Investment Quarterly Magazine Q3 2020

51Q3 Edition | Investment Quarterly

Zim tourism
sector beyond
the Covid-19
pandemic

C ovid-19 broughtmassive dis- (UNWTO) anticipates that
ruptions to the the tourism sector will lose
world’s economy between 60-80% of revenues
and the tourism industry in the current year because of
is one of the severely im- the pandemic. The UNWTO
pacted sectors of the glob- estimates a loss of 850 mil-
al economy. The tourism lion to 1.1 billion internation-
industry depends on the al tourist arrivals, $910 bil-
physical interaction be- lion to $1.1 trillion in export
tween people, and it does revenues and 100-120 million
not come as a surprise that jobs, depending on whether
the sector has borne the the borders are opened in July,
brunt of this global pan- September or December.
demic. The economic re- According to the In-
percussions for the coun- ternational Labour Organisa-
tries dependent on tourism tion (ILO), in 2019 the sector
have been far reaching. accounted for (directly and
indirectly) some 330 million
Caroline The United Nations jobs worldwide, equivalent to
Chidziwo World Tourism Organisation 10.3% of total global employ-

52 Investment Quarterly | Q3 Edition 2020

ment and one in 10 jobs glob- to the pandemic, the sector The tourism sector in
ally. The ILO estimates that had become one of the fastest the country has been a reliable
the pandemic could cause the growing and most dynamic in source of income through-
equivalent of 305 million job the world. However, it seems out the ups and downs of
losses, many of which are in unlikely that the sector will the country’s economic cri-
the tourism sector. return to normalcy anytime sis. Now, the coronavirus
The pandemic brought soon as the virus is not show- pandemic threatens to topple
the tourism sector to an abrupt ing any signs of abating. another pillar of the national
halt at the end of the first Since the declaration economy. According to the
Zimbabwe Tourism Authori-
quarter of 2020 as nations of the coronavirus ty (ZTA), in 2018, 2.5 million
scurried to impose move- as a global pandem- tourists generated an estimat-
ment restriction measures in ic, international trav- ed $1 billion in revenues while
a bid to stem the spread of els have significant- in 2019, tourism dropped by
the deadly novel virus. Prior ly gone down as the 11%. A much higher decline
aviation sector has is anticipated in the current
been grounded due to year as 90% of the tourists
the worldwide trav- who visit the country come
el restrictions placed from overseas mostly Europe
by different coun- and US, areas which have re-
tries. According to corded significant numbers of
the International Air infections. Domestic tourism
Transport Association will continue to be subdued
(IATA), the aviation as most locals cannot afford
sector is expected to the costs of travelling to and
recover in 2024, and this will accommodation at their pre-
have a significant impact on ferred local destination. Mea-
the tourism businesses which sures put in place to combat
are depended on international the spread of the virus are
tourists for survival. also limiting domestic tourism

53Q3 Edition | Investment Quarterly

as people are only allowed to are saddled with debts for the Em-
travel to another province on refurbishments they have un- ploy-
exceptional circumstances, of dertaken to spruce the out- ers’ As-
which leisure travel is not one look for their facilities. Work- sociation
of them. ing capital challenges have of Tourism
The country’s tourism become common as players and Safari Operators (EAT-
sector could lose up to US$1.1 prepaid bookings which usual- SO) said some companies had
billion due to the Covid-19 ly provide funding are almost terminated contracts of some
restrictions. The restrictions non-existent. Hotel occupan- of their workers due to the
brought about cancellations cy is anticipated to plummet effects of Covid-19 and many
of bookings. The loss of reve- below 20% amid fears that others may be furloughed as
nues has resulted in the failure some operators will be forced the novel virus continue to
to service bank loans, failure out of business. African Sun threaten the survival of the
to finance operational costs in its 2019 annual report indi- business. Whilst the tourism
and the loss of opportunities cated that as of 6 May 2020, sector has started reopening,
aimed at developing commu- they had 31 907 room nights its operations remain subdued
nities. Hotels in the country cancelled, which is quite sub- due to the continued surge in
stantial for their business. the number of people that are

infected by the novel virus
in the country. Movement
of people between towns
remains restricted as the
country tries to curb com-
munity transmission of
the virus.

Other countries have
implemented policies to
support the survival of
the industry through the
suspension or subsidisa-
tion of taxes, fees and so-
cial security contributions.

