Investment Quarterly Magazine Q3 2020

Demystifying misconceptions Throwing a brick to kill a fly ZSE delistings outpace new listings, Regulatory overreach – Stringent
around Old Mutual listing on the P19 market confidence wanes P26 regulations on mobile money
ZSE P6 /Gamu Pasi /Cornelius T. Makari /Lavender Marisa P41 /Tinashe Majiga
INVESTMENT
QUARTERLY
Q3 Edition 2020

Regulatory
overreach...

The bane of investors risk appetite?

1Q3 Edition | Investment Quarterly

Editor’s note Q3 Edition 2020

welcome to our third quarter INVESTMENT QUARTERLY MAGAZINE
edition of the Investment 10 Londonderry Ave
Quarterly Magazine. Eastlea - Harare
In this issue we discuss the inherent pen- Tel: +263 787 629 333
chant by authorities to resort to stringent Mobile: +263 733 016 576
regulations on financial markets ostensi- Email: [email protected]
bly to stop alleged economic saboteurs. Directors:
As we flagged in the Q2 2019 edition of Ranga Makwata, Rufaro Zengeni
the IQ Magazine upon the reintroduction Managing Editor
of the local ZWL$, the authorities pre- Jamaica Tongowona
dictably suspended trading on the ZSE Staff writers:
and also suspended dual listed counters Ruramai Gatsi
from trading on the ZSE. Tinashe Majiga
We also investigate the impact of polit- Ruth Dandawa
ical interference on capital markets and Guest writers:
the bearing this has on the attractiveness Caroline Chidziwo
of investment markets and the country Courage Pahla
as an investment destination. Gamu Pasi
The Victoria Falls Stock Exchange Isheanesu Nehanda
(VFEX) is now a reality and will become Lavender Marisa
the third stock exchange after the ZSE Cornelius T Makari
and the FINSEC. We have in this issue Tatenda S Majoni
the FAQs and insights on the new bourse. Advertising:
As always, happy reading and please feel Ruth Dandawa [email protected]
free to write back to us. We value your +263 788 738 975, +263 787 629 333,
feedback. + 263 733 016 576
Editorial:
Managing Editor Jamaica Tongowona [email protected]
Jamaica Tongowona +263 772 768 364, +263 733 016 576
[email protected] +263 787 629 333
Magazine design & layout:
2 Investment Quarterly | Q3 Edition 2020 Jonathan Faith Mbulay
+263 783 574 363 / +263 719 697 070
[email protected]
[email protected]
Photographer :
Allen Matutu:
[email protected]

3Q3 Edition | Investment Quarterly

Contents

10 26 44 60

ZSE delistings out- In search of the
pace new listings, working agric
market confidence
recovery plan for
wanes Zim

Why suspending The New Retail
ZSE over currency Order US Dollar
depreciation was
Prices
a bad idea

6. Demystifying misconcep- 31. Going nowhere fast! /Tatenda Samantha Majoni

tions around Old Mutual listing /Ruramai Gatsi 52. Zim tourism sector beyond
on the ZSE
37. South Africa will move the the Covid-19 pandemic
/Gamu Pasi /Caroline Chidziwo
needle
10. Why suspending ZSE over /The Thinking Man 56. The Land Question and the

currency depreciation was a 41. Regulatory overreach – Economy
bad idea /Jamaica Tongowona
Stringent regulations on mobile
19. Throwing a brick to kill a money 60. In search of the working
/Tinashe Majiga
fly agric recovery plan for Zim
44. The New Retail Order - US /Isheanesu nehanda
/Cornelius T. Makari
Dollar Prices 64Covid-19 times
24. VFEX FAQs /Ruth Dandawa
/Courage Pahla
26. ZSE delistings outpace 47. Survivors guide to daily

new listings, market confidence living in Zimbabwe
wanes

/Lavender Marisa

4 Investment Quarterly | Q3 Edition 2020

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5Q3 Edition | Investment Quarterly

Demystifying
misconceptions
around Old
Mutual listing
on the ZSE

Gamu Pasi Martin Luther be in total darkness. Only
King Jr. made the light of knowledge can
6 Investment Quarterly | Q3 Edition 2020 a very famous rescue you from such a trap.
quote, “Noth- When making regulations,
ing in the world is more it is very important to have
dangerous than sincere ig- people who understand that
norance and conscientious particular industry to be at
stupidity.” That quotable the forefront.
quote portends well with It came as a surprise on the
this Bible verse, Matthew 26th of June 2020 when the
6:23b “If therefore the light Zimbabwe Stock Exchange
that is in you is darkness, (ZSE) suspended trading
how great is that darkness!” following a government di-
Yes, it is very possible to be rective. The market had to
very convinced as a person endure 5 full weeks of inac-
or group of persons that tivity before resuming on the
what you think is very cor- 3rd of August 2020. Howev-
rect and true yet you might

Demystifying misconceptions around Old Mutual listing on the ZSE

er, dual-listed companies Old on the attractiveness of the enables a country to attract
Mutual, Pretoria Portland Ce- nation as a good investment. foreign capital in the form of
ment (PPC) and SeedCo In- foreign investors in the coun-
ternational remain suspended. So let’s go step by step and try’s equity (shares) and bond
According to the govern- try figure out if the follow- markets. For example, about
ment statement, the closure ing allegations were true: i) 30% of Ghana’s local bonds
of the ZSE was meant to stop ZSE sabotaging the country are held by foreign investors
the slide of the local curren- by causing the collapse of the due to their attractive yields.
cy (ZWL$) on the unofficial ZWL$, and ii) OMIR sabo- Zimbabwe is currently expe-
markets, amidst allegations tage on the ZWL$. riencing hyperinflation, which
that the ZSE along with Eco- is the rapid increase in the
Cash (mobile payment plat- i) Was the ZSE prices of goods as a result of
form) were collaborating to sabotaging local too much money chasing few
sabotage the country by caus- currency, ZWL? goods. It has not been pru-
ing the collapse of the ZWL$. dent to keep ZWL in a bank
At the core of government’s By its nature, a stock exchange account because any day you
argument is the Old Mutual provides a most efficient and would wake up having lost se-
Implied Rate (OMIR) which effective way of capital al- rious value. The ZSE has been
is a rate implied by market location. Investors channel a safe haven for investors be-
participants when they trade capital to the most promis-
in Old Mutual Limit-
ed shares listed on the
ZSE, London Stock
Exchange (LSE) and
Johannesburg Stock Ex-
change (JSE).

A stock exchange is a ing investment opportunities. cause stocks usually rise in
reliable barometer to They also help in capital rais- line with or above inflation.
measure the economic ing for corporates (bonds & The folly of holding on to
condition of a country. equity), governments (bonds), cash or investing in mone-
Every major change in and municipalities (bonds). tary assets was clearly evident
country and economy is Over and above, an exchange when most pensioners lost
reflected in the prices of
shares. The rise or fall
in the share prices indi-
cates the boom or reces-
sion cycle of the econ-
omy. Stock exchange is
also known as a pulse of the
economy or economic mirror
which reflects the econom-
ic conditions of a country.
Tampering with the stock ex-
change has a serious impact

7Q3 Edition | Investment Quarterly

their entire pensions during policies (the printing of mon- the US$ was the official cur-
the 2006-2008 hyperinflation- ey) that are not anticipated rency and there were no re-
ary episode. and not matched with local strictions in terms of moving
What actually causes depreci- production will tend to result money in and out of Zimba-
ation or appreciation of a cur- in the twin effects of a decline bwe, OMU shares listed on
rency are factors such as na- in the real interest rates and the ZSE traded at a discount
tional inflation rates, changes upward pressure in domestic to shares on the LSE and JSE.
in real interest rates, differ- price levels as too much mon- For instance, about 10 years
ences in economic perfor- ey chases fewer goods. ago on the 30th of June 2010,
mance, changes in investment OMU shares on the ZSE were
climate and government fiscal ii) OMIR sabotage US$1.53 per share versus
and monetary policy. on the ZWL$ US$1.88 per share on the LSE
The currency of a country and US$1.91 per share on the
with high inflation tends to The Old Mutual Implied Rate JSE representing a 19% and
depreciate whilst the curren- (OMIR) comes from the fact 20% discount respectively.
cy of the country with lower that Old Mutual is a dual-list- In conclusion it can be argued
inflation tends to appreciate. ed counter together with other that the basis for closing the
In terms of economic per- companies like Pretoria Port- market and blaming dual list-
formance, financial flows into land Cement (PPC) and Seed- ed stocks for the local cur-
equity securities (public or pri- Co International. Old Mutual rency depreciation could have
vate) are attracted by high ex- Limited shares are listed on been convenient, if not a lack
pected returns. Investors will LSE, JSE and ZSE as well on of proper understanding of
be attracted by the high per- stocks exchanges in Namibia casual relationships between
formance of individual firms and Malawi. Each share of economic variables including
and the economy as a whole. Old Mutual Plc (OMU) ranks foreign exchange and stock
Investors will favour countries the same regardless of the ex- markets.
that have a good investment change they’re purchased, it
climate with low risk (i.e. they follows that
dislike uncertainty). As the there is an
investment climate improves implied ex-
and risk is lowered, the local change rate
currency appreciates whilst underlying
the opposite is true. Mean- the different
while, expansionary monetary share prices.
From 2009
to 2015 when

8 Investment Quarterly | Q3 Edition 2020

9Q3 Edition | Investment Quarterly

Why suspending
ZSE over
currency
depreciation
was a bad idea

F ollowing a Gov- is the Old Mutual Implied
ernment directive, Rate (OMIR) which is a
the Zimbabwe rate implied by market par-
Stock Exchange ticipants when they trade in
(ZSE) suspended all trades Old Mutual Limited shares
on the 26th of June 2020. listed on the ZSE.
According to the Govern- A look at the history of the
ment statement, the closure ZSE and the role any stock
of the ZSE was meant to exchanges plays in the growth
stop the slide of the local of an economy and empow-
currency (ZWL$) on the erment of entrepreneurs and
unofficial markets, alleg- ordinary investors, suggests
ing that the ZSE along with that such a move would have
Ecocash (mobile payment more long-term negative ef-
platform) were collaborat- fects on the country than what
ing to sabotage the coun- the authorities seek to correct.
try by causing the collapse We advocate that alternative
of the ZWL$. At the core solutions be found instead to
of Government’s argument

