News Update as @ 1530 hours, Tuesday 29 July 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

London Stock Exchange listed mining giant Mwana Africa PLC says it will con-tinue operating in Zimbabwe despite unfriendly operating environment for businesses.

“The single biggest challenge to oper-ate in Zimbabwe is liquidity. The pool

of money is very limited. And when you do raise money it is always very expensive,” Mwana Africa chief execu-tive officer Kalaa Mpinga said.

“But when you go to a pub for a drink, there is always lots of noise. But the noise, doesn’t stop you from having

that drink,” he added.

The Government of Zimbabwe recently implemented laws which require for-eign owned mining companies to cede 51 percent to locals.

Mwana Africa PLC is a pan-African,

multi-commodity resources company focused on the production, develop-ment and exploration of gold, nickel, copper and diamonds. It has been operating in Zimbabwe for more than 10 years running the Bindura Nickel Corporation (BNC).

It also has operations in South Africa, and a broad range of exploration pro-jects and interests in the Democratic Republic of Congo (DRC), Angola, Ghana and Botswana.

In October 2005, Mwana Africa became the first African-owned, Afri-can-managed resource company to be listed on the London Stock Exchange’s Alternative Investment Market (AIM).

Mwana Africa recently posted a US$100m turnaround in bottom line fortunes to a $50 million full-year profit. ― Ventures Africa •

Mwana Africa to sustain Zim operations despite tough environment

BH24

It’s been reported that the Government is planning to step up its revenue col-lection efforts with a crackdown on all informal traders.

This blitz will also rope in the numerous airtime vendors who have become a permanent feature of street side entre-preneurship.

This move is going to be the latest effort to increase revenue for State coffers which have come under strain from a tough economic environment. It is aimed at tapping into the informal economy which, by some estimates, handles up to $7 billion of the currency in circulation.

The new levy is actually not surprising. It’s evident that a lot of money changes hands through street vendors who seem to be selling everything these days. At the same time the airtime vendors are also a major channel for the movement of hard currency.

Someone in the corridors of power was eventually going to come up with a suggestion to get a piece of the action. Earlier this year a 5 cents charge was attached to every mobile money trans-action after the huge revenue poten-tial of mobile money was observed as

something worth tapping into.

What remains to be seen is how effec-tively this street levy is going to be collected from the vendors and street merchants.

The municipal police has enough sto-ries to tell about the cat and mouse relationship they have with street ven-dors. This time the chasing is going to include the airtime vendors who make a tidy sum weaving through traffic at every intersection.

For the airtime vendors this is going to be an added cost to business that they cannot push onto the customer through a price increase.

With airtime sold at face value, any tax or levy just means smaller profits for them. This could force vendors to

evade authorities or drive them out of business, essentially killing the prover-

bial goose for State revenue.-TechZim •

3 NEWS

Airtime and street vendors to pay $1 a day State levy

By Lynn Murahwa

The successful co-hosting of the United Nations World Tourism Organisation (UNWTO) general assembly in 2013 was not a smooth ride as Government did not have adequate resources for the event.

Ministry of Tourism permanent secre-tary Florence Nhekairo yesterday told a parliamentary portfolio Committee on Public Accounts that Government had to work with limited resources.

"I would not say Government was ill-prepared to host the UNWTO, I will say Government did not have resources in terms of the budget out lay that was put on the table.

"The hosting of the conference was no small matter. The crisis management

comes from the fact that the finances availed at the last minute and you must then run around," she said.

She said the need for her ministry to bypass normal procedures in acquir-ing assets during that time was due to

limited finances and a large amount of pressure to perform.

Nhekairo also said the delayed release of necessary funds by Treasury left the ministry with extremely limited time to procure assets and issue formal ten-

ders. "Treasury released our envelope for December 2011 on 28 Decem-ber 2011, which the ministry then accessed on 30 December and that left two days in which to use the money for procurement of vehicles.

"Failure of which Treasury would take back the funds into the Consolidated Revenue Fund, it was therefore not possible at all for the ministry to go through the normal tender procedures and to observe the regulations that we were very much aware of," she said.

