Posts tagged as: zimbabwe

Zimbabwe: Setback for Beitbridge-Chirundu Dualisation

By Tendai Makaripe

GOVERNMENT has put brakes on the US$3 billion Beitbridge-Harare-Chirundu dualisation project, despite the recent hype around what could be Zimbabwe’s biggest infrastructure project since independence in 1980.

The dualisation project was supposed to be launched by President Robert Mugabe last month, with construction work starting this month.

But Transport and Infrastructure Development Minister, Joram Gumbo, said this week that government was no longer in a hurry to start the project.

“The project cannot be rushed,” Gumbo told the Financial Gazette. “A project of this magnitude involves a lot of complex processes that cannot be completed overnight.”

Asked why he was backtracking from government’s earlier commitment, Gumbo said there were many bureaucratic processes involving different arms of government which were stalling the project.

“For example, some of the processes involve the Reserve Bank of Zimbabwe, an institution with its own way of doing things. We also need to open bank accounts at the same time giving ear to our financial advisors on the proper route to take,” he said.

Asked to explain why the project was not commissioned by President Mugabe last month as he had indicated in February, Gumbo said: “I will have to wait and hear from my boss on when he will commission the project. What I can tell you is that it will take place near Mvuma.”

Apparently, it is now nearly 10 months since government announced that it had found an investor, who would pour at least US$2,7 billion into the project.

Last year, government entered into an agreement with a Chinese contractor, China Harbour Engineering Company Ltd (CHEC), to do the work, which would be financed by Austrian firm, Geiger International (Geiger) on a 25-year Build Operate and Transfer (BOT) model. The road continues to wear at a rapid pace, battered by elements. The heavy rains which poured on the country this year left most road infrastructure heavily damaged. The treacherous highway, whose poor state has been blamed for fatal road traffic accidents, is a critical artery in the southern African region.

The latest development is a strange turn of events, considering that the ruling ZANU-PF party is banking on the project to show its commitment to turn around the economy and create jobs promised during the 2013 elections, in which it won a landslide victory against the opposition parties.

There is speculation the ZANU-PF administration could be deliberately delaying the project in order to launch it close to elections, which are slated for next year. The ruling party is already gearing for what promises to be a crunch general election.

ZANU-PF is known for turning national projects into campaign platforms. Already, reports elsewhere in this newspaper suggest that over 700 people in Karoi, Mashonaland West, have registered for jobs on the stretch of the highway project that pass through the district.

With the dualisation of the highway expected to create thousands of jobs, it comes in handy for the party which has received brickbats for failing to deliver the 2,2 million jobs it promised ahead of the 2013 general elections.

Watchers have said the project could be ZANU-PF’s perfect opportunity to appease the agitated populace as the plebiscite draws closer.

But Gumbo denied this was the case.

“That is mere speculation; there is no political involvement whatsoever. This is purely a technical matter,” he said, explaining the current development.

The highway has been delayed for years owing to many factors, among them a nasty legal wrangle involving government and ZimHighways — a consortium of 14 construction firms that included Murray & Roberts Zimbabwe (now Masimba Holdings), Costain Africa (now ZCL Holdings, which is under judicial management), Kuchi Building Construction, Tarcon, Bitumen Construction Services (Bitcon), Joina Development Company and Southland Engineers — which had won the tender for the 900km highway at a cost of US$883 million.

Fed up by the delays, government sought to terminate the contract, arguing that the consortium lacked the financial wherewithal to do the work. ZimHighways claimed that the delays were caused by senior government officials who demanded bribes to facilitate the project.

The battle ended two years ago when government sweet-talked the consortium into withdrawing the case and opt for an out of court settlement under which it would be granted 40 percent of a stake on the road project.

CHEC has also had its own fair share of controversy.

It is a subsidiary of China Communications Construction Company (CCCC), which in 2011 courted controversy in Uganda and several other countries for alleged shoddy deals.

CCCC was blacklisted by the World Bank over fraudulent practices by its predecessor, China Road and Bridge Corporation, in 2009.

But government defended its decision to award it the tender, arguing that that it was CCCC, and not CHEC, that was blacklisted.

The highway is Zimbabwe’s busiest road, carrying nearly 5 000 vehicles per day.

It is not only part of the trunk network in Zimbabwe, but also a major component of the north-south traffic corridor directly linking Harare and Pretoria, and providing landlocked Zambia with access to the Indian Ocean ports of Durban and Richards Bay in South Africa.

Equatorial Guinea’s Obiang Tells Museveni to be Careful With Oil

Photo: Stephen Wandera/Daily Monitor

Uganda President Yoweri Museveni (R) welcomes President of Equatorial Guinea Mr Teodoro Obiang Nguema Mbasogo at State House to inspect a parade Wednesday April 26, 2017.

By Mark Keith Muhumuza & Frederic Musisi

Kampala — Uganda is looking to tap into Equatorial Guinea’s experience of oil production, in order to build its own capacity before oil production starts.