10 Investment Quarterly | Q3 Edition 2020

Why suspending ZSE over currency depreciation was a bad idea

address the underlying caus- ing purpose back then; foreign investors due to their
es of the currency weakness attractive yields
than attacking financial mar- a) To provide capital to the
kets which are simply trans- d) Creates a market for the
mission mechanisms that re- rapidly expanding gold indus-
flect the underlying views of try trading of securities (bonds,
the various market players. If commodities, shares)
anything, the message carried b) Put business on a sounder
by these markets, can prove a 3. Why the ZSE is
very useful source of infor- footing in the colony. considered a hedge
mation for policy-makers. against inflation in
1. The ZSE’s History c) Formalise the way pioneer Zimbabwe?
The ZSE traces its history to
the 1890s with the establish- communities conducted their Zimbabwe is currently expe-
ment of S Hyman’s brokerage business affairs riencing hyperinflation, which
in 1891 to enable the trad- is the rapid increase in the
ing of shares on the JSE and d) To raise the estimation of prices of goods as a result of
too much money chasing after
LSE[1]. In 1894 the Salisbury the colony in the eyes of for- few goods. Official year-on-
eign investors year inflation was reported as
Stock Exchange was estab- 785.6% to May 2020.
lished with 33 members and 2. The purpose of the
18 quotations one of Stock Exchange Rising inflation represents a
which loss of value of the purchas-
a) A means by which a coun- ing power of the currency,
was the BSAC[2]. Another ex- hence it is not surprising that
change was later established try’s capital (from savers) are the USD has gained 667%
in Bulawayo and 2 more in channelled to investors such over the ZWL during the same
Gweru and Mutare followed. that the most promising in- period. At the same time, the
The exchange had the follow- Old Mutual Limited share
vestment op- price kept pace with inflation
1 Rhodesian Herald - 29 October 1892 portunities will as the share price rose 785%
2 Rhodesian Herald – 1 June 1894 receive the li- on the ZSE from ZWL$ 9.60
on’s share of the per share to ZWL$ 85.00 per
economy’s sav- share.
ings. In so do-
ing, the market Faced with threats of loss of
provides a most value, savers and investors
efficient and ef- prefer to hold assets rather
fective way of than cash. For local investors
capital alloca- such as pension funds and in-
tion. surance companies, the Zim-
babwe Stock Exchange, along-
b) Capital rais- side other real assets such as
property, becomes the only
ing for corpo- avenue for investors to pro-
rates (bonds & tect value as they cannot hold
equity), govts
(bonds), munic-
ipalities (bonds)

c) Enables a country to attract

foreign capital in the form of
foreign investors in the coun-
try’s equity (shares) and bond
markets. About 30% of Gha-
na’s local bonds are held by

11Q3 Edition | Investment Quarterly

on to cash. The folly of hold- investors who became net the mealie price should rise
ing on to cash or investing in sellers of about US$ 80mln to ZWL$ 120.00 per bag ver-
monetary assets was clearly and $100mln worth of shares sus ZAR 100.0 per bag in SA
evident when most pension- in 2016 and 2017 respectively. implying an exchange rate of
ers lost their entire pensions ZWL$ 1.20 = ZAR 1.00. If
during the 2006-2008 hyper- 5. What causes the the exchange rate remains at
inflationary episode. A loss devaluation of a lo- ZWL$ 1.00 = ZAR 1.00 i.e.
of value for pensioners can cal currency? does not adjust, Zimbabwe-
end up being a social burden an mealie meal will not
to the state. Several factors are responsi- be competitive in
ble for the depreciation or ap- the market.
4. Are Foreign Inves- preciation of a currency[4] : Zimba-
tors to blame for the bwe-
Currency Collapse? a) National inflation
rates – The currency of a
Since the demise of the Zim-
babwe Dollar from June 2009 country with high inflation
to Dec 2015, foreigners in- tends to depreciate whilst
vested a net US$ 469.3m cu- the currency of the country
mulatively on the ZSE. They with lower inflation tends
represented about 16% of to appreciate. Let’s as-
the total turnover of the ZSE sume that a 20kg bag of
over that period of US$2.8 mealie meal costs ZAR
billion. Government collect- 100.00 in South Africa
ed about US$114.1 million (SA). The same bag re-
over the period or US$17.5 tails for ZWL$ 100.00 in
mln per annum in taxes which Zimbabwe implying an
approximates about 4% [3] of exchange rate of ZWL$
each trade. In 2016, when the 1.00 = ZAR 1.00. In the
Government re-introduced coming year, SA expects
the ZWL as the bond note, inflation of 0% whilst in-
the action “spooked” foreign flation is expected to be 20%
in Zimbabwe implying that

3 Taxes include VAT, Withholding 4 International Investments – Bruno
Capital Gains and Stamp Duty Solnik & Dennis McLeavey

12 Investment Quarterly | Q3 Edition 2020

13Q3 Edition | Investment Quarterly

ans will buy (import) cheaper c) Differences in eco- e) Government fiscal
mealie meal from SA whilst nomic performance – and monetary policy
people in SA will buy less (printing money by the
Zimbabwean mealie meal. Financial flows into equity central bank) – Expan-
Zimbabwe’s capital account securities (public or private)
will depreciate as we import are attracted by high expect- sionary monetary policies that
more mealie meal and ex- ed returns. Investors will be are not anticipated and not
port less. To restore an equal attracted by the high perfor- matched with local produc-
price in mealie meal between mance of individual firms and tion will tend to result in the
SA and Zimbabwe, the ZAR the economy as a whole. twin effects of a decline in the
needs to appreciate by 20% or real interest rates and upward
the ZWL$ depreciates by 20% d) Changes in invest- pressure in domestic price lev-
to reflect higher inflation so ment climate – Investors els as too much money chases
that the exchange rate is ZWL fewer goods.
$1.20 per ZAR 1.00. This is will favour countries that have None of these 5 factors are
the PPP [5] theory. a good investment climate due to actions of the ZSE,
with low risk (i.e. they dislike Old Mutual Limited, OMIR,
b) Changes in real in- uncertainty). As the invest- foreign or local investors. The
terest rates – Financial ment climate improves and ZWL depreciation is largely
risk is lowered, the local cur- due to Government fiscal and
flows into debt instruments rency appreciates whilst the monetary policy decisions.
are attracted by high expected opposite is true. A good in- 6. Dual Listed Shares
returns i.e. high real interest vestment climate has the fol- Zimbabwe is not the first
rates where real interest rates lowing characteristics: country to have dual listed
is the difference between the shares. Dual listed shares are
interest rate and expected in- i) A stable political system common the world over and
flation. If Country A’s bonds ii) Fair legal system that pro- well-established in most pro-
yield 10% but inflation is ex- tects the rights of all investors gressive countries with pro-
pected to be 4%, the real in- iii) A tax system that is fair to
terest rate will be 6%. foreign investors
iv) Free movement of capital
5 PPP = Purchasing Power Parity v) Monetary authorities that
favour price stability

14 Investment Quarterly | Q3 Edition 2020

Why suspending ZSE over currency depreciation was a bad idea

gressive stock exchanges. tween the 5 registers and trade auction rate was ZWL$ 57.36
Examples are Anglogold,(- them in the exchange (market) = US$ 1.00[8]. If we convert
JSE & NYSE), Goldfields of preference. This fungibility all the share prices to their
(JSE & NYSE), BAT (JSE & or ability to move the shares US$ equivalent, we get pric-
LSE), Unilever (LSE, NYSE between the different markets es of $0.70 per share for the
& AEX[6] ). Locally, PPC (JSE and share registers eliminates LSE price and $0.67 per share
& ZSE) and Seedco (BSE[7] & huge discounts or premiums for the JSE shares implying
ZSE) are also dual listed. developing between the 5 mar- that the JSE shares trades at
kets because the shares rank a 3.2% discount to the LSE
The Ministry of Finance sus- pari passu (equally the same) shares and US$ 1.43 per share
pended Old Mutual Plc, Seed- in all 5 markets therefore, on the ZSE. The OMIR is cal-
co Limited and PPC’s fungi- there should be no reason for culated as the ZSE share price
bility status on the ZSE and a big price disparity between in ZWL$ divided by the LSE
these companies are failing the different markets. or JSE share price in US$ to
to receive the merits of their derive an OMIR of ZWL$
fungibility status on the ZSE 7. How is the OMIR 117.69 = US$ 1.00 for the
due to this 12 month suspen- calculated? LSE price and ZWL$ 121.58
sion. Given that the Old Mu- = US$ 1.00 for the JSE price.
tual Implied rate has been so OMIR is an acronym for the If we use the weighted auc-
topical and experiences the Old Mutual Implied Rate. tion rate, the OMU ZSE share
most fungible trades we shall Since each share of Old Mu- price is equivalent to US$ 1.43
focus on Old Mutual Limited tual Plc (OMU) ranks the per share implying that ZSE
but this is not to say PPC and same regardless of the ex- shares trade at a premium of
Seedco International have not change they’re purchased, it 105% and 112% relative to
been equally prejudiced. Old follows that there is an im- the LSE and JSE shares re-
Mutual Limited shares are list- plied exchange rate underlying spectively. The premium has
ed on the London Stock Ex- the different share prices. On not always been huge. On the
change (LSE), Johannesburg the 25th of June 2020 OMU 4th of January 2000, the offi-
Stock Exchange (JSE), Na- shares traded at £ 0.56 per cial exchange rate was ZWL$
mibian and Malawian and the share, ZAR 11.78 per share 38.00 per US$ 1.00 versus
Zimbabwe Stock Exchange and ZWL$ 82.00 per share on the OMIR ZWL$ 41.04 =
(ZSE). At the time of listing the LSE, JSE and ZSE respec- US$ 1.00. From 2009 to 2015
in 1999, the shares were fungi- tively. The US$ per £ rate was when the US$ was the official
ble meaning to say that an in- $1.2443 = £1.00, ZAR per currency and there were no
vestor could move shares be- US$ was ZAR17.46 = US$ restrictions in terms of mov-
1.00 and the Zim$ weighted
6 Amsterdam Stock Exchange 8 Imara Morning Note – 26th June
7 Botswana Stock Exchange 2020

