The AXiS LXXXIV (84)

ZSE Depository Reaches Major DEMAT Milestone Contractionary Policy Curbs Zim Production Zim Seeks to Skirt EU Tobacco Prohibition BNC Predicts 2023 Recovery, As Do All Laggards ................................................................................... ................................................................................... ................................................................................... ................................................................................... ...................................................................................... The Topsy-Turvy Economy An Illusion of Progression and Stability? fifffflffifl ECONOMY #Issue: LXXXIV

equityaxis.net @equity axis @equity axis zimbabwe @equity axis @equity axis @equity axis 08677 197 791 @ aaronc[at]equityaxis.net EQUITY AXIS Financial Insighs at your fingertips The CONTENTS The AXiS LXXXIV 14 Jul 23 In Focus 4 5 6 7 15 Shifting Sands, Essence of the Election Season ZSE Depository Achieves High Demat Ratio Contractionary Policies and Production: A Case of Payoffs Mining Leads FDI Flows into Zim HY-23 : Licensing and Investment in Zimbabwe Markets Guest Column World News 25 26 27 Capital Markets 17 19 20 21 Business around the world Politics around the world Regional Economic watch ZSE Weekly Markets Watch Financial Markets At a Glance 23 24 28 The Cover Page 6 . Page 11 Page 17 8 9 10 11 12 13 Economic News and Analysis Iran and Zimbabwe Sign Agreements to Boost Trade : Raisi Concludes African Tour The Keys to Avoiding EU Ban on Zimbabwe's Golden Leaf : Sustainable Tobacco Farming and Economic Diversification Demography and Business Growth : Exploring Business Survival in Zimbabwe Unraveling the Paradox : Consequences of falling FAO Food Price Index on Zim's State Food Divergent Renewable Energy Paths for African Nations : A Tale of Two African Nations: Namibia and Zimbabwe Going Green : Can Africa Pursue Economic Development Without Relying on Fossil Fuels? Breaking down Borders : Zimbabwe and Botswana Join Hands to Boost Horticultural Exports BNC anticipates recovery in 2023 : But so does every loss making entity VFEX Listings Timeline Tharisa's Karo Platinum Project : Set to Boost Economy and Cement Position as Key PGM Player Unifreight : Strategic Imperative to Confront Seasonal Vulnerabilities and Local Manufacturing Dependency Truworths : Renounceable Rights Offer Aims to Fuel Strategic Transformation Agenda DELTA History & Sales Contributions Zim’s Quest for Economic Stability : Price Controls Won’t Work ZSE ASI 156,728.16 VFEZ ASI 74.97 ZWL INTERBANK 5,412.5484 155,307.10 74.43 5,251.0640 152,053.02 74.38 5,286.7296 141,044.14 74.47 5,297.5033 135,056.70 73.92 4,998.8352 132,380.43 73.55 4,988.2610 -15.54% -1.88% 8.51% ZSE TOP 10 80,176.59 MEDIUM CAP INDEX 468,982.25 SMALL CAP INDEX 2,193,037.49 78,782.22 474,390.60 2,165,867.69 76,405.70 474,799.80 2,082,401.95 68,948.72 467,280.59 2,160,142.99 64,663.99 466,596.26 2,160,142.99 63,103.02 461,086.05 2,160,142.99 -21.29% -1.68% -1.50% “Meanwhile, obsessing about productivity is way up”

4 The AXiS LXXXIV Fri 14 Jul 2023 Shifting Sands, Essence of the Election Season I ascertain the extent to which the Bank issued currency through the reserve money information as this was concealed via exchange rate movements which are factored in coming up with the Zimdol- lar equivalent of aggregate reserves position. Weekly growth would either be attributed to chang- es in government’s deposits with the RBZ or any other similar transitory changes, which could fluc- tuate in successive sessions and therefore be less fundamental in one's attempt to ascertain the levels of money supply growth primarily attributed to RBZ’s currency issuance. For current data to be more indicative of currency injected, the impact of exchange rate depreciation has to be factored allowing for real growth estima- tion. In our analysis we found that after moderating for the impact of the exchange rates, Zimbabwe's base money grew by over 100% in constant currency between April 2022 and April 2023. This growth level is staggering as it highlights massive currency injections, which do not support a stable exchange rate. The RBZ however never admitted to gross currency injections as it continued to high- light that it is performing within targeted money supply growth levels set by the Monetary Policy Committee. It is only in June 2023, that Treasury was pushed to name out RBZ for massive issuance of currency in an irrationale manner. RBZ was called out for issuing currency for the purpose of buying curren- cy surrendered by exporters. We estimated that through this scheme RBZ would have issued about half a billion US dollars worth in local currency between January and May 2023. To balance the scale, RBZ has sought to drain some of the liquidi- ty in Ponzi like schemes including the issuance of gold coins and now digital gold tokens. This is a fraction in the broad basket of short-term financial instruments targeted at reducing the impact of mas- sive money supply growth. In standard terms, instruments of economic moder- ation such as aggressive open market operations, are pursued only in rare circumstances where a certain target has to be achieved. Given reciprocat- ing adverse payoffs, these measures are not designed for sustained unlimited use. However, in the case of Zimbabwe, RBZ is clearly in an unre- strained liquidity mop-up all year round. The ques- tion because, who is creating the liquidity that it has to mop up all year round? Credit extension to the private sector in local currency, according to RBZ data, has remained depressed, faring worse off in the current year (5 months to April) com- pared to the past 2 years, in real terms. The gener- al trend could be informed by sustained punitive interest rates which discourage borrowing and the general shift in preference towards hard currency denominated loans. Much of the credit growth from private sector lending is attributed to USD loans, although the overall deposit base remains largely transitory. Credit to government, an instrument once preferred by government in the past and a significant driver of yesteryear money supply growth (2015-2018), also shows not so significant a growth over the past 1 year. The suboptimal coupon rates coupled with government’s deliberate lack of preference for borrowings, has inspired this trend. Treasury uses this stable trend to show that it has been generat- ing enough resources sufficient to meet a consider- able fraction of its budget. However, this view is not entirely true as it exclu- sively posits market credit as its only source of liquidity. This view does not consider RBZ's power to print money and finance government expendi- ture. As we learnt, the latter has been the preferred route despite its dangers. It is far much more dam- aging to prefer printing money through the RBZ than preferring credit from the market to cover government’s expenditure shortfall. Borrowings are a cost and therefore demand discipline in utiliza- tion. There is always a sense of responsibility asso- ciated with this form liquidity unlike currency issu- ance by the Central Bank. Its impact on currency stability is very immediate and likely very adverse depending on magnitude. After 3 successive sessions of recovery, government is attempting to rebuild confidence. Parallel rates have begun to come off, reducing the premium and perhaps setting the stage for prices to effectively come off. While this is likely to happen in response to the exchange rate movements, we keep warning that this road has been traversed before, there is no indication as yet that anything can be as different this time around. Government is also under pressure to stabilize the exchange rate because its failure has the potential to cost it an election, which is now less than 1 month away. Given the circumstance, any incumbent would do everything in its power to create normalcy until the election even if it only serves the short term. This has been the order in the past including in 2018. The level of TBs issued in that respective year alone doubled that of the prior year, according to Treasury data and this is despite the appreciation and admission that its borrowing path was unsus- tainable. All of these short-term policies were to be undone in 2019, when austerity was introduced as the government attempted to reposition the econo- my on a sustainable path. Last week we highlighted that we cannot take any- thing home from the current Zimdollar run. It is most likely a stability of convenience created to last for a while. There is no evidence as to the source of forex being used to support the auction and wholesale market. Government insists that the forex is from its reserves but this detail too only emerged at the point of conjuncture and not as a deliberate measure of transparency properly high- lighted in some periodic publicly supplied data. Any serious sustainable stability will be accompa- nied by the full liberalization of the currency market, fundamental considerations such as fiscal prudence and restructuring and rebuilding of reserves and this is not yet the case. We sure will only know who is swimming naked, after the tide is gone. is on the verge of an election and so many politi- cal permutations are at play and these have a con- sequential impact on the economy. Already we have seen a currency bloodbath which nearly grounded the economy and the end to such occur- rences is far from over. Monetary data from the RBZ supports the view that authorities have stopped issuing currency and this is consistent with the stability that is presently being enjoyed and even favouring Zimdollar strength. Reserve money, which measures the core credit at the Bank’s disposal held as reserves including issued currency shows a stable trend having ended June at ZWL$535 billion. A larger share of the reserve money balances is held as banks' deposits sitting with the RBZ and these are mainly statutory reserves. About 80% of the reserves are foreign currency denominated. Reserve Money Trend Zimbabwe The growth in foreign currency denominated reserves reflects the exchange rate depreciation which quickened in June and the growing foreign currency deposits with banks in line with both gen- eration and dollarization trends. In the context of this piece, an analysis of the overall reserve money position of Zimbabwe does not show any inconsis- tencies with the verbal testimony by government and the RBZ that it has since stopped issuing currency. However, as in the past these testimonies need not be taken at face value given historical recurring behaviour. The past misgivings by the Bank and Treasury take any public confidence in both the pronouncement and even the data supplied by the same institutions for the public. While Cen- tral Banks globally follow set standards prescribed by affiliate institutions such as the IMF, some countries have continued to withhold some infor- mation and even manipulate some. Zimbabwe falls under this category and it thus becomes increasing- ly difficult to rely on data provided through official bodies. Key examples of such scenarios include the reserve money data highlighted above. Over the last 3 years, RBZ has been publishing weekly positions for the aggregate but it has been very difficult to n sensitive times such as the ones we currently find ourselves in, the sands beneath us keep shifting at a sporadic quicker pace. Zimbabwe

ment cycle. The number of trades executed in Q2:2023 declined by 29% to 2,263 trades. This could be reflective of issuer migration from ZSE to VFEX during the period and possibly the halt- ing of trades each time share prices breached circuit breaker limits. Meanwhile, value of trades fell from ZWL$12.26 trillion (Q1:2023) to ZWL$7.74 trillion. The drop speaks to the unusual level of inactivity the ZSE experienced during the period. Unusual in the sense that the second quarter is when the ZWL entered hyperinflation. Q2 saw VFEX Depository adding three issuers to its listing namely African Sun, First Capital Bank and West Properties. West Properties was an entire- ly new listing on VFEX through an initial public offering (IPO) whilst the other two were listed by way of introduction after migrating from the ZSE. It is important to note that VFEX has the lowest demat ratio and it closed the period under review at 22.7%. The depository’s clearing also follows a T+3 settlement cycle. Most noteworthy, trades executed on VFEX Depos- itory grew by 365% to 2,230 quarter-by-quarter. The VFEX has been associated with illiquidity. This massive jump leaves the market wondering if the economy is dollarizing or whether the VFEX has been a safe haven for investors given the seri- ous loss of value the ZWL has experienced during ZSE Depository Achieves High Demat Ratio I the quarter? In terms of VFEX’s investor composi- tion, the depository cleared 79 foreign corporate and 384 foreign retail investors. Local investors dominated the bourse comprising of 11,225 retail, 1,806 corporate, 2,382 pension fund and 1,157 NMI investors. When VFEX was launched, most market players never thought it would one day succeed. The gen- eral market sentiment at that time was that it would die a still birth. Given where it is now, we learn the importance of persistency and determina- tion. That said, the whole market story concerning depositories’ performance will be incomplete with- out an update from CDC. We commend the CSDs for coming up with their first quarterly issue. In our coming issues, we hope to give an update from Chengetedzai for completeness. improvement since its establishment backed by various factors chief amongst them, the migration of issuers from Zimdollar (ZWL) denominated bourse ZSE to the US dollar denominated exchange, VFEX. To give a background, the ZSE is the parent stock exchange in the country but in 2020 following the need to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls, opened VFEX as its subsid- iary and trading exclusively in USD. It is clear that the exchange’s establishment came on the back of the country’s currency crisis which led to foreign investors struggling to repatriate their funds and capital gains upon maturity of their investments to their respective countries. The birth of the VFEX was also a way of ring-fencing USD denominated transactions against any form of devaluation after mixing them with local currency and for safer timeous settlement upon maturity. Although the ZSE (the exchange) has been operat- ing for so many years its depository arm, the ZSE Depository, is less than two years old after com- mencing operations in October 2021. Chengetedzai Depository Company (CDC) was the first company to occupy the CSD space and in November 2019, the ZSE approached them trying to partner or acquire full shareholding in CDC. The move was rejected by CDC and ZSE Deposi- tory was launched two years later. That time the ZSE lured issuers from CDC through rebates which were meant to reduce issuers’ costs by 30%. That move was blocked by the Competition and Tariffs Commission of Zimbabwe (CTC) as they viewed the move by ZSE as unfair competition – although some had already migrated. The ZSE Depository update is however not a true reflection of the whole market performance as CDC is still the biggest player in settling trades executed on the ZSE exchange with a market share of as high as +70%. However, CDC has no access to settle trades executed on VFEX because of a statutory instrument, S.I. 196 of 2020, which clear- ly sets out that the clearing and settlement of trans- actions executed shall only be done by VFEX Depository. That clearly gives VFEX Depository monopoly and ‘unfair’ advantage over other players, CDC in particular. Each time you hear an issuer migrating from the ZSE to VFEX, it is important to note that the move represents direct loss of business from CDC to VFEX Depository (assuming the issuer was under CDC and not ZSE Depository’s admin- istration). The CSD system which CDC introduced to the market was a step to do away with the old manual system where ZSE trades were settled using physi- cal share certificates. That process of doing away with manual certificate is called dematerialisation. It brings efficiency to clearing and settling, facili- tates deposit and withdrawal of securities as well as offering more security to investors among other advantages. During Q2:2023, the ZSE Depository maintained its 12 listings comprised of equity (7), four exchange traded funds (ETF) and one real estate investment trust (REIT). The dematerialization (demat) ratio stood at 88.13% compared with 87.58% in Q1:2023. In terms of demats, Truworths is the most lagging counter with a demat ratio of around 45% whilst other issuers under ZSE Depos- itory have demat ratios ranging from 80 to 100%. The ZSE Depository clearing follows a T+3 settlen a Q2 securities depository update, the ZSE said the Victoria Falls Stock Exchange (VFEX) Depository posted its first ever quarterly 5 The AXiS LXXXIV Fri 14 Jul 2023 DEMAT RATIO