According to Nhekairo, the ministry did not comply with regulations because there were no funds, not because of the UNWTO. •

4 NEWS

Bumpy ride for UNWTO

AdM-DI156506-

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6 NEWS

BH24 Reporter

Zimbabwe needs to increase support to the Small to Medium Enterprises (SMEs) through capacity building and encouraging more input from the pri-vate sector in order to grow the econ-

omy, a report has said.

According to the African Economic Out-look 2014 Report commissioned by the Macroeconomic and Financial Manage-ment Institute of Eastern and South-ern Africa (MEFMI), Zimbabwe lacks

Global Value Chain (GVC) participation because of issues surrounding infra-structure, liquidity, economic empow-erment regulations and the costs of doing business.

"The major constraints to effective

participation within the GVCs are poor infrastructure, liquidity constraints, deindustrialisation, technology gaps, lack of competitiveness, the high cost of doing business and uncertainties related to indigenisation and economic empowerment regulations.

"The government needs to build capac-ity and support private sector participa-tion, especially in SMEs. It also needs to develop an institutional framework for public-private partnerships, in par-ticular to develop world-class infra-structure," the report said.

The report also recommends that gov-ernment should take advantage of the potential for growth and economic recovery found within the mining sec-tor and create new industries con-nected to the sector.

”The development potential of the min-ing sector can be maximised through building resource linkages with the rest of the economy. This includes revenue linkages, backward linkages, forward linkages and knowledge and spatial linkages to create new industries asso-ciated with mining. This is particularly important in that economic recovery in Zimbabwe hinges on the mining sec-tor." •

Zim should increase support to SMEs - report

BH24

The equities markets let up slightly on its negative run adding on 0,42 per-cent as several heavy weight coun-ters experienced gains.

The industrial index was up 0.77 points to close trade at 184.37 points with Natfoods gaining 5 cents to trade at 200 cents and Old Mutual

moving up 2 cents to close at 260 cents. Tobacco processor BAT traded a cent higher at 1301 cents whilst OK Zimbabwe and Starafrica both rose by 0.50 cents to trade at 16.50 cents and 2 cents respectively.

Two counters traded in the negative territory; Econet retreated a cent to 71 cents and GBH lost 0.01 cents to 0.04 cents.

The mining index maintained increases surging by 22.45 points to close at 97.45 points. Bindura rose by a significant 2.45 cents to close at 9 cents and RioZim went up a cent to 21 cents. Falgold and Hwange remained unchanged at previous trading levels.-

― BH24 Reporter •

8 ZSE REVIEW

ZSE in marginal increases

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BH24

It is no secret; Government has stepped up its efforts to collect as much money as humanely possible from Zimbabweans to support the fiscus. Not only has the Zimbabwe Revenue Authority launched a blitz on companies that have been neglecting their duty to ‘give unto Caeser’, it is now moving on to the small fish in the sea.

It’s been reported that the taxman

plans to come down heavily on the multitude of informal traders includ-ing airtime vendors who have become a permanent feature of street side entrepreneurship.

With these vendors on every corner of the CBD it is only logical that Gov-ernment wants to tap into that money lining their pockets.

Most of these vendors are making a killing on the streets as they push

large volumes to earn almost as much as the person sitting in an office, or even more. This blitz is aimed at tapping into the informal economy which, handles approximately $7 bil-lion. But how effectively can Govern-ment implement this new levy and not create more problems for itself? We appreciate how important it is to col-lect as much revenue as possible but we feel there is an invisible line Gov-ernment must not cross.

In a struggling economy such as ours, taking away any profits from small traders is a huge problem. That they should be paying tax is besides the matter. To them, Government wants to make them suffer more than they already are. So this is a good time as any to remind Government not to kill the proverbial goose. The current stance by Zimra to get the money at all costs is not going to help with the vendors.

Either they will start a new cat and mouse game that will not benefit any-one, especially not the taxman, or they will drive them out of business. Some of the profits these vendors

make are not as big as we want to believe and taking as much as $1 a day might push them out of business. So it would be better if Government can introduce the tax at source. Ven-dors will not feel the pinch if it is incor-porated in the wholesale price but if it is taken from his profit, he will defi-nitely cry foul.

