Tobacco decentralisation applauded

MARKET watchers have applauded the Tobacco Industry and Marketing Board (TIMB) for decentralising tobacco auctioning saying the move was a step in the right direction.

Decentralisation comes at a time when more farmers were opting to grow highly rewarding golden leaf resulting in the number of registered tobacco farmers swelling to 91 278 from 70 904 in the previous season.

Zimbabwe is this year expected to produce 170 000 tonnes of tobacco from about 90 000 hectares planted at a yield of 1.88 tonnes per hectare.

In previous selling seasons, farmers were required to transport their produce to Harare where they would spend many nights and days at auction floors.

Tetrad Securities in its weekly market watch ending February 14, 2014 said the decentralisation will help bring buyers closer to farmers.

“During the week under review, TIMB, for the umpteenth time, issued a reminder to the effect that the 2013/14 marketing season will open on the 19th of February 2014.

“Three auction floors were licensed to handle auction sales and these are; Tobacco Sales Floor (TSF), Boka Tobacco Auction

Floors (BTAF) and Premier Tobacco Auction Floors (PTAF).

“In addition, Mashonaland Tobacco Company will handle contracted crop sales through its floors which are located in Harare, Rusape, Mvurwi and Karoi.

“The move by TIMB to slowly decentralise contract sales is a step in the right direction.

“This is so because the sellers will be brought closer to the buyers compared to a scenario where all sales are done in Harare.

“This enhances the quality of the crop compared to a scenario where farmers have to bring the crop to Harare from as far as Karoi,” said Tetrad.

Tobacco last year grossed around US$616.1 million and expectations are high this season that the figure will rise due to massive interest to grow the crop among farmers.

Harare disappoints EMA

 

THE Environmental Management Agency (EMA) says city councils, especially the City of Harare, are not doing enough to manage solid waste.

Statistics show that of all the 57 orders issued by EMA in 2013, 43 of them were issued to Harare City council.

Orders are legally binding documents ordering a city council to clear rubbish in undesignated areas.

Despite the 43 orders, a media tour organised by EMA around Harare’s high density suburbs especially Budiriro and Highfield 3, exposed heaps of rubbish dating back to June 2013 that remain uncollected.

Vendors at Tichagarika Shopping Centre in Highfield 3 said city officials have told them on countless occasions that they have no fuel to collect the accumulating rubbish. 

The media recently exposed the hefty salaries earned by high ranking Harare City Council officials at the expense of service delivery, which has nose dived since the introduction of multiple currencies in February 2009.

Harare City Council is on record saying they have no money and equipment to effectively clear rubbish and provide adequate water to residents alleging non-payment of rates.

EMA’s environmental education and publicity manager Steady Kangata told the media during the tour that Harare and other city councils have let his organisation down by failing to effectively deal with rubbish.

“…in city centres there is no proper solid waste management and in residential areas. We are exposing people to diseases caused by rubbish.

“But our biggest challenge and let down are local authorities; imagine that people at times put litter in bins and they get filled but no one gets to empty them timeously.

“Harare has failed to sustain clearing of rubbish despite the Orders we issued to them. What is happening is that they clear one spot and as they move to other spots, heaps of rubbish start to accumulate where they would have cleared because they take long to do it.

“The situation is not exclusive to Harare but even other cities are failing,” said Kangata.

He also took a swipe at litter bugs especially those that throw litter from their vehicles saying they risk being arrested.

He added that his organisation is working with the Zimbabwe Republic Police and Harare Municipal Police to bring litter bugs to book.

Last year, the agency said about 703 litter bugs was arrested and of that number 203 were people who throw litter from their vehicles, especially those with posh vehicles while 500 were pedestrians.

Trade deficit widens

By Daniel Chigundu

THE gap between imports and exports continues to widen on the back of the country’s collapsing industrial production capacity and poor exports, Zimbabwe Statistical Agency (ZimStat) has revealed.

“Zimbabwe imported goods worth US$6.55 billion against exports of US$2.78 billion in the ten months to October 2013.

“Resultantly, the trade deficit widened by 25 percent to US$3.77 billion from US$3.02 billion recorded in August,”

ZimStat added that South Africa remained the largest trading partner accounting for 48 percent (US$3.17 billion) of the imports and 73 percent (US$2.04 billion) of exports mainly driven by the country's mineral outputs.

Since the land exercise Zimbabwe has been importing food from South Africa and neighbouring countries due to poor farming methods employed by the new farmers, coupled with erratic rains.

Late last year MDC-T shadow finance minister Tendai Biti said the problems facing the country cannot be patched up overnight and that the situation is set to worsen on the back of an under-funded agricultural season.