Speaking at the Joint Oil and Gas Convention and Regional Logistics Expo at the Kampala Serena Hotel, on Thursday, country’s President Teodoro Obiang Nguema Mbasogo, who wrapped up his visit to Uganda shorty after speaking at the conference, said they had agreed with President Museveni of Uganda on areas of corporations especially in the petroleum sector.

Equatorial Guinea which produces 300,000 barrels per day has been an oil producing country for the last 20 years.

“This visit has actually enabled us to identify a number of important areas for economic cooperation for the two countries, such as those areas where we have been able to sign accords like the petroleum and gas sectors,” President Obiang said.

The details of this partnership are still not yet known but the Uganda government is keen on picking lessons from countries that are involved in oil production.

During bilateral talks between heads of state of the two countries on Wednesday night, Uganda’s Energy Minister, Ms Irene Muloni signed an MoU for cooperation in oil and gas with Equatorial Guinea’s minister Obiang Lima.

Mr Nguema said as Uganda proceeded with production cycle, there were important issues the country needed to address in order to maximise benefits.

He said the country needed to participate in the production process, deliver local content laws that protect nationals and also support refining of oil products.

“The issue of catering for example, like the supply of food and feeding the oil operators, this is something that local companies can carry out very well. It is not expected that foreign companies will be the ones carrying out this kind of business in your country,” he added.

Equatorial Guinea has not in the last 20 years built an oil refinery. Since 2010, the country has been planning for an oil refinery but the economics involved are still considered risky.

Uganda is planning to build a 60,000 barrels per day oil refinery in Kabaale, Hoima District. Sourcing for the investor has proved futile as the viability of the project continues to be questioned.

President Obiang also warned that Uganda needs to be on the lookout for those looking to derail on the dreams of oil production.

President Museveni, on the other hand, emphasised that Uganda was in “fast-track mode” to have oil production start by 2020.

He also praised President Obiang for the resource management in the Equatorial Guinea which he says has transformed the country into a model economy after taking over an economy in disarray in 1979.

“H.E Obiang is a great pan-Africanist and has led his country from a state of devastation to one of the Worlds’ fastest growing economies… Under his able leadership, Equatorial Guinea has transformed into a model economy with modern infrastructure. 90 percent of the country has now been electrified and significant investments have been made into basic services and education. Most of this tremendous transformation in EG has been made possible from the utilization of the oil and gas resources properly,” President Museveni said.

Uganda is expected to start oil production that will peak at about 80,000 barrels per day. Equatorial Guinea’s production is estimated at 300,000 barrels per day, with 90 percent of that exported. It has a population of about 1.2m people compared to Uganda’s 35 million people.

President’s Nguema’s advice to Uganda, however attracted scorn, especially on social media platforms, with several commentators saying given Equatorial Guinea’s experience in managing its natural resources, he should be the last person to offer advice to Uganda.

According to the New York-based Natural Resources Governance Institute, that monitors transparency in extractives, the country is the third-largest oil producer in sub-Saharan Africa, supplying 304,000 barrels a day but its oil revenues are mostly misused.

According to the IMF, Equatorial Guinea boasts the highest level of per capita income in all sub-Saharan Africa, at $22,300 per year about the same as Portugal but more three-quarters of the population live below the poverty line.

President Nguema, is ranked currently as the longest serving non-traditional leader in the world with 37 years under his belt. He is followed by Angola’s Jose Eduardo dos Santos with 36 years but announced plans to step down this October, Zimbabwe’s Robert Mugabe (36 years), Cameroon’s Paul Biya (33 years), Uganda’s President Museveni (31 years), and Sudan’s Omar Bashir (27 years).

Fake Insurance Cover Schemes Haunt Sector

By Issa Yussuf

Zanzibar — The Managing Director of National Insurance Corporation (NIC), Sam Kamanga has emphasized to member states of the Common Market for Eastern and Southern Africa (COMESA) to ensure that hitches hampering use of Yellow Card Scheme are removed.

Speaking on the sideline of the 42nd meeting of the COMESA management committee of the Yellow Card Scheme, he said efficiency of the service would be enhanced by computerizing operations of the scheme to curb forgery.

“So far the insurance business has been good and Tanzania has the chance to benefit more in the region because most of the vehicles pass through in the country,” he said.

Mr Kamanga said adding that fake insurance remains a problem and that they have been working with the police to stop the production. He said differences of official languages and legal framework regarding foreign financial operation have delayed the plans to introduce electronic payment, which is expected to end fake yellow cards.

According to the NIC board chairperson Mr Laston Thomas Msongole, the Yellow Card is essentially a Regional third party motor vehicle insurance scheme that provides third party legal liability cover and compensation for medical expenses resulting from road traffic accidents caused by visiting motorists.

He said besides offering third party liability protection to the insured or the driver whilst in a foreign country, the COMESA Yellow Card Scheme also offers emergency medical cover to the driver and passengers of the foreign motor vehicle involved in the traffic accident.

In his speech to open the meeting, the Zanzibar Minister of Finance Dr Khalid Salum Mohamed said asked members to create awareness and that the yellow card must be relevant to travelling motorists, road accident victims, insurance companies and the public in general.

