Category Archives: Business

Policy to boost local car assembly

The government is finalising new legislation which supports the growth of the motor vehicle industry through capacitating local vehicle assembly and component manufacturing.


Mike Bimha

Mike Bimha

A draft copy of the legislation titled The Motor Industry Development Policy Framework, which is being prepared for Cabinet approval, aims to boost local assembly of vehicles to 70% from the current levels of below 10%.

Industry and Commerce minister Mike Bimha told NewsDay on the sidelines of the launch of Grandtiger vehicles on Monday that the policy was targeted at local and foreign investors. The vehicles are being assembled in partnership with Chinese car manufacturer BAIC and Willowvale Motor Industries (WMI).

“Investors want to know what the policy framework is for them to have confidence to invest. Without any policy they will come and say ‘what policy?’ And when we say we do not have, they will say ‘bye bye’ and go to other countries,” Bimha said.

“It is more to encourage both local and foreign investors to go into the motor vehicle value chain. The policy does not just address the assemblers, it also addresses component manufacturers, those who can make components for cars. The moment you have policy framework then investors will see that there is some support and that it is sustainable for them to invest and make a return out of it.”

He said that the policy framework would soothe investors who wanted to partner local assemblers, which would result in them investing in capacitating that segment in the motor vehicle value chain.

Since 2012, the country’s biggest assembler WMI had ceased production, as the company could no longer sustain itself with the downturn of the economy.

As such, this gave rise to second-hand vehicles that started elbowing out local car assemblers and retailers.

Bimha said the policy was expected to facilitate the development of the automotive industry to become a significant contributor to the gross domestic product, exports and government revenue.

The government plans to capacitate car assembly to 70%, with a goal of exporting cars in the region and earn the much-needed foreign currency.

The implementation of the policy will first focus on semi-knocked-down (set of car parts that have been partly put together) car kits to increase production.

Once car production go up, the Motor Industry Development Policy Framework is expected to attract investors to partner car component manufacturers to support car assemblers in assembling fully-knocked-down car kits from their component level.

Analysts say such a move is welcome and long overdue, as the sector has suffered stiff competition from second-hand vehicles.

Malawian bank eyes Barclays Bank Zim

Malawian banking group First Merchant Bank (FMB) is in talks with Barclays PLC to buy its Zimbabwean unit.



Last year, Barclays PLC downgraded Barclays Zimbabwe to its non-core division with an intention to dispose it in the future.

Barclays PLC owns 68% shareholding in Barclays Zimbabwe.

In a cautionary statement yesterday, FMB said it was engaged in “exclusive discussions with Barclays Bank PLC (BB PLC), in relation to the potential acquisition of its interests in Barclays Bank Zimbabwe Limited (BBZ)”.

“Discussions with BB PLC are ongoing and may or may not result in the announcement of a transaction involving the acquisition by FMBCH of the interest of BB PLC in BBZ. Such transaction would also be subject to obtaining approval of the banking regulators in Malawi and Zimbabwe,” it said.

The banking group is listed on the Malawi Stock Exchange.

The group is undergoing a corporate restructuring after three principal shareholders, representing 55% of the issued capital of FMB said they intended to transfer their shares in FMB to FMB Capital Holdings Plc (FMBCH), a company incorporated in Mauritius, in exchange for shares in FMBCH. Subsequently, FMBCH will make an offer on the same terms to acquire the remaining 45% of the issued shares of FMB. At the conclusion of the offer period, the shares of FMBCH will be listed on the Malawi Stock Exchange.

The interest from FMB came after the British multi-national banking giant said it could not continue to combine Barclays Bank Zimbabwe with Barclays Africa Group Limited, as the business “is no longer a good fit with Barclays’ core strategy”.

It also said it would reduce its 62,3% interest in Barclays Africa Group Limited over the coming two to three years to a level, which would allow it to be deconsolidated from a legal and regulatory perspective.

In its financial results for 2016, Barclays Bank Zimbabwe posted a profit after tax of $10,8 million up from $3,9 million in 2015. This translated to a basic earnings per share of 0,50 cents up from 0,18 cents in 2015.