“I have move around the country and there has not been much in terms of land preparation, it means we are going to experience food deficit, agriculture has been underfunded, inputs distributed under the presidential scheme are too little and banks have only lent less than US$200million.

“Economic indicators show that there will be a serious shrink of 23 percent in the agricultural sector, 32 percent in mining while the economy will grow by between 1.5 percent to 1.8 percent next year,” said Biti.

Capacity utilisation is said to have deteriorated to below 39 percent owing to a cocktail of challenges chief among them expensive but unreliable water and power supplies, lack of spare parts and unavailability of cheap funds for recapitalisation.

The situation has also resulted in retrenchments of at least 300 workers per week with many companies downsizing or folding operations.

Seasoned market watchers Tetrad Securities said the situation is not health and requires immediate attention.

“Solutions are also needed for the widening trade deficit. We remain a net importer owing to capacity constraints in industry. The further 25 percent increase in the deficit to US$3.77billion shows that the situation continues to deteriorate which is not healthy.

“Furthermore, the deficit was mainly affected by the low exports that have been recorded this year. Value from exports was low owing to softening global commodity prices but what is worrying is the fact that production in most minerals has remained very low due to funding issues and this has made Zimbabwe extremely vulnerable,” said Tetrad.

Could this be the solution?

By Daniel chigundu

IN the last weeks of November last year a new political party (Transform Zimbabwe) was formed out of a prayer network and claims to be God’s own project to walk the country out of its political, economic and social misfortunes.

Zimbabwe is currently in a serious economic crisis underpinned by 80 percent unemployment rate, shortage of power, a huge wage bill, an unfunded agriculture season, domestic debt, sovereign debt, deindustrialisation, lack of FDI, lack of domestic savings and vulnerabilities in the Banking sector.

The coming onto the scene by Transform Zimbabwe has however resulted in many people wondering whether this could be the “Moses” set to guide the country’s exodus from poverty to the good times.

Interim president Jacob Chengedzeni Satiya Ngarivhume says his party will focus on re-engagement with western countries, building an inclusive and competitive economy and empowering every Zimbabwean through access to education, training and health facilities.

“In Prayer Network Zimbabwe, we have created a network throughout Zimbabwe to pray for the spiritual renewal of the nation and heal the social and economic fabric of our society. 
“Our objective is to nurture in all our members those values of integrity, trust, transparency, accountability and goodwill we would like to see in our leaders
“Our aim is to cultivate leaders from all walks of life whose inner spiritual transformation, both in their private and public life, makes them exemplars and role models for those they lead,” he said in a statement.

It remains to be seen how the party proposes to tackle the many challenges being experienced in the economy today which according to former finance minister Tendai Biti is a result of dearth of leadership with the craft competence ,the care and the vision to tackle the present challenges.

So dire is the situation in Zimbabwe that in the past few months there has been massive devaluation of business confidence, activity and wealth creation, with retrenchments, company closures and capital flight being the order of the day since elections.

The liquidity crisis is so bad that echoes of 2008 are now reverberating, there are now limitations on cash withdrawals, telegraphic transfers are now taking longer and cash at ATMs is scarce for the bigger Banks and totally extinct for the smaller Banks.

Statistics also indicate that up to August 2013 imports have been around US$5.6 billion against exports of US$2.3 billion resulting in a trade deficit of around US$3 billion

Tendai Biti said the problems facing the country cannot be patched up overnight as they are a structural problem reflecting collapse of the productive sector, adding that it is a supply side issue demanding a supply side solution.

Indigenisation not friendly

By Daniel chigundu

THE Indigenisation Act and Regulations have rendered the operating environment unattractive to investment especially in platinum mining, Tetrad Securities has said.

Under the Act (indigenisation) foreigners with businesses operating in the country are required to cede 51 percent of shareholding to locals, reportedly at no cost.

High ranking Zanu PF officials have repeatedly ascertained that by virtue of being indigenous Zimbabweans, locals are automatically entitled to free majority shareholdings in any foreign own business because they own the country and the resources being exploited.

However this type of indigenisation has been castigated by both local and international economists who argue that it is not suitable for the current economic situation obtaining in the country.

Earlier in the year Paul Jourdan, a consultant hired by the Ministry of Mines to craft the country’s Mineral Policy said the current indigenisation policy was wrong because the country is desperate for FDI to address skills and capital gap.

In its weekly market watch for the week ending November 15, 2013 Tetrad said while the country could benefit from the anticipated platinum deficit, the lack of investment in platinum mining due to indigenisation presents a worrying situation.

“We are encouraged by the platinum report in as far as Zimbabwe’s export earnings are concerned. With Zimbabwe having the second largest deposits of platinum, we believe the deficit position will somehow support prices.

“With platinum prices expected to trade between US$1,360 and US$1,580 an oz we are of the view that Zimbabwe will be able to lift its export earnings.