6 The AXiS LXXXIV Fri 14 Jul 2023 Contractionary Policies and Production A case of Payoffs es sector. In the first quarter of 2023, output in the highlighted sectors significantly plummeted, with the index of food manufacturers dipping -37.6% despite a mild increase year on year. The beverag- es sector index plunged -62.4% in the first quarter of 2023 compared to the first quarter of 2022, and 60.3% against the fourth quarter of 2022. With reduced production and demand, supply chains within Zimbabwe's economy began to unravel. The contractionary policy caused a ripple effect as businesses scaled back operations or even closed down entirely. This disruption in the supply chain amplified the downward spiral, affecting not only manufacturers but also suppliers and distribu- tors, leading to widespread reduced economic activ- ity. Overall capital expenditure in the quarter is estimated to have slowed down by a circa 25%. Consequently, capacity utilisation, which gauges the productivity of factories, notably slowed down according to internally generated indexes at Equity Axis. Furthermore, the contractionary policy impacted the cost of imports and raw materials in Zimbabwe. The implementation of tighter credit conditions made it difficult for businesses to obtain foreign currency along with the prevailing stringent access to foreign currency on foreign markets, and this led to a scarcity of essential imports. Consequently, the limited availability of raw materials hindered local production, affecting various sectors including man- ufacturing, agriculture, and construction. On the other hand, the inherent challenge of power in Zimbabwe also weighed on production levels in the first quarter of 2023. Over the years, Zimba- bwe has been plagued by recurrent power outages, severely disrupting the country's production and commercial sectors. The inadequate and unreliable power supply took its toll on industries, businesses, and citizens alike in the period under review, ham- pering productivity, economic growth, and impeding commerce. When factories cannot operate at full capacity due to electricity shortages, production levels plummet and output suffers. Manufacturers heavily reliant on machinery and equipment are unable to function efficiently, leading to production delays, loss of orders, and decreased profitability. As a result, the country witnessed a decline in manufacturing activities, affecting both domestic production and export competitiveness. Industries requiring a consistent and uninterrupted power supply, such as mining and agriculture, face debilitating setbacks during power outages. Mining operations heavily depend on electricity to power machinery, ventilation systems, and processing plants. Power disruptions not only halt mining activities but also jeopar- dize worker safety and productivity. Similarly, the agricultural sector, including irrigation systems and cold storage facilities, experiences signifi- cant setbacks during power outages, affecting crop yields, agro-processing, and food preservation. In perspective, in 2022 gold production at Freda Rebecca registered 2,070 kg’s from 2,920 in 2021 while production at the Zimbabwe Stock Exchange listed RioZim recorded 929 kg’s, down from 1,122 kg’s in 2021 and these were partly attributed to power chal- lenges. The uncertainty associated with power outages deters potential inves- tors, hindering economic growth and limiting job creation opportunities. Power outages have a direct impact on commerce in Zimbabwe, discour- aging both local and foreign inves- tors. Unreliable power supply disrupts business operations, leading to missed deadlines, increased costs, and com- promised product quality. These outages also discourage international trade and commerce, as companies face challenges fulfilling orders and meeting export demands. Resultantly, this has seen reduced investment in production in the country as aforementioned on CAPEX growth. Power outages disproportionately impact small and medium enterprises (SMEs), which form the back- bone of Zimbabwe's economy at 88%. These busi- nesses often lack backup power sources or the financial capacity to invest in alternative energy solutions. Consequently, the inability to sustain operations during outages threatens their survival, forcing many SMEs to close or significantly scale back their activities. To give context to the number of players in the manufacturing sector, the Confed- eration of Zimbabwe Industries estimates that there are over 4,500 manufacturing companies who employ at least ten workers in Zimbabwe. A majority of these operate in the small to medi- um-sized sector. Power outages not only disrupt production process- es but also increase costs for businesses. Compa- nies have to resort to expensive alternatives like diesel generators or batteries to keep operations running during outages. This additional financial burden adds to the already high cost of doing busi- ness in Zimbabwe, impacting profit margins and discouraging investment. The increased cost of production may sometimes be offset by reduced production. The contractionary monetary policy introduced in Zimbabwe in 2022 had severe consequences for the country's production levels. The reduced busi- ness investment, declining aggregate demand, supply chain disruptions, increased cost of imports and raw materials, and rising unemployment all contributed to an economic downturn. Power outages in Zimbabwe have also had severe conse- quences for the country's production and commerce sectors for the longest time than any other “ineffi- cient” policy. The decline in manufacturing output, disruption of industrial processes, loss of business opportunities, and the adverse impact on small and medium enterprises have all contributed to an economic downturn. However, it is imperative for policymak- ers in Zimbabwe to carefully assess the impact of policies on production levels while striving for a balance between controlling inflation and fostering economic growth. Only through comprehensive and strategic measures can Zimbabwe hope to over- come these challenges and rebuild its economy for a sustainable and prosperous future. on the ground prove otherwise, and it is a cause for concern as the government continues to advo- cate for the perennial use of a fragile currency on the premise that it supports local production growth. Zimbabwe has been grappling with numerous eco- nomic challenges over the years, and the first quar- ter of 2023 witnessed another blow to its strug- gling economy. The implementation of a contrac- tionary monetary policy over the prior months further crippled production levels along with power outages to some extent, exacerbating ongoing hard- ships for businesses and citizens alike. Zimbabwe adopted a local currency to replace the multi-currency currency regime, and this was named the ZWL. The local unit, however, was not backed by any reserves and was also introduced at a time the country was battling to grow local production. The argument was a weak currency would mean a lower cost of local products in real terms, and thus boost export which in-turn will boost local economic players while improving the country’s balance of payment (BOP) as imports become expensive. However, the local currency became so fragile and infamous with citizens, and the government was now faced with limited options to either continue fostering new measures to control the currency or to ditch it for a hard currency. The opportunity cost of the latter is an increased BOP as imports become cheaper, lack of currency sovereignty, as well as stifled local production, while the pay-off of the former is economic stability particularly in the currency market. Faced with limited options, the government made a bold declaration that it would not consider re-dollarizing. In an attempt to curb escalating inflation rates and stabilize the economy, the Zimbabwean government introduced a contractionary monetary policy in the second quarter of 2022, typically characterized by tight credit conditions and reduced government spending. The policy aimed to limit money supply, decrease demand, and control inflation. However, its implementation led to severe repercussions for Zimbabwe's production sector. The positive and negative effects of the policy started kicking-in in the short-term, that is, the third quarter of 2022, while other “well-prepared” economic players were hit in the medium-term. The contractionary policy increased interest rates, making borrowing expensive and discouraging businesses from seeking credit for expansion or investment. With limited access to finances, many enterprises were unable to initiate or sustain production activities. The reduced business invest- ment resulted in decreased productivity, further hampering economic growth and development. Resultantly, according to recent Zimstat data, the manufacturing index, which gauges production from manufacturers, was down 14.8% in the first quarter of 2023 against the corresponding period in the prior year. The index was down 42.5% from the fourth quarter of 2022. Contractionary measures often restrict consumer spending, aiming to reduce overall demand and control inflation. However, the decline in consumer spending during the fourth quarter of 2022 was more abrupt than anticipated. As disposable incomes dwindled, consumers were forced to limit their purchases, leading to a decrease in demand for goods and services. This decline in aggregate demand directly hit production levels as businesses struggled to find buyers for their products, and this led to decreased production levels in the proceed- ing period, the first quarter of 2023. This saw a slow-down in output from the two notable consum- er sectors, the food manufacturing and the beveragWhile speculation from particular “patriots” has it that local goods are dominating the shelves of Zimbabwe retailers, numbers “Meanwhile, obsessing about productivity is way up”

*From Page 4 EQUITY AXIS fifffflffiflffi  Financial insights at your fingertips. flfl fl flffi fl  fl  fl fl flfi
fl  www.equityaxis.net Equity Axis Head Office 32 Lawson Avenue, Milton Park, Harare, Zimbabwe t: +263 (08677) 197791 c:+263 772 615 181 [email protected] Follow us 7 The AXiS LXXXIV Fri 14 Jul 2023 Licensing and Investment in Zimbabwe tors need to take appropriate measures to mitigate the risks they may face when investing in Zimba- bwe. Conclusion: ZIDA's Quarterly Report for 2023 provides a com prehensive overview of the licensing and invest- ment trends in Zimbabwe, and it is a significant tool for investors who are interested in investing in the country. The report shows that ZIDA's efforts to promote investment in Zimbabwe are yielding positive results, with significant investment oppor- tunities available in the mining, construction, and services sectors. The increase in the number of new licenses issued and the projected investment value indicates that Zimbabwe is experiencing a positive investment climate, and ZIDA's efforts to promote investment in the country are paying off. However, investors must be aware of the challenges they may face when investing in Zimbabwe, such as high infla- tion, foreign currency shortages, and political insta- bility. These challenges may lead to difficulties in repatriating profits, accessing foreign currency, and obtaining necessary permits and licenses. ZIDA's report provides a roadmap for investors interested in investing in Zimbabwe, and it high- lights the investment opportunities available in the country. Investors must take appropriate measures to mitigate the risks they may face when investing in Zimbabwe, such as conducting thorough due diligence, seeking legal and financial advice, and diversifying their investment portfolio.In addition, investors must consider the regulatory environment in Zimbabwe, which has undergone significant changes in recent years. The government has intro- duced several reforms aimed at improving the ease of doing business, and investors must stay informed about the changing regulations to avoid any legal or financial issues. Overall, ZIDA's report is a useful tool for inves- tors interested in investing in Zimbabwe, and it provides valuable insights into the investment climate in the country. While there are challenges to investing in Zimbabwe, the country offers signif- icant investment opportunities, especially in the mining, construction, and services sectors. Investors who take appropriate measures to mitigate risks and stay informed about the changing regulatory environment can benefit from investing in Zimba- bwe. the investment, with 129 new licenses issued and a projected investment value of $1,426.15 million. The construction sector saw 11 new licenses issued, with a projected investment value of $108.94 million. The services sector also saw an increase in investment, with 80 new licenses issued and a projected investment value of $109.45 million. Comparing these figures to H1 2022, ZIDA issued 107 new licenses, with a projected investment value of $1,355.31 million. The mining sector accounted for the majority of the investment, with 50 new licenses issued and a projected investment value of $1,099.6 million. The construction sector saw seven new licenses issued, with a projected investment value of $63.64 million. The services sector saw 15 new licenses issued, with a projected investment value of $117.35 million. The increase in the number of new licenses issued and the projected investment value shows that ZIDA's efforts to promote investment in Zimbabwe are yielding results. However, investors need to be aware of the challenges they may face in investing in Zimbabwe. Implications for Investment Climate ZIDA's report highlights the significant investment opportunities available in Zimbabwe, especially in the mining, construction, and services sectors. However, investors need to be aware of the chal- lenges they may face in investing in Zimbabwe, such as high inflation, foreign currency shortages, and political instability. ZIDA's report provides a roadmap for investors interested in investing in Zimbabwe. The report highlights the investment opportunities available in the country and provides valuable insights into the investment climate in Zimbabwe. However, invesrecently released its Quarterly Report for 2023, T which provides a comprehensive overview of the licensing and investment trends in Zimbabwe. In this article, we will provide an in-depth analysis of ZIDA's report and its implications for the invest- ment climate in Zimbabwe. Licensing Trends One of ZIDA's core functions is licensing, which allows for a formal relationship between investors and the government. As of March 31, 2023, ZIDA had issued investment licenses to 5,255 investors, with most issued before its establishment by its predecessors, ZIA and ZIMSEZA. In Q2 2023, ZIDA received 157 license applica- tions, issued 171 new licenses, and renewed 153 licenses. In H1 2023, ZIDA received 313 license applications, issued 287 new licenses, and renewed 228 licenses. Comparing these figures to the same period in 2022, ZIDA received 109 and 230 license applications, respectively, issued 51 and 107 new licenses, respectively, and renewed 75 and 138 licenses, respectively. The decline in license renewals could be a cause for concern, as it could indicate a challenging investment climate in Zimbabwe. However, ZIDA's efforts to update its database and remove inactive investors could lead to a more accurate representa- tion of the number of active investors in the coun- try. Investment Trends ZIDA's efforts to promote investment in Zimbabwe have yielded positive results, with mining being the sector that attracted the most investment in Q2 2023. In Q2 2023, 62 new mining licenses were issued, with a projected investment value of $202.7 million. The construction sector was the second-largest recipient of investment, with six new licenses issued and a projected investment value of $59.78 million. The services sector also saw a significant increase in investment, with 43 new licenses issued and a projected investment value of$41.94 million. In H1 2023, ZIDA issued 287 new licenses, witha projected investment value of $1,836.05 million. The mining sector accounted for the majority of he Zimbabwe Investment and Development Agency (ZIDA), a government agency that is focused on promoting investment in ZimbaMining Leads FDI Flows into Zim in HY-23

8 The AXiS LXXXIV Fri 14 Jul 2023 & Analysis Raisi Concludes African Tour Iran and Zim Sign Agreements to Boost Trade cooperation agreements for energy, agriculture, pharmaceuticals, and telecommunications, as well as research, science, and technology projects. One of the agreements involves the creation of a tractor manufacturing plant in Zimbabwe with an Iranian company and a local partner. The agreements are expected to deepen economic ties between the two countries. Zimbabwe's Expectations from Iran Zimbabwe is welcoming investments in several sectors of its economy, according to Mnangagwa. However, he did not disclose how much invest- ment Zimbabwe was expecting from Iran. Last week, Iran's Foreign Ministry claimed that Iran's trade with Africa will surpass $2 billion this year. The cooperation between Zimbabwe and Iran is expected to help both countries achieve mutual advances. Raisi's African Tour Raisi's African tour started with his visit to Kenya on July 12, where he met Kenyan leader William Ruto and announced the revitalization of diplomatic bonds. The two leaders signed new agreements to exchange capacities in various sectors, including agriculture, mining, and technology. Raisi then proceeded to Uganda, where he criticized Western nations' support for homosexuality and LGBTQ+ rights. He praised Uganda's recently-enacted law against homosexuality and called for cooperation between Iran and Uganda in this area. Conclusion Iran and Zimbabwe have signed agreements to deepen their economic ties despite facing US sanc- tions. The 12 memorandums of understanding signed by the two countries cover several sectors, including agriculture, pharmaceuticals, and telecom- munications. The agreements are expected to help Zimbabwe reduce its reliance on the West and deepen its partnerships with other countries, includ- ing Iran. Raisi's African tour aimed to find new trade alliances to counter the impact of US sanctions on Iran's economy. His outreach to other nations facing US sanctions reflects Iran's efforts to create new partnerships and alliances to overcome the impact of the sanctions. I strengthen bilateral ties between Iran and Zimba- bwe as both countries face US sanctions. During the visit, Raisi and Zimbabwean President Emmer- son Mnangagwa signed 12 memorandums of understanding to boost trade and economic ties between the two nations. The agreements covered a range of sectors, including agriculture, pharma- ceuticals, telecommunications, gas, energy, and edu- cation. Iran and Zimbabwe have a history of cooperation in political and trade relations. The two countries share historical ties, and Mnangagwa thanked Iran for its assistance in Zimbabwe's liberation war in the 1970s. Iran and Zimbabwe already have a joint permanent commission on political and trade rela- tions. The latest visit by Raisi is expected to deepen partnerships between the two countries and counter the impact of US sanctions. Zimbabwe Trade with so-called “Geopolitical Villains” Zimbabwe has been seeking new trade alliances with other countries, including Russia and China, as it seeks to reduce its reliance on the West. Zim- babwe has been under US and European Union sanctions for over 20 years, largely due to allega- tions of human rights abuses under former presi- dent Robert Mugabe. For a long time, Zimbabwe's relationship with the European Union (EU) and the United Kingdom (UK) has been strained due to the country's colo- nial history. The sanctions imposed on Zimbabwe after the land-reform program in the 1990s and years of human rights abuses have only exacerbat- ed the situation. In recent years, Zimbabwe has sought to normalize its relationships with Western countries, advocating for reengagement with the EU. Meanwhile, EU diplomats have been keen to differentiate the EU from the UK and create a more active presence in the country. However, the sanctions have become a scapegoat for the Zimba- bwean government to blame for thefailing econo- my, with the ruling party campaigning against the sanctions for almost two decades. Iran, also under heavy U.S. economic sanctions, has been seeking ranian President Ebrahim Raisi concluded his three-nation African tour with his visit to Zim- babwe on July 13, 2023. The visit aimed to new trade alliances around the world. In 2023, Iran's President Ebrahim Raisi made a rare visit to Africa, aimed to find new trade alliances to coun- teract the impact of U.S. sanctions on Iran. The visit to Zimbabwe highlighted Iran's efforts to counteract the heavy economic punishments imposed on them by the U.S. and EU. Zimbabwe's attempt to leverage trade with other sanctioned countries, specifically Iran, raises the question of whether it will be effective in countering the impact of U.S. sanctions. While it may provide some relief for Zimbabwe's economy, it is unlikely to completely alleviate the impact of the sanctions. Furthermore, Zimbabwe's continued human rights abuses and lack of demo- cratic reforms may lead to other countries being reluctant to engage in trade with them, regardless of their own sanctions. Raisi's Outreach to Other Nations Facing US Sanctions Raisi has been reaching out to other nations strug- gling under US sanctions, including his visit to Latin America last month, where he went to Vene- zuela, Nicaragua, and Cuba. He has been seeking new partnerships and alliances to counter the impact of US sanctions on Iran's economy. Iran has been subjected to a new set of sanctions by the US for allegedly supplying Russia with drones used in the war with Ukraine. The Agreements Between Iran and Zimbabwe The 12 memorandums of understanding signed by ran and Zimbabwe cover several sectors of the Zimbabwean economy. The two countries signed

