By Tawanda Musarurwa

HARARE – Zimbabwe’s f irst quarter (2016) raw milk production rose 18,6 percent from the same period last year on the back of init ia-tives by several players in the sector to boost their capacities.

According to latest f igures from the Dairy Services Department in the Ministry of Agriculture, Mechanisa-tion and Irrigation local milk production increased to 15,9 mil l ion l itres from 13,4 mil-l ion l itres in the first quarter of 2015 – an 18,6 percent rise.

On a month-on-month

basis, in January 2016 milk output rose by 17,6 per-cent to 5,5 mil l ion l itres

from 4,6 mil l ion l itres in the prior comparable period. February also recorded an

increase, with output rising by a signif icant 23,7 percent to 5 mil l ion l itres from 4,1

News Update as @ 1530 hours, Thursday 21 April 2016

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Zim Q1 milk production up 18,6pc

mill ion recorded the same month in 2015.

March fol lowed a much sim-ilar trend, with milk produc-tion for the month going up by 16,7 percent to 5,3 mil-l ion l itres from 4,6 mil l ion l itres last year. The latest stats show that producers retailed 1,8 mil l ion l itres of milk in Q1 compared to 1,5 mil l ion l itres recorded same period in 2015.

And intake by processors increased to 14 mil l ion l itres, a gain from the 11,8 mil l ion l itres recorded in the prior comparable quarter.

The local milk industry is beginning to accrue bene-fits from heifer importation schemes that have been implemented over the last few years by processors such as Nestle, Dairibord and Dendairy.

The dairy industry is cur-rently operating at around 14 percent capacity with

installed capacity able to produce over 400 mil l ion l itres annually. At its peak in 1999, Zimbabwe pro-duced over 150 mil l ion l itres of milk annually and was exporting into the region and beyond.

For the past decade, the country’s dairy industry has been struggling and this has resulted in dairy compa-nies fai l ing to meet national demand of 120 mil l ion l itres per annum. As a result, the country remains a net

importer of milk to cover for the deficit importing at least 10 mil l ion l itres of milk every month.

In 2015, producers fai led to meet the production targets of 70 mil l ion l itres after recording 57,5 mil l ion l itres. The Government is cur-rently working on a l ivestock policy, which is expected to drive the industry towards efficiency of production as well as growing the capac-it ies of small-scale dairy farmers.●

2 NEws

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HARARE -Cement manufacturer Lafarge Cement Zimbabwe has reported an after tax loss of $1,9 million for the full-year to December 31, 2015, down from a net profit of $80 000 in FY2014.

The firm’s revenue for the period under review increased margin-ally by 2 percent to $61, 5 million from $60, 4 million previously, driven by an increase in sales.Cement sales rose 5 percent as the company secured new market segments.

Lafarge’s total current assets during the period under review decreased by 13 percent mainly due to the reduction in inventory arising from the obsolescence provisions, while total equity reduced marginally by 5 percent due to the reduction in retained earnings driven by the loss for the year.

In a statement accompanying the results chairman Mr Muchadei Masunda said the net impact of

these movements resulted in a decrease in net working capital of $2, 86 million from the previous year.

The company generated $6 million from operating activities, which was an increase of 72 per-cent over FY2014. Going forward, Lafarge chairman said he expects the firm to be profitable in the current financial year on the back of cost-cutting measures and strategic marketing initiatives.

“We expect the general trading environment to exert pressure on prices due to ongoing economic

stress. However we anticipate improved profitability in 2016 mainly driven by operation costs reduction measures and targeted strategic marketing initiatives,” he said.

The cement manufacturer paid off all bank loans amounting to $4, 8 million during the year under review. Due to the loss incurred the board chose not to declare a dividend for the period.

Lafarge Cement Zimbabwe is the local unit of global cement giant LafargeHolcim.●

Lafarge posts $1,9m loss for FY15

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By Tawanda Musarurwa

HARARE - Local seed com-pany Zadzamatura-Dekalb will tomorrow launch its new ‘Dekalb Maize seed’ and Monsanto agro-chemical products.

Zadzamatura-Dekalb is a locally owned seed company that distributes Dekalb-Mon-santo products in the country and has been operational since 2004 after Monsanto divested from the country.

Prior to its divesture, Mon-santo had merged with Cargil who owned the Zadzamatura brand that had 15 percent of local market share.

Said Zadzamatura managing director Mr Danny Myers: “We reintroduced Zadzamatu-ra-Dekalb/Monsanto products to the Zimbabwean market last year after securing a distribution deal. We are launching at a time when the first crop is ready and our

products are available in all major retail outlets nation-wide.

“We realised that Monsanto left big gap on the market when they divested from the country in 2004 and we took this opportunity because the Zadzamatura-Dekalb/Mon-santo brand is well known in Zimbabwe for winning seeds and chemicals.”

