Nicoz shareholders ask for more

NICOZ Diamond shareholders have described the US$0.064 cents dividend as unreasonable and too small especially for the minority shareholders of the company.

Speaking at the company’s 12^th annual general meeting minority shareholders said they expected something reasonable.

“We expected something reasonable above (US$0.064cents) that, but we have no option maybe that’s what is in the market. So I am proposing that small shareholders should be given opportunities to benefit from the company’s operations,” he said.

Another disappointed shareholder who added her voice to the issue said it was more reasonable to exchange their dividend for shares.

“The amounts (dividend) are too small, it is better to get shares than to get small amounts into your bank account,” she said.

Explaining the reason behind the dividend company chairman Albert Nduna said the company performance was the same as prior year and therefore it was prudent to give the same dividend given last year.

“The Board thanks the management and staff for the efforts put to guard the profitability of the company given the operating environment. The performance of the company in 2013 allowed the Board to recommend a dividend of US$0.064 cents per share to the shareholders of the company, the same as that of 2012 as the performance for the two years have relatively been the same.

“Shareholders got their dividend around May 21, 2014 and those who have not are encouraged to contact ZB transfer secretaries and update their banking details,” he said.

Nduna added that the short term insurance sector in Zimbabwe continued to be heavily traded with 24 active players vying for US$200 million worth of premiums, but was quick to point that there is still room for growth.

He said at peak the market used to record almost US$600m worth of premiums and that the prevailing situation is however just mirroring the economy at the moment where many sectors are operating at low capacity utilization levels.

Nicoz said the insurance market grew by 8 percent from 2012 in terms of total premiums and the company grew by 24 percent showing that it is gaining market share of an already existing pool of business.

The company chairman said they have observed an encouraging trend were people are realising the importance of getting insured by tried and tested companies than as compared to going for the prices.

“We have seen clients becoming more discerning and realizing that insurance is more about security than it is about getting the cheapest price. You want to be assured that when an unfortunate event happens; you are quickly financially restored by your insurer, you never know what will happen!

“Nicoz Diamond has been able to pay all its obligations, and its financial strength has been subjected to independent review year after year by Global Credit Rating of South Africa, maintaining an A- rating since 2006,” he said.

Nicoz Diamond optimistic

NICOZ Diamond managing director Grace Muradzikwa says her company remains optimistic of a bright future despite not yet seeing positive signs in the economy.

Muradzikwa told shareholders at the company’s 12^th annual general meeting that she remains hopeful of the economic policies being crafted by government to stir economy out of the murky waters.

“Though the outlook of 2014 is not yet clear, we remain optimistic that policies being put in place by government will go a long way in helping stir the economy forward,” she said.

The macro-economic environment obtaining in Zimbabwe remains a major challenge for businesses operating in the country mainly because of the chronic liquidity constraints coupled with subdued economic performance, which has seen capacity utilisation in industries ranging between 45 and 39 percent.

Majority of companies are seeking funds for recapitalisation but local banks have been unwilling to offer long-term funds and at reasonable rates.

Barclays Bank announced at its annual general meeting a few weeks ago that it is continuing with its safe-lending strategy owing to high levels of defaulting in the country.

The bank also said majority of deposits in the bank are short-term and transitory in nature and cannot be loaned for a long time.

However the unavailability of these funds has resulted in most companies scaling down operation while many others have closed shop.

A few banks that have been a bit generous with their loan book are said to be only giving short-term loans with a maximum of 36 months and at usurious rates.

The under-performance obtaining in the economy at the moment has derailed minister Patrick Chinamasa’s economic growth projection of 6 percent with the World Bank saying the economy will only grow by a mere 3 percent this year.

Economic expects have blamed the country’s high risky status, policy inconsistencies and the controversial indigenisation program being implemented by government as the major reasons that has resulted in foreign investors shunning the country.

Under the Indigenisation and Economic Empowerment Act all foreign owned companies operating in the country and whose value is more than US$1 are required to cede 51 percent shareholding to locals.

And there has been conflicting statements with regards to the 51 percent stake, with some in government saying they will be acquired at market value.

But President Robert Mugabe is on record during his election campaigns arguing that locals will not pay a cent for the shares by virtue of being the owners of the land and resources.

Major mining companies such as Zimplats, Mimosa Mining and Unki Mine among others having already complied with the law.