Barclays Zimbabwe was the fifth largest capitalised commercial bank as at December 31, according to statistics from the central bank.

Its core capital was $46,4 million behind CBZ ($205,7 million), Stanbic ($86,1 million), BancABC ($67,9 million) and Standard Chartered ($57,4 million) against the minimum threshold of $25 million. Banks should have minimum capital of $100 million by 2020.

From School Dropout to Multi-Millionaire: The Story of 29-Year-Old Zimbabwean Hebert Ganje

Twenty-nine year-old Zimbabwean, Herbert Knight Ganje, is a millionaire, who dropped out of school at 17.

“I found school boring, and I was never really good at school,” explained Ganje, who now sits at the helm of a multi-million dollar advertising company in Botswana, called H & G Advertising.

The school dropout said he managed to convince his mother to allow him to “take a one year break and travel,” and then continue with school at a later stage.

It was during this break that Ganje’s road to success started.

“My friend then invited me to Botswana,” Ganje reflected, on what turned out to be a rough experience, where he survived on odd jobs, and was basically homeless.

“When I came to Botswana I stayed in a tuck shop where there was just a mattress and blanket, that is how I survived,” lamented Ganje. “But all the time I was focused on my goal which was to set up a company.”

Equipped with just “an idea and passion,” it wasn’t long after being in Botswana, that Ganje realized his goal of starting his own company, almost unexpectedly.

“I got my first client even before I registered the company,” said Ganje. “I just did a small presentation and the client was impressed, that’s how the company started.”

That company, the initials of his first and last name, is now a $50 million empire headquartered in Botswana, with operations in 13-African countries, serving such clients as Coca Cola, Unilever and Samsung.

As a result of his success at such a young age, Ganje made the list of Forbes Africa Magazine’s “30-Most Promising Young Entrepreneurs for 2017,” a recognition he said he was both surprised and humbled by.

Of his company, Ganje explained that “we have a group of companies within the agency of agencies, which are client specific. We cover digital marketing, below and above the line marketing, media buying.”

Raised in the suburbs of Waterfalls, in Zimbabwe’s capital, Harare, Ganje, said he now wants to turn H & G Advertising into the biggest advertising agency in Africa, and compete globally.

“At the office they call me ‘bill’, short cut for billionaire,” quipped Ganje. “But it’s no longer about money. We want to grow our business and grow our team. We want to make sure that we become the biggest advertising agency in Africa.”

Despite his limited education, Ganje, who attended Frank Johnson Primary School before proceeding to Lord Malvern High School in Harare, for his secondary education, argues he is sufficiently equipped to handle the business of H & G Advertising.

“I am a keen reader, even though I did not complete school, I know a lot about the business. I can hold any position in the business. I can be the accountant,” Ganje said confidently.

Ganje urges the youth to follow their passion, and says he will start, through his Facebook page, mentoring upcoming entrepreneurs.

Though now living in Botswana, Ganje still visits his birth country of Zimbabwe, and says he is keen to give back to his Waterfalls community someday. – VOA

Forensic audit exposes rot at NRZ

Mr Larry Mavima

Mr Larry Mavima

Oliver Kazunga, Senior Business Reporter
SOME managers at the National Railways of Zimbabwe (NRZ) do not have qualifications for their posts while the parastatal’s wage bill is not in tandem with the size of the workforce, a top company official revealed yesterday, citing findings of the company’s forensic audit.

At present, NRZ employs about 4 000 workers from close to 20 000 it used to employ at its peak before the economic downturn.

Last year, the Government authorised a forensic audit of the railways firm’s after the parastatal’s board, led by Mr Larry Mavima, noted that such an audit was one of the key priority areas towards turning around the fortunes of the ailing company.

The forensic audit seeks to reflect what has been going on at NRZ in the past five years in relation to the parastatal’s procurement system, how revenue is being collected from the firm’s estates and properties as well as determining the firm’s human resources and staffing.

