News Update as @ 1530 hours, Wednesday 06 May 2015

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Development assistance should come through Vote of Credit: ChinamasaBy Rumbidzayi Zinyuke

HARARE - Government says all devel-opment assistance to the country should come through the Vote of Credit to prevent double allocation of funds to the same economic areas and enhance accountability of donor funds.Speaking at a Government-development part-ner meeting on the review of the Aid Co-ordination Architecture, Finance and Economic Development Minister Patrick Chinamasa said development partners can discuss with government how they want their funds to be dis-bursed.

“We are saying aid should come through the Ministry of Finance and the money goes to the Vote of Credit. From there, we agree as Govern-ment and the development partners involved, where they want the funds to

be directed,” he said.

He said this would make it easier for Government to make budgetary allo-cations towards areas that have not been covered by development aid and avoid directing funds towards the same areas that have already been covered by donors.

Non-Governmental Organisations operating in Zimbabwe were last year accused of diverting development funds to personal use instead of chan-neling them through the state.Minister Chinamasa said it is difficult for govern-ment to track aid that does not come through the Vote of Credit.“If we (Gov-ernment) do not know when the aid has come, we cannot be expected to be grateful and say ‘thank you’ when we don’t know where the aid went or how it was used,” he said.Minister Chi-

namasa said development assistance plays a crucial role in attaining the goals enshrined in ZimAsset.

“To help achieve this, Government aims to place a transparent Aid and Development Assistance Co-ordina-tion framework that would significantly improve effectiveness of development assistance, build transparency and lead towards new levels of engagement and mutual accountability between Zimba-bwe and its development partners,” he said.Speaking at the same event, UN resident co-ordinator Mr Bishosw Para-juli said there is need to strengthen aid co-ordination to assist in clearly iden-tifying and addressing development needs and gaps.He said the review of the Aid Co-ordination architecture would help donors to appreciate the full extent of the ongoing development efforts, and cement further strong

development co-operation and foster mutual accountability.

“The absence of a well-functioning development mechanism not only prevents the realisation of the above enabling factors but also constrains the Government’s ability to ensure align-ment of donor resources to national priorities, potentially depriving the country of value for money,” he said.He said a structured government-led dialogue among stakeholders could greatly promote transparency and build trust among stakeholders.

“The United Nations team stands ready to support strengthening of the overall national development co-operation. It is therefore important for us to advance development cooperation effectiveness in line with international agreements,” he said.●

BH24

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Constrained money supply keeps Zim inflation low in the region

BH24 Reporter

HARARE - Zimbabwe's money supply continues to be relatively flat due to the use of the multi-currency system.

According to the latest Common Mar-ket for Eastern and Southern Africa (COMESA) Harmonised Consumer Price Index (HCPI), Zimbabwe main-tains one of the lowest rates of total inflation at -1 percent in March 2015, only ahead of Rwanda which has a total inflation rate of -3.3 percent.

COMESA's HCPI is specifically

designed as a macro-economic meas-ure of monetary inflation, while some national consumer prices indices - including Zimbabwe's - have other purposes such as cost of living meas-urement.

Economists believe monetary infla-tion to be 'real' inflation to the extent that it reflects a sustained increase (or lack thereof) in the money supply of a country.

It occurs when central banks print too much fiat currency. Too much of any-thing devalues the existing supply and

thus it is with money.

Zimbabwe's use of the multi-currency system has however meant that its central bank - the Reserve Bank of Zimbabwe - is not printing local cur-rency, a factor that has resulted in con-strained money broad money supply in the economy, hence the negative inflation rate.

At the broader level, COMESA's annual inflation rate stood at 10,7 percent in March 2015. The year on year inflation rate (annual percentage change) in the COMESA region as measured by the HCPI-COMESA stood at 10,7 percent for the month of March 2015, up from 9.8 percent registered in February 2015.

A year earlier the rate was 12,4 per-cent.

The month-on-month inflation rate in the COMESA region as measured by HCPI-COMESA stood at 1.6 percent for the month of March 2015, unchanged compared to February 2015. It was 0.8 percent in March 2014.

Within the COMESA region, Sudan

recorded the highest year on year infla-tion rate of (+27,1 percent) followed by Malawi with an annual inflation rate of (+19,9 percent) whilst Rwanda recorded the least annual inflation rate of (-3,3 percent) in March 2015.