“Accordingly, the general public in our countries and beyond also needs to be aware of the opportunities that are brought by these instruments.”

Ms Immaculate Morro- ‘COMESA Yellow Card Scheme’ Country Coordinator, said the scheme is currently operational in twelve COMESA Member Countries and one non COMESA member Country: Burundi, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.


Magufuli Fires 9,932 Civil Servants

President John Magufuli has instantly sacked 9,932 workers who have been found using fake certificates. Read more »

Zimbabwe: HIV, Aids Chokes Informal Sector

columnBy Alois Vinga

A NATIONAL Aids Council (NAC) report has revealed that HIV and Aids is wreaking havoc in the country’s informal sector, a development likely to affect Zimbabwe’s economic recovery due to the fact that the sector is now a predominant factor in the economy.

In a document titled: The HIV and Aids strategy for the Informal Sector; Situational Analysis Report; March 2017′, NAC said the dynamics of knowledge, attitudes, and perceptions on the impact of HIV and Aids in the small to medium enterprises sector (SMEs) in Zimbabwe indicate that risky behaviour is rampant in the informal sector.

The report said the informal sector has not been targeted within the range of national efforts to fight HIV and Aids, tuberculosis (TB) and cancers.

“This has been a critical omission given that the Zimbabwean economy is accepted as being largely informal both in terms of numbers employed within the sector and its contribution to the gross domestic product and gross national product.

“There has been a wrong perception about the informal sector localities — they are places of work for the sector and as such should be treated no differently from the formal sector places of work. They should instead be targeted differently due to such factors as that they are hard to reach, may be in inhospitable settings and may lack basic infrastructure and amenities,” said the report.

Some 62 percent of survey respondents acknowledged that HIV and Aids is a major challenge in the sector where 15 percent of the risky behaviour is characterised as multiple sexual partners, while 46 percent of the dicey deeds are linked to inconsistent or non-use of condoms.

The gender perspective to multiple sexual partners indicated relatively high risk behaviour on the part of male respondents than females, with only nine percent of women having two or more sexual partners compared to 19 percent of men.

Although condom use is a critical preventive measure in reducing the spread of HIV and Aids, there was inconsistent use of the condoms even with casual partners.

Reasons given for this behaviour included the notion that condoms reduced sexual pleasure or they are for prostitutes or for use outside marriage.

The report also notes that 67 percent of SMEs had no HIV and Aids workplace programmes because the enterprises lack the initiative to provide information on HIV and Aids as well as discuss HIV and Aids issues at the workplace.

Electronic and print media were cited as the major sources of information about HIV and Aids for SME workers.

The report divided the informal sector into eight groups: Group One — small scale miners; Group Two — cross-border traders; Group Three — public transport workers and manufacturing; Group Four –sex workers; Group Five — small scale farmers and farm workers; Group Six — vendors (including food vendors), and hair and beauty; Group Seven — construction; and Group Eight — manufacturing.

The report observed that informal cross-border traders pass through and often spend extended periods of time in high HIV transmission areas where there is limited affordable accommodation, food, transport and recreational facilities.

This environment was contributing to the existence of an intricate web of sexual relationships among informal cross border traders, uniformed personnel (customs officials, immigration officials and customs clearing agents), sex workers, truck drivers, money-changers (and touts), local border-town residents and deportees, which potentially increases the risk of one contracting the HIV virus.

The report noted that as of December 31 last year, there were 908 508 adults and 64 620 children on anti-retroviral therapy, whose uptake increased in the country from 879 271 in 2015 to 974 128 in 2016.

The voluntary male medical circumcision (VMMC) uptake is still low in the informal sector.

Men had misconceptions on VMMC that once you are circumcised you cannot contract HIV.

For female-dominated small enterprises, if business does not go well, they easily engage in sex work to supplement income.

HIV and Aids stigmatisation was manifested at two levels: Self-induced stigmatisation and discrimination, and stigma from others which undermines peer to peer support.

So deeply entrenched are some stigmatisation issues that workers opted not to access services from health facilities due to the attitudes of service providers.

Workers indicated that it was for this reason that they would opt for traditional herbs or purchase condoms on the streets, notwithstanding the fact that there was no guarantee of their efficacy.

Among the groups that are highly mobile are small-scale miners, cross border traders, public transport workers and manufacturing whose mobility has undermined adherence and the continued exposure to messages that help behaviour change.

The informal mining sector is usually found in remote and hard to reach areas making the provision of services and commodities extremely difficult.

This remoteness results in exposure to HIV and Aids, while at the same time making it difficult to have comprehensive integrated HIV and Aids services.

Interviewed persons acknowledged that the majority of the informal sector is not organised and is therefore difficult to mobilise.

In many of the informal workplace settings, the lack of infrastructure contributes to the difficulty to this lack of organisation.

Since SMEs generally appear too busy to access treatment, there is disconnect between diagnosis and treatment because the workers have to be by their places of work in order to earn an income.