As much as we want to formalise the informal traders, or tax them rather, we will create more problems for our-selves if Government is not careful.

Either it becomes more expensive to sell their wares and they leave the business or they will evade the tax-man. It’s the Government’s choice. Go easy and get more money over time or get tough and get more now. The problem with the latter is that the source of revenue will eventually run out.

As we have said before, there is no quick fix to our economic situation and revenue collection will not answer all the problems. So Government should approach the issue to tax, especially on the vendors, with caution. •

10 BH24 COMMENT

Go easy on vendors or lose them!

BH24

EMPLOYERS in the metals and engi-neering sector should expect employ-ees belonging to the National Union of Metalworkers of South Africa (Numsa) to be back at work by Thursday.

The union on Monday declared victory after it secured double-digit increases and avoided an agreement that would unduly limit the right to strike.

Numsa said on Monday that its 220,000 members would begin to return to work on Tuesday, and that it would sign a wage deal with employer body the Steel and Engineering Industries

Federation of South Africa (Seifsa) that provides a 10 percent increase for its lowest-paid members for three years.

The union expects to sign the deal on Tuesday afternoon, but some of its members may find themselves locked out of work. Employer body the National Employers Association of South Africa (Neasa) said it would not sign the deal, as it was unafforda-ble, and would implement lockouts at workplaces.

Neasa is expected to petition Labour Minister Mildred Oliphant to not extend

the agreement to its members, and has said it will challenge in court any decision to extend the agreement.

Numsa said it expected all employer representatives to sign the agreement, and would ask that the agreement be formally gazetted as soon as possible, a process that may take weeks.

The end to the month-long strike that has crippled businesses was welcomed on Monday, amid fears that the full picture of its negative effect on the economy was still to emerge. "The settlement offer has been overwhelm-

ingly and unanimously accepted by our members," Numsa general secretary Irvin Jim said at a media briefing on Monday.

Parties had been close to a wage agree-ment for weeks, reaching a final agree-ment on pay last week and continuing talks on a contentious amendment to a labour peace clause in the agreement at the weekend.

The parties have now agreed that the clause that had delayed resolution of the strike would remain unchanged in its intent. ― BDLive •

The Communications Authority of Kenya (CAK) has ruled in favour of Air-tel after the company accused its rival Safaricom of anti-competitive practice, a move coming weeks after Safaricom had decided to open up the network.

The CAK has also prohibited the mobile operator from levying extra charges on competitors using its network.

This brings to an end a long battle between Airtel and Safaricom over exclusivity of the service, which barred M-Pesa agents from engaging in busi-ness with other mobile operators.

In a letter signed by the CAK, and sent to Safaricom and Airtel on Friday July 25, Safaricom was ordered to effect the directive before July 18.

“All restrictive clauses in the agree-ments between Safaricom and mobile money transfer (M-Pesa agents) be immediately expunged but in any event not later than July 18, 2014,” the letter states.

The CAK in its ruling also declared that Safaricom’s oversight shall be lim-ited to its business with the agents. Each mobile money service provider

shall also be responsible for ensuring compliance with the Central Bank of Kenya regulations. “We did not rule on the interoperability and the cost of transactions because it is an issue that needs the input of both the Central Bank of Kenya and the Communica-tions authority,” CAK director-general Wang’ombe Kariuki said.― Human IPO •

12 REGIONAL NEWS

Airtel wins case against Safaricom to open up M-Pesa

Employers at odds over strike settlement

BH24

14 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATSGen Station

29 July 2014

Energy

(Megawatts)

Hwange 461 MW

Kariba 720 MW

Harare 30 MW

Munyati 32 MW

Bulawayo 28 MW

Imports 0 MW

Total 1271 MW

1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am

Seed Co Limited 19th Annual General Meet-ing Venue: Seed Co Administration Block at Sta-pleford Date: Wednesday 20 August Time: 12:00 hours

National Tyre Services Limited 52nd Annual General Meeting Venue : Boardroom, Stand 4608, Corner Cripps/Seke Roads, Granite-side, Harare Date: 20 August 2014 Time: 14:30 hours