15Q3 Edition | Investment Quarterly

Why suspending ZSE over currency depreciation was a bad idea

ing money in and out of in supply should ultimately In addition, investors
Zimbabwe, OMU shares bring about an alignment in can easily access and re-
listed on the ZSE traded the prices. In Zimbabwe, due patriate their proceeds
at a discount to shares on to challenges with repatriation upon sales. There are no
the LSE and JSE. For in- of proceeds for foreign inves- restrictions between the
stance, about 10 years ago tors, fungible shares like Old JSE and the LSE, as a
on the 30th of June 2010, Mutual provide the only legal result a proper price dis-
OMU shares on the ZSE mechanism available to move covery mechanism exists.
were US$1.53 per share funds between countries. As a
versus US$1.88 per share result, demand for the shares, 9. Prejudice to
on the LSE and US$1.91 per predominantly by foreign in- Pensioners & Insurance
share on the JSE representing vestors leads to a demand in Industry
a 19% and 20% discount re- the fungible shares. Local in-
spectively. vestors seeking a currency Pension Funds and Insurance
hedge have also participated. companies are arguably the
8. The OMIR - Why it Investors with free funds, en- largest pool of institutional
exists in Zimbabwe ticed by a relatively ‘higher’ investors holding assets on
and why there is no price in Zimbabwe were buy- the ZSE. According to the
arbitrage between ing Old Mutual in other reg- Pensions Industry Report to
the JSE and the LSE isters and selling them on the 31 March 2020, out of a to-
share price? ZSE. This helped provide the tal asset base of ZWL 29.8bn,
much needed liquidity for for- investments in equities made
Ideally, the Law of One Price eigners exiting and at the same up 35.3% of the industry as-
should hold for identical as- time balanced the share regis- sets. Combined with invest-
sets even if listed in different ter as only a certain number ment property, these 2 assets
markets. Investors should not of shares can be moved across classes made up 82.7% of the
make sustainable long-term assets, due to their hedging
profits if the markets are effi- registers. While Old Mu- and value preserving nature in
cient and there are no restric- tual is also listed on the inflationary periods. Property
tions. Arbitrage will work to JSE and LSE, there is no is illiquid relative to shares so
correct any, mostly temporary, active arbitrage between from a liquidity perspective,
price misalignments. Investors these markets as fungi- shares are the most import-
will buy where the asset are bility and movements of ant asset for most institutions.
cheaper and sell in the ‘over- assets between the 2 ex- Pensioners rely on month-
priced’ market. The increase changes is generally seam- ly/lump-sum disbursements
less, with no restrictions. from their pensions whilst
insurance companies have
to pay claims and benefits to
their clients. Closing the mar-
ket means that all these stake-
holders cannot access their
funds. Where will pension
funds, insurers get money to
pay their clients if the market
is closed indefinitely?

16 Investment Quarterly | Q3 Edition 2020

10. Existential threat to better than the ZSE. Mean- vestment grade A+ for Long
the ZSE value chain while, shareholders that re- Term debt versus BB- (sub-in-
quire liquidity cannot sell. vestment grade) for South Af-
Closing the market creates an b) Shareholders and investors rican government bonds.
existential threat to the oper- in general are the ones who e) If the Old Mutual Limited
ations of the following insti- stand to gain or lose from a shares are traded exclusively in
tutions; such a decision to de-list their US$ as envisaged, this may en-
shares listed from the ZSE, tail that local investors would
a) Life companies hence procedurally such a de- rush to dispose the shares in
b) Pension Funds cision should be subject to a favour of holding US$ cash,
c) Short term insurance Special Resolution by mem- which could be detrimental to
d) Stockbrokers bers in general meeting. the country in the long-run as
e) Asset Managers the share will end up more in
f) Custodial services c) Migrating to a US$ ex- the hands of foreigners than
g) Banks change is unlikely to serves locals.
any purpose for Old Mutu- 12. Speculation
11. Old Mutual Limited’s al Limited shareholders. Old Speculation is the purchase
de-listing & Proposal Mutual Limited shares are or sale of shares (investment)
to list the shares on a largely used as a currency with the hope of profiting
US$ only Market hedge or a store of value by from the price movements
Zimbabwean investors. This of the investment. Specula-
This could be an unviable op- status will not change post tors focus purely on the price
tion for a number of reasons: migration to a US$ exchange. movement and pay no atten-
tion to the fundamentals of
a) We currently don’t have d) Investors that are holding the underlying investment.
a US$ only market so to pro- Old Mutual Limited shares Speculation is neither immor-
pose that OMU be re-list- want exposure to the specif- al nor is it illegal. Investment
ed on a yet to be established ic properties that it is a large is a zero-sum game mean-
exchange whose modalities, multinational company with ing that if someone makes a
rules, efficiency, viability are an LSE, JSE listing and rel- 100% profit, the other side
unknown could prove chaotic. atively low risk rating and has made a 100% loss. As
It is unknown how long it will is fungible. S&P[9] rates Old such, speculation can actually
take to establish another ex- Mutual Limited debt as in-
change and whether the new
exchange would function any 9 Standard & Poor’s

17Q3 Edition | Investment Quarterly

be considered a pre-requisite depreciation of the ZWL$.
for any financial market as
speculators provide the nec- 3) If indeed Old Mutual
essary liquidity and price dis-
covery mechanisms. Limited was being used by
certain individuals, syndicates
13. The negative effects and or corporates to illicitly
of halting trades on manipulate the markets and
the ZSE and de-listing or exchange rate then would it
OM not have been more prudent
to gather such evidence and
a) Failure to attract foreign prosecute those entities rath-
investors er than suspend the market
as this sets a bad precedence
b) The attack on property whilst the collateral damage is
rights increases Zimbabwe’s excessive.
political risk
4) The exchange rates there-
c) Not encouraging for
would be multi-nationals that fore reflect economic funda-
may want to list on the ZSE mentals at any point in time.
like Nestle
5) With the current premi-
d) Creates unnecessary pan-
ic among investors um that Old Mutual Limited
e) Lack of tax revenues from shares trade at on the ZSE
Zimra against JSE and LSE, if fun-
gibility was permitted, the
f) Damage to the country’s premium would disappear as
image investors bring stock in from
the JSE and LSE to sell on
g) Discourages a savings the ZSE. Old Mutual Limited
culture which is the bedrock has traded at big discounts for
of economic growth for the long periods of time during
country. the US$ days when its role
as a currency hedge was not
Conclusion required because foreign cur-
rency was available through
1) We consider the abrupt the banking system.

closure of the ZSE to set a 6) The action to close the
bad precedent and detrimen-
tal to the economy in the ZSE and threat to de-list Old
long-run. Mutual Limited creates an ex-
istential threat to the coun-
2) In our view, it is not the try’s financial, insurance and
investment industry.
ZSE, Old Mutual Limited,
PPC or Seedco International’s
listing status nor the OMIR
that are responsible for run-
away inflation and the rapid

18 Investment Quarterly | Q3 Edition 2020

Throwing a
abrficlyk to kill

Cornelius T. I magine a scenario in On the 26th of June
Makari which the NYSE, Nas- 2020, all trades on the Zim-
daq and CBOT are babwe Stock Exchange (ZSE)
all closed for a month were suspended following a
because the Republicans government directive. The
have a “feeling” that Apple ruling party, Zanu-PF issued a
Inc shares are causing the statement on the 9th of July
USD to depreciate against 2020 endorsing the de-listing
the Euro? Closer to home, of Old Mutual Plc from the
could you see the ANC or- ZSE. The closure of the ZSE
dering the closure the JSE was meant to stop the slide
due to suspicions that Old of the local currency (ZWL).
Mutual Plc’s dual listing on Government stated that it had
the JSE and LSE is causing ‘’impeccable intelligence’’ that
the creation of money? As proved that the ZSE along
ridiculous as these exam- with EcoCash (mobile pay-
ples seem, that was Zim- ment platform) were sabotag-
babwe’s sad reality when ing the country by causing the
markets were closed for a collapse of the ZWL. At the
month in July. Much like core of government’s argu-
the man that hurls a brick ment was the Old Mutual Im-
towards a fly on his win- plied Rate (OMIR) which is
dow, the negative impact a rate implied by market par-
of this unwise decision will ticipants when they trade Old
be long term and probably, Mutual shares listed on the
permanent. ZSE. Zanu-PF also alleged

19Q3 Edition | Investment Quarterly

Throwing a brick to kill a fly

that Old Mutual Plc’s fungibil- (VFEX) following SI[1] 196 b) Why should a VFEX inves-
ity created money, enabled in- of 2020. The VFEX is to be tor think that their money is
vestors to externalise money a USD only market. Amongst safe if in the past, other inves-
and drove black market rates. the rules, a resident Zimba- tors (local and foreign) that
invested foreign currency on
the ZSE have failed to repa-
triate their money in foreign
currency?

c) Why should VFEX work
if local depositors have failed
to get their money from their
banks after government shift-
ed goal posts by changing
withdrawal limits and chang-
ing the currency?