54 Investment Quarterly | Q3 Edition 2020

Bisate Lodge villas at night, near Volcanoes National park in Rwanda The pandemic has brought In Malaysia the government calling for tax breaks and in-
the need for dialogue between offered income tax relief for centives from Treasury to re-
tourism players and the insur- tourism expenses starting in main in business.
ance sector which currently March. In Rwanda tourists The recovery of the
concentrates on insurance will have a two-year grace pe- tourism sector will be chal-
that only covers physical dam- riod to postpone bookings at lenging due to the fragile
age caused by disasters such no extra cost. In Egypt, rent health system of the coun-
as floods and fires and not payments have been suspend- try which is incapacitated to
the effects of the pandemic. ed for tourism sector players handle the pandemic and may
Some programmes such as the at state controlled landmarks. result in many countries re-
Catastrophe Containment and In our country, the local gov- stricting their citizens from
Relief Trust by the Interna- ernment has provided the visiting the country. Also the
tional Monetary Fund (IMF) sector with a stimulus pack- image of the country has been
can offer short term debt re- age worth ZWL$500 million. tainted by the escalating po-
liefs to some of its members. There has been outcry by in- litical tensions. The econom-
Governments in the formal players in the country ic crisis in the country, could
medium and long term should regarding access to the pack- make services in the country
also focus on economic diver- age. Tourism players, who are more expensive as everything
sification of towns that are counting their losses as one is now pegged against the US
solely dependent on tourism. of the sectors hardest hit by dollar.
the COVID-19 pandemic, are

55Q3 Edition | Investment Quarterly

The Land
Question and
the Economy

Jamaica The land issue has Emotions are running
Tongowona remained a source high across the political di-
of political and vide and just like at the onset
56 Investment Quarterly | Q3 Edition 2020 economic struggle of the fast track land reform
in Zimbabwe since coloni- programme, US$3.5 billion
sation in 1890, the armed compensation has polarised
liberation struggles (first opinion. There is a camp that
and second Chimurenga), is claiming that the govern-
independence in 1980 and ment is effectively reversing
the fast track land reform the land reform programme
programme in 2000 dubbed and another in favour of the
the third Chimurenga. And compensation deal because it
now with the signing of redresses the ills of the cha-
the Global Compensation otic land reform programme.
Agreement (GCA) the land Broadly the compensation
question is once again mak- deed is a provision in the 2013
ing headlines. Under the National Constitution and the
terms of the GCA, approxi- current political leadership’s
mately 3,500 white ex-farm- attempt at changing the taint-
ers will receive a compen- ed profile of the country in-
sation of US$$3.5 billion ternationally. Section 295 of
which authorities argue is the Constitution provides that
only for improvements on indigenous farmers and white
the land. farmers, whose properties

The Land Question and the Economy

were protected under Bilater- moreover earned the country instead of the government
al Investment Protection and sanctions from the US and having to burden tax payers.
Promotion Agreements (BIP- the European Union. And Moreover, the resettled farm-
PAs), are entitled to compen- chief among the causes of ers also benefited from farm
sation for both land and im- these economic sanctions was property, plant and equip-
provements. the failure by the Zimbabwe- ment, biological assets as well
Representatives of the an authorities to observe the as from a plethora of govern-
Commercial Farmers Union rule of law and not respect- ment funded farm mechani-
view the US$3.5 billion agree- ing private property rights all sation programmes over the
ment as a huge milestone and pinned on the land redistribu- past two decades. It’s also rea-
the resolution of the long-out- tion programme. sonable that beneficiaries of
standing issue of compensa- The complexity of the the land reform programme
tion. While the political ad- land and the economy ques- bid with other aspiring farm-
ministrators may scout for tion in Zimbabwe lies in the ers for deeds. But again this,
the funding through various fact that currently all farm the government argues will
instruments in order to man- land belongs to the State, result in the resourced white
age the profile of the coun- which means there is no ten- former commercial farmers
try, the different economic ure and thus this land cannot acquiring back all the land and
ills that beset the country at be used as collateral for bor- thus effectively reversing the
the moment indicate that this rowing purposes. Perhaps the land reform programme.
proposed compensation is governments should just put It’s one good thing to
highly unlikely to “bring clo- the title deeds on the market agree on a price for compen-
sure and a new beginning” in to raise the US$3.5 billion and sation for planning purpos-
as far as the land question and in the process attracting seri- es and for future generations
the economy is concerned as ous investors into the agrarian but it’s also another in terms
envisaged by the proponents. sector. It’s been 20 years since of respecting private property
The 2000 land reform the land reform and benefi- rights. The flagrant behaviour
programme resulted in the ciaries are now expected to of the largely populist po-
free fall of the economy and have settled and in a position litical leadership in terms of
to at least pay compensation property rights and the rule of