Mr Myers said that his com-pany’s maize varieties are suited for local conditions as they were developed in Zim-babwe under the Zadzamatu-ra-Cargil brand.

The varieties’ key benefits include excellent grain qual-ity, good tolerance to mois-ture stress and resistance to grey leaf spot.

“The Zadzamatura-Dekalb launch is a game changer in local maize production because being a wholly owned Zimbabwean company

puts us in a unique position to quickly and easily respond to Government policy and farmers’ needs in a fast changing environment,” added Mr Myers.

He said that his company’s strategic partnership with Monsanto means that cus-tomers can take advantage of the latest breeding tech-nology and access to new drought tolerant varieties that are being developed by the African Agricultural Tech-nology Foundation (AATF) under the Water Efficient Maize for Africa (WEMA) pro-ject which is sponsored by Monsanto.

In a bid to maximise yields and mitigate the effects of climate change in Sub-Saha-ran Africa, the WEMA project aims to develop drought-tol-erant and nitrogen use effi-ciency maize using conven-tional breeding methods.●

Seed firm launches new maize variety

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New York- Zimbabwe expressed strong optimism on Wednesday that developed countries will honour a $100 billion financing pledge made at a United Nations (UN) Climate summit in Paris last year to tackle devastating effects of global warming.

Speaking ahead of the formal signing of the Paris climate agreement here by world leaders, Environment, Water and Climate Minister Oppah Muchinguri-Kashiri Minister said it appeared all nations, particu-larly big powers, were now keen to tackle the negative effects of climate change.

For decades, developed countries - especially the United States - only paid lip service to collective global efforts to fight climate change, resulting in very little, if anything, being achieved.

Repeatedly, the countries reneged on pledges to finance climate change mitigation programmes and projects in less developed nations, most of which suffered

hardest from global warming. The impact of climate change included more frequent droughts and floods, with the severity of both increasing.

But Minister Muchinguri-Kashiri said the world sobered up at last year's Paris UN Climate Summit, and attitudes towards tackling challenges posed by global warming were changing espe-cially among the big powers. She said developed countries had already started honouring their Paris summit financial pledges, way ahead of the 2020 deadline for the entire financing to be in place.

The fund is principally meant to finance climate change mitigation efforts in developing countries such as clean energy generation and agriculture.

"This time around the situation is different; there is some funds that have already been deposited. We are confident, but we are yet to reach that high level of satisfac-tion," she said.

"We are confident that even if some aspects of the (Paris) agreement are not legally binding, there will be movement towards reducing pollution levels," Muchinguri-Kashiri said, referring to the main source of climate change. The minister, who is accompanying President Robert Mugabe to the signing ceremony of the Paris Climate Change agreement, said Zimba-bwe whole-heartedly embraced the pact, and was committed to its full implementation.

Several world leaders - including President Mugabe - will on Friday sign the Paris Climate Change agreement, ending more than a decade of protracted negotia-tions, and marking the beginning of a united global fight against global warming.

Under the agreement, the world plans to restrict global tempera-ture increase to between 1,5 per-cent to 2 percent which experts say would reduce the effects of climate change.- New Ziana●

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Zimbabwe confident developed world to honour climate pledges

BH2412

HARARE -The mainstream industr ia l index added a fur-ther 0.36 to c lose at 99.01.

The posit ive momentum was dr iven by gains in cement manufacturer PPC, which added $0,0489 to sett le at $0,6489 and beverages giant Delta, which l i f ted by $0,0102 to $0,5902.

Also on the upside was giant insurer Old Mutual which went up by $0,0029 to trade at $2,2376 whi le croco-di le skin producer Padenga added $0,0020 to $0,0720.

On the downside, there were only two counters, namely SeedCo which s l ipped $0,0200 to c lose at $0,5800 and Dair ibord which c losed

at $0,0550 fo l lowing a $0,0010 loss.

The mining index was steady at 20.16 as Bindura, Fal-

gold, Hwange and RioZim al l maintained previous pr ice levels at $0,0102, $0,0050, $0,0300 and $0,1100 respec-t ively - BH24 Reporter ●

ZsE13

Industrials extend gains

MovERs CHANGE TodAY PRICE UsC sHAKERs CHANGE TodAY PRICE UsC

PPC 8.15 64.89 SEEDCO -3.33 58.00

PADENGA 2.85 7.20 DAIRIBORD -1.78 5.50

Delta 1.75 59.02

OLD MUTUAL 0.12 223.76

INdEx PREvIoUs TodAY MovE CHANGE

INDUSTRIAL 98.65 99.01 +0.36 points +0.36%

MINING 20.16 20.16 +0.00 POINTS +0.00%

14 ZsE TABLEs

ZsE

INdICEs

stock Exchange

Previous

today

15 dIARY oF EvENTs

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

PowER GENERATIoN sTATs

Gen Station

21 April 2016

Energy

(Megawatts)

Hwange 409 MW

Kariba 460 MW

Harare 30 MW

Munyati 13 MW

Bulawayo 22 MW

Imports 0 - 400 MW

Total 1189 Mw

• 26th April 2016 - The Fifty-Sixth Annual General Meeting of the shareholders of British American Tobacco Zimbabwe (Hold-ings) Limited; Place: British American Tobacco Zimbabwe Offices, 1 Manchester Road, Southerton, Harare; Time: 10.00 hours...