“Our major worry however relates to the indigenisation regulations which have been reported to be dragging down total production from Zimbabwe.

“Whilst the platinum sector has to a larger extent not been affected by indigenisation compared to other mining sectors, we maintain our view that the investment climate is not conducive.

“There is need for policymakers to formulate policies that encourage investment inflows in platinum production and also need for value addition so that Zimbabwe generates more value from its minerals,” said Tetrad.

Overall, the interim platinum market is set to record a much wider deficit of 605,000oz in 2013 compared to last years’ 340,000oz.

This will be the third consecutive year in deficit for the metal. Platinum prices have however been soft during 2013 as they have been unresponsive to supply side concerns mainly from strikes in South Africa.

The metal’s prices have fallen from a peak of US$1,730 in February to trade below US$1400. Into the future, Johnson Matthey forecasts another deficit for 2014 as demand will continue to outstrip supply.

Global supply for platinum on the other hand is expected to grow by a marginal 1.59 percent to 5.74million oz in 2013. According to the report much of the 1.59 percent growth is expected to come out from Zimbabwe.

This country is expected to register a record production of 400,000oz of platinum, which is an 18 percent increase compared to 2012’s production of 340,000 oz.

The growth is expected to emanate from Zimplats’ Phase 2 expansion which is expected to ramp up production at the mine. South Africa’s production which accounts for close to 75 percent of platinum supplies is expected to remain largely unchanged mainly affected by the legal and illegal strikes that have hit the sector.-

Economy in auto-cruise: Biti

By Daniel Chigundu

FORMER finance Minister Tendai Biti has said the lack of confidence and trust in the country has driven the economy into auto cruise mode.

Biti said the only possible solution that can take the country out of the situation was through moving towards building and restoration of the lost trust.

“If the wage bill is now 110 percent of total expenditure, self evidently there is no fiscal leg room to finance social services and public sector infrastructural programs. The truth of the matter is that the economy is on auto cruise to a melt down and fast.

“Economic fundamentals do not change dramatically within the space of three months. What has altered is confidence and trust. A trust deficit has emerged and with it all the things that happen in low trust high cost economy.

“The starting point is therefore not one of money or some dubious ill written policy. It has to be the building of, and restoration of trust and confidence.

“Speeches alone will not be sufficient but bold actions that will deal with issues of transparency, bilateral aid, foreign direct investment and the issue of the disproportionate wage bill,” Biti said.

Speaking on the delayed budget presentation Biti said it is wrong economics to assume that there is a Santa Claus out there who will fork out the billions of dollars that are required for a budget, arguing that  one must work with what is available, which he said is a lot of money were it to be well managed.

“…credit has a correlation with the debit that is the golden rule of accounting. As every accountant student or teacher knows out there, you give to the right what you take from the left. Some would prefer to call it “you eat what you kill”.

“So budget presentation cannot be delayed because of hope or ambition. The bad signals being send by delayed budget are just not worth the delay.

“Hard decisions must be made particularly on the expenditure side. There is too much hubris being carried which if boldly addressed can save a lot of millions,” he said.

Zimbabwe is experiencing a sluggish economic situation driven by such challenges as erratic power supplies, liquidity constrains and depressed capacity utilisation of 40 percent which continue to adversely affect the economy.

The Zimbabwe Revenue Authority (Zimra) last month published its third quarter (Q3) revenue collection performance in which it collected US$897.3 million against a target of US$904.9 million representing a negative variance of 0.84 percent.

This became the second consecutive negative variance after the six percent miss recorded in the second quarter (Q2).

In its weekly market watch surveys seasoned market watchers Tetrad Securities said the revenue collections by Zimra serves to highlight the difficult situations obtaining in the country and that if it continues it will create deficits that might bring headaches.

“Zimra’s Q3 report mirrors the slowdown in the economy. The revised revenue target of US$3.91 billion for 2013 according to the Mid-term Fiscal policy may be difficult to attain. This is so because we expect the current subdued environment to persist for the remainder of the year. More so, Zimra has only managed to report a positive variance of 5 percent in Q1 whereas for Q2 and Q3had negative variances of 6 percent and 0.84 percent respectively.

“Unless there are other sources of revenues for the government the 2013 revenue target seems unachievable. With government revenues expected to be below target we foresee the government failing to maintain its “eat what you kill” policy as government expenditure is not declining and not expected to decline anytime soon.

“For an already cash strapped government, low revenues may create deficits that may be difficult to fund especially given the fact that we are not using our own currency.