57Q3 Edition | Investment Quarterly

58 Investment Quarterly | Q3 Edition 2020

law is divorced from what the different interpretations and But again not every-
GCA seeks to achieve. There misinterpretations even by thing wrong about the sit-
is lack of seriousness about those steering it. The govern- uation in Zimbabwe at the
property rights and the rule ment also previously frustrat- moment is tied to the land
of law on the part of a gov- ed several foreign investors question. There are outstand-
ernment that resorts to regu- by cancelling agreements with ing reforms also provided for
latory overreach and stringent no valid reasons. This poses in the 2013 Constitution and
regulations on capital mar- the question whether there’s the Zimbabwe Democracy
kets where it’s highly expect- method in prioritising the and Economic Recovery Act
ed to let the markets decide. US$3.5 billion compensation (ZIDERA) that have not been
The forced delistings of dual and if the government is act- addressed. There are still
counters listed on the Zimba- ing in good faith. headlines on human rights
bwe Stock Exchange (ZSE) The question to com- malpractices, corruption and
and the stringent regulations pensate or not compensate political rights violations
on mobile money operators white farmers remains debat- which make the re-engage-
speaks of a government that able and likely to remain so for ment efforts with western
is not ready to reform and ob- generations to come. Some governments impossible. The
serve free markets. argue that the white farmers land reform programme has
Government’s track re- benefited from the land and also failed to produce enough
cord in terms of policy clar- cheap labour over the years staple food as the country
ity and consistence does not since colonisation and thus continues to import food.
help matters either. The com- there is no justification for Two decades after the agrarian
pensation deal itself is not so paying compensation. After reform, there’s still no proper
clear to many that it generated all it was never their land in the working agricultural plan to
a lot of confusion and had to first place hence they have no resuscitate the agribusiness
be further clarified by further bargaining power. The other and boost production and
ministerial statements. Lack camp is amenable to the gov- anchor the economy. There-
of clarity in government pro- ernment paying compensation fore, it will take more than the
grammes and policies was also on the basis that the land re- US$3.5 billion compensation
witnessed with the Indigeni- form programme of 2000 was to white farmers for the coun-
sation and Economic Em- botched and thus justifies the try to fix its current economic
powerment policy, now aban- US$3.5 billion in the name of issues.
doned, which was a subject of respect for property rights.

59Q3 Edition | Investment Quarterly

In search of
the working
agric recovery
plan for Zim

Isheanesu T he average Zimba- ricultural headlines; prepa-
Nehanda bwean can hardly ration and planting of the
think of anything winter wheat crop, the sales
60 Investment Quarterly | Q3 Edition 2020 luxurious during of tobacco, agricultural
the Covid-19 pandemic. The mechanisation programme
economy continues to de- and maize imports, just to
teriorate at a time most of name a few. The appropri-
the informal sector remains ate and working agricultur-
closed whilst those fortu- al revival plan for Zimba-
nate enough to still have bwe remains outstanding
formal jobs are so under- and many initiatives have
paid they can hardly afford been tried. From the Re-
the basics, let alone luxu- serve Bank of Zimbabwe
ries. The focus for many funded farm mechanisa-
is survival, prioritising on tion programme, Presiden-
basics, mostly food. This, tial Inputs Scheme, Com-
thus, calls for the prioritisa- mand Agriculture and most
tion of adequate food pro- recently the John Deere
duction in the country. The mechanisation scheme and
second quarter of 2020 has the Pfumvudza concept.
been marked by several ag-