THE BH24 DIARY

BH24

16 ZSE

ZSEMOVERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

BNC 37.40 9.00 GENERAL BELTINGS 0.04 -20.00

BAT 0.08 1,301.00 PEARL PROPERTIES 2.81 -3.10

COTTCO 5.56 0.95 ECONET 71.00 -1.39

EDGARS 2.62 12.52

MASIMBA 5.00 2.10

MEDTECH 25.00 0.05

NATFOODS 2.56 200.00

OK 3.13 16.50

OLD MUTUAL 0.78 260.00

ZIMBABWE NEWSPAPERS 11.11 1.00

IndicesINDEx PREVIOUS TODAY MOVE CHANGE

INDUSTRIAL 184.95 183.76 -1.19 POINTS -0.64%

MINING 61.13 66.53 +5.40 POINTS +8.83%

Stocks Exchange

BH24

18 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,354.16 -7.26 -0.31% 18June

Kenya 4,896.77 -13.83 -0.28% 21July

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 42,784.30 -107.52 -0.25% 21July

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 185.72 -0.21 -0.11% 21July

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "There is only one way To succeed in anyThing, and ThaT is To give iT everyThing." -vince lombardi

Globalshareholder.com

BH24

The US should investigate Facebook Inc. (FB)’s plan to collect the web browsing activities of its users to deter-mine if the company is violating an agreement with the government to ensure people’s privacy, an advocacy group said.

Facebook, the biggest social network-ing site, would routinely monitor the web habits of its users, contrary to its

prior representations, according to a letter sent to the Federal Trade Com-mission by Kostas Rossoglou, senior legal officer of the European Consumer Organization and Jeffrey Chester, exec-utive director of the Center for Digital Democracy.

The non-governmental organizations, joined in a grouping they call the Trans Atlantic Consumer Dialogue, petitioned

the FTC to open a probe into Face-book’s practices. Facebook last month said it would try to deliver more tar-geted advertising by viewing what its users do on sites other than Facebook.

“We are writing to express deep alarm,” the group said in its letter to FTC Chair-woman Edith Ramirez.

Jodi Seth, a spokeswoman for Face-

book, said the company couldn’t comment on a letter it hasn’t seen. Facebook in late 2011 agreed to set-tle complaints by the FTC that it failed to protect users’ privacy or disclose how their data could be used. It later entered into a 20-year agreement with the agency that requires the Menlo Park, California-based company to get clear consent from users before shar-ing material posted under earlier, more restrictive terms.

If the FTC finds Facebook has violated the agreement, the privacy groups would ask the agency to compel the company to stop the tracking, Chester said in an e-mail.

Facebook has been giving people more control over their settings after years of criticism over its privacy policies. In May, the company said that the posts of new members who begin sharing on Facebook will only be visible to their friends, as opposed to the public. The company also added options for users to decide what Facebook information they share with third-party applica-tions. ― Bloomberg •

20 INTERNATIONAL NEWS

Facebook plan to monitor user web browsing rouses alarm

by Joseph Ngwawi

The Sadc region is poised to become a major continental source of energy if current plans to boost generation capacity are implemented.

With plans to build new short-term generation projects to add more than 21,500 megawatts (MW) by 2017, southern Africa holds the key to the continent’s efforts to achieve energy self-sufficiency.

This region is also in the forefront of developing renewable, clean energy sources.

Southern Africa is home to the world’s largest proposed hydropower scheme, the Grand Inga, which is the centre-piece of a grand vision to develop a continent-wide power system.

Located in western Democratic Repub-lic of Congo (DRC), about 50 km upstream of the mouth of the Congo River and 225km southwest of the cap-ital Kinshasa, Grand Inga is expected to generate 40,000MW when completed.

Based on a feasibility study conducted

between 2011 and 2013, Grand Inga will be constructed in six development phases, with the Inga III Dam and hydropower project being the first of these phases.

When completed, Inga III will produce 4,800MW of electricity.

The proposed dam is the fourth and largest of a series of dams that have been built or are proposed for the lower end of the Congo River. The dam site is on the largest waterfall in the world by volume, the Inga Falls – a series of falls and rapids that drop in elevation via small rapids.

The falls are incorporated into the cur-rent Inga I and Inga II hydroelectric

facilities, with the volume of the river diverted some 30 percent of the aver-age discharge.

