The AXIS XIII

The The Politics of Frustration
Zimdollar’s Second Death Imminent?
Zim’s Cybersecurity Threat
From Pandemic to Endemic

The good bye - elections

#ISSUE: XIII

The Axis Friday 04 February 2022 #ISSUE: XIII

The Tanganda bounces
back on ZSE after a
14 year hiatus

PAGE 23

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March by-elections to coalition of civic society groups and individuals
that campaigned for a "No" vote in the 2000 con-
stitutional referendum, in particular the Zimbabwe
Congress of Trade Unions (ZCTU).

seal MDC’s fate As by-elections linger, it is likely to be a goodbye
With by-elections set to be conducted in to the political characters of Douglas Mwonzora
late bloomer. He did not cut the grade of and Thokozani Khupe and their whole lot, includ-
a few weeks time, Zimbabwe will soon first-generation MDC MPs who stormed the par- ing founding members, Elias Mudzuri, Tapiwa
be moving past what could go down liament in 2000, despite a decorated student Mashakada and Morgan Komichi. The bunch is
in history as the most absurd moments in its activism run, before the formation of the MDC. navigating its political twilight with reckless aban-
political history. The running 8th August house Chamisa only came to parly as a replacement of don, taking no prisoners, typical of anyone sure of
(2018-2023), has had the most parliamentary Learnmore Jongwe. In 2014, he lost to Douglas what is coming ahead. A probability test on histor-
recalls of any period since independence, at about Mwonzora, his current nemesis, in an attempt to ical data, done by Equity Axis shows that the
21. It also holds a record for going the longest land the influential Secretary-General post for the MDC does not have a chance of winning any seat
mile with vacant house representative seats on MDC-T party. Chamisa also enrolled into varsity among the 28 which are being contested for in the
deferred by-elections. for a law degree way in his prime age. pending by-election. If the party does not win the
by-elections, it will be one step away from extinc-
tion.

Critics point out that these records are a creature Wamba’s (Chamisa’s pseudonym) road to the Forecasting models applied to the historical elec-
of the incumbent ruling party in Zimbabwe, apex of the main opposition has also been tion results data for the 28 constituencies to be
which has conveniently capitalised on both the littered with mishaps, some of which remains a contested in the March by-election reveal that the
chaos in the opposition camp and a fiery pain in the butt, up to this day. When Morgan CCC party is likely to secure 20 seats. All except
COVID-19 pandemic to diminish the effective- Tsvangirai died, Chamisa’s party was supposed to one of the 20 seats, were won by the MDC Alli-
ness of the opposition, by whittling down its rep- find a replacement through an election, as per the ance in the 2018 elections, now CCC. The contes-
resentatives in parliament. It is its grip on key party constitution. The winner of the election tants for the CCC party for the upcoming by-elec-
institutions such as the judiciary and the elections (MDC-T) would have been immediately endorsed tions were all winners in the 2018 elections,
board ZEC, which has influenced these conclu- as the MDC Alliance candidate for the 2018 har- before being booted out of parliament, by a tech-
sions. It is also the lackadaisical approach which monised election, but a lot of factors had already nicality.
government has adopted in the implementation of shifted since Tsvangirai’s death, such as the
political and economic reforms that makes these evolving union with Tendai Biti and Welshman It is thus likely that they all still command as
criticisms valid. Instead, some controversial bills Ncube, his MDC Alliance partners and the likely much grassroots support. Likewise, 12 out of the
easily sailed through parliament with minimum effect of the short term control of the party by 28 contested seats are in Harare Province, a major
scrutiny, due to diminished powers of the opposi- Khupe in the transitional period, all made it a stronghold of the opposition. Analysed data shows
tion. complex task. that the CCC candidates formerly MDC Alliance
who contested the 2018 elections won the 12
However, with the emergence of by-elections set Chamisa’s foes easily capitalised on this evolu- Harare seats with an average of 61% of the total
for March, a new political powerhouse on the tion to claim that he had grabbed power, a posi- vote. The MDC has ZIwMo- n successive elections in
left, is likely to be birthed. The opposition as we tion which the Supreme court upheld. Could he all the above mentioned 20 constituencies over the
have known it since the turn of the millennium, have done better? As his history shows, the odds last three (3) elections. While the general trajecto-
will change. The pending by-election will not for Chamisa to have done it right, in the first ry of the opposition in parliament has been
only birth a new opposition but will deliver a instance, were very slim. The irrationality which adverse over the last three (3) elections, we do not
decisive final blow to opposition political oppor- characterised decisions that were taken towards anticipate a further downward spiral based on the
tunists in the mould of Douglas Mwonzora and his ascension to the top may have also been performance of the overall economy.
Thokozana Khupe, already at war between them- influenced by the time factor. There was barely
selves. The two (2) are opposition leaders from four (4) months for the opposition camp to The one (1) additional seat, which CCC is likely
an MDC faction, the MDC-T which has recorded regroup and mount a meaningful fight to take to add to its tally is the Kwekwe Central one
all wins at the judiciary against a rival camp, the over power in Harare, following Tsvangirai’s which was left vacant after the death of Masango
MDC Alliance, but with little to no substance on death. Being handicapped in swiftness, in hind- Matambanadzo, who won the 2018 election on the
the ground (political base) to show for it. sight, the shortcomings of Chamisa during this NDP ticket. There are also good chances that the
It has been a long time coming as the opposition period, were to be expected. CCC party could grab the Gokwe Central seat
circus has been going on for far too long. The Four (4) years on and Zimbabwe is on the verge from the ZANU-PF camp. Gokwe has the narrow-
chaos in the opposition camp dates as long back of a new political era. The pending by-election est winning margin among all of the contested
as Tsvangirai’s death in 2018. Perhaps it would will put a final nail in the coffin of the MDC seats.
have been wiser, had the move by the MDC party as we have known it. The labour backed * To Page 5
Alliance to break away from the MDC of the party, has been the main opposition party in Zim-
past would have been effected much earlier. This babwe since 2000. Barely one (1) year after it Markets watch PAGE
would have probably saved a lot of drama and was formed, MDC almost garnered a majority in
inconveniences as are now being endured. But, parliament. In 2008, the party won both the pres- 28
Nelson Chamisa, the man who should have done idential and parliamentary elections but was
these things, has never had the gift of intellectu- denied State House power by the securocrats. CEO Legacies Vs Legacy
ality in abundance. The party, however, shared power with ZANU-PF Corporations PAGE 26
Chamisa, as his history shows, is a slow mover, in government from 2009 to 2013 and has split
who rarely gets it right the first time and is a more than five (5) times since its inception. The
MDC was formed from members of the broad