The official who preferred not to be named told Business Chronicle that the NRZ forensic audit report was out and is still being discussed internally.

“Results of the forensic audit are out and among other issues, the report shows that the number of NRZ workers do not support the wage bill, it does not tally with it. Also the number of NRZ managers is uneven to the number of the workers.

“In addition, the report shows that some of the managers do not have qualifications that are commensurate with the posts that they occupy,” said the official.

NRZ public relations manager Mr Nyasha Maravanyika professed ignorance about the issue saying they were yet to receive the forensic audit report.

“We have not yet received it (forensic audit report), but once we receive it we will go through it. And once ready for public consumption, we will make it available,” he said.

Mr Mavima who was appointed at the helm of the parastatal in March last year is on record saying heads would roll at NRZ should the forensic audit report show any acts of maladministration and impropriety.

The ailing parastatal is saddled with about $144 million legacy debt with the workers owed $80 million.

NRZ requires $400 million in the short to medium term for recapitalisation. In 2014, the Auditor General’s report for NRZ accounts showed that the parastatal’s freight unit was generating annual revenue of $91,2 million, but incurring expenditure of $103 million.

The passenger unit had annual revenue amounting to $3,2 million, with costs over three times more at $10,9 million.

NRZ is one of the strategic companies in Zimbabwe’s economy and its demise over the years has been blamed for crippling viability of several downstream industries.


Red flag raised over Barclays Zim suitors

Happiness Zengeni Business Editor
THE calibre of directors of First Merchant Bank (FMB) Malawi , which is eyeing a controlling stake in Barclays Bank of Zimbabwe, has raised eyebrows amid revelations that they were implicated in alleged corporate misgovernances and malpractices in lending, some of them as recently as last year.

This comes as FMB Malawi yesterday issued a cautionary statement saying it was in discussions with Barclays Bank Plc over the potential acquisition of the group’s controlling stake (67,68 percent) in Barclays Zimbabwe. FMB is listed on the Malawi Stock Exchange while it also has equity interests in banking operations in Botswana, Mozambique and Zambia.

The group, which is also undergoing a restructuring, said discussions with Barclays Plc are ongoing and may or may not result in the announcement of a transaction involving the acquisition by FMB of the interest of Plc in Barclays Zimbabwe. The Anadkat family owns the majority stake in FMB.

However, several shareholders and financial analysts have raised concern that the Malawi headquartered group has been involved in past controversies, which do not bode well with the traditionally conservative Barclays Zimbabwe and which go against the new rules contained in the Banking Amendment Act.

Two of the directors Dheeraj Dikshit (the managing director) and Rasik Kantaria have been in the news over allegations of lending malpractices and failure to comply with Malawian laws over money laundering and externalisation. Information sifted by The Herald Business from various regional publications, shows that the main shareholders of the banking group are alleged to have been involved in externalisation and money laundering.

According to Nyasa Times in 2013, the banking group under the management of Mr Dikshit was implicated in the Capital Hill cash-gate scandal.

More recently (in November 2016) Mr Kantaria was in the eye of a storm after Ugandan authorities placed Crane Bank in receivership over irregular lending practices. Mr Kantaria was a director and the second largest shareholder in Crane Bank with a 47,32 percent stake.

Ugandan authorities placed Crane Bank in receivership on October 20, 2016 and immediately suspended the nine-member board of directors, as well as the bank’s executives, saying the bank had failed to meet the legal requirements of its operating licence.

In Zimbabwe, under the Banking Amendment Act, a director or manager of a failed bank whether in the country outside, is not allowed to take up a role in any local bank.

The Act also says that directors should not have been involved in any money laundering acts within or outside the country.

Concerns have also been raised over the size of FMB when compared to Barclays Zimbabwe. At the close of the 2016 financial year, Barclays Zimbabwe had a market capitalisation of $65,19 million against the FMB group’s of $33,76 million.

In terms of deposits, Barclays Zimbabwe was at $391,7 million against FMB’s $144,48 million. There is also a huge gap on total assets with Barclays Zimbabwe at $476,2 million against FMB’s $208,75 million.