The HCPI-COMESA comprises of twelve divisions of expenditure. And they posted the following average price changes during the month of March 2015 from the prior comparable period:

Food & Non-alcoholic Beverages (+10.1 percent); Alcoholic Beverages and Tobacco (+26,1 percent); Clothing and Footwear (+8 percent); Housing, Water, Electricity, Gas and Other Fuels (+15,9 percent); Furnishings, House-hold Equipment and Routine House-hold Maintenance (+4.6 percent); Health (+3,9 percent); Transport (+9 percent); Communication (+1,3 per-cent); Recreation and Culture (+15,3 percent); Education (+21,3 percent); Restaurants and Hotels (+12,1 per-cent) and Miscellaneous Goods and Services (+3 percent).

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By Funny Hudzerema

HARARE - Mr Mkhululi Ndlovu, the managing director at Westchase Consultants, was recently elected Zimbabwe National Chamber of Commerce Mashonaland vice-pres-idency at the organisation's annual general meeting.

Prior to this he was the ZNCC Mash-onaland branch's chairman, a posi-tion that has been taken up by Inte-grated Properties managing director Mr Mike Juru.

The AGM also saw the appointment of Hunyani Holdings general man-ager Mr Nick Alves to the position of first vice chairman, and Surdax Cleaning &Landscaping manag-ing director Mrs Roselyn Charehwa Musarurwa as second vice chair-man.

Other new members of the exec-utive committee include Avenues Clinic managing director Mrs Mer-issa Kambani, The Power of Touch founder and managing director Mrs

Beatrice Sithole, Onara Transport managing director Mrs Juliet Muton-hori and BAT Zimbabwe human resources business partner Mr Fran-cis Mwale.

ZNCC Mashonaland regional man-ager Mrs Christine Kahari said the executive was selected according to the expertise in business and their knowledge of industry.

“The members were selected according to our constitution and we are set to do the final elections in

Victoria Falls to select the president from the regional presidents which were selected in all the regions,” she said.

Meanwhile, ZNCC Harare branch will hold its Annual Business Awards Ceremony on May 15, which will this year be running under the theme: “Maintaining Competitiveness in a Rapidly Changing Environment”.

Industry and Commerce Minister Mike Bimha is expected to be the keynote speaker at the event.

Categories this year include: Busi-ness Man of the Year, Business Woman of the Year, Entrepreneur of the Year, Most Innovative SME of the Year, Best Bank Supporting SMEs, Rural Business Person of the Year, Best Exporter of the Year, Best Social Corporate Responsibility Program, Best ICT Company of the Year and Best Parastatal of the Year.

“This event has grown from strength to strength and gained popularity over the years and last year’s attendance was close to 500 delegates,” said Mrs Kahari●

ZNCC Mashonaland appoints new executive

BH24

Mkhululi Ndlovu

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7 ANALYSIS7 NEWS

HARARE - The Zimbabwe Diamond and Technology Centre (ZDTC) on Tuesday unveiled the first batch of state of art equipment which will enable the coun-try to cut and polish diamonds before exporting.

The centre signed a multi-million dollar deal with Indian firm, Sahajanand Laser Technology Limited early this year for supply of the machinery.

Although Zimbabwe is among the top five producers of diamond in the world, over the years it has been losing out

through exporting rough diamonds.

ZDTC chairman Mr Lovemore Kurotwi said the last batch of the machinery was still awaiting clearance in India and was expected in the country soon.

Mr Kurotwi said the equipment had the capacity to cut and polish all diamonds mined in the country.

“This machinery is for the industry and with this technology one set of laser has the capacity to cut 100 big stones and alternatively 700 small stones per day. If we multiply by the number of units we are talking of thousands of stones to be cut per day,” he said.

“We are not doing any experiments. All other countries that are mining dia-monds have established such centres. It is only us who are the major producers but do not have the machinery to cut our stones,” he added.

At least nine experts from India are in the country to commission and train locals to operate the scientific equipment.

Mr Kurotwi said the Indians would be in the country until the local experts were familiar with the machinery.

He said China and Dubai had expressed interest in partnering the ZDTC.

Mr Kurotwi said there was need to merge the seven local companies that were cutting and polishing diamonds for easier control.

Speaking at the same event beneficia-tion firm Supertrend Enterprises chair-man Retired Colonel Charles Mugari said the only way the country could make money was by selling processed dia-monds.