Health services and programmes, which are provided during normal operating hours, are thus out of their reach, further increasing their vulnerability to HIV and Aids.

For example, small scale miners are not available during day time because they would be busy underground mining.

The report also noted that the absence of meaningful social protection measures hampers the efforts of the informal sector significantly and renders it prone to the HIV and Aids pandemic.

Poverty, one of the key drivers of HIV and Aids, is heavily present within the informal sector which means that addressing HIV and Aids issues has to go beyond simple biomedical approaches to encompass socio-economic matters.

Culture is also still exerting a strong stranglehold within the sector as evidenced by issues of condom uptake, multiple concurrent sexual partnerships, and gender-based violence.

Zimbabwe: Electricity Supply Authority Plans Massive Restructuring

THE Zimbabwe Electricity Supply Authority (ZESA) is carrying out a restructuring exercise that will see 1 700 workers becoming redundant as the parastatal realigns its business model.

Employees at the power utility told the Financial Gazette that last year, the entity initiated a restructuring exercise which has rendered a number of posts redundant.

They alleged that recently a new organogram was launched and positions for artisan assistants, drivers and lead artisans would be phased out.

National Energy Workers Union of Zimbabwe (NEWUZ) secretary general, Thomas Masvingwe, who is representing the workers on the pending job cuts, confirmed the development.

He pointed out that artisan assistants had been reduced from a ratio of two to one to the current one to one per every artisan. He said concerted efforts had been made to engage ZESA on the matter since last year, but no meaningful progress had been made.

NEWUZ has since written to the designated agent of the Energy National Employment Council to register displeasure over the exercise.

In their submissions, the workers allege that on June 26, 2016, ZESA Holdings wrote to them advising that no such exercise was going on and if they should adopt a restructuring exercise, it would do so in consultation with the employees and their representatives.

“Surprisingly, on the 3rd of April 2017, the claimant learnt through memos addressed to its members that the respondent was actually on the advanced stage of the restructuring exercise, which will result in the loss of 1 700 to 2 000 jobs. Despite the assurances made by the respondents, they have unilaterally proceeded with their unlawful exercise. Consequently a labour dispute has arisen wherein this tribunal is clothed with jurisdiction to urgently resolve the matter,” said the workers in the court papers.

Contacted for comment, ZESA Holdings public relations manager, Fullard Gwasira said that the company was not aware of the developments.

“The ZESA group is not embarking on a retrenchment exercise at the moment, and has not given any such notice as is required by the Labour Relations Act. The Labour Act clearly emphasises the need to consult staff before any retrenchment exercise is embarked on. As part of the process to align staff structures to the prevailing business model, the company regularly examines its manpower charts. This process identifies areas of over and under staffing. The company then subsequently aligns its staffing to the business strategy. This process may entail moving staff to new areas which would have been identified. For example, the advent of prepaid meters has negated the meter-reading function, and staff in these portfolios is being redeployed in line with the current strategy,” Gwasira said.

Masvingwe insisted that there was no room for redeployment because the new organisational charts do not contain new posts.

“In this instance, some posts have totally been rendered redundant and the few remaining have been trimmed implying that the organisation now needs fewer people than before,” he argued. “Further, a copy of the internal correspondence memo in our possession dated April 3, 2017 undersigned by ZETDC managing director, Julian Chinembiri, confirms that the restructuring exercise is on course,” he said.

The memo from the ZETDC said: “The exercise was done to respond to the needs of the current business environment. It was important to review the organisational charts following the introduction of prepayment meters, planned automation of processes, creation of new customer services sections and observation that the 2006 charts were redundant in some instances.

“To that end, employees are to be aligned to the new charts by May 31 2017. Consultations will be done and the whole process shall be managed in a transparent manner with minimum anxiety to staff. It is hoped that the exercise shall be viewed positively for the benefit of both employees and ZETDC business.”

On June 29, 2016, Masvingwe wrote to the ZESA Holdings chief executive officer, Joshua Chifamba, on the matter.

“Our instructions are that you and your group have embarked on far reaching restructuring exercises. The ramifications of these exercises are varied and many, but includes the loss of employment by some of our members. Our understanding of the law is that we need not only to be consulted, but also to participate in the process in order to effectively protect the rights and advance the interest of our members,” reads the letter.

On July 7, 2016 ZESA’s head of corporate affairs, Rufaro Pasipanodya, denied that there was any restructuring exercise taking place.

“We note that you make reference to a far reaching exercise that you say the company has embarked on. Regrettably, we are unaware of the exercises that you allude to. ZESA Holdings and its subsidiaries would, as a matter of course, advise all the representative unions of its intentions, if at all it reaches a decision to undertake exercises of such a nature,” Pasipanodya said.

Zimbabwe: Hwange’s Festering Environmental Disaster

By Problem Masau

PHIBION Alimenda (74) coughs as thick smoke emanating from Hwange Thermal Power Station in the distance engulfs his Ingabula village.