Ideally, according to financial analysts, depositors and stakeholders of the banking group, expect the ultimate Barclays Zimbabwe acquirer to have a similarly strong reputation and view them as partners who will bring value to not only the bank but the economy as a whole.

“FMB is a relatively small, family-run business and this is reflective in its current structures. Do they have capacity to deal with the level of sophistication of the local market? Do they have a clean track record,” said Fiona Chigwida a market analyst.

Analysts were agreed that continuity was the single most important factor in the Barclays case and any acquirer would have to be a large brand that has demonstrated capacity to build and improve on the Barclays Zimbabwe heritage.

Well placed sources told The Herald Business that Plc had signed an exclusive agreement with FMB over its 67,68 percent stake and after having issued cautionary statements, due diligence would commence.

The sources said it was likely that Barclays Plc would keep a residual investment and also keep its brand over the transitional period in the event that the transaction sails through.

Former bankers DBF Capital and the National Social Security Authority were also said to have been keen on the Barclays Zimbabwe stake. In yesterday’s trades on the Zimbabwe Stock Exchange, Barclays Zimbabwe gained 8,76 percent to 3 cents but still has a year-to-date loss of 6 percent.

FBC develops 62pc medium density houses in 2016

Mr Mushayavanhu

Mr Mushayavanhu

Enacy Mapakame Property Reporter
FINANCIAL services group, FBC Holdings developed 62 percent of the total medium density houses constructed in 2016.

Last year, 1 476 houses were delivered in the whole country. Of these, 116 were medium density houses.

Briefing analysts during the company’s financial results presentation last week, FBCH group chief executive Mr John Mushayavanhu said the financial services group, through its building society delivered 72 houses for the medium density market. This is in addition to upmarket gardens and high rise flats delivered in Harare last year.

“In 2016, the whole country did 1476 houses of which 116 were medium density. If you remember that is the area we were looking at. So of the 116 houses, 72 houses are ours which is 62 percent of the total,” he said.

In earlier reports, FBC Building Society indicated it was negotiating with local authorities for provision of land for high density housing projects in Harare, which would take on the Kwekwe and Gweru models.

The development will add on to the over 800 housing units the building society has delivered across the country since dollarisation, with half of them delivered in 2013 alone.

These have been developed in key strategic areas encompassing low to medium and high density in Harare’s Philadelphia, Greendale, Waterfalls, Glaudina, Newlands, Kwekwe and Gweru as part of efforts to provide affordable housing and reduce the housing backlog.

Meanwhile, the financial services group has restructured its mortgages to accommodate the growing market and ease pressure on home seekers.

“When we started we were giving people 10 year mortgages.

“Traditionally a mortgage is something between 20 years to 35 years. So we restructured some mortgages to 15 years and 20 years, depending on what the customer wants,” said Mr Mushayavanhu.

Indications are that Zimbabweans living in the diaspora take up 30 percent of the building society’s mortgages.

Since dollarisation, FBC BS has grown rapidly over the years with operating income growing by a constant annual average of 81 percent.

Masiyiwa joins Fortune Magazine’s top 50 leaders

Telecoms mogul and millionaire Strive Masiyiwa has been named among the top 50 leaders by top global business publication, Fortune Magazine.


Econet founder Strive Masiyiwa

Econet founder Strive Masiyiwa

Masiyiwa was ranked 33rd on the list.

The list was released last week as part of Fortune Magazine annual ‘The World’s 50 Greatest Leaders’ meant to honour men and women who are transforming the world and inspiring others to do the same. To date, the list is the fourth one done by the magazine.

Jean Case, chief executive officer Case Foundation and chairman of the Board of Trustees of the National Geographic Society said Masiyiwa’s lifelong commitment to helping others set him apart from the rest.

“He is a crusader who has transformed countless sectors and lives while also seeking to preserve Africa’s vital resources through his own sustainable investments and environmental policy leadership … I am inspired by his vision, his persistence, and his fearless spirit.” Case said in a write-up of Masiyiwa’s nomination.