9 The AXiS LXXXIV Fri 14 Jul 2023 Zimbabwe's tobacco industry has been expe- riencing a successful sales season, with records being broken and an upward Avoiding EU Ban on Zim's Golden Leaf Sustainable Tobacco Farming and Economic Diversification Under the Tobacco Value Chain Transformation Plan, the government has set a target of produc- ing 300 million kgs of tobacco by 2025, and the US$60 million fund is among the various initia- tives aimed at increasing tobacco production. The fund would support 50,000 hectares and 60 million kgs of tobacco. Using the latest figures(at time of writing)-Day 85 of tobacco marketting season, the contractor trading segment has also demonstrated a robust performance, with 267.95 million kilograms sold at a seasonal average price of US$3.04/kg, totaling US$814.84 million in value. This has already surpassed the target of 230 million kgs, achieving the highest revenue of all time in a tobacco season of over USD800 million. While Zimbabwe's tobacco industry has been experiencing a successful sales season, it is essen- tial to remember that sustainable tobacco farming is critical for the country's future. Zimbabwe needs to invest in research and development, promote environmentally friendly production prac- tices, and support smallholder farmers to achieve sustainable tobacco farming. The success of the tobacco season does not mean that Zimbabwe can rely solely on tobacco exports for its economic growth. The government needs to diversify the country's economy to reduce its reliance on a single commodity and increase its resilience to external shocks. Finally, a ban on tobacco exports from Zimbabwe to the EU could have severe implications for the country's economy, making it essential to grow tobacco sustainably. tive social, economic, and environmental impacts. To achieve sustainable tobacco farming, Zimba- bwe needs to adopt more environmentally friendly production practices, support smallholder farmers, and promote socially responsible labor practices. The Tobacco Industry and Marketing Board (TIMB) has been playing a crucial role in encour- aging farmers to adopt sustainable tobacco farm- ing practices. TIMB has issued a reminder to tobacco cultivators, emphasizing the need to erad- icate all tobacco stalks to prevent the transmission of diseases and pests to the succeeding crop. This is an essential step towards sustainable tobacco farming, as it helps to prevent the spread of diseases and pests that could harm the environ- ment and reduce crop yields.Notably, the 2022/2023 tobacco sales season has exceeded the previous year's comparable period by 47.57% and 46.67% in both volume and value, respectively, as of Day 85. This is a testament to the resilience of the tobacco industry in Zimbabwe. However, it is important to note that the success of the tobacco season does not mean that Zimbabwe can rely solely on tobacco exports for its economic growth. The government needs to diversify the country's economy by investing in other sectors such as mining, agriculture, tourism, and manufacturing. This will help to reduce the country's reliance on a single commodity and increase its resilience to external shocks such as a ban on tobacco exports production target of 300 million kgs by 2025 being set as a result of that. However, the success of the tobacco season does not necessarily mean that Zimbabwe is assured of a sustainable future. The European Union (EU) has given Zimbabwe two years to grow tobacco sustainably, or else a ban on the golden leaf may be imposed. This ban could have serious implications for Zimbabwe's foreign currency generation efforts, as the golden leaf is the country's fourth largest foreign curren- cy earner after gold, platinum, and diaspora remit- tances. In 2022, Zimbabwe had a haul of about US$1 billion from tobacco exports, with the EU buying tobacco worth US$150 million yearly from Zim- babwe. The EU is a strategic partner for Zimba- bwe, as Harare accesses 27 markets within the economic union. Therefore, a ban on tobacco exports from Zimbabwe to the EU could have a severe impact on the country's economy.It is, therefore, critical that Zimbabwe grows tobacco sustainably to avoid such a scenario. Sustainable tobacco farming involves production practices that are environmentally sound, socially responsible, and economically viable. Sustainable farming practices help to conserve natural resources, protect the environment, and improve the liveli- hoods of farmers and communities. To achieve sustainable tobacco farming, Zimba- bwe needs to invest in research and development, promote environmentally friendly production prac- tices, and support smallholder farmers. The gov- ernment and other stakeholders need to work together to provide technical assistance, training, and resources to farmers to help them adopt sustainable practices. The current tobacco farming methods in Zimba- bwe are not sustainable for several reasons. First- ly, the use of chemical fertilizers and pesticides has led to soil degradation, reduced soil fertility, and water pollution. These chemicals can also harm human health and the environment, leading to long-term negative consequences.Secondly, the high demand for tobacco has led to deforestation, as farmers clear forests to create new fields for tobacco cultivation. This has contributed to climate change, as forests play a crucial role in absorbing carbon dioxide from the atmosphere. Thirdly, tobacco farming is often associated with poor working conditions, which are not socially sustainable. This has led to calls for better labor practices and more responsible supply chains.Fi- nally, tobacco farming is heavily reliant on exter- nal factors such as weather, market demand, and government policies, which can be unpredictable and volatile. This makes it a risky business and can lead to financial instability for farmers. The current tobacco farming methods in Zimba- bwe are not sustainable because they have nega-

Eastern and Southern Africa (COMESA). These agreements provide access to a larger market of over 400 million people, offering opportunities for businesses to expand beyond national borders. Since Zimbabwe is rich in natural resources including fertile land, full capacity utilization of these resources can buttress the country into regional markets with access to almost half a billion populace. The nation was once recognized as a bread basket of Africa, and this aforemen- tioned potential can be harnessed over time to overcome the constrained local demand due to low population. One of the key factors contributing to business growth in low-population countries like Zimbabwe is the opportunity for market expansion. With less competition, businesses have a higher chance of capturing a larger share of the market. This is especially true in sectors that have been historical- ly underserved, such as healthcare, education, and infrastructure development. Zimbabwe has made significant strides in improving its infrastructure, including transportation networks, telecommunica- tions, and energy supply. These developments create a conducive environment for businesses to operate efficiently and effectively. Improved infra- structure also attracts foreign direct investment, which can further stimulate economic growth. Furthermore, Zimbabwe's low population can be seen as a potential advantage for businesses look- ing to implement innovative strategies or technol- ogies. The relatively small size of the market allows for greater flexibility and agility in adapt- ing to new trends and consumer demands. Busi- nesses can experiment with different approaches, gather feedback, and refine their offerings more quickly than in larger, more saturated markets. In line with this, low labour costs can be another incentive for business growth in the country. The country has an abundant workforce, which offers businesses the opportunity to reduce production costs and increase competitiveness. This advantage becomes particularly significant for industries with labour-intensive operations, such as manufacturing and agriculture. However, it is essential to acknowledge the chal- lenges that low-population countries like Zimba- bwe face when it comes to business growth, and therefore make informed decisions to sail in such waters. With a small population, businesses may struggle to achieve economies of scale. The limit- ed domestic market size can make it challenging for companies to achieve high sales volumes and profitability solely within Zimba- bwe. To overcome this chal- lenge, businesses need to explore export opportunities and tap into regional or international markets, and this requires an exorbitant initial capital outlay. Due to the subdued economic growth in the country that is already less populated, most skilled labour has found its way to greener pastures in other countries, leaving Zimbabwe with a shortage of skilled labour. Limited access to quality educa- tion and training due to poverty and redundant growth in the academic field, particularly infra- structure, has also attributed to this. This has hindered business growth as companies struggle to find qualified employees with the necessary expertise at a reasonable remuneration. Demo- graphic changes, such as declin- ing birth rates or an ageing pop- ulation, can result in labour shortages and talent gaps in certain industries. Businesses must anticipate these changes and implement effective recruit- ment and retention strategies to ensure a continuous supply of skilled workers. 10 The AXiS LXXXIV Fri 14 Jul 2023 Demography refers to the statistical study of human populations, including their size, composition, and distribution. It encomDemography and Business Growth Exploring Business Survival in Zimbabwe This may involve investing in training and devel- opment programs, promoting diversity and inclu- sion, and creating flexible work arrangements to attract and retain employees from different demo- graphic backgrounds. Demography plays a crucial role in shaping eco- nomic trends. Changes in population size, age structure, and income distribution can impact eco- nomic growth, inflation rates, and consumer spending. Businesses must closely monitor demo- graphic trends to anticipate economic shifts and adjust their strategies accordingly. This may involve expanding into new markets, diversifying product offerings, or targeting emerging consumer segments. Businesses also ought to foster a culture of innovation within the organization to respond effectively to changing demographic dynamics. Encourage employees to generate creative ideas and develop products/services that cater to evolving consumer demands. Embrace agile business practices that allow for quick adap- tation to demographic changes and market trends. By analyzing demographic data, businesses can gain insights into changing consumer preferences, needs, and behaviours. This understanding allows them to tailor their products, services, and market- ing strategies to target specific demographic segments effectively. Collaborating with other businesses, industry influencers, or community organizations can also aid in business expansion within the parameters of Zimbabwe, and enlarge their reach and access to new markets. Strategic partnerships can also provide opportunities for knowledge sharing, resource pooling, and joint marketing efforts. Overall, despite its low population, Zimbabwe presents opportunities for businesses to thrive and expand. By leveraging the advantages of a less saturated market, businesses can identify niche markets, innovate, and differentiate themselves from competitors. To maximize the prospects of business growth in Zimbabwe, entrepreneurs and investors need to adopt strategies tailored to the local context. This includes understanding the needs and preferences of the Zimbabwean market, investing in sustainable infrastructure development, and fostering partnerships with local businesses and communities. With the right strategies and adaptability, businesses can unlock the full poten- tial of Zimbabwe's economy and contribute to its development despite a low population base and ever-changing demographic trends. passes various factors such as age, gender, income, education, and ethnicity. These demo- graphic characteristics significantly impact busi- ness growth as they influence consumer behaviour, market demands, workforce availability, and economic trends. Therefore, understanding the relationship between demography and business growth is essential for business enthusiasts and prospective investors in businesses to ascertain the going concern of businesses in a respective market. Different demographic groups exhibit varying buying patterns, preferences, and consumption behaviours. For instance, millennials may priori- tize sustainability and social responsibility, while older generations may value cost-effectiveness. To ensure business growth, companies must under- stand these demographic differences and tailor their marketing strategies and product offerings accordingly. Demographic changes can influence market demand. For example, an ageing popula- tion may lead to increased demand for healthcare and elderly care services. Similarly, shifting demo- graphics, such as an increase in the number of working women, can create new market opportu- nities for products and services that cater to their needs. Businesses need to analyze demographic trends to identify emerging market demands and adapt their offerings accordingly. With a population of approximately 16 million people, businesses in Zimbabwe face unique chal- lenges and opportunities in this low-population country. While a low population may seem like a disadvantage for businesses, it also presents opportunities for growth and innovation. With a smaller consumer base, businesses can focus on niche markets and cater to specific needs and preferences. With fewer consumers, it becomes easier for businesses to identify specific needs and target their products or services accordingly. This creates opportunities for specialization and differ- entiation, leading to stronger customer loyalty and increased profitability. By identifying untapped market segments and offering tailored products or services, companies can establish themselves as leaders within these niches. This approach allows businesses to differentiate themselves from com- petitors and build customer loyalty. With such a low population, there is less competi- tion in Zimbabwe compared to larger markets like South Africa. For example, the country has only three main supermarket chains, that is, Pick N Pay, OK Zimbabwe and Spar Zimbabwe while countries like South African boast of dozens of major supermarket chains. Another example is the mobile network industry which is monopolized by Econet against incompetent NetOne and Telecel. This provides an advantage for businesses looking to enter or expand within the country. With fewer competitors vying for market share, companies have an opportunity to establish themselves as market leaders more quickly. There is, therefore, a better chance of succeeding in business in Zim- babwe compared to highly populated countries like South Africa. While populated countries tend to leverage on high demand for businesses, countries like Zimba- bwe leverage on untapped potential for business- es. Zimbabwe's economy has traditionally relied heavily on agriculture and mining sectors. Howev- er, there is growing recognition of the need for economic diversification to drive sustainable growth. This presents opportunities for entrepre- neurs and investors to explore new industries such as technology, renewable energy, tourism, and manufacturing. By diversifying the economy, Zim- babwe can attract foreign investment and create new business opportunities. Despite its low population, Zimbabwe benefits- from its strategic location within Southern Africa. The country is part of regional trade agreements such as the Southern African Development Com- munity (SADC) and the Common Market for

11 The AXiS LXXXIV Fri 14 Jul 2023 The Food and Agriculture Organization's (FAO) price index, which tracks the most globally-traded food commodities, has conConsequences of Falling FAO Food Price Index on Zim's State Food are heavily reliant on maize as their primary source of food. Furthermore, the expected maizeshortfall could lead to potential price hikes due to the limit- ed supply. The Grain Marketing Board (GMB), which is the sole buyer of maize in Zimbabwe, has already warned of potential price hikes due to the expected shortfall. Current prices at GMB in Zim- babwe are hovering around $330-340 per tonne, and this could increase if the supply remains limit- ed.The possible reduction in maize production in Zambia and Malawi is also likely to have a signifi- cant impact on Zimbabwe's ability to import maize from these countries. Zimbabwe relies heavily on imports from these countries, and any reduction in production could result in a limited supply avail- able for importation. This could force Zimbabwe to explore other options such as importing from South Africa, which could be more expensive. From an economic perspective, the decline in the FAO price index could have implications for global inflation. Lower food prices could help ease infla- tion pressures, especially in countries where food makes up a significant portion of the consumer price index. However, this could have a negative impact on food producers and exporters, who may struggle to maintain profits in a low-price environ- ment. This could result in reduced investment in agriculture, leading to long-term implications for global food security. The potential for a 2008-like recession due to the decline in global food prices was initially a con- cern that policymakers were be mindful of at the start of the year due to supply chain disrup- tions(some of which were expereienced in the food industry). The 2008 global financial crisis was partially triggered by high food prices, which led to social unrest and political instability in several countries. However, the current reduction in food prices suggests that the world economy is not close to recession as envisaged by the fall in the FOA tinued its downward trend in June, reaching its lowest level in over two years. While this is good news for consumers globally as it eases inflation pressures on food prices, it could have significant implications for global food producers and export- ers. The continued decline in food prices can be attributed to several factors, including increased global supplies of grains and cereals, favorable weather conditions in key producing regions, and reduced demand due to the COVID-19 pandemic. However, the contradiction to this trend is the staple food dynamic in the SADC region, specifi- cally Zimbabwe, which is showing an opposite trend. Zimbabwe, like many other countries in the region, is facing a significant maize shortfall, which could have far-reaching implications on the local and regional economy. The expected maize production for the 2022/23 season may reach 1.5 million tonnes, which is 32% lower than the country's annual maize needs of 2.2 million tonnes. Consequently, Zimbabwe may need to import around half a million tonnes to fulfill its maize requirements for the 2023/24 marketing year. The expected shortfall could have several implications on both local and regional pricing, trade with regional players, and food security for vulnerable populations. Zimbabwe currently imports maize from neighbor- ing countries such as Zambia, Malawi, and South Africa to meet its food and feed demand. Howev- er, with Zambia and Malawi also facing reduced maize production, there could be a scramble for the limited supply available, leading to regional price hikes. This could further exacerbate the already high cost of living for Zimbabweans, especially those in low-income households who food price index. In fact, the decline in food prices could stimulate economic growth by increasing disposable income for consumers and reducing input costs for businesses. While the reduction in FAO food price index is generally positive, the expected maize shortfall in Zimbabwe highlights the potential negative implica- tions of declining food prices. The shortfall could have far-reaching implications on both the local and regional economy, and policymakers need to take urgent action to mitigate the potential impact. Policymakers may need to consider measures such as subsidies or importation of maize to ensure food security for vulnerable populations and avoid long-term economic instability.It is also crucial for global policymakers to promote sustainable agricul- tural investment and productivity to ensure long-term food security and stability in vulnerable regions. High food prices could lead to food inse- curity, which could in turn cause a recession due to social unrest and political instability. Policymak- ers should therefore ensure that global food security is not compromised, and that the most vulnerable populations are protected from the effects of higher food prices. In conclusion, the reduction in the FAO food price index is good news for global consumers, as it eases inflationary pressures on food prices and sug- gests that fears of a recession are premature. How- ever, the expected maize shortfall in Zimbabwe highlights the potential negative implications of declining food prices. Policymakers need to take urgent action to mitigate the potential impact and promote sustainable agricultural investment and productivity to ensure long-term food security and stability in vulnerable regions. High food prices could lead to a recession due to social unrest and political instability, making it essential to ensure that global food security is not compromised. Unraveling the Paradox ' '

