Mugabe’s solution to hunger

They will need assistance

By Daniel Chigundu

PRESIDENT Robert Mugabe’s new cabinet will be called early into action following stunning revelation by the World Food Program (WFP) that about 2.2 million of rural people face massive starvation early next year.

 The WFP says the magnitude of the hunger and affected areas are contained in the Zimbabwe Vulnerability Assessment Committee (ZimVAC) rural livelihoods report were it is estimated that about one in every four rural people will need food assistance early 2014.

It is also believed that this will be the worst hunger since 2009 when more than half the population required food assistance.

In his speech at the official opening of the 103^rd edition of Harare Agricultural Show President Mugabe promised that his government would mobilise grain for the country through imports and other measures.

“In order to mitigate the effects of hunger, the government is mobilising grain from areas of surplus to needy areas. In addition, measures have been put in place to import grain from neighbouring countries.

“Going forward, it is government’s intention to ensure food self-sufficiency for the nation. Further to alleviate the adverse effects of the vagaries of climate change, government has developed multi-sectorial strategies in line with the Food and Nutrition Security Policy.

“More specifically in the agricultural sector, these involve enhancing the development of drought tolerant and short season crop varieties, the rehabilitation and development of irrigation infrastructure, promotion and adoption of technologies like conservation agriculture as well as promotion of water harvesting and water conservation techniques,” said Mugabe.

Although this is expected to be a test of character for the new government that will also have to deal with the liquidity crisis biting the economy, the WFP has indicated that it will work closely with government to help the affected.

“Many districts, particularly in the south, harvested very little and people are already trying to stretch out their dwindling food stocks.

“WFP is working closely with the government and partners to respond to the looming food crisis and will start food and cash distributions to the most vulnerable in October,” said WFP country director Sory Ouane.

Since the turn of the millennium when government implemented the chaotic land reform that was often accompanied with violence, Zimbabwe has struggled to meet its grain requirements.

Zimbabwe which before the land reform used to be the breadbasket of Africa has been relying on grain imports from South Africa and Zambia.

What makes the situation even harder for the country is that most beneficiaries of the land reform have since dumped the low paying maize, in favour of the highly priced tobacco.

Statistics on the ground indicate that Zimbabwe’s tobacco output has dramatically increased with a further increase expected in the coming season.

Tobacco statistics have also shown that about 163million kilograms of the golden leaf had gone under the hummer at various auction floors as at July 23.

During the tenure of the inclusive government President Mugabe attributed the country’s agricultural woes to deliberate under-funding by the former finance Minister Tendai Biti.

Zimbabwe unattractive PPI

By Daniel Chigundu

Badly needed... who will bring his money to Zimbabwe

ZIMBABWE which is battling to lure Foreign Direct Investment (FDI) to help capitalize struggling businesses and ease the liquidity crisis bedeviling the economy since dollarisation has been declared unattractive for business.

Results released from the global mining survey 2012/2013, produced by the Fraser Institute titled Policy Potential Index (PPI) has indicated that Zimbabwe’s mining rank has plunged from glory.

The PPI said Zimbabwe was only able to collect a mere 13.4 points out of 100 compared to 21.8 points recorded last year.

“High PPI represents policy attractiveness whilst a low reading indicates unattractive policies. The low reading saw Zimbabwe ranked 91 out of the 96 jurisdictions compared to 74, thus leaving Zimbabwe sitting in the list’s bottom 10 countries,” said the survey.

Since 2009 Zimbabwe has had to do with an unstable political environment that was laden with unnecessary clashes between political parties that formed the inclusive government.

The clashes are also blamed for producing an unattractive economic environment characterised by policy inconsistences and diverging views regards the implementation of the controversial indigenization policy.

According to economic analysts these wrangles are the major reason behind the country’s poor performance.

Other nations that had the least ranking on policy attractiveness were Indonesia, Vietnam, Venezuela, DRC and Guatemala.

Finland on the other hand had the highest ranking of 95.5 points with Sweden on second position while Botswana in terms of African countries had the highest ranking.

The Fraser’s PPI Index considers factors such as legal system, taxation system, uncertainty concerning the administration, interpretation and enforcement of existing regulations.

It also considers uncertainty concerning environment regulations, trade barriers, political stability and corruption among other factors.

Africa as a continent was also reported to have dropped for the fifth year as most nations within the continent aim to reform their respective mining industries.

Market watchers Tetrad Securities have warned against brushing this poor performance aside since mining is a critical contributor to the country’s coffers.

 “The drop in Zimbabwe’s ranking on policy attractiveness need not be underestimated particularly as the mining sector is the key contributor. In 2012 the mining sector contributed an estimated 16 percent of the country’s GDP.

“Our view is that with the huge capital requirements for the sector there is need for policymakers to come up with policies that stimulate growth of the industry,” Tetrad said.

Mining companies in Zimbabwe are still waiting for the finalization of their indigenisation proposal by government amid unconfirmed reports that indicate the new government is set to introduce a host of changes to the indigenisation regulations -

Doom as Dalny Mine closes

By Daniel Chigundu

President Mugabe...in a fix

THE country’s mining sector which had been showing some signs of growth since dollarization has been dealt a major blow following the closure of Canadian owned Dalny Mine.

Dalny Mine a subsidiary of Toronto listed mining company New Dawn closed shop on August 30, following alleged power disconnection notice from Zesa.

In its quarterly results for the month ending June 30, New Dawn had expressed fears for this closure, but had hoped that it would not come through as they were putting their all in trying to address the issue.