A month later, on the bwean company will be per- d) If the government ever
28th of July 2020, the Min- mitted to list up to 20% of decided in future, to re-intro-
istry of Finance (MoF) an- their capital on VFEX whilst duce the USD and other con-
nounced that trades on the non-resident companies can vertible currencies as official
ZSE would resume on the list up to 100%. Non-resi- currency, what would happen
3rd of August. The statement dent ZSE listed companies to the VFEX?
added that shares in Old Mu- that delisted 5years ago are e) Why are shareholders of
tual, PPC and SeedCo (which permitted to list on VFEX if the dual listed companies not
are all dual listed) would re- they intend to invest 20% of being asked for their opinion
main delisted pending fur- money raised on VFEX in the on the matter, or have they?
ther trading modalities. The next 5years. Money raised on A good (high quality) market
MoF noted that none of the VFEX can be held in an ap- has the following characteris-
dual listed companies were in- proved local or offshore bank tics:
volved in any parallel market account. This may sound like a) Timely and accurate infor-
trading activities. Interesting- a great initiative, but it will mation
ly, no light was shed on the not work and here’s why; b) It is liquid
‘’impeccable intelligence’’ that a) Why should any investor c) Low transaction costs
had warranted the market’s believe that VFEX will work d) Prices rapidly adjust to new
closure in June. if authorities have failed to information
On the 5th of Au- make the ZSE work without Focusing on liquidity; which is
gust the ZSE published ex- interference from govern- the ability to buy and sell an
change control regulations for ment/party? asset quickly and at a known
the Victoria Falls Exchange price, that is not substantial-
1 SI = Statutory Instrument ly different from the price
of prior transactions (price
continuity). Price continuity

20 Investment Quarterly | Q3 Edition 2020

21Q3 Edition | Investment Quarterly

Throwing a brick to kill a fly

requires market depth which same shares on the LSE or tion rose 35.5% despite closed
means that numerous poten- JSE? The only reason why markets. The official rate
tial buyers and sellers must they would consider was ZWL$ 6.62 per
be willing to trade at prices buying my shares US$ at the end
above and below the current is if my shares of June 2019,
market price. These buyers trade at a signif- ZWL$ 57.36
and sellers enter the market in icant discount per US$ in June
response to changes in supply to the JSE and 2020 and ZWL$
and demand or both and thus, LSE shares, 76.76 per US$ in
prevent drastic price changes. and fungibility July 2020 imply-
Let’s suppose that I permits arbitrage ing an annual infla-
have 100 shares of Old Mutu- trades to close the tion rate of 1,059.2%
al plc shares that are now list- discount. By limiting market
ed on the VFEX. If I want to participants (excluding local to July 2020. If government
sell my shares the demand will investors without forex), the through the central bank fuels
come from only 2 sources i.e. authorities have inadvertent- inflation by printing money,
locals with forex or foreign ly reduced the VFEX’s depth blaming market participants
investors with forex. We know implying that liquidity on the that attempt to hedge them-
VFEX will be much lower selves from the negative ef-
that from June 2009 to Dec fects of bad policies is simply
2015, foreign investors only than on the ZSE. absurd.
represented 16% of all ZSE With lower liquidity, Allan Gray, one of
trades including trades in dual there will be higher South Africa’s biggest mon-
listed shares. This means that price volatility on ey managers had 16% of its
local investors are the biggest the VFEX. Contin- money in its $309 million Af-
drivers of valuations on the ued prohibition on rica Excluding SA Fund as at
ZSE. Here’s the challenge; fungibility will exac- July 2020 in Zimbabwe. In
why should any of those 2 erbate the liquidity June, the fund took a 45%
potential buyers want to pur- risk. In summary, haircut to its ZSE listed valua-
chase my Old Mutual shares VFEX is doomed tions YTD. What institutional
in USD when they can get the to have much lower fund manager is going to con-
liquidity than pre- vince their risk or compliance
viously on the ZSE department that they should
and my shares will increase their exposure to
most likely sell at a significant Zimbabwe? Zimbabwean as-
discount to the JSE and LSE sets should justifiably trade at
shares. Under this scenario, a discount in order to reflect
holders of dual listed inves- higher relative political risk.
tors are certain to lose value According to the
if they migrate to VFEX. World Bank’s ease of doing
Official year on year business, Zimbabwe has made
inflation to July 2020 stood some progress coming from
at 837.5% with the monthly a score[2] of 48.57 and rank-
rate at 35.5% up from 31.7%
in June. Please note that infla- 2 The Ranking is out of 190 countries

22 Investment Quarterly | Q3 Edition 2020

Throwing a brick to kill a fly Do you want
ing 159 in 2018, 50.44 and
ranking 155 in 2019 to the a business magazine
current 54.50 and ranking 140
in 2020. Countries that score iwannhfiacohlyristmiicnaastilgihvatenfu?dl,
well tend to be very entrepre-
neurial whilst having very low To get an online copy contact:
corruption. All the hard work
that has been done to improve Ruth Dandawa Jamaica Tongowona
the business conditions has P: +263 788 738 975 E: [email protected]
been undone by government’s E: [email protected] P: +263 772 768 364
own negative policies that are
harmful to capital accumula-
tion.
Hendrik Du Toit,
founder of NinetyOne Asset
Management which manag-
es[3] about US$ 146 billion
observed that countries that
have well-developed capital
markets are the envy of those
without. This is because coun-
tries without well-developed
capital markets will tend to
have the wealth of the coun-
try in the hands of the few
that tend to be politically con-
nected. Good examples in Af-
rica are countries like Angola,
Gabon, DRC, Mozambique.
Zimbabwe’s poor record on
property rights, persistent,
high inflation due to poor fis-
cal and monetary policies, the
brain-drain, political risk, cap-
ital controls and latest attacks
on free capital markets are all
pointing to a country headed
in that unfortunate direction.

Cornelius T. Makari is an In-
vestment Analyst based in
Johannesburg South Africa

3 30 June 2020

23Q3 Edition | Investment Quarterly

Victoria Falls
Stock Exchange
(“VFEX) FAQS

What is VFEX? What are the incen- What are the ben-
tives for participat- efits of listing on
The Victoria Falls Stock ing on VFEX? VFEX for Issuers?
Exchange (VFEX), is a sub-
sidiary of the Zimbabwe Key incentives awarded to ● Ability to raise capital in
Stock Exchange (“ZSE”) VFEX include: hard currency;
established to kick start the ● Capital raised by a compa- ● Ability to use different
Offshore Financial Services ny listed on the VFEX may securities to raise capital –
Centre (OFSC) earmarked be held in an approved local debt, equity, ETF and RE-
for the special economic or offshore account with an ITs.
zone in Victoria Falls; internationally recognized ● Tax incentives for share-
banking institution; holders;
What currency will ● Allowance to use offshore ● Lower trading fees which
be used for trading settlement for secondary may lead to improved li-
on VFEX? market trades; quidity;
● Tax incentives for inves- ● Enhanced profile within
The trading currency on tors on VFEX – 5% divi- and outside Zimbabwe;
VFEX is United States Dol- dend withholding tax (for- ● Lower exchange control
lars. eign investors only) and risk.
exemption from capital
gains withholding.

24 Investment Quarterly | Q3 Edition 2020

Will fungibility be What is the listing

permitted between process for an Issuer
ZSE and VFEX?
not listed on ZSE?

● Not in the interim, the Not listed Local firm Can list 100% Can be IPO
market will be advised of on ZSE Foreign firm of capital on or Introduc-
any changes
Will fungibility be permit- VFEX tion
ted between VFEX and Can list 100% No Need to
other exchanges? reinvest 20%
● the current suspension on on VFEX of the capital
fungibility will apply and a
review will be done when Why do we think
the suspension expires; VFEX will succeed?

Will listing by intro- VFEX is expected to suc-
duction be permitted ceed on the following basis:
for current ZSE issu- ● The exchange is being es-
ers? tablished in a special eco-
nomic zone that offers tax
● only new securities can be and exchange control in-
listed if the issuer remains centives to participants;
listed on ZSE. Issuers can ● Local entities in need of
however delist from ZSE hard currency capital can
and list 100% on VFEX by raise the capital through
way of introduction; VFEX;
● Offshore settlement will
What currency will further reduce exchange
dividends be paid out control risk;
on VFEX? ● Support from regulatory
authorities including Gov-
● Dividends will have to be ernment of Zimbabwe;
in USD or any other con- ● Lower trading fees will
vertible currency; make VFEX competitive
against other regional ex-
What is the listing changes;
process for an Issuer ● Trading in hard currency
who is currently list- reduces exchange rate risk
ed on ZSE? for international investors;
● VFEX will have its own
Local firm Can list 20% Only new securities depository with a
Foreign Firm of capital securities guarantee fund to minimize
Now securities settlement risk; and
Can delist from or introduction ● VFEX will seek partner-
ZSE and list on Now securities ships with international
or Introduction brands to reduce perception
VFEX 100% To reinvest risk.
Can delist from 20% of the
Listed on ZSE and list on cpital raised
ZSE within 5years
VFEX
Can delist from
ZSE and list on

VFEX

25Q3 Edition | Investment Quarterly

ZSE delistings
outpace new
listings, market
confidence
wanes

Lavender C ompanies nor- The ZSE currently has eight
Marisa mally delist from counters Border Timbers,
stock exchanges CFI, Cottco, Old Mutual,
26 Investment Quarterly | Q3 Edition 2020 voluntarily when PPC, SeedCo International,
they fail to benefit from Falgold and Hwange suspend-
listing opportunities such ed from trading their shares
as raising equity capital, in- on the bourse. Five counters
creasing volumes and prof- Border Timbers, CFI, Cottco,
itability as well as growth Falgold and Hwange have dif-
opportunities usually as- ferent reasons for not trad-
sociated with quoted com- ing shares while Old Mutual,
panies. Most delistings on PPC and SeedCo Internation-
the Zimbabwe Stock Ex- al were solely suspended for
change (ZSE) in the past their dual listing status at the
few years have been a result behest of the authorities.
of diverse reasons. These The forced suspension and
range from voluntary del- pending delisting of Old Mu-
istings, mergers, failure to tual, PPC and SeedCo Interna-
meet continuing obliga- tional counters from the ZSE
tions as well as liquidation effectively reduced the num-
of the listed entities.

ber of counters on the official In a joint cautionary state- also published a cautionary
list to 58. There are also pend- ment on 9 June 2020, Zimre statement on 16 June 2020
ing corporate actions this year saying the company was en-
that may result in the delisting Holdings Limited (ZHL) and gaged in discussions that in-
of Dawn Properties, Falgold Zimre Property Investments volve a potential transaction
and Zimre Property Invest- Limited (ZPI) also announced relating to a cash offer to
ments. that they had entered into ne- minorities and the termina-
Tourism counter African Sun gotiations for the acquisition tion of the ZSE listing of the
cautioned shareholders on 3 company.
June 2020 saying it is in dis- of the entire issued share cap- Lack of policy that compels
cussions with Dawn Prop- ital in ZPI and if successful, companies to maintain listing
erties for the acquisition of the transaction would culmi- on the local stock exchange
100% of the issued share cap- nate in the voluntary delisting after a foreign shareholder
ital of Dawn in exchange for of ZPI shares from the ZSE. acquires majority stake is ex-
Resources’ counter Falgold acerbating the challenging
African Sun shares based on situation that has seen most
an agreed price. This transac- counters delisting from the
tion, if successfully approved ZSE. Since the economy was
by shareholders, would result formally dollarised in Febru-
in the voluntary delisting of ary 2009, almost all rights is-
Dawn Properties in terms of sues by listed companies have
Section 11 of the ZSE Listing failed to attract significant
Requirements. support. Most were undersub-
scribed, and these include OK
Zimbabwe, NMB, MedTech,
Art Corporation, NicozDia-
mond, African Sun, Fidelity,
the collapsed CFX, Interfresh
and FBC Holdings.