ZSE ASI 12,103.19 ZSE TOP 10 7,856.23 MEDIUM CAP INDEX 21,112.08 ZSE TOP 15 8,615.32 SMALL CAP INDEX 368,770.93 ZWL INTERBANK 115.4223
12,120.10 7,864.28 21,155.21 8,642.03 374,941.96 115.4223
12,079.74 7,817.52 21,233.64 8,601.70 381,675.40 115.4223
12,197.04 7,925.43 21,181.14 8,703.82 389,356.20 116.6500
12,257.96 7,989.13 21,115.71 8,763.66 380,011.86 116.6500
12,304.52 8,045.88 20,975.49 8,804.26 388,954.09 116.6500
2.41% -0.65% 2.19%
1.66% 5.47% 1.06%

Political Analysis 3The AXIS XIII - Friday 04 February 2022

2018 Elections Heatmap - By Election Constituencies

Battle Ground (Swing Constituencies) Analysis Notes

230% There are 5 battleground constituencies from the pend-
ing by-elections. For the ruling party ZANU-PF chances
are that it could retain Tsholotsho South. The other 4
constituencies are likely to be snapped by the opposition
CCC. The key battleground to defend for the opposition
is Mutasa South while for ZANU-PF, Tsholotsho South is
the constituency to defend. If the opposition snaps
Kwekwe Central it increases its tally in parliament by 1
seat. Regardless of the outcome of the election, ZANU-PF
will retain a majority in parly.

