News Update as @ 1530 hours, Thursday 7 August 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

BH24 Reporter

Econet Wireless Global has secured a $150 million loan facility from African Export-Import Bank to expand its oper-ations.

In a statement, Afrexim bank said Econet would use the funds to expand its mobile banking services and solar

energy projects. The money will also go towards servicing a debt which the mobile giant assumed for network infra-structure projects.

The syndicated facility was arranged through a number of global financial institutions including the Southern Afri-can Trade and Development Bank and

Stanbic Bank Zimbabwe. “The closing of this facility represents a clear demon-stration of Afreximbank’s commitment to partnering with African and interna-tional financial institutions to support the growth of African multinationals,” said Jean Louis Ekra, president of Afrex-imbank. “Afreximbank is determined to continue working with leading African

entities, like the Econet Group, which are making great strides in connecting Africa through their innovative telecommunica-tions solutions and, in-turn, enhancing intra-African trade, which is a corner-stone of the Bank’s mandate.”

The syndication is part of a multi-creditor security sharing arrangement coordi-nated and arranged by Afreximbank.

Under the arrangement, Afreximbank, as global security agent, holds security for Econet’s various creditors, including the China Development Bank Corpo-ration, Ericsson Credit AB and Indus-trial Development Corporation of South Africa.

Econet Zimbabwe has said it will anchor its growth on non-voice related products and services with Ecocash leading that initiative.. •

Econet gets $150 million Afreximbank loan facility

Sifelani Tsiko

Environment, Water and Climate Minis-ter Saviour Kasukuwere on Wednesday said the Government will take a firm line to reduce the destruction of the coun-try’s wetlands due to the intensification of construction activities on the fragile habitats.

Addressing participants at a national stakeholders’ workshop on the sustaina-ble use of Zimbabwe’s wetlands, Minister Kasukuwere said that Government will "fiercely reject" any further construction activity that could lead to the net loss of the country’s wetlands.

“I will not allow a situation where rules and laws are violated. This is why we are calling on all stakeholders to come up with new strategies,” he said. “We will fiercely reject and reject construction of

buildings on wetlands. The issue is that just don’t because when the damage is done its actually very difficult to undo it.” Minister Kasukuwere said councils should stop allocating stands for buildings on wetlands. “We are engaging all councils to prevent this.

Councils should stop allocating land for construction purposes on wetlands,” he said. “We want to conscientise our stakeholders about the importance of conserving wetlands. It’s in our interest to build our country but we must balance this with need to conserve and sustaina-bly use our wetland resources.”

The workshop which drew participants from Government, business, civil soci-ety and the agricultural research sector was jointly organized by the Ministry of Environment, Water and Climate, the Environmental Management Agency and

the World Wide Fund for Nature (WWF). “Wetlands occupy a significant propor-tion of our country’s landscape hence we cannot ignore them,” Minister Kasukuw-ere said.

Environmental lawyer Regis Mafuratidze said there was need to address poor co-ordination among various institutions

charged with the responsibility of man-aging wetlands and to align policies and laws that affect wetlands with the new Constitution.University of Zimbabwe marine biology researcher Professor Christopher Magadza bemoaned poor participation by blacks on issues pertain-ing to the conservation of the country’s environmental resources.

He said whites were playing a leading role in most bodies dealing with envi-ronmental conservation while blacks appeared largely disinterested.

Wetlands are habitats to a wide range of plants and wildlife. They are responsible for re-charging the water table, filtering and purifying water, preventing soil ero-sion, siltation and flooding.

Environmentalists say wetlands in Zim-babwe are under threat due to agricul-tural expansion, urbanization, population growth, the proliferation of boreholes, sand and quarry extraction, poaching of timber and wildlife and pollution.