“The little contribution coming from mining royalties is also worrying. There is need for government to increase transparency on how mining revenues are accounted for especially on diamonds. This is also the same view shared by IMF,” Tetrad said.-

Long way before media uhuru

By Ndafadza Madanha

IN 2008 following a disputed poll Zimbabwe's three major political parties appended their signatures to the Global Political Agreement (GPA).

The deal brokered by former South African president Thabo Mbeki contained several reforms that were to be implemented by the inclusive government.

Amongst the reforms were media reforms and article 19 of the GPA spelt out the agenda for the inclusive government regards the proverbial fourth estate?

During its tenure the inclusive was expected to bring about several changes to the media environment that would have led to greater plurality of opinion accessibility and affordability for the people.

However, taking stock of the inclusive government against article 19 one cannot help but feel shortchanged.

The challenges that faced media practioners and the ordinary citizens in disseminating and receiving information are still entrenched.

One of the major concerns of media practioners was the criminal defamation law and some sections of AIPPA and POSA and expectations were high that the inclusive government would tackle these issues.

Unfortunately the inclusive government failed to deal with these issues and it had to take a constitutional court ruling to strike down the criminal defamation law.

To his credit the new minister of information and broadcasting services Jonathan Moyo had spoken against the law before the constitutional court intervened.

AIPPA still remains a big challenge to the quality of news as it restricts the amount of information journalists can receive and impart to the public.

The law places too much power in ascertaining what can and cannot be released for public consumption.

The African Commission of Human and Peoples Rights Special Rapporteur on Freedom of Expression have in the past called upon African states to repel criminal defamation laws.

The law is also in contravention of the Model Access to Information Law (MAI) by the African Commission on Human and Peoples’ Rights which seeks to give effect to the right of access to information as guaranteed by the African Charter on Human and Peoples’ Rights, to any information held by a public body or relevant private body; and any information held by a private body that may assist in the exercise or protection of any right.
The laws also demands the establishment of voluntary and mandatory mechanisms or procedures to give effect to the right of access to information in a manner which enables persons to obtain access to  information of public bodies, relevant private bodies and private bodies as swiftly, inexpensively and effortlessly as is reasonably possible;
MAI also seeks to promote access to information in public bodies, relevant private bodies and private bodies by obliging the same to keep and maintain information in a form and manner that facilitates the right of access to information.
It is a further objective of this Act, generally, to promote transparency, accountability, effective governance and development by, empowering and educating everyone to understand their rights in terms of this Act.
Indeed in some instances governments are justified in restricting information for security and national interests but this discretion must be used judiciously and ensure it does not unduly curtail the access of vital information.While proponents of the inclusive government point to the several licences issued to the private media as a sign of plurality one has to question whether more papers have meant more opinions and greater space for the marginalized voices.Granted more papers are a barometer for plurality but in a polarized Zimbabwe plurality has been meant for either or that position virtually narrowing voices that can be heard.Zimbabweans have over the past decade been deprived of new opinions our media has been polarized to an extent that anything outside the mainstream is regarded as fringe and not worth reporting on. The plurality in media titles has dismally failed to seek the opinions of the rural folk and statistics indicate the bulk of population resides in the countryside. Even the circulation of the newspapers is confined to urban centers.

According to the Zimbabwe All Media Products Survey (ZAMPS) for the first half of 2013 readership of daily papers continues to decline with a merge 1 percent of the rural pollution having moved from the abject poverty to the cash economy this hampers their ability to purchase newspapers if they are available on the market.The existing newspapers have failed to pay into a levy created to help in the establishment of community owned newspapers owing to the difficult economic environment prevailing in the country.The inaccessibility is not limited to the print media but also the electronic media with indications that only 30-50 percent is able to access the national broadcaster.While the BAZ granted two licenses during the tenure of the inclusive government the accessibility of these stations is largely confined to large cities and their content is skewed in favor of the urbanites.Far flung communities such as Beitbridge, Binga, Mt Darwin fail to receive information from the public broadcaster owing to lack of infrastructure.The formation of BAZ was underpinned by the desire to create an environment to ensure communities could receive and disseminate information.

Unfortunately the authority has failed to issue community licences owing to the restrictive measures, the status quo has effectively ensured communities that have no access to the national broadcaster cannot be part of the national discourse.

Failure by government to relax its stringent licensing requirements has ensured information remains elitist and accessible to small segment of the community largely urban dwellers.

The absence of community radio stations in Africa’s most literate state is at variance with the African Charter on Broadcasting which envisions public, private and community broadcasters.

The use of the internet as a source of news, while growing in Zimbabwe is still largely an urban phenomenon and government has in recent year’s shown propensity to monitor activities.

Going forward there seems to be need for greater accessibility of the country’s media avenues by all citizens. Diverse opinions must be accommodated if the country is to effectively deal with the challenges it faces. Laws that curtail the fundamental right to expression must be struck of all our statues.