Parliamentary Seats Split Overal 2018 Results

MDC-T ZANU PF MDC-T
196 179
ZANU PF

99
100
88
62 78 70
57

41

2000
2005
2008
2013
2018

TOTAL 120 120 270 270 270 High Concentration of By-Election
Seats in opposition stronghold

Analytics By: Equity Axis Research
Data Provided by: Zimbabwe Human Rights Monitors Platform

Powered by

Political Analysis 5The AXIS XIII - Friday 04 February 2022

* From Page 2 party has had access to government and of Out of parliament, without any more legal battles
course government funding. His win at the top with Chamisa, Douglas Mwonzora will find him-
There is also a wider pool of other parties’ votes court on the land also delivered him to the party self useless to his purported backers. On the
to rob from. Its loss of the by-elections will see headquarters which is located along Nelson Man- electoral field, Mwonzora is certain to lose out-
the borrowed robs of the main opposition in par- dela Avenue in Harare. Even in defeat, Douglas side of his MDC constituency. He lost his
liament, being transferred to CCC. Effectively, Mwonzora and his party will certainly retain the Nyanga North parliamentary seat in 2013. In
this repositions the CCC formation, giving it party headquarters, but funding from government 2018, he got nominated to the Senate by the
room to articulate its alternative policy, debate will grossly narrow. MDC Alliance through proportional representa-
government policy and bargain more effectively The latter will dim his party’s hopes for a 2023 tion. It is likely that given Mwonzora’s move to
with ZANU-PF and government. These tacit comeback. Without government funding, the leave the MDC Alliance for a party that got
manoeuvres ahead of the 2023 election boost MDC will have to rely on donations and other barely 1% in the last election, his chances of
prospects for the CCC party. The party could fundraisings from its membership. With a dwin- securing a ticket to parliament are close to noth-
tactically capitalise on the regained mojo to ener- dled support base, if it all even exist and no seri- ing.
gise the base and perhaps win the election. ous value proposition to attract external funding, These outcomes will see MDC, just remaining in
the MDC will speedily wilt. If the allegation that name, at least up to 2023, following which the
As main opposition leader, Douglas Mwonzora, ZANU-PF was cosying with the MDC is true, it party will collapse. The only value which will be
whose mantra is that of rationale disputation has will only have been because the latter was of retained on the MDC brand post the next har-
been very accommodative to ZANU-PF, the party value to the former, in its quest to consolidate monised elections will be its properties, which
which he has vigorously fought for over 30 power against the real rival, the MDC Alliance, may eventually be leased as the party turns to a
years. now CCC. commercial venture.

As the main opposition on paper, Mwonzora’s

A vision on its and dedication
own is not is required to
enough. make that
Hard work vision a reality.

Strive Masiyiwa

Political Analysis 6The AXIS XIII - Friday 04 February 2022

The Politics of Frustration:

A Caricature of Zimbabwe’s Shrinking Democratic Space

In this long read, Equity Axis’ Editor, Raynold Douglas Mwonzora. The ascendance of Mwonzora to the presidency
Mhotseka explores the rise of “politics of of the MDC-Alliance, and the purging spree he
frustration” in Zimbabwe. He unpicks the Politics of Frustration embarked on recalling MPS and councilors loyal
enigma of the battle for control in the main to Chamisa – who were elected by the people,
opposition camp – which has seen a popular Just when we thought that the power squabbles expose some fundamental weaknesses in the
figure, Nelson Chamisa ends up forming his over leadership of the “MDC” have come to an application of the law.
political outfit, CCC. What effect do these rup- end following the formation of a new political While democracy is regarded, rather rhetorically
tures have on the country’s democratic space, and outfit by the Nelson Chamisa camp on Jan.24, as the “will of the people”, it was the courts (a
how will they affect the economic landscape? 2022, Douglas Mwonzora who himself is leading key pillar of democracy) that ruled that Chamisa
Where does ZANU-PF come in? a shaky political outfit as he has Thokozani was an illegitimate leader of the MDC-Alliance,
The last time Zimbabwe took to the polls in June Khupe to worry about over control of the despite having contested the 2018 elections and
2018, there was renewed hope that whoever wins MDC-T, dropped what other local media houses garnered over two (2) million votes according to
the presidential election will turn around the referred to as a “colossal bombshell”. official figures from the Zimbabwe Electoral
country’s political, economic, and social misfor- Mwonzora’s camp claimed that all candidates Commission (ZEC).
tunes. For the first in as many years, there was
no Robert Mugabe or Morgan Tsvangirai on the
ballot paper. Tsvangirai had succumbed to cancer
on February 14, 2018, while Mugabe was ousted
by his close lieutenants through a well-orchestrat-
ed military coup in November 2017.

He later passed away on September 6, 2019.

It was a contest between the incumbent, President
Emmerson Mnangagwa, and closest rival Nelson
Chamisa, who has since disputed the election
results, claiming that it was rigged.