Public ignorance of wetland values, func-tions and fragility, and inadequate or conflicting management structures have also led to wetland degradation. Laws that criminalise wetland abuse include the Environmental Management Act, •

2 NEWS

Minister vows to fight wetlands destruction

Minister Kasukuwere

AdM-DI156506-

BH24

BH24 Reporter

Aim-listed Mwana Africa’s Freda Rebecca recorded a 1 percent increase in gold pro-duction to 13,503 ounces for the quarter ending June 2014 from 13,380 ounce in the prior period. Recovery at Freda

Rebecca was 6.2 percent lower at 76.8 percent due to temporary power supply failures at two absorption tanks. Chief executive Kaala Mpinga said the increase in bullion was as a result of improvements in main production block feed grade. “Overall I am pleased to report that there

was a 8 percent increase in head grade at Freda Rebecca which we believe will be sustained, commissioning continues at the Freda Rebecca’s tailings retreatment and Klipspringer continues to make progress,” he said. Production at Bindura Nickel Cor-poration was, however, 14 percent down

as underground mobile equipment was taken out of commission for refurbishment and mining of lower grade areas.

At BNC, head grade was 6 percent lower at 1.5 percent and recovery down 4.7 percent to 84.1percent “This quarter was mixed as various modifications intended to improve efficiency at Freda Rebecca and Trojan Nickel has been undertaken and the result of these changes will not be reflected until our Q2 update. “All the work under-taken was necessary as part of the equip-ment rebuild to pave the way for ramping up in Q2 at Trojan Nickel and improved mill efficiency at Freda Rebecca which puts both mines in a stronger position for Q2,” he said. •

4 NEWS

SMEs need support mechanisms

Freda Rebecca Q1 gold output up

By Funny Hudzerema

Small and Medium Enterprises in Zim-babwe need adequate support mech-anisms for them to be able to operate profitably, an official said today.

Speaking at an SMEs International Expo held in Harare, Indonesia Ambassador to Zimbabwe Eddy Poerwana said SMEs can achieve their potential if they have the right tools especially the exposure to ICTs in their day to day activities. “SMEs

have become breeding grounds for inno-vation and some of the world foremost businesses have evolved from small enterprises to the burgeoning multi-na-tionals,” he said. He said SMEs in Zimba-bwe faced the same challenges as those in Indonesia but their problems need to be addressed professionally.

Poerwana said SMEs account for 99,98 percent of enterprises and 99,4 per-cent of employment in his country. The Government has been working towards

formalising the SMEs sector in a bid to integrate the 85 percent of the SMEs that are still operating as informally into the formal system and top into the $7,5 bil-lion they generate annually.

In a speech read on her behalf at the same event, Permanent Secretary in the Ministry of Small and Medium Enter-prises Evelyn Ndlovu said SMEs must legalise their operations for Government and other financial sectors to fund them and boost their business. “Government

is working with small businesses espe-cially the marginalised sectors to try and strengthen the sector’s participation towards a brighter Zimbabwe. We are targeting sectors that big businesses think do not exist and look down upon.

“We are trying to link corporate to SMEs and I am glad some big companies have already come on board,” she said. She added that this can be achieved through an enabling environment that will pro-mote the SMEs to grow. •

BH24

The industrial index gained a further 1,09 points today to close at 193,41 percent pushed by gains in National Foods, Hippo and Seedco.

Natfoods went up 10 cents to close at 210 cents whilst Hippo and Seedco both traded 5 cents higher to close at 75 cents and 90 cents respectively. Radar gained 1.50 cents to 5.50

cents and ZBFH was up a cent to trade at 8 cents.

The gains were partially offset by losses in Colcom and TA Holdings which traded a cent lower to close at 25 cents and 15 cents respectively.

African Sun also eased 0.30 cents to 2.4 cents and Cotco shed 0.05 cents

to settle at 0.90 cents.

The mining index moved up 0.38 points to close at 83.65 points. RioZim increased by 1.90 cents to trade at 26 cents and Hwange gained 1.20 cents to 6 cents. Bindura and Falgold were unchanged at 7 cents and 4.01 cents respectively. ― BH24 Reporter •

6 ZSE REVIEW

ZSE maintains upward momentum on Natfoods, Seedco gains

BH24

The new economic blueprint, ZimAs-set, clearly places infrastructure devel-opment as one of the priority issues under its infrastructure and utilities cluster.

The cluster has goals of bringing on board roads (700kms new, 500kms rehabilitated, 200kms widened and grading 4 000kms of rural gravel roads), rail (400kms rehabilitated), construction of 10 dams and addi-tional 450 MW of power (from refur-bished existing facilities and new units at Hwange) among others.