AfDB reaffirms support to ZIM

THE African Development Bank (AfDB) says it is committed to support efforts by government to turn around the economic and social situation prevailing in the country.

Addressing delegates at the launch of the Youth and Tourism Enhancement Project (YTEP) and the Governance and Institutional Strengthening Project (GISP), AfDB resident representative Mateus Magala said his bank will work with government and other stakeholders in changing the status quo in Zimbabwe.

“…As the AfDB celebrates its 50th anniversary, permit me to seize this opportunity to once again reaffirm the commitment and availability of the African Development Bank Group to support the efforts of the government of Zimbabwe in addressing the major challenges to socio-economic development in the country.

“The AfDB will continue to work with the government and partners to restore business confidence and to help the country to fully reengage,” Magala said.

The projects approved by the executive board of the AfDB in December 2013 will see the YTEP and the GISP projects being financed to the tune of US$4.1million and US$8million respectively.

The funded projects are set to contribute towards improving public sector capacity for economic recovery and inclusive growth as to the reduction of youth unemployment and poverty in Zimbabwe through sustainable pro-poor economic growth and improved socio-economic development led by the private sector.

And Magala said to achieve these goals, the projects will strengthen the enabling environment in order to improve the competitiveness of the private sector and thereby promote broad-based economic growth and development, export diversification and job creation.

The AfDB boss also called for effective leadership from the ministry of finance and economic development who will be managing the implementation of the project to ensure effective collaboration among all stakeholders and ensure that it is efficiently executed.

“I would like to call on all of you that will be implementing these projects to learn from experiences of other Bank supported projects. Issues of rules and procedures, financial management, procurement, monitoring and evaluation should be comprehensively discussed in order to start the implementation of these projects on a good platform.

“So often projects fail because of poor implementation and we hope this will not be the case with this excellent project,” he said.

The bank said its support to YTEP and GISP is consistent with the government’s  priorities as enshrined in the Medium Term Plan (MTP 2011-2015) and the Zimbabwe Agenda for Socio-Economic Transformation (ZimAsset 2013-2018), as well as AfDB’s 2013-2022 strategy that focuses on growth  that is inclusive across age and geographies.

Thus these projects are designed to seize the youth dividend by enhancing the skills of Zimbabwean youth for improved employability, job creation, competitiveness and development of the private sector and poverty reduction.

Empowerment funds exhausted

POSSIBILITY of other youths accessing the youth empowerment loans hangs in the balance as banks have exhausted their allocated funds while some beneficiaries are said to be failing to repay their loans.

Funds under this facility are being handled by CABS, The Commercial Bank of Zimbabwe (CBZ) and The Infrastructure Development Bank of Zimbabwe (IDBZ).

However CBZ (US$1.7milion) and the IDBZ (US$250 000) have indicated that they have utilised all the money allocated to them under the facility.

The soft loan revolving fund set up in 2009 was put in place to build capacity to youths who are not involved in any mainstream economic activity, through income generating projects.

Addressing delegates at a youth fund dialogue meeting organised by the Zimbabwe Youth Council, CBZ Head-Microfinance and Consumer loans Handson Maeresera said although they have exhausted their share of the fund, they are worried by the level of non-repayment.

“The available funds allocated to CBZ were exhausted, but this is a revolving fund which must be repaid but youths think this is money to spend.

“Most of the money is not being spent on projects they were applied for thereby affecting the repayment plans, that’s why most of them have failed to pay back.

“We are let down by the youths,” said Maeresera.

Speaking at the same meeting IDBZ Head-Special Programs Gregory Mupfumira while bemoaning that his organisation had received a small amount he also appealed to the beneficiaries to honour their loans.

“We received US$250 000 in a country that has 10 provinces you can do the sums and you can come to the conclusion that it’s really nothing, though we are not complaining since it is a revolving fund.

“However some people who benefitted from the fund are not being honest with us. If your project was funded do the best to help others being funded by paying your loans.

“We are appealing to those who benefitted that if they are facing challenges they should come and see us so that we can see how best we can help them,” Mupfumira said.

The IDBZ official indicated that while they are aware that due to the prevailing economic situation in the country markets are now depressed and it’s now more difficult to acquire raw materials, beneficiaries are best advised to seek guidance from the banks on the way forward than to hide.-