“We are exporting jobs out there and with our current economic challenges it is high time we start thinking positively and see how we can stop exporting those jobs and create new ones by add-ing value to our own minerals,” he said

Zimbabwe mines most of its diamonds from the vast Marange fields in Mani-caland province which are estimated to have the capacity to supply

25 percent of global demand.

Researchers contend that Zimbabwe has the potential to generate over $8 billion and create over 200 000 jobs annually when it starts processing its minerals.- New Ziana●

Zim Diamond Centre unveils state of the art machinery

Mr Lovemore Kurotwi

BH24

Industrial stocks bucked a six-day losing streak to bump 0.47 (or 0.30 percent) in today's trades to close at 155.38.

AFDIS gained 10 cents to trade at 50 cents, while giant retailer OK Zim added a cent to 11 cents and StarAfrica moved up 0.40 cents to close at 1.40 cents.

ART was the biggest gainer, as it doubled to 0.60 cents, while bev-erages manufacturer Delta gained a marginal 0.01 cents to trade at 105.01 cents.

Only two counters traded on the downside. Telecoms giant Econet retreated by 0.52 cents to 47.98 cents whilst ZPI lost 0.20 cents to close at 0.80 cents. Higher trades in trades in Delta, Econet and AFDIS pushed the value of trades to $2,17 million.

The mining index was flat at 42.93 points as BNC, Falgold, Hwange and RioZim maintained previous price levels at 4 cents, 0.40 cents,

3.50 cents and 6 cents, respec-tively. - BH24 Reporter

- BH24 Reporter●

9 ZSE REVIEW

Equities recover after six day losses

REGIONAL NEWS 10

Growth in its South African ferro-chrome and coal operations were a highlight amid a mixed production performance for the March quarter reported by diversified global miner Glencore on Tuesday.

Although prices for almost all com-modities have continued to weaken, reflecting oversupply, expansion pro-jects launched during the years of higher prices are only now coming on stream.

Attributable ferrochrome produc-tion had risen 15 percent to 385 000 tonnes compared with the same quar-ter last year, as the Lion 2 expansion project startedlast April, Glencore

said. Total coal production from SA, Australia and South America grew 4 percent to 35.6-million tonnes, driven by the commissioning of two new pro-jects in SA.

Glencore, which produces and markets more than 90 commodities, including agricultural produce, reported higher quarterly output of ferrochrome, nickel and zinc compared with a year ago but lower output of copper, cobalt, lead and platinum group metals (PGMs).

The lower PGMs’ production reflected poor ground conditions at the Eland Platinum mine near Brits.

Within its energy division, the group’s South African export thermal coal pro-duction rose 14 percent and domes-tic thermal coal by 6 percent as the Tweefontein and Wonderfontein mines ramped up.

The group’s share of oil production in Equatorial Guinea and Chad grew 52 percent to 2.6-million barrels, both from the ramp up of two new fields and an increase shown in its interests in Chad.

Average cash copper prices have fallen 17 percent between the first quarter of last year and this year, while coal prices have fallen by about 20 percent on average over the past year.

BHP Billiton CEO Andrew Mackenzie said last month the group was deliv-ering strong operating results while efforts to improve productivity and lower costs were helping to offset weak prices.

Rio Tinto CEO Sam Walsh said the group’s solid production in the March quarter was driven by a focus on effi-ciencies. - BDLive●

Glencore's SA coal production grows

ArcelorMittal (SA) to reduce output at Newcastle by 6pc

ArcelorMittal's South African unit will cut second-quarter production by 6 percent at its Newcastle plant due to slack demand from its domestic market, it said on Tuesday.

"Production to be reduced by a further 6 percent to 4,300 tons per day to reduce the steel stock on hand," the firm said in a presentation deliv-ered at the plant in South Africa's eastern KwaZulu-Natal province. - Reuters●

11 ZSE

ZSEMOVERS CHANGE TODAy PRICE USC SHAKERS CHANGE TODAy PRICE USC

ART 100.00 0.60 ZPI -20.00 0.80

STARAFRICA 40.00 1.40 ECONET -1.07 47.98

AFDIS 25.00 50.00

OK ZIM 10.00 11.00

CFI 5.00 2.10

Delta 0.01 105.01

INDICES

INDEx PREVIOUS TODAy MOVE CHANGE

INDUSTRIAL 154.91 155.38 +0.47 POINTS +0.30%

MINING 42.93 42.93 +0.00 POINTS +0.00%

Stocks Exchange

12 DIARy OF EVENTS

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

POWER GENERATION STATS

Gen Station

24 April 15

Energy

(Megawatts)

Hwange 442 MW

Kariba 614 MW

Harare 30 MW

Munyati 29 MW

Bulawayo 26 MW

Imports 0 MW

Total 1153 MW

20 May 2015 - The Seventy-Fifth Annual General Meeting of Astra Industries Limited; Place: The Auditorium at Astra Park, Cor-ner Ridgeway North / Northend Roads, Highlands, Harare; Time: 12:00 hours.

