News Update as @ 1530 hours, Tuesday 24 June 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

Zimbabwe is not in the first batch of ACP countries to receive EU support under the 11th European Development Fund (EDF). Zimbabwe has missed out the last two EDFs due to the sanctions the EU imposed on the country.

Imposition of the sanctions meant that

Zimbabwe could not benefit from the EU's financing of budgetary support and support for projects, and was suspended from the 9th EDF National Indicative Programme.

But Zimbabwe is likely to be part of the 11th EDF as the EU has been gradually easing the sanctions since 2012, and their complete elimination (which is possible this year) will help revive capi-tal flow in the country.

Although Zimbabwe has come up with its National Indicative Programme (NIP) for the 11th EDF - which will see the country receiving over €200 million for the three sectors of health, agricul-ture-based economic development and governance & institution building - it is yet to be approved by the EU.

The NIPs outline the strategies and

priorities of how EU aid will be applied in a country, and is a result of close collaboration between the EU and the partner country to reflect the Govern-ment’s own policies and needs, as well as ensuring support for national prior-ities where the EU has a value added.

Last month Finance Minister Patrick Chinamasa said Zimbabwe's NIP "was in line with ZimAsset." It will therefore be one key source of funding for pro-jects outlined under the country's eco-nomic blueprint. However, with the first batch of ACP countries having had their NIPs approved during the ACP-EU Joint Council of Ministers held last week in Kenya, Zimbabwe will have to wait until early next year to see if its NIP will be approved. The NIPs for the remaining ACP states are scheduled to be finalised and signed by early 2015.

The financial allocation available for ACP countries under the 11th EDF (covering 2014-2020) amounts to more than €31.5 billion.

The first batch consists of 16 countries, with a total of more than €4.6 billion of EU support having committed towards national development strategies in 16 ACP countries.

In a statement ACP said ministers from 15 African states (Botswana, Côte d'Ivoire, Djibouti, Ethiopia, Gabon, Ghana, Kenya, Mauritania, Niger, Sao Tome & Principe, Sierra Leone, Soma-lia, Swaziland, and Tanzania) and one Caribbean (Suriname) co-signed the first National Indicative Programmes (NIPs) under the 11th European Devel-opment Fund for the period 2014-2020, with European Commissioner for Development Andris Piebalgs. •

Zim to wait until 2015 for 11th EDF approval

Minister Chinamasa

2 TECHNOLOGY

By Rumbidzayi Zinyuke

Econet Wireless is working expanding its 3G and 4G services to pave way for the introduction of an entirely Internet Protocol (IP) network which will ena-ble the transmission of information between devices and individuals with speed and ease.

Speaking at the launch of Econet’s Plat-inum Suite in Borrowdale this morning, chief executive Douglas Mboweni said the network would allow them to cater for customers’ needs as technology evolves.

“The kind of network we have to build is what is known as the 20-20 network. It is an entirely IP network that is smart and enables communication between devices,” he said.

Econet launched its 4G service last year in preparation for the UNWTO general assembly co-hosted with Zam-bia, becoming the seventh network in Africa to introduce the product.

Mboweni said the company would invest an undisclosed amount in expanding both its 3G and 4G services while awaiting the roll out of the 5G service by other players.

“We are living in an age where conveni-ence, speed and security are key. 4G is already operational and we are looking at expanding it to other areas as part of the investment we are working on.

There is still a lot of work that needs to be done in 3G and 4G but 5G is a tech-nology already being looked at by other players and we are watching it closely.

As soon as we find that it is ready for roll out then we will go for it because our issue is to make sure that our cus-tomers continue to enjoy speed on their devices,” he said.

He said Zimbabwe is lagging behind in

e-commerce and the new IP network will encourage internet buying which is faster and more convenient than going to the shop physically.

“We continue to invest in infrastructure for high speed access so that if you want to do a transaction from home it is done fast, securely and conveniently.

Why should l visit a shop to buy a shirt when the shirt can come to me? Our network will enable that connectivity,” he added.

Mboweni added that Econet would soon launch a tracking system which can be used on cars and other devices.

“Your vehicle has so many components which can communicate a message and the network which we are building will enable the transmission of these messages to you.

This means your car can communicate with you wherever you are. That is why we are talking 4G and eventually 5G,” he said.

Going into the future, Mboweni said investment will be driven by the needs of particular markets. •

Econet to introduce an entirely IP network

Mr Mboweni

3 NEWS

'IMF report consistent with reality'By Tawanda Musarurwa

Economic observers say the IMF report on Zimbabwe released yesterday is consistent with what is transpiring on the ground.