As enthusiasm was high and both men promised who filed under Chamisa’s Citizens Coalition for So where does the will of the people stand?
“real” changes, voter turnout was also high. Fast Change (CCC) ahead of the March 26 by-elec- Well, nothing functions alone in a democratic
forward to 2022, as the country prepares for tions still belong to the MDC-Alliance. space, it is made up of various enabling factors
another presidential election in 2023, the environ- The MDC-Alliance’s secretary-general Tapiwa so this will not be the conversation of the day.
ment appears to be marked by a full relapse of Mashakada in that shocking, but typical This reference is only meant to give a brief high-
electoral anemia. The spark that lightened the announcement warned that these candidates risk light of how Mwonzora rose to the helm of the
political environment en route to the 2018 elec- disqualification and recall from parliament if they MDC.
tions has faded, understandably so, because of a win in the by-elections. Initially, the courts ruled in favour of Khupe as
confluence of factors key among them the unrest Whilst the term politics of frustration can be the legitimate leader of the MDC in a case
that has since characterised the opposition camp, easily associated with discontent among the elec- against Chamisa. Mwonzora jumped ship as he
specifically the Movement for Democratic torates with dashed economic expectations, and left Chamisa’s camp to join Khupe in a move
Change (MDC). patience wearing thin, in this context, politics of that seemed to have paid off for him as he went
The MDC, a party that was formed in Sept. 1999 frustration is regarded as a tool implored to on to defeat Khupe at a congress that was
on the grounds of labour union movements chal- weaken the strength of the opposition party. allegedly marred by controversies including
lenging Mugabe’s tyrannical rule and economic Different individuals and groups have varying claims of vote-rigging and use of scare tactics
mismanagement, has had a fair share of problems theories regarding events in the opposition camp, against Khupe and her allies.
dating back to the time Tsvangirai was the where some have alleged that the ruling party Judging from the most recent announcement by
leader. The likes of Tendai Biti and Welshman ZANU-PF is the architect, working with the likes Mwonzora’s camp that candidates who registered
Ncube formed their political parties, as a break- of Mwonzora to weaken Chamisa’s political for the upcoming by-elections under the Citizens
away from Tsvangirai’s camp. clout, however, I will not delve much into those for Coalition Change banner risk being recalled,
That precedence carried on after the passing on assertions, but Mwonzora is a key figure to talk it seems the man has not had enough.
of Tsvangirai. Chamisa who quickly moved to about. Is that all Mwonzora has to offer? Frustrating the
replace Tsvangirai as MDC-T president contested Biti, after the Supreme Court ruled against Cha- country’s democratic space by making sure that
the 2018 elections as leader of the MDC-Alli- misa, claimed that “The government is trying to the opposition camp remains unstable and direc-
ance. On the other hand, Thokozani Khupe who usurp our party.” tionless? Or does he have a legitimate claim,
was one of the vice presidents to Tsvangirai Mwonzora’s strategies make no ideological sense. justifiable within the boundaries of democracy?
upon his death contested the 2018 elections as His actions, supported by the likes of Morgan My view is no.
leader of the MDC-T. One could have easily Komichi, does little to suggest that he believe Ignorant of the will of the people, Mwonzora
thought that the “T” was for Thokozani, in what that he stands a chance to win the upcoming only appears to be an arrogant politician whose
would easily be another typical case of politics presidential elections. interest is to destabilise the political environment
of personalities that has crippled the opposition Komichi was once a Chamisa loyalist and fought for what seems a deeply personal vendetta
movement over the past years. to defend the citizens’ vote. On the eve of the against Chamisa.
As it turned out, that was not the case. The “T” presidential result announcement, he bravely Probably, as a successful lawyer, he thinks he has
is a continuation of Tsvangirai’s political party risked his freedom by declaring that the election a role to sanitize the country’s democratic space,
(MDC-‘T’svangirai) and not a new formation. result was fake. But the ideologies are now but the likes of Chamisa himself, Tendai Biti,
The MDC-Alliance won 88 National Assembly different. and Welshman Ncube are also lawyers. So, why
seats and 25 senate seats whilst MDC-T did not
win a single seat. *To Page 7
But Khupe wanted control of Chamisa’s camp –
the larger movement. In March 2020, the
Supreme court ruled that Chamisa was an illegiti-
mate leader of the MDC-Alliance and observed
that Khupe was the genuine acting president of
the party at the time of Tsvangirai’s death. This
was an endorsement of a similar ruling that was
given by the High Court in 2018. The Supreme
Court directed Khupe to convene an extraordinary
congress within three months to elect the party’s
new president. She lost the presidential contest to