When TN Bank listed on the
ZSE on July 11, 2012, it be-
came the first company to
list on the bourse after 2010.
It also raised optimism that

27Q3 Edition | Investment Quarterly

PA I N T S

THE
COLOUR
PEOPLE

Tel: 667 621 - 7 / 661 618/26
1544 Soutter Rd, New Ardbenie, Harare - Zimbabwe
[email protected] / pigmentopaints.co.zw

28 Investment Quarterly | Q3 Edition 2020

ZSE delistings outpace new listings, market confidence wanes

more listings would follow. de-listed in February 2015. ment sanctioned by the High
However, on February 10 the During the same month, ABC Court and the exchange gave
following year, the bank del- Holdings, that dually-list- the company the greenlight.
isted after being acquired by Loss-making Gulliver, which
Econet and was later rebrand- ed banking outfit bought by had been struggling to meet
ed to Steward Bank. famed banker and past Bar- listing requirements, on the
Astra Holdings de-listed from clays Plc chief executive of- other hand opted to delist ow-
the domestic bourse. The new ficer, Bob Diamond, through ing to serious viability prob-
shareholders, who were then his Atlas Mara investment ve- lems. Before that, financial
holding over 80% of stock in hicle which he jointly controls services group Trust Holdings
with African billionaire Ash- had also been suspended early
the company, were compelled ish Thakkar, voted with its in June 2013. Apex Corpora-
to do so by listing regulations tion, Cairns Holdings, Celsys,
after taking up more stock feet after the takeover, leaving Chemco Holdings, Interfresh,
than they should have left to the bourse one more company Interfin, Phoenix Consolidat-
allow for at least 30% of the poorer. ed, Trust Holdings also left
shares to be freely floating. A three-year listing drought the exchange.
Art, which had just announced subsequently followed. Since A total of 11 companies had
plans to buyout minorities, 2009, 19 companies have delisted from the ZSE in the
was also looking for the exit been delisted from the ZSE. year 2013 due to liquidity chal-
door. The company had new In 2013 alone, the ZSE struck lenges that resulted in compa-
shareholders, from foreign off Gulliver, Steelnet and nies failing to raise money on
capital. Lifestyle Holdings (formerly the local bourse and attracting
TA Holdings, which de-list- TN Holdings), from its offi- new investors to inject fresh
ed its insurance unit, Zimnat, cial list due to restructuring cash.
in 2009, had long been in the exercises among others. Life- On February 9, 2016 technol-
departure lounge and finally style proposed to delist fol- ogy and printing firm Celsys
lowing a Scheme of Arrange- delisted from the ZSE after it
breached some listing rules.

Celsys applied for voluntary
suspension which followed
a proposed takeover and re-
verse listing by Cambria Afri-
ca Limited through a Scheme
of Arrangement which was
granted in 2012.The company
however, violated listing rules

29Q3 Edition | Investment Quarterly

by failing to publish results,
failure to provide quarterly

reports; non-convening of 1949, Pelhams was listed in
annual general meetings and 2002 after having been unbun-
non-payment of annual listing dled from a restructuring Del-
fees for 2014 and 2015. ta. Trading of Pelhams shares
In 2016, Radar sought ap- on the ZSE was suspended on
proval from the shareholders December 10 2015 and lat-
for the delisting of the com- er terminated from listing on
pany’s shares from the ZSE. the bourse on the basis of the
The reason for the proposed issuers’ non-compliance with
delisting was that the group the ZSE listing requirements.
had continued to underper- Colcom delisted its shares
form. However, the company from the ZSE after its major
shareholder, Innscor Africa
announced plans to acquire all
shares in the pork foods pro-
ducer. Founded in 1944, Col-
com had been listed on the
local bourse for 24 years.

said the trading in shares of NicozDiamond, one of the
the company has been limit- country’s leading short-term
ed and the absence of suffi- insurance companies, delisted
cient buyers and sellers of the from the ZSE in August 2018
shares meant that the shares after its majority sharehold-
were relatively illiquid. Radar er, First Mutual Holdings in-
also said the size of its com- creased their shareholdings to
pany did not allow it to fully 100%.
take advantage of being listed The country needs more list-
on the ZSE. ings but unfortunately the op-
Pelhams, one of Zimbabwe’s erating environment is making
oldest furniture and applianc- it difficult for existing compa-
es retailers, fell on hard times, nies to justify their presence
incurring successive losses on the board. It does not look
leading to it being placed un- like this trend will stop any
der provisional liquidation in time soon.
November 2015.Founded in

30 Investment Quarterly | Q3 Edition 2020

Going
fnaoswt!here

Ruramai Going nowhere of Finance Patrick Chinamasa
Gatsi fast! Simply on 29 January 2009 liberalised
means ultimately price setting and formally ad-
achieving no use- opted use of multi-curren-
ful, beneficial or successful cies in the country. This par-
outcomes for the effort one tial dollarisation immediately
is putting. killed off hyperinflation and
I’m certain most of stabilised the economy, set-
you have come across this ting the stage for economic
idiom several times being rebound.
used in relation to Zimba-
bwe and I concur that it According to Godfrey
effortlessly describes the Kanyenze, et al in a paper
country’s post-indepen- titled The Outlook for the
dence political and eco- Zimbabwean Economy, “the
nomic situation. When period of the GNU and the
things start looking up multi-currency regime wit-
and we think we are going nessed an economic rebound
somewhere as a nation, we in Zimbabwe, with Gross Do-
actually take many steps mestic Product (GDP) growth
back, thus going nowhere, averaging 10% between 2009
if not actually going back. and 2012, compared with 3%
Reverting back in time; for Sub Saharan Africa (SSA)
before the inauguration of and 2.2% for the world over
the Government of Nation- the same period. Even as the
al Unity (GNU), the budget SSA and world economies
announced by acting Minister experienced negative growth
on average in 2009, weighed
down by the global financial

31Q3 Edition | Investment Quarterly

Going nowhere fast!

cri- should learn les- currency black market and
sis, sons from previ- ostensibly to put in place re-
Zimbabwe re- ous experiences forms that restore mobile
corded a positive growth rate and exercise money platforms to their
of 6%.” due diligence original purpose. On 3 August
Almost a decade lat- in tabling new 2020, the ZSE resumed trad-
er, the country finds itself in policies. Be- ing but three counters, Old
economic doldrums and it’s low is a brief Mutual, Seed Co Internation-
like a re-run of the 2008 era. of some of al and regional cement maker
Faced with such an econom- the significant PPC remained suspended.
ic crisis, the authorities keep recycled mea- This was not different
on recycling policies of yes- sures that oc- from the disruption of ZSE
teryear and hastily implement curred between trading on November 21,
measures without carrying the second and 2008 after the then RBZ gov-
out necessary consultations. third quarter of ernor Gideon Gono suspend-
This all boils down to poli- 2020. ed the use of Real Time Gross
cy inconsistencies and lack Settlement (RTGS) system
of shrewdness by authorities 2020 June - Sus- saying it had become an “ac-
as they keep recycling failed pension of the ZSE tive vehicle for illicit foreign
measures which only target exchange parallel market deal-
effects and not causes. The Zimbabwe Stock ings, as well as a convenient
Exchange (ZSE) suspended excuse by sellers of goods to
trading following a statement overprice their commodities.”
issued by the Secretary for Trading resumed in US dollars
Information, Publicity and on February 19, 2009 after the
Broadcasting Services on 26 government agreed to dollar-
June 2020. The government ise the economy by adopting
announced the suspension the multi-currency system.
of phone-based mobile mon- Suspending the mar-
ey transactions and trading ket was not a good idea as it
on the ZSE to allow investi- can have devastating effects
gations into illegal dealings
connected with the foreign

The government

32 Investment Quarterly | Q3 Edition 2020

Going nowhere fast!

in both the short term and the the “Zimbabwe is Open for tions this year, businesses have
long term. In the short term, Business” mantra. been encouraged to peg prices
the 25-days suspension result- against the official exchange
ed in loss of approximately 2020 June - Introduc- rate as their foreign currency
$420 mln in potential market tion of foreign curren- needs are being met through
turnover while brokers’ com- cy auction system the auction system. However,
mission lost can be estimated most retailers have continued
at $10.7 mln. On June 23, the Re- to peg their prices against the
Before the suspension serve Bank of Zimbabwe parallel rate as there continue
of the bourse, total market (RBZ) announced a new forex to be disparities between the
turnover for the 20 days which auction system, saying it will official exchange rate and the
recorded trades in June was bring “transparency and effi- parallel rate. This indicates
ZWL$1.907 bln, an indication ciency” to currency trade. The the lack of confidence in the
of how bullish the market auction system is one of the auction system, which author-
could be in a good month. many attempts by central bank ities hope that if it works to
The stock exchange over the past two years to set- desired effect will stabilise
has lost billions since trading tle on a working forex trading the exchange rate and help in
resumed on 3 August as mar- system. An auction platform the building of market confi-
ket sentiment remained nega- is not new; Zimbabwe intro- dence.
tive due to market suspension duced a Managed Foreign Ex- In September 2008,
and accusation of impropri- change Auction System in Jan- businesses were licensed to
ety. Investor confidence is at uary 2004. It was abandoned sell in foreign currency along-
an all-time low especially with within a year, after the market side the Zimbabwe dollar. See
foreign investors who have realised RBZ was keen to con- the similarities to what’s taking
been selling for most of 2020. trol the rate, which resulted in place right now? Since we are
Waning investor confidence losses for exporters. At the travelling down the same road,
to bring capital into the coun- time, sellers complained that one would think it will be wis-
try is the long term effect of they could not withdraw their er for the government to do
the suspension. The suspen- offers from the auction even away with recycling these pol-
sion was largely seen as an in- if unhappy with bids. icies and just do the inevitable
fringement on property rights – re-dollarising the economy.
and this has exacerbat- Since the introduction Then, just as now, inflation
ed disinvestment by for- of the foreign exchange auc-
eign investors shifting
their investments into
other security exchang-
es with better policies.