The IMF report highlighted several issues that are causing an economic slowdown, notably revenue underper-formance, structural bottlenecks and a fragile global financial environment.

Economist Joseph Mverecha told BH24 that the concerns raised by the IMF were mainly related to a tight liquidity situation. "The IMF Report following the recent Article IV is fairly consist-ent with conditions observable on the ground. Tight liquidity conditions per-sist, against the background of declin-ing domestic aggregate demand and weakening external sector fundamen-tals.

"Financial intermediation – necessary for recovery and growth is hampered by both liquidity constraints and bank-ing sector vulnerabilities. Accordingly distress conditions have widened across key industry sectors, with cor-responding loss of fiscal revenues, aggravated by high local costs of doing

business. This means that there are demand and supply structural issues underpinning the current decline in economic activity," he said. In one of its key recommendations, the IMF said enhancing financial sector stability remains a priority and recommended continued vigilance in monitoring weak banks and a proactive approach to ensure "an orderly resolution of insol-vent non-systemic banks."

The international financier also said restructuring and re-capitalising the Reserve Bank of Zimbabwe would help mitigate vulnerabilities. Mverecha, however, maintained that Zimbabwean authorities are fully aware of the struc-tural issues affecting the country and are in the process of handling them. "The most important thing to remem-

ber though is that both the Minister of Finance and Economic Development Patrick Chinamasa and RBZ governor John Mangudya have already identi-fied these structural issues and most importantly have articulated what needs to be done going forward.

"The minister has stated that, we need to engage our international devel-opment partners and international financial institutions and continue on the SMP as an integral aspect of an external arrears clearance programme so that Zimbabwe can again access concessional bilateral and multilateral financing," he said.

"Significantly, a number of proac-tive measures are still pending, but it seems to me that we are in the right direction. Much more still needs to be done. The journey to recovery and sus-tainable growth is long, but not impos-sible."

The IMF also acknowledged Gov-ernment's commitment to continue implementing the policies and reforms agreed with the Fund under the Staff Monitored Programme (SMP) and to stay engaged with the international financial institutions. •

BH24

By Lynn Murahwa

The Agricultural Marketing Authority (AMA) has urged cotton farmers to negotiate favourable prices on an indi-vidual basis with buyers rather than wait for a price to be announced.

This is despite the fact that AMA recently set a price guide for the 2014

cotton marketing season at between 40 to 50 cents per kg depending on grade.

In an interview with BH24, AMA chief executive Rockie Mutenha said the country’s cotton farmers should not wait for prices to be announced but should take it upon themselves to negotiate prices with their buyers.

“Cotton farmers should not wait for us to announce a price. They should go and negotiate with their buyers and look for opportunities for the best prices,” he said

He said due to farmers requesting a platform to negotiate prices last year, this year they have been given that opportunity. He added that AMA is, however, releasing prices weekly in The Sunday Mail but farmers should still seek to negotiate.

“Last year farmers asked for the oppor-tunity to be able to negotiate prices for their cotton so this year we have given them that platform. We have been releasing weekly prices in The Sunday Mail but we encourage the farmers to go out and seek negotiable prices for their crop,” said Mutenha.

Mutenha said AMA does not know why some farmers are waiting to hear prices being announced and that it was decided that this year farmers should negotiate towards the prices they hope for.

“I don’t understand why farmers would wait to hear of a set price when it was agreed that this year they have been given the chance to negotiate for favourable prices with their buyers,” he said.

Mutenha's sentiments were backed by agronomist Zivanayi Zigwadi who said that negotiating on a personal basis will give the farmers a greater chance of survival. “Cotton farmers definitely need to negotiate in order to survive, otherwise you will not survive,” he said.

He added that farmers need to engage the buyers before growing to get better prices because the prices during last year’s season were very low.

“The problem is that farmers need to engage with the buyers before growing the crop so as to agree on a set price. We hope that through negotiations we get better prices than the low ones offered last year” he said. •

5 AGRICULTURE

Negotiate prices for yourselves, cotton farmers told

AdM-DI156506-

BH24

Mobile phone company, NetOne is close to securing a $218 million loan from China, which will be used to finance its migration from 3G broadband to 4G, an official said on Tuesday.

NetOne chief executive officer Reward Kangai said most details of the loan had been thrashed out. “The loan has been approved in China and we are now waiting for it to be signed. From what I gather, they are now asking for a num-ber of things for example we need to set up an escrow account so that when the re-payments are due that escrow account will be able to pay our dues,” he said.