21 May 2015 - The 20th Annual General Meeting of Members of NMBZ Holdings Lim-ited; Place: 4th Floor, Unity Court, Corner 1st Street/ Kwame Nkrumah Avenue, Harare; Time: 10:00 hours.

28 May 2015 - The twentieth Annual General Meeting of Dairibord Holdings Limited; Place: Mirabelle Room, Meikles Hotel, Harare; Time: 11:30 am.

29 May 2015 - The 13th Annual General Meeting of NICOZDIAMOND Insurance Lim-ited; Place: NICOZDIAMOND Auditorium, 7th floor Insurance Centre, 30 Samora Machel Avenue; Time: 12:00 hours.

THE BH24 DIARy

European Central Bank officials will debate tighter rules for the liquidity that Greek lenders rely on for sur-vival, two people familiar with the matter said, a move that underscores the fragility of the country’s financial system.

The Governing Council will discuss Wednesday whether to raise dis-counts on the collateral Greek banks pledge in exchange for emergency funding, said the people, who are familiar with the agenda and asked not to be identified. Governors will also review how much more Emer-gency Liquidity Assistance to offer Greek banks.

With access to capital markets shut and deposits flowing out of their

vaults, ELA is the last thread keep-ing Greece’s banks afloat. While economists say the ECB is unlikely to demand higher haircuts without a green light from Europe’s politicians, the debate shows how concerned some central bankers are about Greece’s solvency 100 days after Prime Minister Alexis Tsipras came to power.Greek bonds plunged yester-day as Tsipras’s government stepped up its game of brinkmanship with international creditors, blaming them for a failure to end an impasse in the country’s bailout talks.

“Tighter collateral requirements could send a strong message to the Greek government that time is running out,” said Holger Schmieding, chief econ-omist at Berenberg Bank in London.

Still, the ECB will not take big polit-ical decisions, without the support of European Union governments, according to Schmieding.

New Slide

Greek bonds resumed their slide today, with the yield on two-year notes rising 66 basis points to 21.64 percent at 11:06 a.m. in Athens, after climbing 149 basis points on Tuesday. The benchmark stock index slipped 0.4 percent after dropping 3.9 percent on Tuesday, the most in six weeks.

Greece is sending mixed signals about just how much money it has left. While officials say they can make payments to the International Mon-etary Fund this week and next, one policy maker signaled last month that the country may struggle to keep its finances afloat beyond the end of May.

An interest payment of 200 million euros ($225 million) to the IMF by Greece will be made today “as nor-mal,” Alternate Finance Minister Dim-itris Mardas said in interview with Mega TV. - Bloomberg●

13 INTERNATIONAL NEWS

ECB considers tighter noose on Greek banks

GREEK FINANCE MINISTER YANIS VAROUFAKIS

Mobile phones have proven to be potential game-changers in boosting access to financial products and services to people in Africa. This is particularly true for those at the bottom of the socio-economic pyramid as seen in East Africa. It has often been appraised based on its contribu-tion to ‘banking the unbanked’, but mobile money has achieved much more, it has saved the continent nearly $2 billion previ-ously lost annually to inefficient money transfer.UK-based think-tank, Overseas Development Institute (ODI), in a 2014 report noted that Africans in Diaspora pay an average of 12 percent to money transmitters to send $200 home. This is a far-cry from the global average of 7.8 percent and more than double the 5 percent target set by the G8. “These excess fees cost the African continent $1.8 billion a year; enough money to pay for the primary school educa-tion of 14 million children in the region.”

Why Africa pays so much

Weak competition, concentra-tion of market power and flawed financial regulation all contrib-ute to high remittance charges, according to ODI. Western Union and MoneyGram are the two leading money transfer oper-ators (MTOs) that account for two-thirds of remittance trans-fers, and ODI estimates that both will account for $586 mil-lion of the loss associated with the remittance ‘super tax’, part of it through opaque foreign currency charges. ‘Exclusivity agreements’ between MTOs, their agents and banks also restrict competition and make prices jump. However, WorldRe-mit, a UK-based company founded by a Somalian, is pro-viding much-needed petition.