12 The AXiS LXXXIV Fri 14 Jul 2023 Divergent Renewable Energy Paths for African Nations As the global energy economy undergoes a profound transition, developing countries across Africa find themselves at a pivotal Africa at a Renewable Crossroads The divergent examples of Namibia and Zimba- bwe underscore the epochal juncture African nations have reached as the global energy econo- my transforms. As renewable costs plummet and climate change intensifies, countries across the continent have unprecedented opportunities to drive development by leveraging their abundant solar, wind, and hydrogen resources. But seizing this promise will require most states to emulate Namibia’s policy foresight and dedica- tion to creating highly favorable conditions to attract investment. How African nations navigate the current intersecting crises around energy access, food security, and climate volatility will reverberate far beyond their borders in the coming decades. Those proactive in embracing renewables will gain advantages in energy independence, econom- ic growth, and influence in global climate mitiga- tion efforts. But states slow to decarbonize risk missing out on the accelerating transition and remaining dependent on imported fossil fuels. With their growing populations and energy demand, African nations’ policy choices will sub- stantially shape the planet’s climate trajectory. By following Namibia’s lead in prioritizing renew- ables, African states can simultaneously advance domestic development and environmental sustain- ability on the global scale. With its abundant resources and enabling environ- ment, Namibia aspires to serve as an African model for catalyzing broad prosperity through strategic renewable energy deployment. But repli- cating Namibia's emerging success will require most African governments to muster commensu- rate political will and policy commitment. The divergent examples of Namibia and Zimba- bwe make clear the high stakes of the decisions African nations now face at this renewable cross- roads. How countries balance national develop- ment goals with global energy decarbonization imperatives will determine the continent's political and economic influence in coming decades. Afri- can states unwilling to leverage their renewable potential risk being left behind as the world enters a new energy era. But those pursuing green tran- sitions creatively could drive growth and assume leadership in building a sustainable future. countries also aggressively pursuing renewable hydrogen, including regional rival South Africa. But Namibia’s coherent strategy and aligned poli- cies provide advantages in the race to establish ahriving green hydrogen sector. Executing these grand plans poses monumental financial and logistical challenges, with costs potentially rivaling Namibia’s annual GDP. How- ever, success could catalyze profound economic impacts. Renewable hydrogen development could transform Namibia from electricity importer to exporter, enhancing energy security and indepen- dence while enabling growth in electricity-inten- sive sectors. Other macroeconomic benefits like greater curren- cy autonomy could also fundamentally redefine the Namibian economy. Despite the substantial obstacles, Namibia is demonstrating the immense developmental rewards on offer by leveraging government-backed renewable technology. Zimbabwe: The Complex Renewable Calculus In contrast to Namibia, Zimbabwe remains strong- ly committed to coal-fired power even as the world rapidly decarbonizes. With elections approaching, Zimbabwe is projected to experience intensifying electricity shortages as new mining and manufacturing operations strain the national grid. A massive 500MW steel facility planned by DISCO Steel typifies the surging industrial demand. Like Namibia, Zimbabwe possesses abundant solar and wind resources that could support a thriving renewable hydrogen industry and help diversify its electricity mix. But substantial obsta- cles stand in the way of Zimbabwe following Namibia’s pursuit of renewables. Years of economic turmoil and political instability have severely hampered Zimbabwe’s ability to attract the foreign direct investment critical to build out renewable infrastructure. The country also must formulate supportive policies and regu- lations to effectively govern renewable hydrogen production, storage, transportation, and quality standards. Zimbabwe’s hesitancy highlights the complex calculus developing countries face in plotting their energy transitions. But the incentives to embrace renewables are increasingly clear. crossroads. Industrialized nations are rapidly moving to decarbonize their energy sectors by investing heavily in renewable technologies, espe- cially green hydrogen. Meanwhile, African states face complex decisions balancing rising electricity demand, economic development goals, and climate change mitigation needs. The contrasting approaches of Namibia and Zimbabwe illustrate the manifold challenges of navigating this new energy landscape. Namibia: A Renewable Gateway to Prosperity Namibia has embraced renewables not just as a means to reduce emissions, but as a catalyst for comprehensive industrialization. The government believes green hydrogen in particular can ignite sweeping economic development and position Namibia as a major renewable energy exporter. This focus aligns closely with Namibia’s Vision 2030 plan to achieve living standards on par with developed countries by 2030. “Green hydrogen provides a spark that can enable other industries to flourish,” said Immanuel Mnyupe, Namibia’s Director of Energy. Whereas most industrialized nations seek to transition from dirtier energy sources, Namibia aims to vault directly to clean fuel technologies as a gateway to prosperity. Namibia envisages renewable hydrogen catalyzing high-value manufacturing and opening up lucra- tive partnerships worldwide. But realizing these ambitious plans will hinge critically on securing immense capital to construct projects harnessing Namibia's abundant wind and solar resources. The government has moved aggressively on mul- tiple fronts to attract foreign direct investment (FDI) on the scale required. Initiatives include bilateral government partnerships, trade confer- ences, engaging with multinational corporations, and agreements like the landmark $10 billion green hydrogen pact with a German company. Namibia boasts advantages that position it as an attractive FDI destination. These include stable governance, ample renewable resources, estab- lished capital markets, and port access to facilitate equipment imports. The country’s relatively sophisticated financial system also helps leverage its strong capital foundations to lower investment risks. By creating an enabling environment for renew- ables, Namibia aims to leapfrog the carbon-inten- sive development path that prevailed in today’s industrialized countries. The government views its world-class renewable resources as the ticket to climb the value chain into highly skilled, techni- cally advanced industries. Namibia does face competition from other African By following Namibia’s lead in creating strong enabling conditions for green hydrogen, Zimba- bwe and other african countries could meet domestic electricity needs, catalyze broader economic growth, and lower emissions. A Tale of Two African Nations: Namibia and Zimbabwe

Can Africa Pursue Economic Development Without Relying on Fossil Fuels? 13 The AXiS LXXXIV Fri 14 Jul 2023 Going Green Africa is a continent that has been blessed with an abundance of natural resources, including fossil fuels. However, as the energy transition. For many countries, the infras- tr-ucture needed to support renewable energy is lacking, and the cost of transitioning to renew- ableenergy can be prohibitively high. In some cases, the lack of access to finance and investment can also hinder the development of renewable energy projects. In addition to these challenges, African countries must also consider the economic implications of transitioning away from fossil fuels. Many coun- tries heavily depend on revenues from oil and gas exports, and a sudden shift away from these indus- tries could have significant economic consequences. As such, African countries must carefully consider the timing and pace of their energy transitions to ensure that they do not harm their economies. The Importance of Sustainable Development Sustainable development is critical to achieving economic development in Africa without relying on fossil fuels. This means that African countries must pursue economic growth while also considering the long-term impacts on the environment and society. Sustainable development requires a holistic approach that considers economic, social, and envi- ronmental factors. A key aspect of sustainable development is the promotion of energy efficiency. Many African coun- tries have significant energy inefficiencies, with much of the energy produced being wasted due to outdated infrastructure and inefficient technologies. Addressing these inefficiencies can help reduce energy costs and improve the affordability of renewable energy. Another critical factor in sustainable development is the promotion of access to finance and investment. Many African countries lack the resources needed to develop renewable energy projects, and access to finance and investment can help bridge this gap. International organizations and financial institutions can play a crucial role in supporting African coun- tries in their energy transitions. In conclusion, pursuing economic development in Africa without relying on fossil fuels is possible, but it presents significant challenges. Renewable energy presents an opportunity for African countries to provide clean and affordable energy to millions of people while also addressing the impacts of climate change. However, African countries must carefully consider the economic, social, and envi- ronmental implications of energy transition and pursue sustainable development. With the right approach, Africa can achieve economic growth while also protecting the environment and ensuring a prosperous future for its people. world continues to experience the harsh impacts of climate change, there is a growing need for Africa to consider alternative means of economic develop- ment that do not rely on fossil fuels. This article explores the possibility of economic development in Africa without relying on fossil fuels, highlight- ing the potential of renewable energy, the challeng- es that African countries face in achieving energy transition, and the importance of sustainable devel- opment. The Need for Renewable Energy in Africa Many African countries have historically relied on fossil fuels, including oil and gas, for their eco- nomic development. However, the continent remains one of the most vulnerable regions to the impacts of climate change, despite contributing only 3-4% of global CO2 emissions. The need for decarbonization is evident, and renewable energy presents a promising solution. Renewable energy, such as solar, wind, and hydro- power, has the potential to provide clean and affordable energy to millions of people in Africa. The continent has abundant solar resources, with some regions receiving up to 3,000 hours of sun- light per year. Wind energy potential is also signif- icant in many countries, particularly in coastal areas and high-altitude regions. Hydropower, which has been a significant source of energy in many African countries, also presents opportunities for expanding renewable energy capacity. The Challenges of Energy Transition in Africa Despite the potential of renewable energy, African countries face significant challenges in achieving Breaking Down Borders Zim and Botswana Join Hands to Boost Horticultural Exports Zimbabwe's horticultural industry is a key player in the country's economic growth strategy. Despite favourable climatic condiThe new export corridor aims to address these challenges by creating a direct link between local horticultural players and the Botswana market. Botswana is a natural market for Zimbabwean horticultural products due to its proximity and demand for fresh produce. By engaging in this partnership, both countries hope to create an off-take market for the 35,000 village gardens under Zimbabwe's Presidential Rural Development Programme. The initiative has the potential to create significant benefits for both countries. For Zimbabwe, it provides an opportunity to increase its export reve- nue and create employment opportunities. The horticultural industry has the potential to create jobs across the value chain, from farming to processing and packaging. For Botswana, it provides an opportunity to expand its horticultural market and diversify its trade relations. However, the success of the initiative will depend on the ability of both countries to address the chal- lenges that have hindered trade in the past. One of the main challenges is the lack of reliable transpor- tation infrastructure. The current road network between Zimbabwe and Botswana is poor, making it difficult to transport goods between the two countries. To overcome this challenge, both coun- tries need to invest in their transportation infrastruc- ture and create an efficient and reliable transporta- tion network. Another challenge is the lack of harmonized trade policies between the two countries. There is a need- for both countries to work together to harmonize their trade policies and create an enabling environ- ment for trade. This includes addressing issues relat- ed to tariffs, non-tariff barriers, and customs proce- dures. The lack of harmonization has been a major hindrance to trade in the past, and both countries need to work together to address this challenge. Moreover, the success of the export corridor initia- tive will depend on the ability of local horticultural players to meet the quality standards required by the Botswana market. Botswana is known for its high-quality standards, and Zimbabwean exporters need to ensure that their products meet these stan- dards to access the market. This requires invest- ments in quality control measures, such as packag- ing and labelling, to ensure that products meet the required standards. In conclusion, the new export corridor for horticul- tural products between Zimbabwe and Botswana is a significant opportunity for both countries to boost trade and create employment opportunities. Howev- er, it will require a joint effort to address the chal- lenges that have hindered trade in the past. By investing in transportation infrastructure, harmoniz- ing trade policies, and meeting quality standards, both countries can unlock their potential and break down borders to strengthen their trade relations. The initiative is an important step in the government's strategy to revitalize the economy and create jobs, and it has the potential to contribute significantly to Zimbabwe's economic growth. tions and fertile soils, challenges such as the lack of reliable transportation infrastructure and high export costs have hindered industry growth. How- ever, the recent launch of a US$30 million horti- cultural export revolving fund and the new export corridor between Zimbabwe and Botswana offer a glimmer of hope. This initiative aims to create a direct link between Zimbabwean horticultural players and the Botswana market, unlocking the potential to generate foreign currency and create employment opportunities. In this article, we'll explore the new export corri- dor between Zimbabwe and Botswana, which is creating a direct link between local horticultural players and the Botswana market. We'll discuss the challenges that have hindered trade in the past, such as the lack of reliable transportation infrastructure and harmonized trade policies, and how the initiative aims to overcome them The new export corridor for horticultural products between Zimbabwe and Botswana is an important step in this strategy. Zimbabwe has a comparative advantage in horticulture due to its favourable climatic conditions and fertile soils. The country produces a wide range of horticultural products, including fruits, vegetables, flowers, and herbs. However, the lack of reliable transportation infra- structure and the high cost of exporting have hindered the growth of the industry.