“There were negotiations two weeks ago and perhaps what is now needed is a

high level delegation to go to China to finalise the deal.” The loan, an agree-ment between the Zimbabwean and the Chinese government, will be processed through the China Exim Bank. Kangai said despite the progress made, some competitors in the industry had allegedly been pulling strings to derail the loan deal.

He said this was because when the deal sailed through it would result in NetOne offering stiffer competition to its competi-tors, who for long have enjoyed an edge

over the state owned company due to limited finances.

“There were issues with our competitors, they were trying to kill this project. There was a big fight and up to now they have not given up.

Muguti argued that the awarding of the contract had been flawed as Huawei had not gone through the tender pro-cess. The lawsuit, which was withdrawn this year, had stalled negotiations for the $218 million Chinese loan.― New Ziana •

7 TECHNOLOGY

Netone close to securing loan from China

Econet partners with Apple BH24 Reporter

*As the mobile company launches new premium customers’ shop

Econet Wireless has entered a partner-ship with multinational mobile phone manufacturer Apple and is now an exclusive provider of its products in Zim-babwe. The company has other part-nerships with Huawei, ZTE and Ericson among others. Speaking at the launch of Econet’s third premium customers’ shop

in Borrowdale today, chief commercial and customer services officer Stanley Henning said this was a milestone in offering customers a great selection of smart devices at reasonable prices.

“It has taken us a long time to get here but it has finally happened. We are now the official exclusive provider of Apple products in the country,” he said. He said representatives from Apple were in the country to finalise some aspects of the deal. Apple is one of the largest phone

manufacturers with Samsung and Hua-wei and offers a range of high end prod-ucts such as smart phones and tablets.

Speaking on the platinum suite, Econet’s high value customers’ general manager Fungai Mandiveyi said platinum custom-ers would be able to access top class service and products from the shops. “Our customers can get products like Sumsung, Apple and others with ease. We also have partnerships with Steward Bank, African Sun, Edgars, Avis, Zimoco

among others,” he said. He said the shops would also ensure convenience to customers and comes with a number of benefits that include access to top class service, flexible payment plans for hand-sets and devices.

The company already has outlets in Avondale and Bradfield in Bulawayo and another in South Africa. Mandiveyi also said through their new look platinum suite, they were not segregating their customers. •

BH24

The equities market today bumped a significant 1.21 percent, lifted by gains in selected heavyweight stocks.

The industrial index expanded by 2.28 points to close at 190.31 points. Cig-arette manufacturer BAT gained 50 cents to trade firmer at 1 300 cents, while Natfoods added 5 cents to close at 215 cents.

Another heavyweight Delta went up 4 cents to 129 cents and ZBFH increased by a cent to trade at 4 cents.

Dairibord and Edgars both added 0.80 cents to close at 10 cents and 13 cents respectively. A couple of heavyweights also traded in the negative, but this was not enough to offset the gains.

Telecoms giant Econet traded in nega-

tive territory, retreating a cent to trade at 73 cents, while OK Zimbabwe eased 0.30 cents to 18 cents.

Padenga shed 0.10 cents to 8.90 cents and Astra lost 0.50 cents to close at 4 cents, Bindura bounced back to push the mining index up 3.93 percent as it gained 2.32 points to close at 61.32

points. Bindura increased by 0.19 cents to 4.8 cents, and minings were also bouyed by Hwange which moved up 2.99 cents to trade at 7.50 cents.

Falgold and Riozim maintained previ-ous trading levels. — BH24 Reporter •

9 ZSE REVIEW

Equities in significant gains

Zimbabwe has lost out unfairly as a result of the anti-asbestos lobby.

Especially so, when the chrysot-ile asbestos that the country pro-duces is not the amphibole type that is considered unsafe and has been banned by several bodies.

It is a positive development that the Government has come up with specific position on our chrysotile asbestos.

Government fully appreciates importance of chrysotile asbes-tos to the country, as Industry and Commerce Minister's state-ments at a Turnall event yesterday shows:

"Government will strive to cre-ate a conducive environment for businesses to be sustainable in their various operations in order to produce quality and affordable products and create employment for our growing nation. Testimony to this is the recent launch of the Zimbabwe Chrysolite Asbestos Position Paper.

The position paper reflects the Government's position regarding

production, trading and safe use of chrysotile asbestos and related products."

The position gives direction to both primary producers and manufac-turers who have traditionally been dependent on the mineral.

In terms of chrysotile asbestos' economic importance to Zimba-bwe, at their peak the two chrys-olite asbestos mines in Zimbabwe employed around 5 000 workers directly.

According to the new 'Zimbabwe Chrysolite Asbestos Position Paper' that was released by Government last month, the same mines eco-nomically sustained more than 20 000 people, predominantly in and

around the two mining towns of Zvishavane and Mashava.