“With fair and transparent prices, we are challenging the “Remittance Super Racket” of incumbent money transfer com-panies in Africa which continue their practices of agent-exclu-sivity arrangements and charg-

ing unreasonable fees. We are embracing mobile money as new technology that is set to revolu-tionise banking from the ground up and make money transfers more convenient for everyone,” CEO & Founder of WorldRemit, Ismail Ahmed said in an inter-view. Ahmed, who founded the online money transfer service in 2010 aims to use technology to shake-up the industry, which he considers stagnant. “By taking the industry online and refus-ing to engage in anti-compet-itive practices, we are bringing fairer, lower cost remittances to Africa.”Years of experience working with a number of remit-tance businesses, as well as international policy makers has taught him that mobile money is a technology that addresses an important human need; access to financial services. With this at the back of his mind, he part-nered with EcoCash and MTN to enable instant transfers to the telcos’ mobile wallets. The com-pany is also close to launching instant mobile money transfers

to Econet in Burundi. More than 50 percent of Worldremit’s transfers to Africa are currently received as Mobile Money or air-time top-ups.

Why is remittance impor-tant to Africa?

Money sent home by friends and relatives working abroad are critical to the survival of many in rural communities within Africa. Without a decent job or mon-ey-making trade, many rural dwellers depend on handouts to cater for domestic bills.

This has made the innovative transfer service popular within Africa. The continent received $32 billion in 2013 and is expected to receive more than $40 billion by 2016. Somalia is heavily dependent on remit-tances. Money sent home by Somali Americans to Mogadishu is estimated to hit $215 mil-lion annually. This accounts for about 4 percent of the country’s GDP.

14 ANALYSIS

How mobile money is saving Africa $2bn annually

14 ANALySIS

According to Jonathan Scanlon of Oxfam America, remittances to Somalia is the largest and most impor-tant financial flow going into the country. “It really is a lifeline for the coun-try.”Nigeria, Africa’s larg-est economy also depends on remittances for foreign exchange. Money transfer, mainly from North America and Europe, makes up the country’s second highest foreign exchange earner. The country is also Africa’s top remittance recipient, accounting for around two-thirds of total remittance inflows to Sub-Saharan Africa. Remittance to Nige-ria is recorded at $21 bil-lion for 2014 alone. While making a case for donor agencies to restructure the way aids are channelled for more efficiency, Hong Kong-based Ghanaian academic Adams Bodomo claimed that Africans living outside the

continent send more money home than what traditional Western donors send as Official Development Assis-tance (ODA).Africans in the Diaspora have recog-nised the importance of the money they send home to their families are. With mobile money proving to be a more effective means of transferring funds home, they are increasingly adopt-ing the service.A GSMA report for 2014 highlights that “2014 saw a steep increase in the number of international remittances via mobile money, primarily driven by the introduction of a new model using mobile money as both the sending and receiving channel”.

Banking the unbanked

Mobile money continues to expand the reach of financial services in highly unbanked Africa. Accord-ing to Frans Prinsloo, Man-

aging Director at Hollard International, South Afri-ca’s largest privately-owned insurance group, “The rapid uptake of mobile telephony, the introduction of smart phones and cloud comput-ing, and the availability of affordable data have for-ever changed the financial services landscape.”Today, the number of active Mobile Money accounts globally now exceeds 100 million and sub-Saharan Africa accounts for more than half (53 per-cent).“Cash is increasingly becoming an obsolete tech-nology as the developing world sprints ahead of the developed in its adoption of Mobile Money,” Ahmed of WorldRemit further explains.Bill Gates recently made a big bet that by 2030, almost everyone will have a mobile money account. “Not having access to a range of cheap and easy financial services makes it much more difficult

to be poor.“Traditional banks cannot afford to serve the poor because of their costs. That’s why 2.5 billion adults don’t currently have a bank account,” Gates stressed.Mobile money is affording the poor access to more financial services everyday. From savings account to credit insurance, the tech-nology is saving Africa, a continent where nearly 50 percent of its population are resident in rural communi-ties.

However, there is still a long way to go to finally estab-lish a robust cross-border transaction market using mobile technology. Although its potential to lower costs is undisputed, its use remains limited due to the regulatory burden related to combating money laun-dering and terrorist financ-ing, according to the World Bank. - Ventures Africa Ventures Africa●

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