Considering we have already started to hear about how funding has been secured for some projects, especially power generation projects, the goals are fair and achievable assuming a strong work ethic prevails.

Chinese firm Sino Hydro won the bid to expand the country’s second largest power station by 300 megawatts at a cost of $319 million. We "hear" work on the project will begin next month and a ground breaking ceremony for commencement of work set for Sep-tember 4 this year. But we are hear-ing about this seven months after we heard that Sino Hydro workers were

already on site and the ground break-ing ceremony would be conducted in a few weeks time. The problem we have as Zimbabweans is that we like to talk. We talk about things that are yet to happen as if they are already happening. And this usually takes the momentum out of the way we imple-ment projects.

We know what is good for us but then we fail to make it work for us. In as much as we understand that there were preconditions that had to be met before work could start, to the ordi-nary person, they expected work to be halfway through by now. It is good to inform the public on matters that affect them, but when these things do not materialise, we have to explain to them why they did not. The Kariba South expansion project is just one

of many. Projects have been under-way for a long time with no results to show the ordinary people. Yet they are always in the news.

Government should make sure that officials do not keep throwing dates around. They should only release such important information when and if there actually is something concrete on the ground. It will be good to know when a project has started for a change. The media should also stop taking everything they are told by offi-cials as news, it makes it hard for the readers to believe them. Two readers had this to say about the Kariba South project: “This project is not going any-where. We are always told work will start shortly. At one time we were told work had commenced. Not very differ-ent from the New Zimsteeel project.

A lot of false starts.” “There is no need to tell us about ground breaking, that is not construction. We should be told that power is going to switched on in September, period.

We have seen this happening at NewZimsteel and many other signing ceremonies but nothing has happened up to now. When will these ground breaking ceremonies be switching on ceremonies?” They are right. Media needs to desist from announcing things before they are truly complete, and officials need to stop throwing dates around for the sake of progress.

We don’t need to hear about such important projects, we need to see them taking off the ground and being completed on time! •

8 BH24 COMMENT

Let’s see the projects getting off the ground, not hear about them!

BH24

The United States is committing $800 million to assist Ethiopia with issues of economic development, education, capacity building, health, among oth-ers.

Secretary John Kerry made this known on Tuesday when he met Ethiopian Prime Minister Hailemariam Desalegn before their meeting in Washington DC.“Our relationship is strong and pro-ductive, and we’re very, very grateful for their leadership most of all at a difficult time in some difficult places,”

said Kerry, who noted that Ethiopia has been at the forefront of helping to move the peace process in Sudan and South Sudan.

Desalegn also said Ethiopia was work-ing assiduously to pacify the region, which, according to him is the “basis for all the engagements and economic development that take place.”

He noted that the East African country is seizing the opportunity presented by the US-Africa Summit and busi-

ness forum to speak to investors as it seeks to attract investments into Ethi-opia. The country is also working very hard to fight terrorism and extremism, Desalegn says.

Ehthiopia’s economy has experienced strong growth over the past decade, averaging 10.9 percent per year in 2003/04 – 2012/13 more than double the regional average of about 5 per-cent, according to the World Bank.

The country is expected to continue its

economic growth as it attracts invest-ments from the US as it has from emerging markets, notably China, Tur-key and India.

“However, in order to convert these interests into actual investments, Ethi-opia must be more competitive by considerably reducing logistics cost and time,” noted Guang Zhe Chen, World Bank Country Director for Ethiopia in a recent World Bank Group report.– VENTURES AFRICA •

10 REGIONAL NEWS

US to commit $800m to Ethiopia’s economic development

South Africa must find $23 billion to avert junk rating on Eskom South Africa must find 250 billion rand ($23 billion) of support for Eskom Hold-ings SOC Ltd within weeks to prevent the power producer from being cut to junk and dragging down the country’s credit rating, a minister said.

The government is considering inject-ing capital and providing convertible loans to the state-owned utility, Pub-lic Enterprises Minister Lynne Brown told reporters today in Johannesburg. The company is rated BBB-, the low-est investment grade, by Standard

& Poor’s with a 50 percent chance of being downgraded by mid-September.