Masiyiwa said he was humbled by being nominated for a second time.

“I’m humbled to have been nominated for a second time. I know much of it is due to the support readers on this platform give me. I have told you before, and I want to say here once again, how much all of your comments mean to me each and every week,” he said wrote on his official Facebook page.

“I was particularly humbled by the comments in this article from Jean Case, who with her husband, Steve Case, founded the company America Online, one of the companies credited with developing the Internet as a global marketplace.”

Masiyiwa joins notable figures on the list such as Pope Francis who was ranked 3rd, German chancellor Angela Merkel (10th) and former United States vice president Joe Biden (23rd) among others.

Masiyiwa is also the richest Zimbabwean with a net worth valued at $600 million as the end of 2014 by Forbes Magazine, an international business publication.

Zimpapers to grow top line in 2017

Mr Deketeke

Mr Deketeke

Business Reporter
LISTED media group, Zimbabwe Newspapers Limited, says it will focus on growing the top line while keeping an eye on costs, as part of key strategies for the business in the 2017 financial year.

Group chief executive Pikirayi Deketeke said in an interview that the group would continue to optimise revenue through innovation and product diversity in order to grow revenue streams.

This comes after Zimpapers saw revenue dipping 6,3 percent to $37 million in the 12 months to December 2016 while operating costs declined 23,5 percent to $21,8 million.

In line with the drop in revenue, the group recorded a drop in gross profit to $24 million from $30 million. After tax profit also fell to $2,2 million from $2,7 million.

Mr Deketeke said while keeping costs under wraps was paramount; growing the business required a sustained attack on the top line to optimise opportunities for improved profitability.

“Through the new products we have, such as The Suburban Newspaper, we will make an effort to make sure we grow the top line. New products have a gestation period and we expect that by now they have matured and are more acceptable to the market.

“We also expect that the market is now more familiar with them and we are beginning to see the growth coming through, (including products such as vernacular newspaper) Kwayedza,” he said.

“So, there is hope that the top line can grow and it is our momentum in 2017 that we need to drive growth in everything that we do. This can be in terms of growth in circulation volumes, advertising, listenership and our radios. Whether its events, there has to be revenue growth in all our business units,” Mr Deketeke added.

Zimpapers said it expects to benefit from restrictions through statutory measures such as rebates on some raw materials.

Some of the measures are already positively impacting on some of its operations including National Printing, which is now profitable. Natprint was the best performer in the group in February.

The Zimpapers chief said measures by the Reserve Bank of Zimbabwe to cap bank interest rates at 12 percent per annum would help efforts to keep a lid on growth in operating costs.

Zimbabwe’s leading and only listed media group closed the year with borrowings at $37 million and a drop in borrowing costs should augur well for the company’s efforts to lower finance costs.

Other measures to keep costs within check will include a freeze on hiring, prudent procurement of raw materials (eliminating middlemen), and being prudent in managing other costs.

Mr Deketeke said the organisation had no plans to further reduce the head count, although he would not completely rule it out, adding that multi-skilling the firm’s workforce would be critical.

Being a diversified media group, Mr Deketeke said the organisation would seek to optimise benefits from its convergence concept where a single reporter should be able to provide material usable across the group’s different media platforms.

Zim in $14.2m trade surplus against SA


Business Reporter
ZIMBABWE recorded $14.2 million trade surplus against its major trading partner, South Africa, after exporting goods worth $185.4 million to the neighbouring country in February compared to $171.2 million imports.

Latest data from the Zimbabwe National Statistics Agency (Zimstat) show that during the period under review, the country’s exports included scrap metal, agricultural produce, beef, minerals as well as wines.

Last month, Zimbabwe’s imports from South Africa included vehicles, fish, sausage casings, biscuits, electrical energy, chemicals, disposable napkins, incontinence pads, and wooden furniture.

Zimstat indicated that the country’s trade deficit in the first two months of the year was at $309.7 million as exports fell by about seven percent to $240.5 million from $258.7 million in January.