Term of The Week IFRIS 17 jurisdictions, and industries. It establishes a consistent approach to the recogni- tion, measurement, presentation, and disclosure of insurance contracts, which will enable investors and other stakeholders to make better-informed decisions. Understanding the term One of the key changes introduced by IFRS 17 is the requirement for insurance companies to use a current value approach to measuring insurance contracts. This means that companies must estimate the present value of all future cash flows associated with their insurance contracts, taking into account the time value of money and the probability of different outcomes. IFRS 17 also introduces new requirements for the presentation and disclosure of financial information related to insurance contracts. Companies must provide more information about the nature and extent of insurance risk, the assump- tions and methods used to estimate future cash flows, and the impact of chang- es in these assumptions on financial results. In addition to the changes in measuring and reporting insurance contracts, IFRS 17 also introduces new requirements for the recognition and measurement of acquisition costs, as well as the calculation of the contractual service margin (CSM). Under IFRS 17, insurance companies must recognize acquisition costs as an asset and amortize them over the expected duration of the insurance contract. This is different from previous accounting standards, which allowed companies to immediately expense these costs as incurred. Overall, IFRS 17 represents a significant change for the insurance industry, and companies must make significant investments in technology, data, and reporting systems to comply with the new standard. IFRS 17 is a new set of accounting standards issued by the International Accounting Standards Board (IASB) that provides guidance on how insurance companies should report their financial statements. IFRS 17 replaces the previous standard IFRS 4, which had allowed companies to use a variety of accounting methods. The main purpose of IFRS 17 is to improve the transparency and comparabili- ty of financial statements for insurance contracts across different companies, ' '

Zim’s Quest for Economic Stability Amonth ago, this column advised authorities to desist from threatening businesses by freezing accounts or suspending/revoking operating licenses as this will lead to severe unin- tended outcomes such as the disappearance of goods in formal markets. The attainment of dura- ble macroeconomic stability is only possible if there is a swift implementation of crucial reforms, consistency of policy, and the existence of mutual trust between the Government, private sector, and labor. This week, the column focuses again on the latest authorities’ policy moves akin to price con- trols to highlight why they will likely lead to unin- tended outcomes. On the 11th of July, the Ministry of Finance and Economic Development released a statement titled ‘Violation of Exchange Control Directives and Government Policy’ in which it named players in the pharmaceutical sector who were exhibiting ‘destabilizing forward pricing and speculation’. For- ward pricing is a practice of front-loading antici- pated exchange rates in the current prices leading to self-fulfilling exchange rate depreciation with negative knock-on effects on prices. According to the Reserve Bank of Zimbabwe (RBZ) exchange regulations, corporates are only allowed a 10% margin above the official interbank rate when setting ZWL prices. For example, if the official rate is at ZWL/USD 5000, companies must not exceed ZWL/USD 5500 when valuing their stock in ZWLs. However, the continued fragility of the local currency has forced many companies to defy these regulations by engaging in forward pricing to cushion themselves from excessive exchange rate losses associated with a volatile macroeconomic environment. The government has since introduced a cocktail of economic stabilization measures including suspen- sion of import duty on basics, preannouncing as well as limiting the weekly forex auction envelop, introducing the wholesale forex auction system for banks, and Treasury taking over both exporters’ forex surrender requirements and RBZ external debt obligations. The Treasury has also decided to promote the use of local currency in the economy, for instance, by directing all Government minis- tries, departments, and agencies (MDAs) to collect taxes & other fees in ZWLs and it has in June 2023 directed companies to settle their 50% of Quarterly Payment Dates (QPDs) be settled in ZWLs to increase appeal and demand of the ZWL in the economy. These measures particularly the wholesale & the Dutch forex auction systems have managed to mop up excess liquidity that was prevailing in the formal markets, a shift that has brought sanity to the markets. Forex auction statistics show that a combined US$77.42 million was sold by RBZ at the auction market between June 7 and July 11, mopping up about ZWL457.82 billion held by banks and importers. In other words, the sale of forex through the auction has significantly reduced ZWLs available for use by economic agents there- by causing an acute shortage of ZWLs in the market. Consequently, ZWL decline moderated and has now started gaining in both markets. Between June 28 (ZWL/USD 6326.58) and July 13 (ZWL/USD 4988.26), the local unit gained 26.8% of its value in the interbank market while recoup- ing 8% in the alternative markets from ZWL/USD 8100 to ZWL/USD 7500. Buoyed by this ZWL stability, the government is Price Controls Won’t Work ceivable to the market that the ongoing stability will be temporary due to the government’s track record of policy inconsistency. A granular analysis shows that the current ZWL stability has not come on the back of implementation of meaningful reforms or fiscal & monetary discipline but is just the government starving the market of ZWLs by not fulfilling its obligations. The Treasury is yet to pay contractors undertaking ongoing infrastructure projects, settle exporters’ forex surrender require- ments, and fulfil financial obligations on RBZ external debt it recently assumed. More so, without considering rising spending pres- sure coming from the pending elections, Treasury is expected to offer a salary increment to all civil servants lest it risk jeopardizing public service delivery as a result of likely devastating labour strikes. It will also foot the bill for grain purchases from farmers during the ongoing 2023/24 market- ing year. Last but not least, we are still experienc- ing a huge confidence deficit in the ZWL and there is a clear lack of public trust in government due to increased corruption and impunity. All these will lead to increased uncertainty and likely increase ZWL liquidity in the economy which will force the ZWL to significantly plummet again. A standing challenge in the way that government regulates the economy is the inconsistency in the application of policy/law. While private businesses are being hounded for charging high exchange rates and taking payments in the more secure USD, there are virtually no fuel stations trading in ZWLs anymore. Public offices such as the Registrar Gen- eral are taking USDs for passport applications while NetOne, a government-owned telecommuni- cations companies continue to prefer selling some products in the USD. Allegations stand that the fuel sector is allowed due to cronyism and the interest of the ruling political elite in the fuel cartels. If the law and policy are not applied fairly across the economy, the government cannot hope to retain control. The issue of control itself presents another chal- lenge as the current moves by authorities gravitate toward price controls and risk causing acute short- ages of goods & services in formal markets. This is because price controls lead to prices that are not related to the cost of production, cannot address scarcity, fail to tackle the underlying reason for inflation, and distorts market forces of demand & supply. In the end, they affect the direly needed mutual trust between authorities and the corporate world. Also, introducing price controls at a time the market is full of negative perceptions and hold- ing adverse expectations for the future due to the likely disputed & contested election result will exacerbate macroeconomic instability. As such, there is a need to allow the price stabiliz- ing effect caused by the ongoing moderation of ZWL decline in the foreign exchange markets to cascade to prices with little interference from the “Visible Hand”. The core problem and elephant in the room that requires addressing is the lack of significant production in the nation due to the lack of implementation of meaningful political and socio-economic reforms to improve the deteriorat- ing social contract, upgrade poor international rela- tions, enhance property rights, respect for human rights & freedoms, thwart existing pricing distor- tions and increase market competition & innova- tion. now coming against companies not benchmarking ZWL prices at the official rates. As alluded to earlier, a total of 17 pharmacies that were named in the latest statement are at risk of losing their trading licenses. Also, in early June 2023, the Financial Intelligence Unit (FIU) of the RBZ reportedly froze the bank accounts of 12 major suppliers of goods & services including four (4) supermarkets for allegedly refusing ZWL payments, diverting goods to the informal mar- kets, and engaging in forward pricing practices. To deter the so-called delinquent business practices, the FIU has further threatened to take remedial and puni- tive measures including inter alia imposing adminis- trative fines, freezing bank accounts indefinitely, refer- ring culprits to authorities for suspension/revocation of trading or operating licenses, and prosecution. Following, it is my view that the government is trying to treat the symptoms while ignoring the root cause of the ailment. This is because transacting busi- ness has all but rejected the local currency due to its continued massive fluctuations experienced since its re-introduction in 2019 trapping Zimbabwe into hyperinflation. For instance, the latest ZimStat June 2023 MoM inflation statistics show the general prices mounting by 74.5%, a characteristic of a hyperinfla- tionary economy. Hyperinflation is a period of very high, accelerating, and out-of-control general price increases generally measured by a rate of more than 50% per month. As I always say in this column, there are two (2) main reasons behind economic agents’ demand for foreign currency assets during hyperinflation: currency substitution and asset substitution. On one hand, currency substitution means that foreign money is essentially used as both a medium of exchange and a unit of account. Since high inflation increases the cost of using domestic currency for transacting purposes, economic agents are prompted to be on the lookout for cheap alternatives. On the other end, asset substi- tution entails agents’ risk and return considerations between domestic and foreign currency-denominated assets. Generally, forex-denominated assets provide insurance against macroeconomic risks. So, to me, the non-adherence to official rates by busi- nesses can’t be regarded as intentional or mischievous but is purely based on the rationality principle. Authorities must understand that even though the exchange rates have stabilized in both markets, busi- nesses can’t just lower prices overnight. The essence of sustainable enterprise is hinged on cost minimiza- tion and profit maximization. Many businesses have restocked when the exchange rates were going hay- wire hence forcing them now to sell at a price far much lower than the product cost will result in these businesses incurring huge losses. Secondly, the firming of the ZWL exchange rate in official markets is occurring at a greater pace than what is happening in the alternative markets. This is leading to the widen- ing of parallel market premiums. For instance, while the rates are falling in both markets, the average premium is burgeoning from 14% (21 June) to 50% (13 July). High parallel market exchange premia promote excessive rent-seeking behaviours in the economy. Thirdly, markets are drawing lessons from experience. When the foreign auction system was introduced in June 2020, the economy enjoyed a period of ZWL and price stability but for a short period as the authorities quickly reverted to fiscal & monetary indiscipline. This affected businesses that have largely embraced and amassed ZWLs. So, it is highly conBy Zvikomborero Sibanda The AXiS LXXXIV Fri 14 Jul 2023 15

*To Page 18 But so Does Every Loss Making Entity 17 The AXiS LXXXIV Fri 14 Jul 2023 BNC Anticipates Recovery in 2023 markets V ny may not be held liable for any losses resulting from the event. However, it also means that the company may have to pay penalties for not being able to deliver nickel to customers as per their contracts. This inflates operating costs. Unexpected change in the ore body “Production was also negatively impacted by an unexpected change in the ore body, leading to a severe decline in the high grade massive resource footprint.” “This change requires a rapid transition in the mining model from a low-volume, high-grade strat- egy to a low-grade, high-volume strategy. Unfortu- nately, the transition is behind schedule due to the delays in the delivery of the new underground mining mobile equipment which is a prerequisite to the realization of the new mining strategy,” said Masunda. An unexpected change in the ore body at BNC means that the composition and characteristics of the ore deposit being mined underwent an unfore- seen alteration. This change may have resulted in a reduction in the amount or quality of the ore that can be extracted from the mine, or it may have made it more difficult or expensive to extract the ore. This unexpected change in the ore body had a neg- ative impact on production at the mine. The change required a rapid transition in the mining model from a low-volume, high-grade strategy to a low-grade, high-volume strategy. This transition was behind schedule due to delays in the delivery of new underground mining mobile equipment, which was necessary to realize the new mining strategy. The unexpected change in the ore body at BNC affected production in several ways. The change in the ore body reduced the grade of the ore being mined, which means that there was a lower con- centration of valuable minerals in the ore. This led to a reduction in the amount of nickel extracted from each tonne of ore, which ultimately translates to lower production levels. The change in the ore body caused delays and disruptions in the mining operations. For instance, the mining methods that were previously used may no longer be effective, and new methods may need to be developed and tested. This can result in delays in the mining schedule and ultimately lower production levels. Thus, the unexpected change in the ore body at BNC can had significant negative impacts on production, including reduced ore grades, increased costs, delays and disruptions, and uncertainty. These impacts led to lower production levels and requires the company to revise its mining strategy to adapt to the new conditions. Global Supply Chain Disruptions The Company said it was adversely affected by low underground mining mobile equipment avail- ability due to obsolescence. It managed to solve the challenge through acquisition of four new LHDs, in addition to face rigs, support rigs, and production long-hole rigs during the course of the year. The disruptions to global supply chains delayed the delivery of the four new LHDs, in addition to face rigs, support rigs, and production long-hole rigs, which were necessary to improve underground mining mobile equipment availability. This delay impacted the company's ability to mine efficiently and meet production targets. Besides, the delay in equipment delivery also resulted in increased costs for the company, as they had to continue using old and outdated equipment that required more maintenance and repairs. Cost of sales increased by 18% to US$60.5 million, production and financial performance after a slum- ber in the financial year ended March 2023. A loss of US$17 billion incurred in 2022 marked the company’s worst performance since recapitalisation in 2012. The company succumbed to a busload of head- winds in the period under review which resulted in a plunge in production. These included factors within the internal environment, at macro-economic level and across the borders. Full-year results for 2023 published by the compa- ny shows that power outages, supply chain disrup- tions, machine breakdown and unexpected changes in the ore body played a critical role in plummet- ing productivity. SVR Breakdown “During the second half of the year ended 31 March 2023, the Company experienced additional operational challenges which exacerbated the situa- tion including the Sub-Vertical Rock Winder (SVR) breakdown, which was declared a force majeure event, resulting in the loss of October and Novem- ber 2022 production months,” said the company’s chairperson, Muchadeyi Masunda. A Sub-vertical Rock (SVR) winder is a specialised piece of equipment used in underground mining operations. It is typically used for hoisting mined ore and waste rock vertically up a shaft within the mine, and it is designed to handle heavy loads of rock and equipment. It plays a critical role in transporting ore and waste from underground mining operations to the surface for processing and disposal. The breakdown of the Sub-vertical Rock Winder (SVR) resulted in the loss of October and November 2022 production months. This means that the company was unable to produce any nickel during these two months, leading to a decline in overall production. The replacement of the damaged bull gear is expected to take place in August 2023. Until then, the SVR Winder can only run at 60% of its capac- ity, which will continue to impact nickel production negatively. This also pose a bad picture for the first quarter and or second quarter of the year. Masunda said the SVR breakdown was declared a force majeure event, which means that the compaictoria Falls Stock Exchange (VFEX) listed Bindura Nickel Corporation (BNC) is hoping that it can bounce back to strong