“We are looking at how to get Eskom out of its trouble because it has a short time to prove it is on a good footing to credit agencies,” Brown said.

“The main thing is to prevent a down-grade on Eskom from the credit agen-cies and the country as a whole from getting downgraded.”

Eskom, which provides 95 percent of South Africa’s electricity, has a funding

deficit of 225 billion rand for the five years to 2018 and has been forced to implement managed blackouts this year as it struggled to keep the lights on after a decade of underinvestment in power plants.

A downgrade to junk would signifi-cantly raise borrowing costs for Eskom, the country’s biggest seller of corporate bonds with about 255 billion rand of debt outstanding.

South Africa’s energy regulator last week approved a tariff increase that

could amount to 5 percentage points on top of the 8 percent previously agreed. Prices may have to rise further for Eskom to plug its funding gap.

In addition to capital injections and convertible loans, the government “is looking into guarantees that we could give Eskom,” Brown said.

The government currently has a provi-sion to back 350 billion rand of Eskom debt, of which Eskom has used a third. ― Bloomberg •

BH24

12 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

7 August 2014

Energy

(Megawatts)

Hwange 593 MW

Kariba 720 MW

Harare 14 MW

Munyati 29 MW

Bulawayo 28 MW

Imports 0 MW

Total 1384 MW

Seed Co Limited 19th Annual General Meet-ing Venue: Seed Co Administration Block at Sta-pleford Date: Wednesday 20 August Time: 12:00 hours

National Tyre Services Limited 52nd Annual General Meeting Venue : Boardroom, Stand 4608, Corner Cripps/Seke Roads, Granite-side, Harare Date: 20 August 2014 Time: 14:30 hours

THE BH24 DIARY

BH24

14 ZSE

ZSEMOVERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

RADAR 37.50 5.50 STARAFRICACORPORATION -12.00 2.20

ARISTON 30.00 0.65 AFRICAN SUN -11.11 2.40

HWANGE 25.00 6.00 TA HOLDINGS -6.25 15.00

ZB 14.29 8.00 COTTCO -5.26 0.90

FIDELITY 9.89 10.00 COLCOM -3.85 25.00

TURNALL 8.43 4.50

RIOZIM 7.88 26.00

HIPPO 7.14 75.00

SEED CO 5.88 90.00

ZIMRE 5.26 1.00

IndicesINDEx PREVIOUS TODAY MOVE CHANGE

INDUSTRIAL 184.95 183.76 -1.19 POINTS -0.64%

MINING 61.13 66.53 +5.40 POINTS +8.83%

Stocks Exchange

BH24

16 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,301.05 +0.70 +0.03% 01Aug

Kenya 4,943.28 +37.19 +0.76% 01Aug

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 41,801.51 -132.89 -0.32% 04Aug

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 189.52 +0.21 +0.11% 04Aug

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "SucceSS iS not So much what we have, aS it iS what we are." ― Jim rohn Globalshareholder.com

Nestle, the world’s largest food com-pany, plans to spend 8 billion Swiss francs ($8.8 billion) in its first share buyback in three years after reporting first-half revenue growth that exceeded analysts’ estimates.

Revenue gained 4.7 percent excluding acquisitions, divestments and currency shifts, the Vevey, Switzerland-based maker of KitKat bars and Nespresso coffee said today in a statement.

That compares with the 4.5 percent median of 14 analysts’ estimates com-piled by Bloomberg News. Nestle said it plans to repurchase the stock starting this year and into 2015.

The shares rose as much as 3.1 per-cent.

Nestle has outperformed its main Euro-pean rivals Unilever and Danone in the first half and is increasing its distance on them with its plan to return cash

to shareholders through repurchases. Unilever, the maker of Magnum ice cream and Lipton tea, and French yogurt maker Danone last month reported revenue that missed esti-mates.

Nestle said today the sale of part of its stake in French cosmetics company L’Oreal will boost second-half profit by 7.4 billion francs ($8.2 billion).

“The 8 billion-franc buyback has to be

put in the context of M&A activities,” Jean-Philippe Bertschy, an analyst at Bank Vontobel, wrote in an e-mail.