Political Analysis 7The AXIS XIII - Friday 04 February 2022

*From Page 6 ned over and over again leading others to “We are putting citizens back at the centre,” he
become disinterested voters. said. “A new great Zimbabwe is being born. We
the wide divergence in political ideologies? It’s In addition, the increasing national focus on poli- have a new entity, a new organisation. We have
the game of politics, a power wrangle that does tics is also leaving the economic environment not left the past. The new baby is called Citizens
not have the people’s best interest at heart. properly attended. The politicians have moved Coalition for Change.”
beyond a competition of ideas and philosophies He should, however, not underestimate the impact
Consequences as far as solving the economic crisis is concerned that the current political environment can have on
and into a zero-sum game in which each side’s the 2023 election outcome and beyond.
The politics of frustration at play in the opposi- gain is the other’s loss. As the 2023 election mood kicks in, one thing is
tion camp is a plus for ZANU-PF. Whilst this clear: The citizens are frustrated. The national ire
may further weaken Chamisa who is by far the Chamisa’s Position relates to inequality, shrinking democratic space,
closest rival to President Mnangagwa – setting economic concerns, lack of electoral reforms,
the incumbent for victory in 2023, the effects of After garnering a massive number of votes in the gross human rights abuses, embezzlement of
dirty politics will outlast elections. 2018 presidential elections, Chamisa knows that public funds, corruption by top government offi-
The events that have shaped the country’s demo- he owes the people. He is answerable to the cials, and a fragile health system.
cratic space since the 2018 elections lower citi- people, and in the face of legitimacy challenges If the CCC faces any further attacks including
zens trust in the national government, causing and losing in the courts of law, as well as having the legitimacy of its candidates like Mwonzora
people to view it with hostility, skepticism, and a resourceful ZANU-PF to worry about, his hope has warned, the baseless battle over party
outright contempt. There is an increase in the is the people. colours, hurdles in securing adequate funding, I
belief that ZANU-PF wants a one-party state. At the announcement of the formation of the believe that at this rate, ED doesn’t need to seri-
What the politicians are creating is a governance CCC, he tried to demonstrate that this was a peo- ously campaign for renomination.
problem and this also dampens investors’ senti- ple-driven change.
ments on the country. The people’s commitment
to democratic norms and values is being weake-

Term of the week

RDe'ecfiongintiiotino:n lag refers to the time delay between when an •Because it takes time to measure economic activity –
economic shock occurs and when economists, central When economic processes begin to play out one way or
bankers, and the government realise that it has occurred. another, it takes time for analysts and government statisti-
The recognition lag is usually studied in conjunction with cal agencies to gather, analyse, and communicate the
implementation lag and response lag, which are two relevant economic and market data to policymakers.
other measures of time lags within an economy. Monetary authorities may not react immediately to
reports because initial estimates are often inaccurate or
Why recognition lag occurs: incomplete. Upward or downward movements in these
Recognition lag occurs for two main reasons, which are figures are sometimes temporary, reversing during the
next reporting period. This means additional time to cor-
•Because economic shocks, like any economic process, rect, refine, and interpret economic information is regu-
necessarily take time to play out - When an economic larly required.
shock initially occurs, its full significance may not be An example of recognition lag:
apparent for some time until after its aftereffects have During the Great Recession of 2007 to 2009, it emerged
played out through the economy (or not). For example, if that many European countries were saddled with huge
global oil prices rise sharply, it will take some time before government debts. Greece, in particular, was guilty of bor-
the cost of this is passed on to consumers and businesses rowing more money than it could make, although news of
throughout the economy and for any resulting economic the country’s massive deficit did not come to light until
damage to occur. 2010. The recognition lag enabled the problem to spiral
further out of control, putting at risk an entire continent
In addition, due to the inherent volatility, complexity, and and global trade flows.
uncertainty of economic processes and the human
element involved, the exact effects of any given shock can
never be fully predicted simply from the initial trigger.

Economic Analysis 8The AXIS XIII - Friday 04 February 2022

Cost Of Living-UP, Cost of Living Space-Down?