Lowering inves-
tor confidence is the last
thing the country needs
especially when policies
inherently go against

33Q3 Edition | Investment Quarterly

34 Investment Quarterly | Q3 Edition 2020

Going nowhere fast!

was raging out of control. US$, and then to 17,500 to the price increases, shortages and
RBZ introduced Foreign Ex- US$, but at that date it was re- monopolistic tendencies in
change Licenced Warehouses ported that that was only half the market”, Industry and
and Retail Shops (Foliwars), the rate available on the black International Trade Min-
Foreign Exchange Licenced market. ister Obert Mpofu said. In
Oil Companies (Felocs) and 2006 August - The RBZ re- February 2020 government
Foreign Exchange Licenced valued the Zimbabwean Dol- announced plans to set up
Outlets for Petrol and Diesel lar by 1000 ZWD to 1 (reval- subsidised grocery shops
(Felopads). These shops were ued) dollar. At the same time in army barracks to cush-
allowed to sell in forex and Zimbabwe devalued the Zim ion restive members of the
Zimbabwe dollars. However, Dollar by 60% against the uniformed forces from the
the shops quickly stopped ac- USD. New official exchange rising cost of living.
cepting local currency, prefer- rate revalued ZWD 250 per 2007 December - The NIPC
ring USD, as is likely to hap- USD. The parallel market rate warned manufacturers, whole-
pen now. was about revalued ZWD salers and retailers of school
1,200 to 1,500 per USD (28 uniforms and shoes that pric-
******** ******** September 2006). es cannot be increased with-
Despite measures tak- 2007 April - The paral- out approval from the com-
en by the government, there lel market was asking ZWD mission. In a statement, the
are also quite a number of 30,000 for US$1. NIPC said it would “deal”
similarities in general events 2007 November - RBZ re- with companies that effected
that took place in the 2008 era viewed FCA retentions for increases without approval.
and activities taking place be- exporters for their export 2008 May - RBZ announced
tween 2018 and now. Below is proceeds to 65% for an indef- that the dollar would be al-
a timeline of historical events inite period. Farmers grow- lowed to float in value subject
between 2004 and now which ing crops for export will also to some conditions.
clearly illustrate how things be allowed to keep 100% of 2008 May 10 - RBZ insert in
have rarely taken a turn for their export earnings in their Herald details a “new form”
the better for over two de- individual FCAs, again for an of bureaux de change which
cades now; as the same things indefinite period. Prior to the allows money transfer agen-
are happening over and over latest changes, exporters were cies to purchase forex from
again. required to liquidate 65% of the public. RBZ governor
their foreign currency earn- Gideon Gono said the cen-
2004 - A system of auction- ings within 30 days from the tral bank would superintend
ing scarce foreign currency date of acquittal of the export the establishment of 200 such
for importers was introduced, receivables. “enhanced” MTAs in strate-
which temporarily led to a 2007 December - Govern- gic centres across the country.
slight reduction in the foreign ment is looking at adopting Under the new system, the
currency crisis, but by mid- the “Peoples’ Shops” con- RBZ will retain 30% share-
2005 foreign currency short- cept to “serve the low-income holding in each of the agen-
ages were once again severe. earners and beat rampant cies.

2005 July - The currency was
devalued by the central bank
twice, first to 9,000 to the

35Q3 Edition | Investment Quarterly

Going nowhere fast!

2008 June - Government 2014 August - Zimbabwe 2019 June - Government
implemented price freeze in began selling treasury bills abruptly decreed that the
June, followed two months and bonds to pay public sec- country’s sole legal tender was
later by wage freeze. tor salaries that have been de- the RTGS, renamed the Zim-
2008 July - The Governor of layed as GDP growth weakens babwe dollar, and abolished
the RBZ, Gideon Gono an- while the economy experienc- the use of multiple curren-
nounced that the Zimbabwe es deflation. US$2 million cies. The aim was to end the
dollar would be redenomi- was sold in July through pri- informal market contribut-
nated by removing 10 zeroes, vate placements of Six-month ing to galloping inflation and
with effect from 1 August Treasury bills at an interest restore government control
2008. ZWD10billion became rate of 9.5%. over monetary policy. The de-
1 dollar after the redenomina- 2015 June – Central Bank cision to move to a local cur-
tion. formally phases out the Zim- rency was done in haste and
2008 August - Government babwe dollar, formalising the this sent Zimbabwe back to
t reintroduced price controls multi-currency system intro- square zero (2008).
in the tourism sector follow- duced to counter hyper-infla- 2019 July - Inflation had in-
ing a “spate of unilateral price tion. creased to 175% following the
increases” by the industry. 2016 November - A new na- adoption of a new Zimbabwe
2009 January - Govern- tional currency - called bond dollar and banning the use
ment allows use of foreign notes - is introduced and of foreign currency thereby
currencies to try stem hyper- pegged at par to the US dollar sparking fresh concerns that
inflation. The downside was amid public resistance. the country was entering a
foreign currency shortages in 2016 - In September the fi- new period of hyperinflation.
an import-dependent econo- nance minister identified “low
my where more dollars leave levels of production and the From these events, it is clear
the country than arrive. The attendant trade gap, insignifi- that the government must
government should have been cant foreign direct investment now commit to a long-term
alert to this effect and tak- and lack of access to interna- strategy that includes polit-
en action to curb this earlier tional finance due to huge ar- ical reform to buttress eco-
rather than late. rears” as significant causes for nomic advances and con-
2009 February - A final de- the poor performance of the fidence. Progress depends
nomination was implemented, economy. on confidence. Economic
cutting 12 zeroes, before the 2019 February - Zimbabwe reform and re-engagement
Zimbabwe dollar was offi- launched a foreign exchange could be transformative for
cially abandoned on April 12, interbank market in February Zimbabwe. If the govern-
2009. 2019 to allow importers and ment is seriously commit-
2010 March - New “indi- exporters to trade its surro- ted to lasting structural eco-
genisation” law forces for- gate bond notes and other nomic reforms, the country
eign-owned businesses to sell foreign currencies. has a brighter future.
majority stake to locals.

36 Investment Quarterly | Q3 Edition 2020

South Africa
will move
the needle

The F oreign powers of robust economic growth
Thinking Man have played a sig- would not have happened.
nificant role in After all, President Mugabe
Zimbabwean his- had won the runoff election
tory from the birth of the and been sworn
modern nation with its in. As far as
current borders in 1890. In the rul-
his memoir – Bitter Har- ing par-
vest, former Rhodesian ty was
Prime Minister Ian Smith con-
laments the betrayal of his cerned,
South African counter-part, they had
John Vorster who withdraw a legiti-
support for his regime and mate mandate
forced him to the negoti- from the electorate and they
ating table at Lancaster had the police and military
House. on their side to back up their
A compelling case can be made claim. The violence that char-
that without the involvement acterised the 2008 run-off
of then South African Presi- made it clear that the powers
dent Thabo Mbeki the Glob- that be had no compunction
al Political Agreement (GPA) deploying brutal oppression
of 2008 which ushered in the to shore up their position and
Government of National Uni- the proletariat had no capaci-
ty (GNU) and with it five years ty to resist.

37Q3 Edition | Investment Quarterly

The Thinker: South Africa will move the needle

It is Pretoria’s inter- the country witnessed a re- feat of policy ineptitude,
vention that turned Morgan versal of economic fortunes the so-called “Second Re-
Tsvangirai from a powerless that is difficult to conceive public” succeeded in mak-
enemy of the state to a Prime for a nation not at war. To ing things worse after taking
Minister who, if the terms of put this into perspective, civil over from Mugabe. And then
the GPA were to be imple- servants witnessed an erosion the Covid-19 pandemic ar-
of their remuneration in real rived on the world’s stage to
mented terms from US$300 to as little make things worse. Not since
to as US$30 depending on which 2008 has the South African
rate you use. Zimbabweans government called out a cri-
their are significantly poorer today sis in Zimbabwe that they are
letter and spirit, was the Head than they were in 2013 by al- sufficiently concerned about
of Government who could most any sensible indicator to send envoys to engage
chair the Council of Minis- of human well-being. the ruling party. Throughout
ters. Compared to the record This moment in history Zimbabwe’s modern history,
setting hyper-inflation, emp- is even more confounding in intervention by Pretoria has
ty supermarket shelves and the context of the coup that moved the needle, and this
widespread poverty and hu- was not a coup of Novem- time around will be no excep-
man suffering that was per- ber 2017 and the well-spring tion. The nature of diploma-
vasive until 2009, the GNU of optimism it engendered. cy is such that the public may
ushered a period of currency It seemed like a once-in-a- be frustrated by the pace of
stability and relative prosper- lifetime opportunity to su- progress and the overly po-
ity. Blue chip companies like per-charge reforms that would lite language coming out of
Delta and Econet (before the underpin decades of dou- Pretoria, but no government
unbundling) were able to raise ble-digit GDP grow, lifting in Harare can sustain legiti-
billions of real dollars to not millions out of poverty. Paral- macy without the recognition
only rehabilitate their dilap- lels were made to the death of and support of South Afri-
idated plant and equipment Chairman Mao, the founding ca. Mugabe was alive to this
but to significant increase ca- father of the People’s Repub- in 2008 and so was Smith in
pacity to meet the fast grow- lic of China in 1976 and the 1979.
ing demand. rise of Deng Xiaoping, the re-
Following the election former who set the Chinese
of 2013 and the return to un- on a path to being a glob-
fettered power by Zanu-PF, al economic superpower.
Hope for reforms in the
“new dispensation” was
fuelled by the appoint-
ment of technocrats
from the private sector
with no history in politics
to senior government posi-
tions.