The power generated will be double the capacity of the largest dam in the world, the Three Gorges Dam in China.

The DRC and South Africa signed a Memorandum of Understanding in November 2011 for the development of Grand Inga and followed that up with a cooperation Treaty in May 2013 to jointly develop the Inga III Dam.

South Africa will purchase 2,500MW of the total 4,300MW generated, making it the principal buyer for Inga III elec-tricity.

The DRC has commenced the process of selecting a developer, with a number of consortia currently bidding for selec-tion as developers of the Grand Inga.

These include SinoHydro and the Three Gorges Corporation from China, Activ-idades de Construcion y Servicios, and Eurofinsa, both of Spain, and Dae-woo-Posco from South Korea.

Construction is planned to commence

in 2016 following the conclusion of social and environmental assessment studies.

The Grand Inga mega-project is a pri-ority for a number of Africa develop-ment organizations, including Sadc and the African Union’s New Partnership for Africa’s Development (Nepad).

Grand Inga dam has been estimated to cost more than US$80 billion, including cost of the transmission lines needed to carry its power across Africa and potentially to Europe.

Another SADC country, Angola, has also announced plans to quadruple its power generation capacity from the current 2,250MW to about 9,000MW by 2025.

Energy and Water Minister João Bapti-sta Borges said most of the power will come from the Middle Kwanza hydro-power station, Lauca station and the Central Cambambe hydro plant.

“Our ultimate goal is to reach 9,000MW by 2025,” he said, adding that “This means multiplying by four the current capacity, our great resource is hydro-

21 ANALYSIS

Sadc – Africa’s energy source

22 ANALYSIS

power production.”

At least US$23 billion has already been invested by Angola in the energy sector to rehabilitee and expand some of the existing power plants.

“The rehabilitation of power station and the expansion of the distribution net-works of these dams are our priorities because we want to be part of the best producers of power in Africa, as well as produce and distribute the energy to Angolan population,” the Secretary of State for Water, Luís Filipe da Silva, said.

Key activities to fall under the invest-ment include the construction of a hydropower station at Lauca Dam which will add 2,060 MW into the national system whilst another Com-bined Cycle Station with a production capacity of 750 MW will be constructed.

Sadc also plans to launch the proposed Sadc Centre for Renewable Energy and Energy Efficiency (SACREEE). This should be launched by September 2014 under a revised roadmap agreed by Sadc and development partners.

According to the revised roadmap, a preparatory phase runs from January to July 2014.

This would be followed by the first operational phase running for three years, which includes the official launch by September this year.

Sadc is working closely with the United Nations Industrial Development Organisation (UNIDO) and the Austrian Development Agency (ADA) to acceler-ate implementation within the revised timelines.

The proposed centre would, among other things, spearhead the promotion of renewable energy development in the region.

It is expected to contribute substan-tially to the development of thriving regional renewable energy and energy efficiency markets through knowledge sharing and technical advice in the areas of policy and regulation, tech-nology cooperation, capacity develop-

ment, as well as investment promo-tion.

It has been agreed that the centre should be an independent Sadc insti-tution that should be owned and sup-ported by Sadc member states for sus-tainability purposes.

Such a development would give the centre more authority to spearhead efforts to increase the uptake of renew-able energy sources in the region.

Various cooperating partners such as UNIDO and ADA have pledged to pro-vide financial support to the centre for the first three years. After that, the centre should be self-sustaining.

The location of the centre is yet to be decided although a number of Sadc countries have expressed interest in hosting it. Establishment of the SACREE is expected to see a grad-

ual increase in the uptake of cleaner energy sources that could result in reduced carbon emissions in line with the global trends towards clean and alternative energy sources.

According to the African Develop-ment Bank (AfDB), the region has the potential to become a “gold mine” for renewable energy due to the abun-dant solar and wind resources that are now hugely sought after by interna-tional investors in their quest for clean energy.

For example, the overall hydropower potential in Sadc countries is estimated at about 1,080 terawatt hours per year (TWh/year) but capacity being utilised at present is just under 31 TWh/year.

A terawatt is equal to one million meg-awatts. ― sardc.net •