The AXiS LXXXIV Fri 14 Jul 2023 18 *From Page 17 US$74.2 million in the prior year. The decrease was in line with reduced sales volume which was attributable to the lower production as detailed above. Cost of sales increased by 18% to US$60.5 million, compared to US$51.4 million for the prior year. Cost of sales were heavily impacted by increases in power costs, high maintenance of aged equipment and the effect of exchange rate disparity. A gross loss of US$11 million was realised in the year under review, compared to a gross profit of US$22.8 million in the previous year, mainly due to the reduced sales volume emanating from the lower production while an operating loss of US$21.8 million was realised, from the operating profit of US$11.9 million in FY2022. The Company incurred losses before and after taxation of US$24.2 million and US$18.5 million respectively, which represented a decrease of 320% and 329% respectively, year-on-year. Total equity of US$41.6 million decreased by 31% from US$60.1 million as a result of the loss incurred for the year. The Company closed with a net liabilities position of US$13.4 million (2022: net current assets of US$8.4 million) due to operational chal - lenges alluded to above. In addition, the Company increased its current borrowings by US$4.5 million from the comparable financial year. Total capital expenditure for the year amounted to US$8.3 million (FY2022: US$6.5 million). This was driven by the programme to replace the old and unreliable underground mining mobile equip - ment and was being funded from bank loans and internal cash flows. The Revamp campaigns Expediting the transition in the mining model from a low-volume, high-grade strategy to a high-volume, low-grade strategy By transitioning to a high-volume, low-grade strate - gy, the mine can increase its overall production levels. This is because the focus is on extracting a larger quantity of lower-grade ore, rather than a smaller quantity of higher-grade ore. This approach can help to offset the negative impact of the unex - pected change in the ore body, which reduced the high-grade massive resource footprint. Also, the transition to a high-volume, low-grade strategy may require the deployment of additional equipment to achieve the necessary production levels. This can improve overall equipment utilisa - tion, as the new equipment will be put to use more frequently, reducing downtime and increasing productivity.The high-volume, low-grade strategy can also help to reduce costs, as the cost per tonne of ore extracted may be lower with this approach. This can be achieved through economies of scale, as the mine is producing a larger quantity of ore. Replacement of the damaged SVR bull gear in August 2023 The replacement of the damaged SVR bull gear will help to restore the hoisting capacity of the Sub-vertical Rock Winder to its full capacity. This will improve the mine's ability to transport ore and waste rock vertically up the shaft, which will help to increase production levels. In turn, the replace - ment of the damaged bull gear will also reduce the downtime associated with the limited hoisting capacity. This will help to improve overall equip - ment utilisation and increase productivity. Also, the damaged bull gear can pose a safety risk to workers, and its replacement will help to improve the safety of the mining operations. During the period under review, a new record of 3.7 million fatality-free shifts was achieved with the last fatality having been recorded in June 2015. Three Lost Time Injuries were recorded in the year, versus two in the prior year. The same goes with ensuring consistent equipment availability and accelerating underground develop - ment using the acquired new and rented equipment. The consistent availability of equipment, including the newly acquired equipment, will help to improve the mine's ability to extract ore and waste rock efficiently. This will increase production levels and help to offset the negative impact of the unex - pected change in the ore body. Further, the new and rented equipment will help to improve overall equipment utilisation, as the equip - ment can be put to use more frequently, reducing downtime and increasing productivity. This will likely require less maintenance and repair, which can help to reduce maintenance costs. This will also help to improve equipment utilisation and increase productivity. Implementing various cost containment and cash-saving initiatives to ensure the business remains cost-effective This is another measure the company said it will take. The cost containment and cash-saving initia - tives can help to reduce costs across the mining operations, which can help to improve the mine's profitability. This can include reducing non-essential expenses, optimizing processes, and streamlining operations. The cost containment and cash-saving initiatives can also help to improve the efficiency of the mining operations. By optimising processes and streamlining operations, the mine can extract more ore and waste rock with fewer resources, which can increase productivity. Ultimately, by ensuring that the business remains cost-effective, the mine can improve its financial stability and reduce the risk of financial distress. This can help to ensure that the mine can continue to operate and invest in the necessary equipment and resources to maintain and increase production levels. Conclusion BNC has largely failed to stabilise over the last 5 years and this has due to a number of factors. A change in ownership from Mwana Africa to ASA and Sotic (now Kuvimba) has had an impact on operational stability particularly on cashflows. With these changes came changes in offtake agreements and changes in the mining plan. Capitalisation levels at BNC have remained low given how old the mining equipment has become. The breakdown in operations and challenges in offtake and quality of ore are all signs of an unsta - ble entity requiring sustainable capitalisation and proper management, going forward. Perhaps for BNC the past shareholders who recommended restarting the smelter could have made a better decision of rechanelling funds towards present mining equipment replacement, than to invest in an asset that still remains as dormant and subjected to price fluctuation. compared to US$51.4 million for the prior year. Cost of sales were partly affected by high mainte - nance of aged equipment. The disruptions to global supply chains further created uncertainty for the company, as it became difficult to predict when the equipment would be delivered. This uncertainty made it difficult for the company to plan and make decisions regarding their production targets and mining strategy. National grid failure The protracted electrical power outages and general grid instability beginning in February 2023 resulted in severe direct production losses. Without electrici - ty, the company was unable to run their equipment and mine nickel efficiently, leading to a decline in production. The power outages resulted in equip - ment damage, as the sudden loss of power can cause damage to sensitive equipment. This damage further impacted production, as the company had to repair or replace the damaged equipment before they could resume mining. The power outages also created recovery inefficien - cies, as the company was unable to process the mined nickel efficiently without electricity. This inefficiency further impacted production, as the company was unable to recover as much nickel as they would have been able to if they had access to electricity. Recovery efficiency dropped to 77.9% from 85.0% last year. Operations Review Against the backdrop of the above factors, ore hoisted for the year decreased by 11% to 418,587 tonnes from previous year’s 463,338 tonnes. Tonnes ore milled were 9% lower at 418,020 from 461,130 last year in tandem with the lower tonnage hoisted while head grade declined to 0.96% from 1.30% for the prior year with recovery efficiency dropping to 77.9% versus 85.0% for last year. Nickel in concentrate production declined by 37% to 3,180 tonnes from the previous year’s 5,082 tonnes. Unit cash cost of production (C1) increased by 70% to US$18,269 per tonne while the all-in-sustaining cost of production increased by 76% from US$12,410 per tonne for the prior year, to US$21,841 per tonne. Masunda attributed the increase in unit production cost mainly due to the decrease in Nickel produc - tion, the high cost of maintaining the old and obsolete underground mining mobile equipment and the increase in power tariffs during the year.He further made reference to the disparity between the official auction and parallel market rates which continued to widen during the year with local sup - pliers using the parallel market rates rather than the auction rates in their pricing models. The discrep - ancy in the two rates had an adverse impact on the Company’s costs of local inputs. With dampened production, the Company recorded Nickel sales volume of 3,095 tonnes which were 34% lower than the prior year’s sales of 4,720 tonnes, in line with the lower Nickel production. However, the average LME Nickel price achieved during the year was US$25,628 per tonne, com - pared to US$20,602 per tonne achieved in the previous year. The 24% increase in the average Nickel price reflected the global increase in the demand for the metal. As a result, revenue was US$49.5 million from

EQUITY AXIS EQUITY The AXiS LXXXIV Fri 14 Jul 2023 19 VFEX Listings Timeline 2023 Zimplow is the last listing on VFEX, having listed on the 14th of JULY 14th Miner, Bindura Nickel Corporation took VFEX listings DECEMBER 17th 2021 2022 Nedbank Depository Receipts were listed on VFEX NOVEMBER 28th 2021 Caledonia Mining Corporation became the third counter to list DECEMBER 3rd 2021 Padenga became the second counter to list on the JULY 9th 2020 VFEX commenced trading OCTOBER 23rd 2020 Seed Co International became the first counter to list on VFEX OCTOBER 26th 2022 National Foods listed on VFEX DECEMBER 23rd 2022 Simbisa Brands became the sixth counter to list on the bourse DECEMBER 2nd 2023 Innscor Africa Limited, the biggest foods processor became the 8th company to list FEBRUARY 24th 2023 Axia Corporation Limited became the 9th counter to list on VFEX MARCH 3rd 2023 West Property Holdings became the 11th counter on VFEX APRIL 28th 2023 African Sun took VFEX listings to 10 APRIL 14th 2023 First Capital Bank became the second bank to list on VFEX. It took the number of listings to 12 MAY 19th

Strategic Imperative to Confront Seasonal Vulnerabilities and Local Manufacturing Dependency Truworths Renounceable Rights Offer Aims to Fuel Strategic Transformation Agenda The AXiS LXXXIV Fri 14 Jul 2023 20 Set to Boost Economy and Cement Position as Key PGM Player Tharisa's Karo Platinum Project um project's success has significant implications for both the parent company and Zimbabwe's economy. Respect Gwenzi, Chief Analyst at Equity Axis, commented on the latest developments, "The prog- ress at Karo Platinum project is a significant devel- opment for Tharisa. The project's success will help boost the company's revenue and contribute to the Zimbawe's economy. As one of the major players in the Zimbabwean PGM industry, Tharisa's success will translate into a more stable and robust mining sector, which is vital for Zimbabwe's eco- nomic growth." Despite the domestic headwinds and macro events coupled with commodity price uncertainty, Tharisa remains confident in its ability to weather the envi- ronment and continue to provide returns to share- holders while actively and sustainably growing the business. With modern, low-cost structures in place, Tharisa is well-positioned to weather any challeng- es and emerge as a leading player in the PGM industry. company has recorded no lost-time incidents to date, with 540 people on site, including 99 Karo employees and the remaining staff as contractor employees. The concrete foundation pouring is progressing well, with earthworks nearing completion. The pilot mining has commenced, and operational tests will soon begin. Long-lead items manufacturing is progressing as planned, with major deliveries scheduled for Q4 2023. The power line construction is set to commence in this quarter. The Karo Platinum Project remains on track, with the major milestones of the first con- crete pour and pilot mining commencing. Phoevos Pouroulis, CEO of Tharisa, expressed his satisfaction with the project's progress, stating that the company remains on track with construction, with pilot mining having commenced in June. Tharisa's Karo Platinum project in Zimbabwe has reported a successful third quarter update for the period ending 30 June 2023. The Unifreight Africa Limited's plans to significantly augment a dedicated cross-border fleet Truworths Zimbabwe's renounceable rights offer to issue 384 million new shares, Tharisa's equity contribution of US$135 million isbeing drawn down to match capital requirements with cash flow as the company finalizes the senior debt portion for this globally strategic mine. Zimbabwe is considered to hold a significant amount of PGM reserves, and Tharisa is one of the big players and set to be a major contributor to the country's tax contribution. The Karo Platinaimed at buttressing foreign exchange proceeds, confronting earnings seasonality and reducing reliance on cyclical local manufacturing represent a logical strategic response to remedy vulnerabilities and catalyse sustain- able development. CEO Richard Clarke notes the initia- tive aims to diversify income streams, mitigate periodic fluctuations and lessen dependency on local man- ufacturing, where peak income months are currently May and November. Unifreight's plans to upgrade and scale its 35-depot network likewise complement its core less than load business. While the group posted a $1.32 billion loss in 2022 chiefly attribut- able to a $2.16 billion write-down of its Zimplow holding, Clarke high- lighted encouraging trends that would aid prospective performance, includ- ing a dramatic decline in repair and maintenance costs from 12.5% to under 7% of revenue by year-end, ascribed largely to the retirement of older assets superseded by newer FAW models. The strategic realignment towards cross-border fleet augmentation represents an endeavour to widen Unifreight's profit pools by concur- rently enhancing hard currency proceeds, economies of scale and market influence. However, potential- ly steep investment demands and intensifying competition along region- al trade arteries pose tests that Unifreight must successfully navigate to realize envisioned gains. Investments in equipment and infra- structure would generate opportunities for bolstering intraregional cross-bor- der trade and logistics critical for expansion. Yet the increasingly com- petitive nature of cross-border and contract haulage markets implies Unifreight must move decisively and swiftly to capture first-mover advan- tages through a well-orchestrated scaling that differentiates its value proposition and client experiences. Strategic intent alone cannot trans- mute Unifreight's prospects - com- mercial success hinges on the compa- ny's aptitude to mobilize and deploy needed resources efficiently while maintaining operational excellence in an increasingly saturated market. Effective risk management and a strategic vision that balances optimi- zation of current operations with innovation will be indispensable to set Unifreight on a sustainable growth trajectory that decisively con- quers existent vulnerabilities like seasonality and manufacturing depen- dency. Ultimately, Unifreight's fortunes will be determined not just by its aspirations but also its execu- tion - translating strategic plans into tangible actions that yield quantifi- able outcomes. approved by shareholders to raise an estimated 2.2 billion Zimbabwean dollars in additional working capital, could provide a springboard for stra- tegic growth and product innovation initiatives provided the company effectively applies funds. Proceeds would augment working capital financing at cost-efficient levels, enable opening new and differentiated Truworths Chain stores and significantly enrich product vari- ety. The need for additional funding arises from prevailing high interest rates and reduced credit access, necessitating non-traditional financing avenues. Without implementing the rights offer, the company risks severe liquidity pressures, escalating finance expenses and constrained working capital threatening business continuity and competitiveness. The renounceable rights offer involves allocating shares to existing investors usually at a discount, condi- tional upon approvals from the Zim- babwe Stock Exchange, shareholders and the Reserve Bank of Zimba- bwe's Exchange Control department for non-resident allocations. Truworths has engaged its largest 28.66% stakeholder, Mega Market (Private) Limited, to underwrite the offer entirely, providing assurance that all shares would be taken up even without full rights exercise by existing investors. Successfully completing the rights offer would enable Truworths to strengthen working capital financing at sustainable rates, essential for growth, innovation and realizing higher value from assets. Funds would also facilitate opening differentiated and modern Truworths Chain stores as well as enriching product variety and brand positioning to attract new customer segments and retain existing clientele. While the renounceable rights offer represents a step towards business viability, its success hinges on due governance, prudent management of risks related to share issuance and careful allocation of funds towards strategic priorities. Prevailing high interest rates and credit constraints also highlight the need for Truworths to diversify financing sources and judiciously administer working capital over the long term. Ultimately, Truworths must leverage the capital infusion to realize far-reaching transformation through its strategic agenda encompassing geographic expansion into new mar- kets, product innovation and differen- tiation to generate sustainable com- petitiveness and shareholder value. Unifreight

DELTA HISTORY & SALES CONTRIBUTIONS The AXiS LXXXIV Fri 14 Jul 2023 21 45% 19% 18% 1% 4% 2% 5% 6% Bar Bottle Store General Dealer Restaurants Supermarkets Other Wholesale Hotels Lager Beer Trade Channel % Sales Contribution Wholesale 34% 24% 16% 1% 11% 7% 2% 3% 2% Supermarkets Other Bar General Dealer Bottle Store HORECA QSR Petroleum Food Mart Sparkling Beverage Trade Channel % Sales Contribution