In a statement New Dawn said it was placing the mine under care and maintenance while workers will go on unpaid leave.

“Without electrical power, the company cannot operate the mine and thus forced shut down the Dalny Mine operations.

“As part of the shut-down, the Dalny Mine workforce is being placed on unpaid leave and the company is moving the Dalny Mine to care and maintenance.

“The company intends to engage with creditors of the Dalny Mine operations to craft a plan that will address the mine’s outstanding trade payables, which currently total approximately US$3.1 million.

“The mine is expected on care and maintenance until the company is able to satisfactorily address the financial and operational issues that contributed to its shutdown or until a potential sale, joint venture or some other arrangement is realised,” the statement said.

While the Tetrad report agreed that there was something to do with power problems at Dalny Mine it also revealed that issues to do with the delayed approval of the indigenization process, increasing payroll and power costs, high domestic royalties, taxes and fees might have prompted the untimely closure.

Tetrad said the closure of Dalny Mine paints a doom picture for the country and mining sector since mining is one of the key contributors to the Gross Domestic Product (GDP). Mining accounted for 16 percent to the national coffers in 2012 and its closure might pose some challenges for the new government.

“Closure of Dalny Mine does more harm than good for the sector. At a time when the growth of the sector was downgraded from 17.1 percent to 5.3 percent, closure of Dalny Mine implies low gold output.

“Electricity tariffs and royalties are continuously rising at a time when global commodity prices are weakening. This is reducing operational performance of most mining houses thus leading to a reduction in overall earnings for the sector.

“Added to that, the absence of medium to long term finance means the outlook for the sector is likely to remain bleak. Thus there is need for policy makers to address the critical issues for the sector and promote rather than dissuade investment,” said the Tetrad report.

New Dawn has however indicated that they will not hesitate to close all their mines in Zimbabwe should the operating environment continue to be unattractive for business.

The company is reportedly also in the process of reviewing the status of the exploration and evaluation of its assets which resulted in a program to sell some of its mining assets that are not considered integral to its long-term strategy.

The mining giant is currently engaged with several potential parties in an attempt to sell two of their mines Old Nic Mine and the Venice Mine.

Mining is a high capital business in the country and lack of lines of credit to recapitalize is reportedly hampering production and has forced some companies to put their mine under care and maintenance.

Mugabe shocks show-goers

Bona Mugabe in black and white suite

By Daniel Chigundu

PRESIDENT Robert Mugabe shocked show-goers on Friday August 30 when he rewarded them through his company Alpha Omega Dairies for attending the 103^rd edition of Harare Agricultural Show.

Alpha Omega which is involved in the manufacturing of dairy products is a subsidiary of Mugabe’s controversial company Gushungo Dairies which a few years ago was reported to have forced Nestle Zimbabwe to buy its milk which had gone bad after failing to get customers.

Officials manning the Alpha Omega stand which was exhibiting for the second time at the show indicated that the first family had bought yoghurt and dairy juices for all the children and woman attending the show.

And to make matters more interesting the newly married Bona Mugabe helped in dishing out the free products to the jubilant recipients, who were pushing and shoving each other in long and winding queues that formed at the company’s stand opposite the Hall of Commerce.

“All children and women come and get free yoghurt and juices that amai Mugabe (first lady Grace Mugabe) has bought for you, come and get this proudly health Zimbabwean products.

“Nothing has been imported it’s all being made by Alpha Omega Dairies amai’s company come all of you there is plenty for everyone, come please stand in the queues, you will all get.

“Our mother doesn’t come to her children empty handed,” shouted one of the officials at the stand using a microphone.

The generous stunt by the octogenarian however left many people amazed because he (Mugabe) publicly disowned Bulawayo and Harare residents for showing him the middle finger in the just ended harmonized election.

Mugabe was officially opening the Harare Agricultural Show.       

Govt departments rescues Show

Traditional Doves stand at HAS

By Daniel Chigundu

GOVERNMENT departments, parastatals, tertiary institutions and a few commercial banks are the only big institutions that exhibited at the just ended Harare Agricultural Show (HAS), as other companies adopted a wait and see approach on the new government.

Last year the show was dominated by Small to Medium Enterprises (SMEs) who occupied close to 62 percent of exhibition space while big companies only accounted for 38 percent

Although Zimbabwe Agricultural Show Society (ZAS) public relations manager Heather Madombwe tried to lie in vain that there was 98 percent uptake of space this year but the situation on the ground told a different story.

Lack of interest by traditional and usually reliable exhibitors such as Doves Morgans and Chicken Inn is said to have dealt a catastrophic blow to the 103^rd edition of HAS compared to previous version were conglomerates and multinational companies would hog the limelight.

A top Harare based economist who spoke on condition of anonymity indicated that the situation was a true reflection of what is happening in the country and added that if it were not for government firms the show would have been a total disaster.

“One needs only to move around the exhibition halls to see who the biggest exhibitor is, this year. There is one hall which is only occupied by government departments, parastatals and universities but you can still see that the stands are few there compared to last year.

“The upper part of Nelson Mandela Hall has only three stands while the lower part is visibly empty, other companies have resorted to outside stands and tents which are a bit cheaper.

“The other part of the Exhibition Park resembles a ghost town but it’s not a surprise at all because that is the same situation if you visit the industries and situation is being reflected here also,” he said.

Exhibitors interviewed by this blogger expressed disappointment with the crowd that visited the show ground saying that they did not get value for money as they realized inquiries below their expectations.

Others also took a swipe at the number of days arguing that they were too many and that they are not conducive for business.