There are also numerous down-stream benefits.

This clearly shows the value of chrysotile asbestos to the econ-omy of the country.

That value, however, has certainly been decimated by the anti-asbes-tos lobby, which seems to have generalised - deliberately or not - all asbestos as harmful.

Studies have shown that chrysot-ile asbestos is not at all harmful, and Zimbabwe needs to come out and make this message heard both locally and abroad.

Zimbabwe needs to get this mes-

sage "out there" because - along with Russia - the country is a key chrysolite asbestos producer.

The world has been misled about the safety (or apparent lack thereof) of asbestos produced by Zimbabwe.

We need to recover lost ground.

Reviving the chrysolite asbestos exports will certainly provide a boon for the Shabanie Mashava Mines, which are set for revival.

Greater downstream benefits will also accrue to companies such Tur-nall, which is a principal processor of chrysotile products, and to the economy as a whole. •

10 BH24 COMMENT

Need for clarification campaign on chrysotile asbestos

BH24

South Africa's rand remained firm on Tuesday after hitting two-week highs in the previous session as relief swept the market after the country's longest strike ended.

The local unit was trading at 10.57 rand per dollar at 0715 GMT, slightly stronger than its New York close of 10.59. On Monday it had gained 1 percent, breaking through 10.56 to the dollar at one point for the first time in a fortnight.

The five-month stoppage in the plat-

inum sector dragged Africa's most advanced economy into contraction in the first quarter, costing the world's top three producers of the preci-

sious metal almost 24 billion rand ($2.25 billion) in lost revenue. [ID: L6N0P420A]

The reprieve may be short-lived as metal workers' union NUMSA looks set to go on strike next week in the key auto sector.

"The good news is that the strike has ended," said Carmen Nel of Rand Merchant Bank in a morning market note.

"An additional concern is that the increased activity in the platinum sector will add to the existing strain in the power grid, with Eskom recently warning of tight supply," she added.

Government bond yields were steady to slighty firmer, with the yield for the bond maturing next year slipping 1.5 basis to 6.620 percent while the 2026 issue was down 2.5 basis points to 8.285 percent. ― Reuters •

12 REGIONAL NEWS

Rand holds gains as South Africa platinum strike ends

enjoy the CAIO ride!

ANALYSISBH24

14 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

23 June 2014

Energy

(Megawatts)

Hwange 485 MW

Kariba 750 MW

Harare 45 MW

Munyati 27 MW

Bulawayo -- MW

Imports 55 MW

Total 1362 MW

26 June - Pioneer 44th Annual General Meeting of Sharehold-ers, Venue: Pioneer Corporation Africa Limited Boardroom, Corner Hood/Hermes Roads, Southerton, Harare, Time: 10:00 hrs

26 June - Masimba Holdings Limited Thirty-Ninth Annual General Meeting of Mem-bers for the period ended 31 December 2013, Place: 44 Til-

bury Road, Willowvale, Harare, Zimbabwe, Time: 12:00

30 June - TA Holdings 79th Annual General Meeting of the ordinary members Venue: Miti Room, Sango Conference Centre, Cresta Lodge, Harare, Time: 1400 hours

30 June - ZIMRE 16th Annual General Meeting of members, Venue: NICOZDIAMOND Audito-rium, 7th Floor Insurance Centre, 30 Samora Machel Avenue, Time: 1230 hours

THE BH24 DIARY

BH24

16 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

MASH 4.35% 2.40 NATFOODS -2.33% 210.00

INNSCOR 1.24% 81.00 SEEDCO -0.29% 71.00

BAT 1.21% 1,250.00 DAWN PROPERTIES 2.30 0.05

BARCLAYS 1.08% 3.75

DELTA 0.80% 125.00

OLD MUTUAL 0.00% 260.01

Indices

INDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 188.03 190.31 +2.28 POINTS +1.21%

MINING 59.00 61.32 +2.32 POINTS +3.93%

Stocks Exchange

Previous

17 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 2,356.80 +2.31 +0.10% 20June

Kenya 4,825.52 +28.10 +0.59% 20June

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 41,129.29 +60.36 +0.15% 20June

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 187.40 +2.54 +1.37% 20June

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 —"Our business in life is nOt tO get ahead Of Others, but tO get ahead Of Ourselves."― Zig Ziglar

Globalshareholder.com

BH24

The government of India is likely to raise the number of drugs deemed essential and subject to price caps, people directly involved in the process said.