Mozambique’s gold reserves valued at around US$230 M – Lusa The value of the gold reserves held by the Bank of Mozambique last year fell by almost 4%, to around $230 million, according to central bank data compiled on Wednesday by Lusa. According to the annual report by the Bank of Mozambique, the value of country’s gold reserves – in coins and bars – stood at approximately $230.3 million (€208.9 million) on 31 December 2022, with 126,575 ounces (3,588 kilograms) in gold and “based on the average price of gold quoted in US dollars at the reporting date on the London gold market.” On 31 December 2021, the value of these reserves, then totalling 126,530 ounces (3,587 kilograms), was $239.7 million (€217.5 million), meaning that there has been a $9.3 million (€8.4 million) reduction in the value of these assets. According to the international gold price, each ounce was in May worth $1,992 (€1,807), while in December 2022 the price was $1,797 (€1,630) and a year earlier $1,790 (€1,624). Portugal, meanwhile, according to this month’s data from the World Gold Council, consulted on Wednesday by Lusa, is the 15th country with the largest gold reserves in the world (382.6 tonnes). Portugal is also the leader among Portuguese-lan- guage countries, followed by Brazil, with 129.7 tonnes (31st worldwide), then Mozambique, with 3.9 tonnes (88th), while Cabo Verde – outside the World Gold Council’s top 100 countries holding gold reserves – had about 1 tonne in such reserves at the end of 2022.- IOL Rice price hike fears as India, SA's second biggest supplier, considers banning most exports India, the world’s biggest rice shipper, is consid- ering banning exports of most rice varieties, a move that may send already lofty global prices of the food staple higher as the disruptive El Niño weather pattern returns. The government is discussing a plan to ban exports of all non-Basmati rice, according to people familiar with the matter. Authorities want to avoid the risk of more inflation before elec- tions, said the people, who asked not to be identi- fied as the information is not public. The ban will affect about 80% of India’s rice exports. While the move may lower domestic prices, it risks sending global costs even higher. Rice is a staple for about half of the world’s pop- ulation, with Asia consuming about 90% of global supply. Benchmark prices have already soared to a two-year high amid fears that the return of the El Niño weather phenomenon will damage crops. India accounts for about 40% of the global rice trade and has sought to tighten trade of some varieties. India is SA's second-biggest supplier of rice, News24 reported previously. -News24 Google launches ChatGPT rival Bard in EU, Brazil The US tech giant unveiled Bard in February but delayed its release in the European Union as the bloc plans to regulate artificial intelligence amid concerns about risks associated with the rapidly growing technology. Google has raced to catch up with rival Micro- soft, which has rushed to integrate ChatGPT-like powers in a wide array of its products, including the Bing search engine. Bard is "now available in most of the world, and in the most widely spoken languages," Bard's product lead Jack Krawczyk and vice president Amarnag Subramanya wrote in a blog. "As part of our bold and responsible approach to AI, we've proactively engaged with experts, poli- cymakers and privacy regulators on this expan- sion," they said. The company said it would incorporate user feedback and take steps to pro- tect people's privacy and data as it broadens access to Bard. The AI tool can now be used in over 40 languag- es including Arabic, Chinese, German, Hindi and Spanish. It was previously available in three languages -- English, Japanese and Korean. Google also announced new features, including receiving audio responses from Bard or answers in five different styles: simple, long, short, professional or casual. - eNCA Hong Kong poised to ban Japanese seafood over treated nuclear wastewater Hong Kong, one of the world’s biggest buyers of Japanese fish, says it will ban seafood imports from 10 prefectures in the country if Tokyo press- es ahead with its plan to release treated radioac- tive water from Fukushima into the sea. Tse Chin-wan, the city’s secretary for environment and ecology, said Wednesday the ban would include all “live, frozen, refrigerated and dried products or those preserved in other ways,” as well as sea salt and seaweed. Japanese food is hugely popular in Hong Kong, which has more than 2,000 Japanese restaurants. Hong Kong bought 75.5 billion yen ($536 million) worth of seafood from Japan in 2022, making it Japan’s second biggest market for fishery exports behind mainland China, according to the Japanese government. The move comes less than a week after Beijing announced a similar ban on Japanese seafood exports to mainland China, citing concerns over health and safety. Several of Japan’s neighbors, including South Korea, have expressed concerns about the safety of its food exports despite assurance from Tokyo and the International Atomic Energy Agency (IAEAA) that releasing treated radioactive waste water will have a negligible impact. -CNN IMF sees 'pockets of resilience,' slowing mo- mentum in global economy The International Monetary Fund said on Thurs- day that first quarter global growth slightly out- paced projections in its April forecasts, but data since then has shown a mixed picture, with "pock- ets of resilience" alongside signs of slowing mo- mentum. The IMF said in a briefing note for a G20 finance leaders meeting in India next week that manufac- turing is showing weakness across G20 economies and global trade remains weak, but the demand for services is strong, particularly where tourism is recovering. The IMF did not indicate any changes to its April 2023 global GDP growth forecast of 2.8% - down from 3.4% in 2022 - but said that risks were "mostly" tilted to the downside. These include the potential for Russia's war in Ukraine to intensify, stubborn inflation and more financial sector stress that could disrupt markets. But the Fund said that inflation "seems to have peaked" in 2022, and core inflation, while also easing, remains above targets in most G20 coun- tries. Reduced supply chain disruptions and lower goods demand means likely disinflationary pres- sures from goods, the IMF said. "However, services inflation - which is now the major driver of core inflation - is expected to take longer to decline," the IMF said. Strong consumer demand for services, buoyed by demand, buoyed by strong labor markets and the post-pandemic shift in spending from goods to services, is likely to sustain these price pressures, the IMF said.-Re- uters China’s exports plunge most in 3 years amid higher interest rates China’s exports have plunged the most in three years as higher interest rates worldwide dampen demand for Chinese goods. Chinese exports fell 12.4 percent in June com- pared with a year earlier, customs data released on Thursday showed. China is the world’s biggest exporter and the latest figures, after a 7.5 percent decline in exports in May, underscore the challenging out- look for the global economy amid rising interest rates. China’s imports in June also declined, falling 6.8 percent, which was more than expected by econo- mists. Central banks in North America, Europe and Asia have hiked the cost of borrowing to bring living costs under control after inflation in many countries reached its highest levels since the 1980s. - Aljazeera Global public debt reaches record $92tr Global public debt surged to a record $92 trillion in 2022 as governments borrowed to counter crises, such as the Covid-19 pandemic, with the burden being felt acutely by develop- ing countries, a United Nations report said. Domestic and external debt worldwide has increased more than five times in the last two decades, outstripping the rate of economic growth, with gross domestic product only tripling since 2002, according to the Wednesday report, released in the run up to a G20 finance ministers and central bank governors' meeting July 14-18. Developing countries owe almost 30 per cent of the global public debt, of which 70 per cent is represented by China, India and Brazil. Fifty-nine developing countries face a debt-to-GDP ratio above 60 per cent - a thresh- old indicating high levels of debt. "Debt has been translating into a substantial burden for developing countries due to limited access to financing, rising borrowing costs, currency devaluations and sluggish growth," the UN report added.- The Daily Star IMF deposits much-awaited $1.2B with Pakistan’s central bank under bailout, finance minister says Pakistan’s finance minister on Thursday said the International Monetary Fund deposited a much-awaited first installment of $1.2 billion with the country’s central bank under a recent- ly signed bailout aimed at enabling the impov- erished Islamic nation to avoid defaulting on its debt repayments. Minister Ishaq Dar in televised remarks said the remaining $1.8 billion would be received from the IMF over the next nine months. The funds will bolster the country’s foreign exchange reserves, which shrank to less than $4 billion in recent months, raising fears of a default. The country’s foreign exchange reserves are likely to rise to $14 billion this week, Dar said. -AP US Bill aims to counter China control of Congo critical minerals The chairman of the House Africa subcommit- tee, Representative John James of Michigan, introduced a bill requiring the creation of a US national strategy to secure supply chains of critical minerals from Democratic Republic of Congo. The DRC produces about 70% of the world’s cobalt, an ingredient in electric vehicle batteries, and also has major deposits of copper, lithium, tantalum and germanium. The dominance of Chinese companies in the extraction, processing and refining of these minerals “represents an economic and national security threat” that impacts energy indepen- dence and military preparedness, according to the draft bill. The bill is co-sponsored by Jim Baird of Indiana, Young Kim of California, Thomas Kean Jr. of New Jersey and Cory Mills of Florida, all Republicans, like James. - Mining weekly Kenya, Iran ink 22 MoUs to grow bilateral trade after President Raisi visits Kenya and Iran are charting a new path to increase trade between the countries following the Nairobi visit of President Ebrahim Raisi. On Wednesday, President Raisi and President William Ruto signed 22 memorandums of understanding and agreements with the view to lift bilateral trade. The MoUs cover sectors such as agriculture, livestock, culture and heritage, information, ICT, fisheries, housing, urban and metropolitan development. Iran is expected to set up a centre for innovation and technology in Nairobi to be known as the Iran House of Innovation and Technology to house the two countries’ businesses. “This is an innovative way of enabling enter- prises to access Iranian technologies, skills and information. We seek to capitalise on this unique advantage for our prosperity,” President Ruto said. - BusinessDaily Business Around The World The AXiS LXXXIV Fri 14 Jul 2023 23

Politics Around The World deepen ties with the military alliance amid global security threats including Russia’s war on Ukraine and North Korea’s illicit nuclear program. Poland is in the process of buying some $17 billion worth of advanced military equipment from South Korea. The purchase is meant to upgrade Poland’s defense potential and fill in for the older equipment that Poland has offered to Ukraine, like the Soviet-made MiG-29 fighter jets. Trump asks the judge to delay the start of his classified documents trial Former President Donald Trump is asking a judge to delay setting a trial date in his classified docu- ments case, citing the extraordinary nature of a prosecution that could happen during the 2024 presidential race and what his lawyers cast as complex legal issues. In a court filing late Monday, Trump attorneys cite "the sheer volume" of materials they must review in the case, which charges Trump and his valet with conspiring to obstruct a federal probe by hiding highly classified materials Trump had stored in a bathroom and a ballroom at his Florida resort. Those papers included secrets about defense and weapons capabilities of the U.S. gov- ernment and its allies, according to the indictment. Trump is the first former president to face federal charges from a government he once led — a fact that lawyers Christopher Kise and Todd Blanche highlighted in their request for delay. Among other complications, they said, would be the challenge of selecting a jury during the 2024 presidential race, where Trump is running against the current president, Joe Biden.- NPR Dutch PM Mark Rutte to leave politics after government collapses Dutch Prime Minister Mark Rutte said Monday he would step down as leader of the country’s ruling party and leave politics, after his government collapsed over immigration policy, Dutch national broadcaster and CNN affiliate NOS reported. The inveterate survivor of Dutch politics, nicknamed “Teflon Mark” because scandals surrounding his four consecutive governments did not stick to him, announced his surprise decision at a parliamentary debate in the Hague. “I did well and I honestly think that it is the right time [to step down],” Rutte said Monday, adding that he was leaving “with a lot of emotion and with a lot of mixed feelings.” Rutte, who has been in power since 2010 and is Europe’s second-longest serving leader, had said Friday that his government would tender its resig- nation to the Dutch king, triggering new elections to be held in the fall. He said at a news conference that “differing opin- ions about immigration policy” within his four-party coalition government had become “insurmountable,” but did not give any indication that he would resign from politics and was expected to lead the VVD party into the new elections. VVD had proposed limiting entrance for children of war refugees who are already in the Nether- lands, forcing families to wait for at least two years before they can be reunited. - CNN Guatemala election run-off: Chaos after key party suspended Guatemala’s troubled presidential election was thrown into even greater turmoil on Wednesday when the country’s top electoral tribunal con- firmed the results of the June 25 vote while the attorney general’s office announced that the sec- ond-place Seed Movement party had been sus- pended. The seemingly contradictory moves fed more than two weeks of rising tensions and suspicions after the first round of voting, which had seemingly sent conservative Sandra Torres and progressive Bernardo Arevalo, who leads the Seed Movement, into an August 20 presidential run-off. There were immediate calls on Wednesday for Guatemalans to take to the streets in protest and demonstrators gathered outside the Supreme Electoral Tribunal until heavy rain drove them away. It was not immediately clear how the situation would play out now that yet another court had intervened in Guatemala’s electoral process, but electoral authorities said Torres and Arevalo would face each other on August 20. - Aljazeera Mozambique: Government laments extradi- tion to US of former finance minister The Mozambican Minister of Foreign Affairs and Cooperation on Tuesday lamented the extradition of former Finance Minister Manuel Chang to the US, noting that the country may have been “dam- aged” by the former minister in the case of debts hidden. “If there was anything [done by Manuel Chang] in the sense of harming the homeland, it was here”, said Verónica Macamo, speaking to journal- ists today as representative of the Mozambique Liberation Front (Frelimo), the ruling party, after submitting the organisation’s candidacy for the October municipal elections. Noting that the Mozambican State tried to extra- dite the former finance minister to its jurisdiction, Macamo underlined that the decision of the South African court to hand over Manuel Chang to the US must be respected, as it is an exercise of state sovereignty. “What prevailed, prevailed,” she emphasized, on the decision of the justice in South Africa, where Chang, 63 years old, has been detained since December 2018.The former Mozambican finance minister will be extradited to the US this week to answer for his involvement in the hidden debt scandal, an official source told Lusa. “Yes, we can confirm that he will be extradited to the US this week,” Athlenda Mathe, spokes- woman for the South African Police National Command (SAPS), told Lusa. -Club of Mozam- bique Ukraine war: Russian general fired after criti- cising army leaders A top Russian general says he has been removed from his post in Ukraine after telling military chiefs the truth about the dire situation on the front line. Maj Gen Ivan Popov was the com- mander of the 58th Army, which has been fighting in the southern Zaporizhzhia region. In a voice message, Maj Gen Popov said he raised questions about high casualty rate and lack of artillery sup- port. "It was necessary either to keep quiet and be a coward or to say it the way it is," he said. "I had no right to lie in the name of you, in the name of my fallen comrades in arms, so I out- lined all the problems which exist." The voice message was posted to telegram by Russian MP Andrei Gurulyov, who is a former military commander and frequent commentator on state TV. It is unclear when the message was recorded. Among the issues Maj Gen Popov said he highlighted to his superiors were the lack of proper counter battery systems to help repel Ukrainian artillery attacks, as well as a lack of military intelligence. The commander said his dismissal was demanded by senior commanders - who he accused of trea- son - and approved by the Russian defence minis- ter, Sergei Shoigu.-BBC Malaysia probes opposition leader for royal insult as tensions flare ahead of August 12 state poll Malaysia on Thursday launched an investigation into a controversial leader of an opposition-held state for allegedly insulting one of the country’s nine sultans, ahead of a clutch of state polls scheduled for mid-August. The investigation follows police reports lodged against Kedah’s chief minister, Muhammad Sanusi Md Nor, who is accused of committing an offence under the broad ambit of race, religion and royalty – or 3R – by allegedly insulting the sultan of Selangor when questioning the appointment of his state’s chief minister, Amiruddin Shari. - South China MorningPost NATO delivers gut punch to Putin The NATO summit this week delivered yet anoth- er blow to Russian President Vladimir Putin, with allies standing as united as ever against his war in Ukraine while announcing efforts to expand the alliance and boost defense spending. The most punishing setback for Putin came on the eve of the summit, when Turkish President Recep Tayyip Erdoğan hashed out a deal to admit Sweden into NATO after more than a year of resistance. Erdoğan’s reversal not only puts the gears in place to expand the borders of the western security alli- ance — it also signals the Turkish leader is moving closer to the west and away from Putin. “He’s no longer interested in being dependent on Putin economically and strategically,” said Asli Aydıntaşbaş, a visiting fellow at Brookings Institu- tion with the Turkey Project. “I think Russians are upset. I think the Kremlin is very upset.”-The Hill Senegalese opponent charged over verbal attack on President Macky Sall The charges against Birame Souleye Diop, a senior member of the Pastef political party and the Yewwi Askan Wi opposition coalition, are tied to a blistering statement he made last week regarding the president's political intentions. Sall on July 3 announced he would not run for a controversial third term in next year's election, ending months of tense uncertainty. President Macky Sall rules out third-term re-election bid, spelling relief for tense Senegal. At a press conference the following day, Diop suggested that the president could make a U-turn on his announcement. He issued a "warning" to future candidates of Sall's party. "Avoid eating at his house, avoid drinking his water – he is capable of poisoning you and saying, 'As we no longer have a candidate, I'm coming back'", Diop said. Diop, who later apologised for the comments, was charged Tuesday with committing "acts likely to jeopardise public peace" and an "offence against the President of the Republic", his lawyer, Moussa Sarr, told AFP. -France24 EU rejects Myanmar’s diplomatic role and says it still doesn’t recognize generals The European Union’s top diplomat on Thursday expressed opposition to Myanmar’s upcoming role as the overseer of relations between the 27-nation bloc and Southeast Asian nations and reasserted its non-recognition of the strife-torn country’s mil- itary government. The comments marked the latest diplomatic fallout from the Myanmar army’s forcible seizure of power from Aung San Suu Kyi’s elected govern- ment on Feb. 1, 2021 that plunged the country into deadly chaos. Josep Borrell, the EU’s high representative for foreign affairs, raised the concern in a meeting with foreign ministers of the Association of Southeast Asian Nations in the Indonesian capital, Jakarta. The 10-nation ASEAN includes Myanmar and Indonesia, which leads the regional group this year.- AP Presidents of South Korea and Poland hold talks on security, war in Ukraine and business cooperation The South Korean president began a visit to Poland for two days of talks and meetings on global security, the war in neighboring Ukraine, and developing bilateral business and defense ties. President Yoon Suk Yeol was greeted Thursday by his Polish counterpart, Andrzej Duda, at the Presi- dential Palace, where they proceeded into talks. Yoon was also to meet with Poland’s right-wing Prime Minister Mateusz Morawiecki and speakers of both chambers of parliament. Duda has described it as a “very important visit” by a “very prominent guest.” Yoon came to Warsaw after attending a NATO summit in Vilnius, Lithuania, where he sought to The AXiS LXXXIV Fri 14 Jul 2023 24