On the other hand, imports increased by 10 percent in February to $424 million compared to the previous month’s figure of $385 million.

In the first two months, the agency has indicated that the country had a trade deficit amounting to about $309.7 million as imports during the period under review stood at $808.8 million against exports of $499.1 million.

Since the liberalisation of the economy in February 2009, the country has been importing various goods across the globe as the economy was on a recovery path.

Over the years, the Government has been working on trying to reduce negative trade balance through a number of policy interventions including Statutory Instrument 64 of 2016, which was introduced last June.

And through SI 64/2016, which removes several goods from the Open General Import Licence, the Government has been able to restrict imports.

In the 2017 national budget, Finance and Economic Development Minister Patrick Chinamasa announced that the introduction of the five percent bond note export incentive through the Reserve Bank of Zimbabwe also proffers benefits for improved domestic production this year.


Tourism sector poised for growth

new look Victoria Falls airport

Leonard Ncube in Victoria Falls
ZIMBABWE’S tourism sector is poised for major pickings this year going forward on the back of renewed interest shown by players in the aviation industry.

Players in the tourism and hospitality industry told Business Chronicle they were upbeat the coming in of new airlines will transform the whole sector and bring the much needed revenue to the country.

Ethiopian Airlines landed for the first time in Victoria Falls on Sunday after South African Airways made its maiden flight a few weeks ago. Kenyan Airways is also expected to fly for the first time into Victoria Falls next month with Air Link of South Africa coming in the following month.

Africa Albida Tourism chief executive officer Mr Ross Kennedy said the coming in of Ethiopian Airlines was a significant catalyst for tourism growth in Zimbabwe.

“It was another historic day for the aviation industry in Africa and for the African travel and tourism sector, with additional airlift and new route linkages opening. Tourists can now fly from Washington to Victoria Falls with a less than two-hour stopover in Addis Ababa,” he said.

Hospitality Industry of Zimbabwe (HAZ) chairman for the Victoria Falls chapter Mr Chris Svovah said the resort town was ready to meet demand with a number of eateries having been established since the commissioning of the airport by President Mugabe last year.

“This is a sign of approval of our destination by players around the world and a sign of better things to come,” said.

“There are a lot of engagements and inquiries since we commissioned the airport, which can now land wide bodied aircraft. We now expect more numbers into the country and specifically into Victoria Falls. Soon we will be having bigger conference centres and hotels and we have a lot of restaurant establishments such as — KFC, Lookout Cafe, Shearwater Restaurant, Three Monkeys and River Lodge among others,” said Mr Svovah, who is general manager Rainbow Victoria Falls.

Victoria Falls Safari Lodge general manager and HAZ past chairman, Mr Jonathan Hudson, said the coming in of new airlines will improve access to the country.

“This is improving access into Zimbabwe and shows that we are a preferred destination. We are ready to meet demand because we have transport facilities, hotel space and other facilities,” he said.

Mr Hudson, however, said the sector would benefit more if trend in Vic Falls spreads to other resorts such as Kariba, Mana Pools, Matopos and Eastern Highlands.

Love for Africa proprietor Mr Blessing Munyenyiwa, who is also Zimbabwe Tourism Authority (ZTA) board member, said Victoria Falls was now an improved attraction since the completion of airport.

“This is very exciting for Victoria Falls because it makes it accessible from anywhere in the world. We have sporting events such as the Jameson Victoria Falls Carnival, which this year will be a big event as it celebrates five years and this year we started hosting the Kwese Rugby Sevens, which also brought in numbers. All these sporting events are becoming possible because of the airport and this is good because these events have livened our quiet months,” said Mr Munyenyiwa.

Ethiopian Airlines became the first international airline to launch flights into the new Victoria Falls International Airport when its Boeing 737 touched down on Sunday.

It will fly to Victoria Falls from Addis Ababa four times a week, enabling tourists from major cities in the Americas, Europe, Asia and Africa to enjoy hassle-free connections via Addis Ababa.


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