“Nestle would have the ability to do a bigger buyback of 10 billion francs to as much as 20 billion francs.”

The shares traded 2.2 percent higher at 68.55 francs as of 9:02 a.m. in Zurich. They’ve gained 6 percent in the past year. ― Bloomberg •

17 INTERNATIONAL NEWS

Nestle plans share buyback as sales beat estimates

The age old challenge of raising funds to scale a startup idea has always dogged anyone who goes beyond the school or college project/prototype stage of creating a tech based solution.

ZImbabwe’s startups are no different and a number, if not the majority of them, will share testimonies of how this worldwide challenge is a tougher experience locally.

While the availability of investors in var-ied forms has always meant that some entity or movement is willing to show their belief in an idea with capital injec-tion, the Zimbabwean startup ecosys-tem hasn’t had that luxury.

There are a lot of factors to blame this on. Politics (queue the sanctions song), the absence of investor confidence, a shortage of bankable ideas, a dearth

of business skills, uncommitted start-ups and the case of investor flight from parties already anchored in local com-merce – The long and short of it is that there aren’t as many structures pour-ing capital into local startups and with good reason.

Of particular note is the absence of angel investors which has been one setback to the blossoming of the local

ecosystem.

What’s an angel investor?

For most startups the first round of funding to take off is usually provided by “the 3Fs” in small business creation :Friends, Family and Founders.

Angel investors step in after this initial stage when the business needs a fresh capital injection for growth and devel-opment.

As such angel investing is typically a huge gamble from high-net worth individuals with business experience able to invest time and money in these startups with the goal of profiting from their long-term growth. It is hardly a short term deal.

There are high levels of risk asso-ciated with this form of investment largely because the startups are early stage ventures which face the greatest potential of failure. On the upside, suc-cesses from these startups have huge returns.

Unlike venture capitalists, angel inves-tors put in their own funds into fledgling

18 ANALYSIS

Where are Zimbabwe’s angel investors?

businesses. They have a keen focus on the success of the business through a desire to give back to the community and at times wanting to live vicariously through a startup that has loads of potential.

So why would we need Zimba-bwean angel investors?

By their very nature angel investors help bridge the funding gap between ground zero investment and the capital injection a startup seeks from finan-cial institutions, private equity firms or corporate acquisitions. This gap, often called the “valley of death”, is where many dreams and businesses have met their demise.

Angel investors are also key in dispens-ing mentorship, knowledge and access to their networks. This area always challenges startups with a great prod-uct and immense potential, but with limited finesse that a seasoned player can provide through mentorship.

These two benefits of angel investment have the potential to change the course of various startups that have had their ideas stuck in the same spot.

Where are the potential angel inves-

tors?

High-net worth Zimbabweans usually invest in lower risks ventures in fields like agriculture, mining, real estate, FMCG, gas and fuel. In a primary

resource rich and highly consump-tive environment it makes short-term sense to chase Aliko-Dangote strate-gies for entrepreneurial success rather than invest in tech startups with all their uncertainty and unproven models.

This is hardly a unique trend as it is characteristic of other developing countries. According to a guidebook

on angel investing this challenge is also characteristic of other developing countries. Investors focus on industries engaged in natural resource extrac-tion,with most opportunities identified and investment decisions based on

personal connections. (Think political connections)

Investment from successful, financially sound entrepreneurs with battle scars and the time to spare is something that local tech startups unquestionably require. The angle of mentorship that angel investors provide is one factor that could help in the leap to a vibrant

tech startup space.

ZImbabwe has a lot of individuals who can step up to fill the angel investors spot. These same individuals have managed to find financial success in local investment opportunities or through successful careers abroad.

With an abundance of skills harvested from a tough local business environ-ment and exposure acquired through the diaspora these cases both locally and abroad can give back to the eco-system.

What we need are structures that help prepare startups for angel investment. A strong focus on skills and business idea modelling is a great approach, something that the local tech hubs seem to be focused on in a broad sense. In such a case it is more appeal-ing for any potential investor to part with their time and money to help a startup grow.

If we pair this with a strong drive to have diasporan and local Zimbabwe-ans create an angel investors network there could be a chance to advance the development of local tech startups. ―Techzim •

19 ANALYSIS