• 05 May 2016 - Barclays Bank of Zimbabwe AGM; Place: Meikles Mirabelle Room; Time: 1500hrs

THE BH24 dIARY

LoNdoN - Investors hold-ing Mozambique's recently restructured 'tuna bond' are demanding answers from the government and its bankers over what the International Monetary Fund says are previously undisclosed loans that could exceed $1 bill ion.

The revelations have rocked the relationship between one of the world's poorest coun-tries and the International Monetary Fund (IMF), which last year agreed to lend Mozambique $286 million to cushion its economy follow-ing deep declines in com-modity prices and the value of the metical currency.

Only last month investors met Mozambican officials and agreed to swap an outstand-ing $697 million of the dol-lar-denominated tuna bond, issued in 2013 by state-owned fishing-company Ema-tum, for a sovereign issue.

The deal was seen widely as investor friendly and accepted by holders rep-resenting more than 80 percent of the issue. Ratings

agency Standard and Poor's defined the restructuring as "tantamount to a default".

The original $850 million bond has been controversial from the start: when it was launched, it was presented to investors as funding for "fishing infrastructure" but it quickly became apparent

most of the cash was for defence.

Under IMF pressure, the government re-allocated $500 million of the debt to its defence budget. The subsequent bond resched-uling was part of efforts to clean up and rebuild trust for the southern African nation,

under pressure from donors to improve the transparency of its finances.

However, last Friday the IMF said it believed Maputo bor-rowed $1 bill ion more than previously disclosed.

The Fund's Africa Director, Antoinette Sayeh, said the additional loans appeared to have been borrowed from Credit Suisse and Russia's VTB Bank and allocated to Mozambique's defense and security sector.

Credit Suisse and VTB Bank were also joint dealer man-agers on the exchange offer launched in March. Mozam-bique's Finance Minister Adriano Maleiane was quoted on Sunday saying the coun-try had no hidden loans and that this was down to "some confusion".

Investors say if found to be true, the IMF allegations could greatly damage the country's reputation and ability to raise funds. - Reu-ters●

REGIoNAL NEws 16

Investors want answers from Mozambique, banks over loan mystery

Europe’s government bond markets are offering Mario Draghi some respite before the European Central Bank announces its policy decision Thursday.

Benchmark German 10-year bunds fell, pushing the yield to the highest level in four weeks, as traders held off bets that officials are likely to deliver any more easing measures. No economists surveyed by Bloomberg are forecasting a change to the ECB’s interest rates Thurs-day. Spain’s sovereign bonds fell before the nation auc-tions as much as $3,4 bill ion of debt.

Last month policy makers cut rates and expanded the asset-purchase program to include corporate bonds in an effort to return inflation back toward their goal of just under 2 percent. The annual rate of consumer-price infla-tion was at zero in March. Traders may be instead focusing on the longer-term outlook for monetary policy.

Sixty percent of analysts surveyed by Bloomberg said

the ECB will ease further. The most likely date for fresh action was put as the Sept. 8 policy meeting, though some predicted it could happen as early as June.

‘Policy Action’

“The expected market impact is broadly neutral” from Thursday’s policy decision, said Marius Daheim, a senior rates strategist at SEB AB in Frankfurt. Draghi will make “claims that the ECB tool box

is stil l not depleted and call for economic and fiscal policy action to stimulate growth.” There won’t be comments that “fuel speculation on helicopter money and no comments aimed at talking down the euro,” he said.

Germany’s 10-year bund yield rose three basis points, or 0,03 percentage point, to 0,19 percent as of 8:45 a.m. London time, matching the highest level since March 24. The 0,5 percent security due in February 2026 fell 0,335, or 3,35 euros per 1 000-euro face amount to 103,04.

Spain’s 10-year bond yield increased five basis points to 1,58 percent, while that on similar-maturity Italian debt climbed four basis points to 1,44 percent. The bond mar-ket’s outlook for euro-area inflation is giving mixed sig-nals as the positive effects of a rebound in oil prices has been mitigated by the strengthening of the euro. Though any signs of higher inflation expectations would be a boon to policy makers.