In a breathtakingly epic

38 Investment Quarterly | Q3 Edition 2020

The Thinker: South Africa will move the needle

If anything, South Africa has South African Presi-
even more leverage in 2020 dent Cyril Ramaphosa is un-
than it did in 2008 and 1979. der pressure from political
The dysfunctional economy rivals (the EFF and DA) to
means that the government deliver results on the Zim-
babwe issue or continue to
of face withering criticism. With
Zimbabwe (GoZ) cannot op- annualised GDP growth for
erate if its access to US$ and
rands is turned off. The sor- the second quarter of
ry state of manufacturing and 2020 down more than
agriculture means that the 50% the South African
closure of Beitbridge Border business community,
Post would be catastrophic which has much more
of the struggling local econ- political influence
omy. Last, but certainly not than its counter-part
the least, Pretoria will be that in Zimbabwe, would
big brother that can make the like to see the market
case to Harare that the current north of the Limpopo
economic crisis is bad for Za- bounce back and absorb
nu-PF and their future pros-
pects of carrying power. Ev- a meaningful portion of
eryone would be better off if exports. The South African
the economy turned around, electorate, after more than
and South Africa, in the after- 20 years of enjoying demo-
math of serious commitment cratic freedoms, is appalled
to reforms, would be able to by what’s happening in Zim-
underwrite a multi-lateral res- babwe. Every constituen-
cue package to kickstart a re- cy in South Africa, from the
vival. opposition, to the business
community to members of
the ANC would like to see a
resolution to the Zimbabwe
crisis, and Ramaphosa would
be remiss not to deliver. Giv-
en his reputation, the man
who was chosen to negoti-
ate for the ANC in the sem-
inal talks with the Apartheid
regime following the release
of Nelson Mandela, only to
be cast out of politics, make
a fortune and bounce back as
President more than 20 years
later, the smart money would
be on him delivering.

39Q3 Edition | Investment Quarterly

40 Investment Quarterly | Q3 Edition 2020

Regulatory
overreach
– Stringent
regulations on
mobile money

I n Peter Senge’s view a Mobile money or ‘mo-
free market set up does bile wallet’ is a technology
not imply that human that allows individuals to re-
nature is perfect but ceive, store and spend mon-
rather a belief that the in- ey using a mobile devices. In
evitable errors of the hu- Zimbabwe mobile money op-
man condition are far bet- erators include EcoCash, On-
ter overcome by individuals eMoney and TeleCash. It is in
working together in an en- these structures or platforms
vironment of freedom than that money can also circulate
by individuals working un- hence the need for regulation
der a multitude of rules, by authorities; nevertheless
regulations, and restraints regulation must be fair to all.
imposed upon them by an- Mobile money is a popular
other group of imperfect alternative to both cash and
individuals. Zimbabwe banks because it is easy to use,
is facing a challenge of secure and can be used any-
over-regulation in the mo- where where there is a mobile
bile money sector and this phone signal.
Tinashe is chocking various aspects
Majiga of the economy.

41Q3 Edition | Investment Quarterly

Regulatory overreach – Stringent regulations on mobile money

The government of amount. Mobile money brings a
Zimbabwe, on 26 June 2020, Cotton tie between sectors that only
banned mobile phone-based growers criti- twenty years ago were aber-
payments to deal with what cised the gov- rant. Operations of mobile
they termed ‘economic sab- ernment follow- money platform providers
otage.’ The government’s ing its hasty ban now cut across sectors that
guideline to suspend key at- on bulk mobile include banking, payment sys-
tributes of mobile money money trans- tems, telecommunications,
transfer platforms astonished fers, saying that insurance, agriculture and
many Zimbabweans. A feature it would derail health. Stringent measures on
on mobile money platforms their operations these platforms only but wid-
- cashing out would be done as settlements ens the gap. Some years ago
through banks, apparently to were now tak- a conceptual structure was
stop large sums of money ing longer at a time the rate suggested that would ensure a
from being released onto the of inflation was running ram- stable environment for mobile
parallel market. Authorities pant. During this lockdown money. This was before some
have blamed the weakening period, mobile money agents operators such as EcoCash
of the Zimbabwe dollar on who had side jobs affected had become bigger. Gide-
illicit trading of currencies by the lockdown restricted on Gono, the then governor
via electronic transfers. Mil- movements became solely de- of RBZ assured the people
lions of Zimbabweans are pendent on commission from that guidelines were being
dependent on mobile money mobile money as their major drafted. He said authorities
and not all of them practice source of income, which is of would introduce a “payment
the illicit dealings. By pegging great concern to most as there systems oversight guideline”,
individual transactions at a might be attempts to increase an “e-money and electronic
maximum of ZWL$5000 (less premiums they charge to cus- payments guideline” and an
than US$50) per day in such tomers. Reduction in trans- “agency banking guideline”.
an inflated economy, many actions means reduced earn- Gono emphasized
users have been left stranded ings for them. In Zimbabwe, about the need for mobile
as they cannot make payments money platforms to remain as
for services because “merely a payment system or
and bills of cash
larger than shortag-
es, cashing
that out and us-
ing the funds
off-platform
has become
hefty and
thus sub-
scribers are
pushed to
transact
electroni-
cally.

42 Investment Quarterly | Q3 Edition 2020

delivery channel which does sary to ensure that innovations erage household of five re-
not amount to deposit tak- are not stifled by heavy regu- quires to purchase both food
ing”. An understanding be- latory regimes. There should and non-food items, com-
tween the RBZ and POTRAZ be regulations in mobile mon- monly referred to as the to-
was made. These guidelines ey so that both the consumers tal consumption poverty line
didn’t come into play at once and the economy at large are (TCPL) has risen by 37.4 %
but took time to implement, protected. The primary pur- to ZWL$15 572,85 since June
which should never be the pose of a financial regulation according to the data from
case with regulation. The is to maintain the integrity of Zimbabwe National Statistics
companies grew bigger in that the financial system. Stringent agency (ZimStat). This means
era of poor regulation, now regulation discourages growth it will take a household four
that they have grown big it is but poorly regulated financial days to buy basic needs using
like crippling them with a lot institutions have the poten- mobile money which is re-
of regulation at a later date. tial to undermine the stability stricted at $5000 per day.
Some argue that a law to regu- of the financial system, harm Recent directives are
late these platforms came too consumers and can adversely largely seen as attempts to sti-
late and it came with antici- affect economic growth. fle the growth and influence
pated change when it was an- Zimbabwe has a large of Ecocash which is by far the
nounced that the recent direc- informal sector where most biggest mobile money plat-
tive to abridge mobile money payments are done through form in the country. If this is
operators will bring with it a mobile money while hyper- the case then it is unfortunate
new regulatory framework. inflation makes the mobile because it flies in the face of
“A regulator must re- payments limit untenable. the ‘open for business man-
alise that bet- The amount of money an av- tra’ as a longstanding inves-
ter regulation is tor could be feeling unfairly
more beneficial targeted. Last year, the RBZ
than more regu- clashed with mobile money
lation,” said Pro- platforms after banning the
fessor Njuguna withdrawal and deposit of
Ndung’u, for- cash as a response to high
mer Governor, premiums which were being
Central Bank of charged by agents taking ad-
Kenya. He said vantage of cash shortages.
this was neces- The suspension was later lift-
ed after Econet suggested it
would go to court. In conclu-
sion we need regulation that
works, regulation that guaran-
tees mobile operator security
and a system that is economic
growth oriented not a system
that limits growth.

43Q3 Edition | Investment Quarterly

The New
Retail Order

US Dollar Prices

Ruth Undoubtedly 2020 dollars. One reason is that
Dandawa has been quite the local currency which is
the rogue year, known as bond note, is not
44 Investment Quarterly | Q3 Edition 2020 with the Covid-19 accepted outside the south-
pandemic forcing coun- ern African country, mak-
tries worldwide to resort to ing it unworkable for com-
taking different measures panies that need to import
and strategies to help re- goods.
suscitate their economies. In dealing with the
Zimbabwe, the economi- economic woes they have
cally troubled southern Af- been facing for a long while
rican country, also took up now, the government decided
plans as part of measures to revert back to the US dollar
to mitigate against the ef- for specific business. This de-
fects of the coronavirus. cision comes less than a year
As Zimbabwe’s economy after the reintroduction of
continues to struggle amid the local currency emphasiz-
scarce fuel supplies, un- ing economic independence.
stable retail pricing and a Over the past month – Au-
flourishing black market gust 2020, local businesses
for forex, some businesses have resorted to using the US
have resorted to refusing dollar which they deem more
the ever-weakening local stable for daily operations.
currency when transact- Also, the major consumers
ing, instead insisting on of basic goods, civil servants,
conducting business in US

continued to press their em- and forth on policy has left a goods and services and charge
ployer – government for US lot to be desired. There’s so for all domestic transactions
dollar salaries and the state’s much uncertainty which does in both local and foreign cur-
response was the offer to pay not bode well for planning rency at the ruling market”.
covid-19 allowance of US$75 and investment.
per month for each public The Reserve Bank of
sector worker. Zimbabwe (RBZ) argued
In June last year, Zim- that it was struggling to
babwe abandoned multi-cur- harness foreign currency
rency regime, which includ- locally to pay for critical
ed the South African rand, imports, therefore they
US dollar and Chinese Yuan; had to endorse the pol-
following a decade of dollar- icy reversal. However, it
isation that was forced by re- seems the entire econo-
cord hyperinflation. President my is going back to the
Emmerson Mnangagwa’s gov- US dollar. In a state-
ernment at the time said the ment issued concern-
adoption of the Zimbabwe ing the reintroduction
dollar was meant to breathe of dual pricing the
life into the economy. Now RBZ Governor John
that experiment has been Mangudya said: “In
nothing short of a disaster; order to enhance
the government has been giv- the efficient pricing
ing certain sectors permission system in the econ-
to charge in US dollars until omy, businesses
it eventually opened that to will be required to
the entire economy. This back display prices for