Despite his terrible cough, he insists he is fine and believes the polluted air around him has nothing to do with his struggle for breath because he is now “used” to decades of the contaminated air.

His wife, Nyemukani, who had been drying her laundry outside, soon removed the clothes from the line as the smog thickened.

“I have to remove the clothes from the line because they end up turning grey because of the smoke. As you can see, all our clothes are dark in colour; we do not have the luxury of buying bright colours because of the smoke that periodically covers the area,” she said.

Over 60 000 villagers, residing west of ZESA Holdings’ Hwange Thermal Power Station, are at risk of contracting lung and respiratory diseases because of the pollution that has characterised the mining town for decades.

Lying windward of the thermal power station, the villages are in the direct path of air polluted by plumes of smokes emanating from the furnaces firing the boilers that provide steam which then powers the turbines that produce electricity.

An official with the Centre for Natural Resource Governance (CNRG), Farai Maguwu, said residents were at risk of contracting lung infections because of the abundant air pollution.

“The people are at serious risk of contracting pulmonary (lung) diseases. Atmospheric air has been affected by the emissions from the Zimbabwe Power Company furnaces. The continuous emissions will in the long run contribute to acid rain, ozone depletion and global environmental problems that can potentially lead to reduced rainfall and an increase in temperatures,” he said.

“Trees and plants are dying because of the underground heat emanating from coal burial, while mining induced subsidence, without adequate prevention or repair measures, often results in the abrupt sinking of the ground surface, destroying the ecosystem, roads and killing both humans and animals,” added Maguwu, one of those few people who have been trying to break the silence on the environmental disaster that haunts the coal mining town.

Some few kilometres away lies Deka River that has always been revered by the locals, who live in one of the country’s most arid regions.

Both wild and domesticated animals as well as humans have from time immemorial quenched their thirst in the river.

So revered is the river that songs have been composed, poems have been recited and rituals have been conducted in praise of the river.

But the river’s potential for sustaining livelihoods is “ageing” as pollution takes its toll.

A nurse at Hwange’s St Patrick’s Clinic said cases of water-borne and skin diseases were prevalent in the area.

“Most children and even adults complain of stomach pains and skin diseases. Most people in the area have developed an ashen grey skin,” she said.

Chief Dingani Nelukoba said while Deka River has for centuries been their saviour, it is now under serious threat.

“Most of the rivers dry up, but this river has always braved the scorching sun and there are areas where it never runs dry. But there is no more fish in Deka River, while trees are vanishing every day. The mining companies are now many — and they are causing a lot of damage (to the river),” said the chief.

According to a research by CNRG, the water is being contaminated by mining activities that have been going on in the area for years.

“Open cast mining has affected ground water reserves through underground contamination. These contaminated water sources are posing health hazards to people as well as animals.

“Acid mine drainage produced by leaching of sulphide minerals present in the coal has had a direct impact on drinking water quality, aquatic life and corrosion of equipment and structures. The water will soon be too acidic and not suitable for domestic use. The erosion of stockpiles at Chilota mine has also led to the sedimentation at the nearby Deka River. Water contamination is also caused by coal dust settling on the surface water environment as well as from leaching and toxic drainage of particulates,” reads part of the CNRG report.

A wildlife conservationist in the Gwayi area, Watson Hugg, has raised concern over mining companies that are emitting hazardous substances with potential of contaminating water bodies.

He said companies should be stopped from operating in affected areas because people and animals were at risk.

The chairperson of Gwayi/Shangani Catchment area, Langton Masunda, said a lot needs to be done to avert an impending environmental disaster if the mining companies continue to operate without proper guidelines.

“An environmental disaster is looming in areas where these mining exploration firms are operating. We suspect these companies are operating without waste management plans. Most of the rivers in the area have been polluted,” he said.

Under Statutory Instrument 6 of 2007 companies and individuals face a fine or jail term or both for polluting the environment.

Hwange district boasts of high quality coal deposits for thermal, industrial and cooking coal.

Zimbabwe has an estimated 26 billion tonnes of coal reserves suitable for power generation and at the current rate of extraction of three million tonnes per year this translates to more than 8 000 years of mining.

This means Zimbabwe will be home to perpetual carbon emissions for centuries to come, emitting toxic gases that include sulphur dioxide, nitrogen oxides, carbon dioxide and mercury, which are hazardous to general life and the environment.

Zimbabwe: Cash Crisis Hits Tobacco Farmers

Photo: The Herald

Tobacco farmers at auction floor (file photo).

SCORES of tobacco farmers spent the Easter and Independence holidays at the three tobacco auction floors in Harare, while waiting for their banks to release cash upon their reopening on Wednesday.

While some of the farmers had to seek refuge at their relatives’ homes in the capital city, and in other satellite towns namely Chitungwiza, Norton and Ruwa, others were not so lucky.

The unlucky ones were forced to stay put at the auction floors until the banks re-opened for business on Wednesday.

This year, the Tobacco Industry and Marketing Board (TIMB) licensed three auctioneers to buy the golden leaf — as the tobacco crop is affectionately known — from farmers.