Agricultural produc- problems identified, with the lis Haritatos indicated that as
tion in the country drastical- recent a few months back be- a ministry they expected to
ly deteriorated after the land ing the US$51 million John plant 85000 hectares and are
reform programme. This is Deere Mechanisation scheme expecting a yield of around
mainly due to different rea- meant to support farmers 400 000 tonnes by the end
sons, including poorly execut- to boast production. This of the season. As much as
ed land reform programme, time around, we are told, the 70 000 hectares were expect-
lack of adequate agricultural scheme will be managed by the ed to be funded by the gov-
knowledge and also lack of banks with leading financial ernment while the remaining
enough funding and mecha- institutions, Stanbic and CBZ 15 000 expected to be grown
nisation as resettled farmers at the centre of this exercise by the private sector. Reports
with not title to land have which is prioritising produc- suggest power supplies were
struggled to get bank loans ing farmers unlike in the past much better thanks in part of
which have to be supported where political connections much reduced industrial ac-
by collateral. However, even were more important. tivity following the covid-19
to date after some attempts On the production outbreak. Whereas 400,000
to support the local farmers side, the Deputy Minister of tonnes could still be slightly
mechanically, production of the Ministry of Lands, Agri- lower than 500,000 tonnes an-
food for local consumption culture, Water & Rural Reset- nual consumption, if achieved
has been below national con- tlement, Vangelis Haritatos, it will bring some relief to the
sumption requirement. Some indicated that all winter wheat fiscus. Also it is important to
of the reasons have been said inputs were in place by the make some of these interven-
to be lack of adequate ma- end of April 2020 with sup- tions sustainable instead of
chinery. This includes tillage pliers ready for dispatch and an annual recurrence of input
and irrigation equipment. farmers expected to plant be- handouts.
A number of schemes have ginning of May 2020. Vange-
been launched to address the

61Q3 Edition | Investment Quarterly

The country suffers and this factor combines with around 1.8 to 2 million tonnes
massively due to the erratic the instability of food mar- of maize a year, so this fall
rainfall that was experienced kets, particularly in areas with in production meant that the
last season. Droughts and shortages, to increase the con- country would need to import
poor planning have seen the centration of food insecurity at least a million tonnes of
country relying heavily on in urban areas. Food insecuri- maize to cover the shortfall.
imported maize from mainly ty also varies according to the Government says it
Zambia, Tanzania and South season. In rural areas, the lon- has started preparing for the
Africa to feed the nation at ger the period since harvest coming summer cropping
time foreign currency genera- time, the more people’s food season and distribution of
tion has not been increasing. stocks diminish and prices inputs under the Presidential
Food insecurity remains an es- rise. Input Scheme will start in the
sentially urban phenomenon. According to data from coming weeks. Recently there
Most urban households buy at the US Department of Ag- has been a lot of talk about
least some of their food sup- riculture, Zimbabwe’s need an intensive farming concept,
plies from the market, partic- for maize imports was main- called Pfumvudza target-
ularly during years when the ly caused by a poor domestic ing households in communal
harvest is poor and prices are harvest which had fallen by farmers to increase grain har-
thus higher. 53% year-on-year in 2019/20 vest per household.
Informal sector in- production season to 800 000
comes are low and irregular, tonnes. Zimbabwe consumes

62 Investment Quarterly | Q3 Edition 2020

Pfumvudza is a disrup- local manufacturing sectors. prove yields and quality of the
tive innovation that promotes On the other hand, to- leaf to guarantee better prices.
climate proofing agriculture For a country looking for
by adopting conservation bacco sales have been going quick wins as the econom-
farming techniques and in- on even during this pandem- ic meltdown continues, it is
volves the utilisation of small ic, though there was a slight important to get things right
pieces of land and applying delay in the opening of this on the farms first, starting
the correct agronomic prac- year’s marketing season. As at with concluding the land re-
tices for higher returns. The 24 August 2020, 176 million form exercise to enable sit-
Pfumvudza concept will be kilogrammes had been sold ting farmers to produce with-
applied to maize, traditional for US$440 million. Farm- out fearing losing the land.
grains and oil seeds. The con- ers have been getting half of Farmers should be given title
cept also seeks to commer- their proceeds in USD and the which is acceptable to banks
cialise smallholder agriculture. other half in local currency at for them to access loans and
There’s no doubt that farming a fixed rate of 1:25 until the reduce dependence on input
in this country required local- forex auction system was in- handouts from the state which
ised innovation to improve the troduced. Tobacco is the only are putting funding pressure
food security of most house- crop which has seen output on the fiscus. These and other
holds whilst bigger ventures growth post the land reforms confidence building measures
can produce for export and as many local farmers joined could getting agriculture driv-
providing necessary input to in. The potential here is huge ing economic growth again.
if assistance is given to im-