45Q3 Edition | Investment Quarterly

What does this mean items and fuel. The hospitali-
for the consumer? ty industry, for some time was
The whole forex situa- allowed to transact in foreign
tion poses confusion because currency under a special dis-
in September 2019, the gov- pensation. Leading econom-
ernment gazetted a Statutory ics Professor Tony Hawkins,
Instrument (their preferred observed that the govern-
mode of circumventing the ment’s expansion of hard cur-
parliament and passing arbi- rency exemptions for many
trary laws) which said there sectors was proof that it was
will be penalties for business- fighting a losing battle against
es that quote, charge or re- the redollarisation of the
ceive payments in US dollars economy. “Evidence suggests
or any other currency. It read, that de-dollarization has not
“In particular no person shall worked,” Hawkins said. Pres-
quote, display, label, solicit ident Mnangagwa has been
for the payment of, receive or struggling to deliver the swift
pay the price of any goods, economic revival he prom-
services, fee or commission ised at the beginning of his
in any currency other than the presidency. His government
blames sanctions imposed
Zimbabwe Dollar”.
Meanwhile the government by Western
was already allowing for the countries and
use of foreign currency for successive
payment of customs duties on droughts for
selected products, paying for the stalled
emergency passports and ba- economic
sic commodities such as food turnaround.
Be that as
it may, clear
communica-
tion for the
common cit-
izen on how
to understand
the current
forex situa-
tion is required, as confusion
and grey areas in policy breed
corruption.
Policy clarity and consistency
is necessary for businesses to
plan accordingly. The policy
flip-flopping is not helpful.

46 Investment Quarterly | Q3 Edition 2020

Survivors
guide to
daily living
in Zimbabwe

Tatenda S urviving in Zim- on the market. What we had
Samantha babwe has been not prepared for was having
described as an vendors and other retail-
Majoni extreme sport by ers refusing to tender their
some, and although we products with the old notes.
laugh through the pain, This time, the horror was to
the psychological scars watch yet another pile of
are here to stay. I’m still notes become useless pa-
in a state of disbelief over pers right in front of my
what happened to me a eyes again. A second time
few weeks ago, when the in my short lifetime. I had
new bond notes were intro- to take a seat and reflect.
duced. This time around at How does it feel, to be
least, there was some form confused and short changed
of communication by the yet again by the Zimbabwean
Reserve Bank of Zimbabwe economics? I asked this ques-
to get the public ready for tion in full sarcasm as I could
the influx of the new notes

47Q3 Edition | Investment Quarterly

not believe it myself. Let me sion we could just afford the was on the airwaves was defi-
put you up to speed with my bundle of green vegetables, a nitely not on the lived reality
thought process. Remember packet of tomatoes, and some on the ground. On the ground
yester year when you woke lollipops for the kids. was my daughter looking up
up to your bank account bal- You can then imagine to me for an answer as to why
ance having transformed to my confusion when the shop- mom had money in her hands
meaningless zeros? The sink- ping hero came back with the but could not get her a treat.
ing feeling of knowing your money and nothing from the On the ground was a regular
deposits and savings had been shops. For me, it was a con- Zimbabwean faced with this
eroded, just like that? Well, fusing moment to be honest. bond note that was no lon-
that’s the exact same feeling Upon asking her what in Zim- ger being accepted as mon-
I had in recent weeks, when babwe had happened now, she ey. How did we get here, yet
I sent my sister to the local told me how she was turned again? In my confused and si-
shops for household supplies. away with the ‘old’ notes that lently infu- riated
You know how as a hygiene were no longer being accept-
precaution, only one person ed. Imagine the rising in-
procures weekly supplies and ternal fury I had to
properly sanitizes before they calm as just at that
enter the house from their moment, the ra-
dangerous shopping quest dio news bulletin
in the age of Covid-19? Yes, on my favou-
on one of those days, I was rite radio sta-
a proud owner of a bunch of tion blasted
$5 and $2 dollar notes I had the headline
acquired over a few weeks. ‘Crackdown on
As with almost every average retailers reject-
Zimbabwean family, we need- ing old bond
ed much but could afford a notes’. What
little at a time. On this occa-

48 Investment Quarterly | Q3 Edition 2020

Survivors guide to daily living in Zimbabwe

state, I pulled up seat, as the vilians on the importance of The law of energy says you
echoing screams of the tired WHO guidelines during this attract what you give off, so
Zimbabwean anxiety knocked pandemic. At that point my imagine if we could all as
the wind out of me, and I sister had realised that be- Zimbabweans have a positive
slumped into defeat. ing Zimbabwean requires a outlook and actively put into
In the background I certain skill and resilience. effect systems (in our vary-
could hear my sister explain- As I also thought about it, it ing personal, financial, and
ing that she had taken the dawned on me that survival, socio-political spaces) that
long route back home to take keeping mentally healthy, and support progressive goals and
advantage of being outside thriving to achieve personal ambitions to dignify mother
the house. She had passed goals whilst all the while lov- Zimbabwe and bring her into
through the service station ing your motherland Zimba- her land of plenty. All this
and seen prices displayed in bwe, needed a survival guide. positivity is achievable if and
USD, and vendors having up- I quickly stood up from my when everyone begins to love
graded their stalls with the lat- depression comfort zone and themselves and others. Loving
est hand sanitiser trend. It was made a 3-point plan. My plan yourself is mental wellness
a whole new world; masked was on how to survive the that should not be sidelined
customers going about their Zimbabwean terrain and hold and thankfully, spaces such as
business and that a general my head high and determined Rupasa are there for you for
feeling of gloom engulfing resilience pushing me to all things to do with mental
some, whilst for others life greatness, even in times such health. Always take time to re-
was still business as usual, this as these. I gave my daughter flect on you and find at least
time with mask and sanitiser my bunch of now worthless one reason you should smile
added to the cocktail of daily notes to play shop, as I pre- back at yourself. In these un-
living. Overheard had been an pared myself for Zimbabwe; certain times and changes on
elderly couple at the till say- the global scale happening at
ing meat was not necessary 1. Establish your men- the speed of light, self-appre-
during weekdays. She had also tal wellness responsi- ciation is the little bit of pos-
seen a pregnant woman close bility to yourself itive mental health dosing
to tears as she was in the baby we should adopt for
products aisle, trying to calcu- In our beloved coun- ourselves as indi-
late or transact on her phone. try, there is need to strive for a viduals.
A young lady was taking sel- positive outlook each day as it
fies at the local food court, comes. Between fetching wa-
branded takeaway packaging ter, confusing financial news
in one hand, and phone in a and uncertain times, it is im-
well-manicured hand in an- portant to speak positively
other, smiling with the face- about yourself, your
mask pulled down. She would situation and the
surreptitiously throw furtive country at
glances around to look out large.
for the occasional law en-
forcement officer who would
be ready to remind ci-

49Q3 Edition | Investment Quarterly

Survivors guide to daily living in Zimbabwe

2. Stay informed keeping up with information how the digital age has trans-
Imagine my confusion is a mammoth task. However, ferred power to the individual
when I woke up to news that this does not mean you can- through their online spaces.
Old Mutual, SeedCo and PPC not try. I have learnt to tune Knowledge of what is going
being suspended from the into the money market Tues- on in and around Zimbabwe
Zimbabwe Stock Exchange. day auctions so I know the av- enables citizens to keep in
These are companies we grew erage price for forex trading. touch with policy making pro-
This also helps with the hag- cedures, nation issues, and
up looking up to as the giants global trends. Be always pre-
in the economy; radio jingles gling and negotiations with pared, how you decide to use
and television adverts show- vendors and traders, because the power of the internet in
ing these organisations as when you have information helping you survive is entirely
service providers every Zim- you have a level of confidence up to you. For instance, I have
babwean household could that helps you negotiate to had access to quality vegeta-
identify with, then this year your advantage. bles and fruits delivered to my
of atrocities one wakes up to 3. Be always prepared doorstep by local entrepre-
news that these massive com- From having reservoirs neurs with farming land close
panies and industry drivers of water and a stock pile of by, all through WhatsApp ad-
have been suspended. What firewood in case of power vertising. On the other hand,
does this mean for an average cuts, always being ready for I have seen fake news online
Zimbabwean like you and me the worst outcome but hop- destroying lives of person-
when events like this on the ing for the best anyway, is the al friends, relatives, and even
financial market happen? I final survival tip every Zim- well-known local personali-
had to Google and ask a few babwean can identify with. ties. The internet has become
friends in finance for implica- For the cyber villager, this a sword to win against a lot of
tions on ordinary citizens like means also always having in- struggles, it is up to one’s dis-
me. If it was on the news I, ternet connection through cretion which fight to enter.
as the little mouse in the grass data or WiFi for online pres-
had to know why giants in the ence. The adage knowledge is Finally, in this day of
veld where being felled; I had power perfectly summarizes Covid-19, ensure you have
to stay informed. To be sure, your mask and sanitiser as you
approach the battlefield of re-
tail shops and other business
complex. When you think you
have been exposed, take nec-
essary steps to protect others
through social distancing and
self-isolation. Let us always
practice good hygiene, even
after we have survived the
pandemic.

Stay Safe, Stay Sane
& Stay Surviving!

50 Investment Quarterly | Q3 Edition 2020