These are the pioneering Tobacco Sales Floor owned by TSL Limited; Boka Tobacco, founded by the late business magnate Roger Boka; and Premier Tobacco Auction Floors — the smallest of the three.

It was a sad tale of despair all round at the auction floors as farmers braved the five-day holiday away from their families, waiting to access the elusive cash from their banks.

Zimbabwe is deep in the throes of a cash crisis linked to several factors.

At the core of the liquidity crisis is the country’s inability to produce enough for export. With imports chewing a huge chunk of Zimbabwe’s earnings, it has been difficult for banks to keep the country well oiled in terms of its cash requirements.

As a result, depositors have not been able to get their cash on demand.

Currently, banks are limiting cash withdrawals, with some dispensing as little as US$20 per week.

Last month, the Reserve Bank of Zimbabwe (RBZ) directed banks to be more generous with tobacco farmers whom the nation is banking on in terms of its foreign currency requirements.

Last year, tobacco earned US$1 billion in export revenue receipts ahead of platinum and gold.

The previous season in 2015, export earnings were around US$855 million as sales volumes increased 12 percent on prior year to 152 million kilograms (kgs), with cigarette makers in China buying 62 million kgs for US$513 million or 60 percent of total earnings.

So far this season, farmers have sold tobacco worth about US$126 million.

Farmers planted 32 208 hectares of tobacco during the 2016/17 season, from 28 865 hectares planted during the same period last year.

There was also an increase in the number of registered growers with 73 492 registered for the 2016/17 season, an increase from last year’s 69 518.

All indicators point to a better 2016/17 season.

For the typical indigenous farmer, having money in the bank is not good enough.

They still need physical cash to transact in their respective communities where plastic money is still an alien concept.

To cater for their cash requirements, the RBZ recently directed that tobacco farmers should be given US$1 000 per initial sale, hoping to put smiles back on their faces in the wake of the cash shortages.

This has, however, turned out to be a pie in the sky for a lot of the tobacco farmers who still cannot access the cash as per central bank’s directive.

Before the Easter and Independence holidays, most banks could only manage to dispense US$300 per day for initial sales, with some farmers even failing to access that amount.

As a result, most farmers spent close to a week at the auction floors in a bid to withdraw the full US$1 000. Last month, police had to be called in to quell protests at the tobacco auction floors when farmers ran riot when banks reduced the withdrawal limit to US$300.

Banks were clearly overwhelmed last week.

Some of the banks could only manage to serve 40 clients per day due to dwindling cash reserves.

By the time people took a break for the holidays on Thursday last week, hundreds of farmers were yet to receive payment for their initial sales, a month after the auction floors opened on March 15.

As for Prosper Mutabe from Nembudziya in the Midlands Province, even though he has relatives in Harare, they could not accommodate him over the Easter and Independence holidays because they had made prior holiday arrangements outside the big city.

At the same time, he could not go back to his rural home empty handed because his workers were also expecting their dues in the hope of making the Easter holiday a memorable one for their families.

“I came from Gokwe and my relatives who stay in Harare have gone away for the holidays so I am stuck here,” he said.

“Back home, my workers need their payment in cash, but I am failing to access my money. I thought selling my crop this year would come with good fortunes because the price was fairly good, but here I am — struggling,” he said.

Many other farmers had sad stories to tell about sleeping in the open.

To make matters worse for them, it was exceptionally cold throughout the holiday.

Those without any cash to spend were issued with US$1 sadza coupons at the auction floors, allowing them to have meals on credit, which would be repaid once their accounts are credited.

The only other source for cash for most farmers became the cash-back facility at some retail outlets. But then again, the RBZ has set the maximum limit for any cash back facility by retailers and wholesalers at US$20 or $20 bond notes only, which means that option has become unviable for the tobacco farmers.

Because of desperation, some of the farmers have had to move their bank accounts from one bank to another in the hope that they would get better service.

To some, it became the case of jumping from a frying pan into a fire as their payments were still to reflect in their new accounts at the time of going for the holiday break.

Jesta Maunganidze, a farmer from Makonde in Mashonaland West, was one of those who had to regret the accounts switch.

“Those who bought my tobacco told me to change my account because they were failing to process payment using the account I had given them, but up to now, four days later, the transaction is failing to reflect. I cannot go back home like this, so I will wait to hear what they have to say,” she said.

Zimbabwe Tobacco Association chief executive officer, Rodney Ambrose, regretted the bottlenecks in the payment system, which he said needed urgent attention.

“There have been some bottlenecks in the systems that need to be ironed out so that farmers do not have to spend so much time at the auction floors,” he said.

“This is why farmers are spending days at the floors until they get their last batch of cash. The challenge is that they are given so much money per day, so banks reduce the daily limit so that they are able to serve more customers,” added Ambrose.

RBZ governor, John Mangudya, has come to the defence of banks, saying balances in their nostro accounts were continuously declining hence they were unable to release all the cash on time.