63Q3 Edition | Investment Quarterly

Children and
safety in
Covid times

Courage I n light of recent in- set of the Covid-19 epidem-
Pahla crease of Covid-19 in- ic. The study comes at a time
fections in Zimbabwe when there are debates about
64 Investment Quarterly | Q3 Edition 2020 which has upended the scientific evidence into the
lives of children and caus- risks presented by re-opening
ing different calamities; schools amid the coronavirus.
parents have to pay spe- According to the U.S.
cial attention to their chil- Centers for Disease Con-
dren’s safety and well-being trol and Prevention (CDC),
amidst socio-economic fall- among nearly 150,000 cas-
out from the pandemic that es of Covid-19 in the U.S.
has infected more than 23.7 between February 12 and
million people and killed April 2, (only about 2,500, or
more than 810,000 world- 1.7%), were in children. This
wide since last year, when it trend is similar to what has
was first reported. Covid-19 been reported in other coun-
has undeniably changed tries, such as China and Italy
the lives of children. that have had large outbreaks.
A recent study that Hospitalisation rates for chil-
was conducted in France of dren have been much lower as
Coronavirus in children has compared with adults taking a
concluded that children are leaf from South Africa where
both less contaminated and the infections have been rife.
less contaminating, than was A report by the National In-
generally thought at the out- stitute of Communicable Dis-

finance

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65Q3 Edition | Investment Quarterly

eases (NICD South Africa) new stressors on caregivers one who is not trained or
showed that children made up who may have to forgo work. old enough to have authority
less than 7% of all reported Prevention of these calami- over them. They must also be
Covid-19 cases in South Afri- ties is vital, and we have re- warned of dangers of the dis-
ca and were less likely to be searched ways that aim to help ease and must be alert always.
admitted to the Intensive Care families strengthen protection Diet and exercise
Unit or die, when compared measures for children during Like adults, children
to adults. The report noted the pandemic. also need to exercise. Hate
that Covid-19 was uncommon to be the bearer of bad news
in South African children, in- Safe kids are happy but yes breaking a sweat and
cluding those of school-going kids! eating healthy is key in fight-
age, between 5 and 18. More- ing Covid-19 among children.
over, in all cases, children Our children’s safety is
who contract the coronavirus essential at all times. A safe
suffer milder symptoms than and secure child
adults. is a happy child.
When children feel
What is being done safe, they feel loved.
so far? Laughter in children is
the best medicine. This is
According to UNICEF one of the keys to a child’s
quarantine efforts such as success at home, school and
school closures and move- in future. Communication,
ment restrictions, while con- engagement and education
sid- ered necessary, are on Covid-19 with children is
of paramount importance in
disrupting chil- assessing how the disease af-
dren’s rou- fects them differently.
tines and
support Children should
systems. never be left alone or in
They are the company of some-

also adding

66 Investment Quarterly | Q3 Edition 2020

Children and safety in Covid-19 times

A good workout increases cious source of biotin Parents should also use the
their blood circulation mak- is spinach, chomo- extra time they spend togeth-
ing them sweat out toxins and lia and rape. The er with their children while in
other impurities. Playtime is truth is, if they lockdown to learn more about
a valuable way to maintain a exercise well each other’s worlds, both dig-
sense of normalcy for chil- and eat well, ital and physical space.
dren as well as to promote children will Home SWEET Home!
emotional well-being. Chil- be proactive in Children should be
dren should be mindful, how- fighting various encouraged to stay home.
ever, of keeping a healthy dis- diseases. It is prudent to keep them
tance from others. home and away from others
One of the most im- Technology as as much as possible, except
portant things for children is an empowerment for medical care. Due to work
to learn healthy eating hab- tool commitments, transport lim-
its. They need a balanced diet itation or general neglect par-
that consists of fruits, pro- Technology use among ents sometimes leave their
tein foods and vegetables in children should not push out children in custody of other
shades of orange, red, blue, time needed for sleep, physi- people. We must take note
and green, which burst with cal activity, reading, or fami- that the younger the children,
protective antiodants, like Vi- ly connection but it is a crit- regardless of their gender, the
tamins A, C, and E. Also eat- ical tool for them to access more vulnerable they will be.
ing foods containing biotin, a learning, play, entertainment Parents have to be selective of
B vitamin in body’s produc- and social interaction. To events they take their children
tion of fats. The healthy deli- help contain Covid-19, many to and whose company they
schools moved children to will be in but staying home is
the best.
online learning at home and
some parents are working
from home. Many par-
ents are left in impos-
sible situations be-
cause of unreliable
electricity, data
charges and net-
work connec-
tions. It is im-
perative for
parents to
moni-
tor what
their chil-
dren are
seeing on-
line and follow
what their chil-
dren are learning.

67Q3 Edition | Investment Quarterly

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68 Investment Quarterly | Q3 Edition 2020