Inflation Outlook

The five-year, five-year forward inflation-swap rate, one gauge of price-growth expectations, closed Wednes-day at its lowest level since March 1. Strategists at SEB and BNP Paribas SA say this measure has diverged from the rising oil price unlike other market-based gauges.

Germany’s 10-year break-even rate, a gauge of the outlook for inflation derived from the yield difference between bunds and index-linked securities, rose to 1,05 percent on April 19, the highest close this year on April 19.

ECB policy makers’ “ultimate objective is stil l inflation, but they are aware that inflation will start to gradu-ally rebound at best by the end of the year,” said Patrick Jacq, a senior fixed-income strategist at BNP Paribas in Paris. “Recent comments from ECB board members suggest they would prefer keep rates unchanged now. If they ease further, it could become counterproductive” to banks’ profitability. – Bloomberg●

INTERNATIoNAL NEws 17

German 10-year yields rise to four-week high before ECB decision

By donald Kaberuka

The apparent end to the commodity supercycle has sent shock waves across the global economy. It has sparked turbulence in stock markets, put pressure on currencies and fuelled con-cerns about prospects for growth and the stability of public finances.

Africa has not escaped this pessimism. Questions have been asked about the con-tinent’s economic future, with fears that the remark-able gains of the past two decades could be reversed. The mood reminds me of the International Monetary Fund-World Bank meetings I attended at the height of the Asian financial crisis nearly 20 years ago, when analysts were predicting the Asian miracle was at an end.

They underestimated the potential of Asia then, and I believe the potential of Africa is being underestimated now.

As someone who led the African Development Bank (AfDB) for a decade until last year and witnessed first-hand the continent’s economic transformation, I believe Africa is much more resilient than this knee-jerk pessi-

mism suggests. I believe that if the right policies are put in place and well-targeted private investment continues, the continent’s progress will actually accelerate.

I am not suggesting the

rise in demand and prices for commodities has not been important for Africa’s economic progress. But the continent’s turnaround began well before the commodity bull-run. The focus on com-modities has downplayed the

18 analysis18 ANALYsIs

Resources not Africa’s only gem

importance of other sectors such as IT and services. Recent statistical reviews of the economies of countries such as Nigeria and Ghana have shown the size and growth of these sectors has been consistently underesti-mated.

Nigeria, of course, as a major oil producer, is among the African economies more heavily dependent on natural resource revenues. For these countries, tough decisions will be needed to find alter-native sources of revenues.

There may be short-term pain, but many countries have seen the benefits of such reforms in the past. The reality, however, is that very few of Africa’s 54 countries are heavily dependent on mineral wealth. It is invest-ment and growth in regional trade and consumer demand that have been the main drivers of their growth.

These economies — includ-ing Côte d’Ivoire, Ethiopia,

Kenya and Rwanda — stand to gain from lower oil prices. They are already seeing less pressure on their balance of payments.

Even among the relatively few countries in which min-eral wealth is a major driver of growth, there are other factors that give reasons for optimism. In particular, Africa stands to gain hugely from its demographic dynam-ics.

Record numbers of young people will be entering the labour market in the next decade. This technologically engaged young workforce can become drivers not just of African, but also of global growth. The challenge is how we ensure we don’t waste this huge opportunity. Pri-vate capital has a crucial role to play.

In 2005, under my lead-ership, the AfDB took the decision to encourage private investment in the continent. As investors began to realise

that returns outweighed risks — largely related to the cost of doing business — we saw private sector lending grow from $500m to $3bn a year.

Intelligent use of private capital, such as private equity asset classes, can drive Africa’s next leap for-ward. Thoughtful long-term investment is needed to meet the continent’s energy and infrastructure needs. But it can also enable African com-panies to seize the opportu-nities a fast-growing popu-lation will create, in sectors from education and health-care to household util ities.

This is why I work with TPG/Satya, which is looking to team up with talented Afri-can entrepreneurs to help them build their companies. I have seen for myself the ability of Africans to inno-vate. Private equity can help play a transformative role on the continent by providing the capital to scale up and globalise African companies so they become household

names across the world.

Africa’s future progress is, of course, by no means guar-anteed. It faces plenty of challenges.

But the answers are known. They include better regu-lation, predictable policies, modern infrastructure and deeper economic integration.

Provided these solutions are put in place and well-tar-geted private investment continues to flow, I believe Africa can look forward to a new and bright chapter.

Far from the softening of commodity prices reversing Africa’s economic gains, I see a prosperous future built on real, sustainable growth rather than simply nature’s inheritance. – BDLive ●• Kaberuka is a senior adviser to TPG/Satya. He served as president of the African Development Bank Group from 2005 to 2015

19 analysis19 ANALYsIs