ZWL INTERBANK Markets watch T 2023, with an 8% week-to-date increase. This marks one of the strongest performances against the greenback since the liberalised interbank was introduced. This was an appreciation of 8% week to date, one of the best performances against the green- back since the liberalised interbank was intro- duced. The number of bids remained stagnant at ten and non were disqualified. However, allotted money marginally increased to US$5.6 million from US$5.5 million last week. In the current week, RBZ set US$20 million and approximately a quarter was taken up. However, the premium has widened to 46%, with the Zimbabwe dollar continuing to trade at ZWL9000 on the parallel market and ZWL8500 on the P2P markets. The underlying question is if the appreciation is determined by market forces, why is the parallel market rate, and prices in Zimbabwe dollars not responding? The demand for forex has been declining week in and week out, but the question is does this mean the country is now liquid (declining demand) or tightening the Zimbabwe dollar by the government (declining supply). The country has self-dollarised with over 70% of local transactions in US dollars. This has lessened demand for the US dollar as companies can liquidate themselves through local transactions. Regional Markets Rand hits highest since June The South African rand appreciated sharply to trade at 18.2 against the greenback, the highest since June 19th, amid a weaker dollar after a stronger-than-expected cooldown in US inflation boosted hopes that the Federal Reserve may not hike rates beyond July. On the domestic front, the South African Reserve he Zimbabwe dollar has sustained a recov- ery trend, firming to ZWL4998.8352 in the latest auction market held on July 11, Bank is widely expected to raise rates one more time by at least 25bps in July to anchor inflation expectations, taking the repo rate and prime lending rate to peaks of 8.5% and 12%, respectively. However, the central bank continues to see upside risks to inflation emanating from sticky world inflation and a vulnerable rand. Kwacha widens deficit margins The Zambian currency, the Kwacha worsened the deficit margins on the 13th of July 2023 after trading at 18.4 against the greenback from 17.9 last week. However, the Stanbic Bank Zambia PMI came in at 51.2 in June 2023, down fractionally from 51.4 in May, pointing to a second successive month of mild growth in the country's private sector activity. Output and new orders both rose for the second consecutive month, amid improving economic conditions, improved accessibility to money and muted price pressures. This encouraged some companies to expand their staffing levels in June, leading to the first net increase in employment in five months, although only fractionally. Meanwhile, both purchasing activity and stocks of inputs dipped slightly despite expansions at some firms. In terms of pricing, the pace of cost inflation eased for the third month running to the softest in the current six-month sequence of rising prices, helped by an improving exchange rate. In turn, the rate of output inflation in June was modest, but slightly faster than that seen in May. Pula overturns deficits Botswana's currency, the pula, has surged against the US dollar, rallying to 13.1 from 13.5 in just one week. The strengthening of the pula is attributed to increased demand for the currency as economic outlook remains positive. The pula's rally is good news for the country's importers, as it means that they will pay less for goods and services purchased in foreign currencies. However, the strengthening of the pula could also hurt the country's exporters, as it makes their products more expensive in foreign markets. Despite this, the overall impact of the pula's rally on Botswana's economy remains to be seen. Shilling hits 141.2 Kenyan shilling dropped further to 141.2 on the 13th of July 2023 from 140.9 last week as the country’s economic outlook remains clouded. Meanwhile, the Stanbic Bank Kenya PMI declined to 47.8 in June 2023 from 49.4 in May, signalling a further deterioration in the country’s private sector economy. Output and new orders both dropped at faster rates. Inflationary pressures remained elevated, as input prices rose at the fourth-fastest rate on record, attributed to rising fuel prices and the effect of the weaker KES relative to the US dollar. New business continued its downward trend for the fifth month, as firms reported a lack of purchasing power among customers due to high inflation and cash shortages. Moreover, buying activity was reduced as companies adjusted to weaker inflows of new orders, while input inventories increased for the fourth consecutive month. On a positive note, employment grew further in June as firms maintained an optimistic outlook for growth. Naira worsens to 775 The naira edged closer to 800 on the 13th of July 2023 after worsening to 775 against the greenback. When President Bola Tinubu took office, he unveiled a series of reforms to boost the country's economy. He has ended a fuel subsidy that cost US$10 billion last year, removed a controversial central bank governor, eased foreign-exchange controls and initiated an overhaul of Nigeria’s chronically inadequate power industry. However, corruption, political instability and forex shortages remain a slap in the eye. ZimDollar Appreciates by 9% The AXiS LXXXIV Fri 14 Jul 2023 25

26 The AXiS LXXXIV Fri 14 Jul 2023 ZSE & VFEX WEEKLY COMMENTARY In the 5-days to Thursday, the ZSE succumbed to liquidity constraints in the economy which weighed on overall demand in the country. The Central Bank has been mopping up liquidity from the market in a bid to curtail infla- tion and exchange rate loss, and this in-turn has negatively affected activity on the stock market. The mainstream ZSE All Share Index closed at a 5-week low of 132,380.43 points in the week under review after dwindling a whopping -15.54%. Losses were driven by sell-offs in market heavies and penny stocks, while medium caps were relatively stable. The bourse closed the week at a month-to-date loss of -22.77% in nominal terms, while nominal year-to-date returns were trimmed to 579.09%. However, in US$ terms the ZSE is -6.8% down since the beginning of the year. Meanwhile, the Zimbabwe Stock Exchange (ZSE) instituted a trading halt on Zimplow shares on Tuesday as the company set to delist from the bourse on Thursday, 13 July 2023 and subsequently list on VFEX on Friday, 14 July 2023. On the US$ denominated bourse, VFEX, the All Share Index continued to oscillate throughout the week and closed in the negative, plunging a further -1.88% to settle at 73.55 points. Performance was impacted by uncertainty as we head towards elections, along with the constrained liquidity which drove investors to liquidate portfolios. VFEX was heavily weighed by 6 stocks while there were no risers. The bourse closed the week at a month-to-date loss of -3.43% while year-to-date losses stretched to -22.4%. An aggregate of US$1,070,384 exchanged hands on VFEX in the week under review, down from US$1,079,277 traded in the prior week. On the currency markets, the government's efforts to mop-up excess liquidity have gone in overdrive and this has seen a reduced use of the ZWL. Resultantly, the parallel market has been stable for slightly over 3-weeks while official rates have appreciated significantly, thus widening exchange rate premium between the 2 markets, which is a downside. In the week under review, the ZWL gained 7.94% against the US$ on the Auction market to close at ZWL4,998.8352. On the Interbank market, the local unit appreciated by 8.51% against the US$ this week to close at ZWL4,988.261. ZWL INTERBANK ZSE ASI 156,728.16 VFEZ ASI 74.97 ZWL INTERBANK 5,412.5484 155,307.10 74.43 5,251.0640 152,053.02 74.38 5,286.7296 141,044.14 74.47 5,297.5033 135,056.70 73.92 4,998.8352 132,380.43 73.55 4,988.2610 -15.54% -1.88% 8.51% ZSE TOP 10 80,176.59 MEDIUM CAP INDEX 468,982.25 SMALL CAP INDEX 2,193,037.49 78,782.22 474,390.60 2,165,867.69 76,405.70 474,799.80 2,082,401.95 68,948.72 467,280.59 2,160,142.99 64,663.99 466,596.26 2,160,142.99 63,103.02 461,086.05 2,160,142.99 -21.29% -1.68% -1.50%

27 FINANCIAL MARKETS AT A GLANCE 2023 ZSE All Share Index ZSE Top 10 Index ZSE Small Cap Index Interbank Market Rate 8073.94 0.3% JSE All Share Index BSE All Share Index LuSE All Share Index NGSE All Share Index TOP 5 WEEKLY RISERS TOP 5 WEEKLY FALLERS AFDIS ARISTON BAT CFI DELTA DAIRIBORD HIPPO Bridgefort MEIKLES OK SEEDCO STAR AFRICA TSL Tanganda 200000 3055 1919743.26 256280 196043.33 29000 258140.7 1710 79755.81 19242.01 187916.56 648.21 54000 129500 200000 3114.59 1919741.88 256280 280828.68 45000.3 268000 1710 87000 23216.53 194414.69 679 55735 129999.74 Latest Price ZWL Cents Previous Week ZWL Cents EDGARS NTS RTG TRUWORTHS 9977.78 1850 11865 1200 10795.02 1850 11465 1050 Ecocash ECONET ZIMPAPERS 15788.34 58598.13 1165.64 19914.29 75027.7 1300 MASHHOLD FMP 10226.91 9375 10999.21 11021.25 ARTZDR LAFARGE PROPLASTICS TURNALL Willdale RioZim 6000 14375 44995 1300 1821.28 47992.14 6900 14375 45000 1300 1890 47851.11 CBZ FBCH FIDELITY FML GBFS NMBZ ZBFH ZHL 90620 105000 10000 26450 4370 20665 74700 8500 93805 119958.69 9200 27018.97 3800 22570 74700 9933.33 Latest Price ZWL Cents Consumer Consumer Staples Previous Week ZWL Cents Latest Price ZWL Cents Materials Sector Previous Week ZWL Cents Latest Price ZWL Cents Financial Sector Previous Week ZWL Cents CAFCA NAMPAK MASIMBA GBFS RioZim 332006.67 11878.03 85675 4370 47992.14 80945.76 2878.03 11975 570 5692.14 DAIRIBORD DELTA NMBZ ECOCASH ECONET 29000 196043.33 20665 15788.34 58598.13 -16807.47 -92873.62 -5886.38 -4125.95 -14343.41 32% 32% 16% 15% 13% -37% -32% -22% -21% -19.7% COUNTER PRICE CENTS CHANGE Latest Price ZWL Cents ICT Sector Previous Week ZWL Cents Latest Price ZWL Cents Real Estate Sector Previous Week ZWL Cents 4,988.261 8.41% 2,160,142.99 -1.5% 63,103.02 -21.29% 132,380.43 -15.54% 76544.79 3.28% COUNTER PRICE CENTS CHANGE % CHANGE % CHANGE 64046.93 3.27% 8228.3 -0.04% 132380.43 63103.02 ZSE Top 10 Index All Share index ZSE Top10 index WOW -22% MOM -7% YTD 413% 132380.43 232451.32 ZSE Financials Sector All Share index ZSE Financials index WOW -10% MOM 79% YTD 710% 132380.43 229373.16 ZSE IndustrialsIndex (New) All Share index ZSE Industrials Index (new) WOW 16% MOM 159% YTD 977% 132380.43 139499.87 ZSE Real Estate Index All Share index ZSE Real Estate Index WOW -4.3% MOM 91% YTD 687% 8073.94 132380.43 BSE All Share Index BSE All Share index WOW 0.3% MOM 0.2% YTD 4.5% 132380.43 2160142.99 ZSE Small Cap Index All Share index Small Cap index WOW -1.5% MOM 104% YTD 378% 132380.43 443211.41 ZSE Consumer Discretionary Index All Share index ZSE Consumer Discretionary index WOW -1.2% MOM 66% YTD 1149% 132380.43 91438.36 ZSE ICT Index All Share index ZSE ICT Index WOW -19% MOM -16% YTD 422% -46.5% 18% Interbank Market Interbank All Share index 8228.3 132380.43 LUSE All Share Index LUSE All Share index WOW -0.1% MOM -0.1% YTD 12.1% 64046.93 132380.43 NGSE All Share Index NGSE All Share index WOW 3.3% MOM 14.7% YTD 25% 76544.79 132380.43 JSE All Share Index JSE All Share index WOW 3.3% MOM -0.8% YTD 4.8% 132380.43 70235.77 ZSE Materials Index All Share index ZSE Materials Index WOW 0.8% MOM 41% YTD 416% 132380.43 162557.72 ZSE Consumer Staples Index All Share index ZSE Consumers Staples index WOW -20% MOM 5% YTD 565% 132380.43 461086.05 ZSE Medium Cap Index All Share index Medium Cap index WOW -1.7% MOM 109% YTD 1158%

Regional Economic Watch Beef According to the report, the average price of 1kg of boneless beef in May 2023 stood at N2,520.52, when compared to a price of N2,029.59 in May of the previous year. On a month-on-month basis, the price rose from N2,495.69 in April 2023. This indicates a 24.19% increase on a year-on-year basis and 0.99% on a month-on-month basis. Tomato The average price of 1kg of tomato witnessed a year-on-year increase of 17.68%, rising from N423.48 in May 2022 to N498.34 in May 2023. However, there was no specification of the month-on-month change in the report. Rice Local rice prices also experienced significant inflationary pressures. The average price of 1kg of local rice (sold loose) rose from N447.51 in May 2022 to N555.18 in May 2023. On a month-on-month basis, the price increased from N546.76 in April 2023. They added that on a month-on-month basis, the average price of this rice increased by 2.73% in May 2023, adding: This indicates a 24.06% increase on a year-on-year basis and 1.54% on a month-on-month basis.For other food items, the report highlighted additional price increases for onion bulbs and yam tubers. The average price of 1kg of onion bulbs rose by 17.12% year-on-year, from N387.53 in May 2022 to N453.86 in May 2023. Similarly, the average price of 1kg of yam tuber increased by 22.84% year-on-year, from N372.23 in May 2022 to N457.25 in May 2023. Sudan United Nations Secretary-General António Guterres has condemned an air strike in the Sudanese city of Omdurman on Saturday July 8, 2023 which reportedly killed at least 22 people, UN News reports.Guterres offered his condolences to the families of the victims and expressed hopes for a speedy recovery to the dozens who were injured, UN Deputy Spokesperson Farhan Haq said in a statement issued that day. The Sudanese army and rival military group, the Rapid Support Forces (RSF), have been battling since mid-April. Hundreds of people have been killed and nearly three million have been displaced, including to neighbouring countries.Haq said the Secretary-General was concerned about reports of renewed fighting in North Kordofan, South Kordofan and Blue Nile States. The UN chief is concerned that the ongoing war between the sides has pushed Sudan to the brink of a full-scale civil war, potentially destabilising the entire region, Haq said. Gabon Gabon President Ali Bongo will run for re-election in August, he said on Sunday, in a bid to extend his family’s 56-year grip on power in the Central African country.“Because nothing matters more than your success, I am announcing today that I am a candidate”, Bongo told a small crowd of cheering supporters.Elections are scheduled for Aug. 26. Bongo, 64, has been president of the oil-producing nation for two seven-year terms since succeeding his father Omar, who died in 2009 after ruling since 1967. Gabon has no constitutional term limits.Both of Bongo’s election wins were disputed by the opposition, who said he won fraudulently. His 2016 victory triggered deadly clashes between police and protesters during which the parliament building was gutted by fire.Bongo’s re-election bid was thrown into doubt when he suffered a stroke in October 2018 and was flown to Morocco for medical treatment. He spent three months abroad but returned shortly after a coup attempt was thwarted in his absence. Nigeria 1). West African regional bloc ECOWAS has chosen Nigerian President Bola Tinubu as its new chairman at a time of deepening insecurity, including military coups and terrorism, in the region. West Africa has witnessed six successful military coups since 2020, marking a backslide of democracy in a region that had been seen to be making progress in shedding its “coup belt” moniker. Tinubu, who was voted in on Sunday and takes over from President Umaro Sissoco Embalo of Guinea-Bissau, called for swift action against insecurity including terrorism and coups in West Africa which he said had reached “alarming proportion “On peace and security, the threat has reached an alarming level and needs urgent actions in addressing the challenges. In this regard, we must remain committed to the utilisation of all regional frameworks at our disposal to address the menace of insecurity,” he said in a statement on Monday. Tinubu pledged to prioritise political stability, peace and security and regional economic integration in the 16-member ECOWAS. 2). Nigeria witnessed a year-long increase in food prices, particularly for key ingredients such as beef, tomato, and rice, as food inflation rises by 1.13% year on year to 24.19% .The recently released report by the National Bureau of Statistics titled “Selected Food Price Watch” for May 2023, revealed significant price hikes in these essential food items. The inflationary pressure, coupled with contractionary monetary policies, continues to drive the headline inflation rate to new heights, posing challenges for consumers and the economy at large. The AXiS LXXXIV Fri 14 Jul 2023 28