A panel formed by India's health min-istry is meeting for the first time on Tuesday to consider adding more drugs to the list of essential medicines, all of which would then come under price caps, one of the people said. The move would make the drugs more affordable in a country where 70 percent of the people live on less than $2 a day.

Making more drugs subject to price caps will draw the ire of global drug-makers like Pfizer Inc (PFE.N), Glax-oSmithkline Plc (GSK.L) and Abbott Laboratories (ABT.N), all of which have a large presence in India's $15 billion pharmaceutical industry.

The global drugmakers have already been hit by wide-ranging govern-ment-imposed price reductions and a legal system with a history of disallow-ing patent protection in recent years in an emerging market that is a vital growth driver for the firms.

Bringing more drugs under price con-trols would dash hopes for an easing of the populist drug policies of the pre-vious federal government under new, business-friendly Prime Minister Naren-dra Modi, industry analysts said.

"It is surprising that yet another com-mittee is being formed (on price con-trol)," a top executive at the Indian unit of a large global pharmaceutical company said, declining to be named

due to sensitivity of the issue. "This (is) quite the antithesis of what is the purported philosophy of the new gov-ernment."

India last year raised the number of drugs that are subject to price controls to 348 from 74 earlier, covering up to 30 percent of the total drugs sold in the country, according to industry officials.

India's pharmaceutical sector sub-in-dex extended its loss after Reuters

reported the committee's formation, trading down 0.2 percent at 0656 GMT, while the main Mumbai market index .BSESN was trading up 1.1 percent.

Shares of GlaxoSmithKline Pharma-ceuticals Ltd (GLAx.NS), the India unit of GlaxoSmithKline Plc, reversed their gains to fall 0.1 percent. Lupin Ltd (LUPN.NS), India's fourth-largest drug-maker by revenue, was trading down 0.4 percent. ― Reuters •

19 INTERNATIONAL NEWS

India likely to extend price caps to more drugs - sources

By victor Mukandatsama

A must-be-gleeful NetOne was granted an unexpected boost ahead of its com-petitors in the Zesa prepaid electricity retailing facility. They are the only MNO awarded the opportunity to sell prepaid electricity tokens.

No surprises there if you have both-ered to read a bit of Zimasset. I warn NetOne not to celebrate prematurely though. I have seen how they are going about capitalising this opportu-nity and I am driven by no malice when I say Pride goeth…

To pay for Zesa via OneWallet you need to swap your 32k SIM for the 128k

SIM for free or buy a Netone SIM pack. Once activated, you then need to reg-ister (partially via your own phone and fully via an agent) for One Wallet.

Once setup, a Netone services app appears on your list of applications from which you can conduct e-wallet trans-actions. I suppose this is better than direct USSD as with Econet and Telecel. You then need to apply to register your meter number by dialing *120*8#. If your registration is approved by One-Wallet, you will receive a text mes-sage advice and an extra menu item for Zesa Prepaid. Anyone following the process will realise two things. Firstly their system requires pre-registering biller details (account number etc.) the

derivative of which one can then pay for the bill. In other words you don’t just pay for any bills you want to any biller you wish. Which is why you hav-en’t seen any posters with biller codes. Well also because they only have one major biller; Zesa. Which brings me to the second observation.

Other than Zesa, their system does not seem to be very scalable (I may be wrong). Either that, or their transaction ideology is uncommon to the market. This is unlike the EcoCash and Tele-Cash system in which liberalisation of the transactions and the transactions origination exists. It’s a system where agents, billers and merchants are equally critical and solicit and consume at will.

The One Wallet system follows a bureaucratic mountain top approach. Everything depends on an approval process from OneWallet somehow. Approval to register to pay Zesa? Really? Thirdly, NetOne are seeking to get maximum mileage in subscription numbers making sure they sign on as many users onto OneWallet as pos-

sible. Personally, I think this is where they are getting it wrong. Rather than sell the efficiency of the system to get your bills done and set off a snow ball, they are proving it to be riddled with so many spanners.

As an example, it is not possible to register more than two Zesa pre-paid meters. Translated: You are not allowed to buy prepaid electricity other than for a maximum of two preregis-tered meters because if you do, the other beneficiaries won’t bother to join Netone. If you want to pay Zesa from your phone, then join OneWallet.

The fall….

NetOne is ranked third out of three players as far as subscriber base. Some critics argue the awarding of this licence to sell prepaid electricity to NetOne and not the rest of the networks, especially EcoCash, is a true inconvenience. If the Government were to change its policy for whatever reason, Netone could be the least prepared of the three in as far as convenience, and that will be their fall. ― TechZim •

20 ANALYSIS

The Netone-ZESA marriage- Pride goeth before a fall