“Tobacco is paid for upfront. Sometimes banks might take time to credit the merchant account because it is not yet funded. The merchant’s account has to be debited for the farmer’s bank account to be credited, but you will notice that banks’ nostro accounts have to be funded,” Mangudya was quoted saying recently.

Zimbabwe Commercial Farmers Union president, Wonder Chabikwa, said tobacco farmers should be prioritised in getting their cash because they are the country’s only hope of improving the liquidity situation.

“This is worrisome because we had agreed that farmers who deliver their first crop would get US$1 000 (for initial sales) and US$500 for the second so that farmers can cover their cash needs like labour. They failed to do that because farmers still cannot get money from banks,” he said.

“This is inconveniencing the farmers. We are worried that what we agreed upon is not being implemented, all players should work together to prioritise the farmers because we cannot afford to kill the goose that lays the golden egg,” he added.

There is a school of thought that says by demanding cash when they could use Point of Sale facilities, tobacco farmers are exerting unnecessary pressure on an already desperate financial situation whereby the country is facing one of its worst liquidity crises since dollarisation in 2009.

Apart from the cash crisis, the tobacco selling season has also been dampened by the malfunctioning of the e-marketing platform on the initial day of sales, forcing TIMB to revert to the old manual system.

The selling season has also been dogged by the deteriorating quality of tobacco due to incessant rains in the country’s tobacco growing areas.

While this has an effect of pushing down prices of the golden leaf, it also dampens the spirits of farmers who would have toiled in the fields in anticipation of better returns.

As of Wednesday last week, tobacco seasonal sales rose by 42 percent, raking in US$126 million, compared to the same period last year as deliveries increased ahead of Easter and Independence holidays.

TIMB said the volume of tobacco sold was up 42 percent to 47 million kg compared to 33 million kg valued at US$89 million kg during the same period last year.

The average price per bale was US$2,68 , down from US$2,70 recorded over the same period last year.

The tobacco selling season is expected to improve the liquidity situation and assist in addressing the cash shortages.

Zimbabwe: Hwange Colliery in Crucial Creditors Meeting

AFTER months of negotiations, listed coal miner, Hwange Colliery Company Limited (HCCL), will next week finally meet its creditors as it seeks a deal to restructure debts to enable the company to implement its turnaround plan, it has been learnt.

HCCL spokesperson, Rugare Dhobbi, told the Financial Gazette’s Companies & Markets (C&M) that the meeting would be crucial in that if the plan is approved, it would allow the company to access fresh funding from financial institutions.

Dhobbi said: “To allow us an operating space to implement the holistic and inclusive turnaround plan, the company will be entering into structured payment plans with its creditors after approval at a creditors’ meeting. The scheme will enable the company to access working capital from financial institutions who have cited the need to address the company’s balance sheet by converting current liabilities to medium and long -term commitments.”

She said the meeting with creditors would take place on April 26, 2017, paving the way for increased production.

She said government support would be a welcome development through the issuance of treasury bills to essentially support the scheme of arrangement.

Government is the major shareholder in HCCL, controlling about 37 percent in the company while British tycoon, Nicholas van Hoogstraten, through his investment vehicle, Messina Investments, owns a 30 percent interest in the company.

The National Social Security Authority has a 5,87 percent shareholding while Mittal Steel Africa Investments controls a 9,76 percent stake.

HCCL employs more than 3 000 workers and supports a town of about 55 000 people. It is, therefore, viewed by government as a strategic operation.

HCCL used to be the largest coal miner in the country until the emergence of Makomo Resources in 2010, which has chipped off its market share. The Zimbabwe Stock Exchange listed company which also has pockets of its shares trading on the Johannesburg and London stock exchanges, where the coal miner has secondary listings, has been making losses for more than a decade and owes millions to tax authorities, employees and the pension fund.

In its financial results for the year to December 31, 2016 released recently, HCCL narrowed its loss by 22 percent to US$90 million, from US$115 million reported in the previous year.

Revenue declined by 41 percent to US$40 million compared to US$68 million recorded in the previous year due to poor sales.

Total annual coal production volumes decreased to 38 percent as the Portuguese mining contractor, Mota-Engil, which was engaged a few years ago to mine HCCL’s Chaba open cast mine, experienced a decline in its contribution to production volumes to 58 percent during the period under review from 63 percent in 2015.

Total liabilities stood at US$350 million against total assets of US$183 million.

“Hwange Colliery Company Limited notes with concern its recently released 2016 annual financial results statement on the organisation’s performance published on March 31 2017,” the company said.

“Low production levels have led to decreased sales volumes, negative profit after tax and negative gross profit in the period under review.

“Management with the support of the board is aware of the unsustainability of any further decline and is focused on plans to turnaround the company. Measures to effectively turnaround the company are currently in progress. While our last year’s figures project a gloomy outlook, the company wishes to advise that no effort is being spared to address operational constraints and working capital limitations.”

In January this year, C&M reported that the coal miner had faced serious funding challenges, prompting the Portuguese contractor to suspend operations over failure to pay a US$50 million debt.

Under the terms of the contract worth about US$260 million, Mota-Engil had been mining 200 000 tonnes of coal a month from Chaba while HCCL produces about 60 000 tonnes of coal monthly.

But HCCL managing director, Thomas Makore, last week said Mota-Engil has resumed mining operations and expected to reach 200 000 tonnes a month in production output before the end of June this year.

Makore said HCCL was planning to increase production in the open pit operations.

He said: “Management interventions are underway to make the mining equipment more reliable and available for operations so that production will increase to 100 000 tonnes a month in mid-year 2017.

“In addition, resuscitation of underground mining will contribute high value coking coal to the production mix by mid-year. The continuous miner equipment that had a major break down in August 2015 is undergoing major refurbishment commencing this month. The exercise is expected to take about three months to complete.”

HCCL is also pinning its revival hopes on a quick exploitation of its three new coal concessions. Government granted HCCL new coal concessions in Western Area, Lubimbi East and in 2015 with an estimated a resource of 750 million tonnes of mainly coking coal and thermal coal.

Zimbabwe: Govt Develops Diaspora Website

Photo: Ivan David Gomez Arce/Flickr

(File photo).

Zimbabwe is crafting a national diaspora website, aimed at facilitating the engagement and participation of citizens living out of the country in national development, the Ministry of Macro Economic Planning and Investment Promotion has said.

In a statement, the ministry said the website was part of operationalising the diaspora policy.

“The purpose of the website is to promote diaspora engagement and participation of the Zimbabwean diaspora in national development. Among others, the website will showcase the opportunities in different sectors of the economy,” it said.

Cabinet last year approved the Zimbabwe National Diaspora Policy (ZNDP) that seeks to harness the social and intellectual capital of people living outside the country for national development.

The Ministry said the website would be filled with relevant information on the opportunities in the country that the Zimbabwean diaspora may want to take up.

“This applies to opportunities in both the public and private sectors. Money transfer agencies, operators in the tourism sector and financial services sector are particularly encouraged to advertise on this website,” it said.

“The ministry also cordially invites Zimbabwean diaspora associations which are willing to participate in national development to send through their profiles so that they may also be showcased on the website,” it added.

The national diaspora policy is also expected to coordinate engagement between government and Zimbabweans in the diaspora, with a view to encourage beneficial mutual relations to drive economic development.

Statistics suggest that Zimbabweans living outside the country, have emigrated mainly to South Africa, Botswana, Namibia, the United Kingdom, the United States, Australia and New Zealand.

In 2014, diaspora remittances surged to $837,4 million from $794 in 2013, with the Reserve Bank of Zimbabwe saying the flows as having helped improve the country’s external financial position.

New Ziana


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Zimbabwe: Mining Boss Gudyanga Ordered Unbudgeted Payments, Court Heard

By Fungai Lupande

Secretary for Mines and Mining Development Professor Francis Gudyanga ordered several unbudgeted payments from the Minerals Marketing Corporation of Zimbabwe (MMCZ), which he later disguised as dividends, the court heard yesterday.

Prof Gudyanga, who was a lone board member at MMCZ, was in court answering questions during cross-examination in the trial of the company’s acting general manager Richard Chingodza (41) and acting deputy general manager (finance and administration) Hannan Tongai Chitate (35).

Chingodza and Chitate are accused of swindling MMCZ of $625 226, 88 after awarding themselves unapproved allowances.

During cross-examination by Chingodza’s lawyer Mr Oliver Marwa, Prof Gudyanga was asked why he ordered that the company donate $60 000 to Kutama College’s centenary celebrations.

“Did you ask MMCZ if they afforded to pay such an amount,” asked Mr Marwa.

In response, Prof Gudyanga said if the company could not afford the donation, management would have said so.

“A letter to you has indicated that the company did not have the money and it is explaining the delay,” inquired Mr Marwa.

“The request was illegal and it cannot be supported by the Company Act or any Government statute governing public funds.”

In response, Prof Gudyanga said the request was not unique.

“It is part of the company’s corporate social responsibility,” he said.

But Mr Marwa said MMCZ was a public corporation and a creature of procedures and questioned the basis upon which Prof Gudyanga made the order for the donation to be made.

“You were a headmaster at Kutama?” asked Mr Marwa.

Mr Marwa then took Prof Gudyanga to task over a September 8, 2015 payment of $517 000 to Pedstock Investment.

“That matter involves classified activities involving stoppage of linkages in the mineral sector,” Prof Gudyanga explained.

“I am surprised that Chingodza, who is aware of the nature of the issue, decided to bring it to court.”

Mr Marwa asked Prof Gudyanga to elaborate on the nature of the payment and he said it was a special payment for the Mineral and Border Control Unit.

He later refused to comment any further.

Mr Marwa then asked him to confirm whether or not two payments of $500 000 and $375 000 were made to the same company in two months, to which Prof Gudyanga said it was correct.

He also quizzed Prof Gudyanga on an October 23, 2016 payment to a Government department which was disguised as dividends.

The trial continues today.

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