Z imbabwe has witnessed various transitions Zimbabwe has three categories of property At the same time, the cost of buying properties
in the currency market over the past two market, namely the upper market, the mid- and land has remained high despite the transition
(2) decades which eroded the confidence of dle-class market, and the lower-class market. The in the monetary system of the nation. This is pre-
the nation’s currency and monetary system. The typical example given above relates to the upper mised on the valuable and durable nature of the
transitions resulted in rampant inflation and con- market, which would differ when you shift to the non-depreciable asset. According to Madzima, it
tinuous changes in reporting currencies. The lower market. The PPA in the lower market is is rather difficult to control property pricing with-
inflation meant a devaluation of the nation’s cur- US$25,000 while average monthly rentals are out facilities like mortgages availed to the general
rency and an inconsistent money supply. Mean- US$230. This translates to a gross annual return public, as the pricing then follows more natural
while, Zimbabwe has fought tooth and nail in the on investment of 11%. Across the border, in avenues of demand and supply in conjunction
land distribution policies, implementing all sorts South Africa, annual returns on property invest- with available finance.
of measures to ensure accommodation availability ments range between 10%-22%. This then puts On a comparative note, South Africa’s posh sub-
to the masses. However, the need for accommo- the lower property market in the bracket of urbs like Sandton would cost you an average of
dation is still at a high level. regional average returns on property investments 13,000 Rand per month in rentals while the PPA
The two dynamics mentioned above have led to as South Africa ranks third in Africa’s residential stands at 1,000,000 and this translates to an
a tight demand for land, which has seen the cost real estate investment. annual return on investment of about 16%. The
of land growing to the highest levels in the con- On a mere upside, the property investment terrain lower market of South Africa would fetch you
tinent, while the currency distortions have in Zimbabwe historically used to rank among the 6,000 Rand a month in rentals for a property
impacted money supply, thereby allowing macro best in the region. This was during the USD era costing about 400,000 Rand. This translates to an
factors to outweigh demand in determining a as considerable foreign currency liquidity allowed annual return of 18%. South Africa boasts of one
realistic amount chargeable in rentals of the property owners to demand a fair return on their of the strongest currencies in the continent, with
scarce properties. The eroded currency has also investment. In a Herald publication in 2012, a few countries also being accommodated in the
worsened the devaluation of rental incomes in the Vengai Madzima, a property investment consul- Rand Monetary Area. This has exacerbated the
economy while demand to own the spaces has tant and analyst with Wisdom Properties, argued viability of most asset classes in the nation,
kept acquisition costs at a regional high. that “The economic hardships that our country including the property market as the currency has
According to Maslow, accommodation or shelter has been facing translate to a volatile pricing been stable for more than a decade.
is one of the first needs any human requires system of property with no real pattern to incre- The power of any currency determines the
before they are motivated by anything else. This, ments.” strength, efficiency, and viability of its asset
therefore, renders accommodation an inelastic “Idealistically in a stable and well-financed econ- classes. In a country where the currency is highly
element in the lives of citizens. The inelastic omy, real estate should have an ARI or IRR volatile, long-term asset classes or investments
demand is economically expected to render the (Internal Rate of Return) that falls between become highly risky and less appetizing while
market very viable. However, the case is stranger 13,5-15 percent. In Zimbabwe’s case, we find short-term investments bloom on the face of
than fiction in the Zimbabwe market. Returns on that our ARI percentages are all over the place. value-chasing.
real estate investments in the country sometimes Going as low as 5,17 percent and as high as The real estate sector in Zimbabwe has therefore
deviate around 3% annually, meriting on the 15,91 percent, there is a clear 10 percent differ- suffered a huge blow in the face of macro-eco-
macro factors mentioned in the first paragraph. ential as compared to an ideal 1,5 percent,” he nomic factors, along with the wake of Covid-19
In perspective, living in a posh suburb of Zimba- said. which has led to remote working and therefore
bwe, for example, Borrowdale, would fetch you The narrative has changed for the worst as resulted in more vacant commercial properties.
an average monthly rental of US$750 on a Prop- annual returns in the market now go as low as On the stock exchange, the real estate sector has
erty Price Average (PPA) of US$400,000. In a 1% in some sectors, with the differential percent- emerged as the worst-performing sector out of
year, the total rental payments would sum up to age remaining wide. However, in the dollarisation the total seven sectors, at a year-to-date loss of
US$9,000 which translates to a gross annual and multi-currency era, the market was quite -8.3%.
return of about 2.3%. Ceteris Paribus, the pay- viable as indicated by the publication cited The financials sector which houses banks trails at
back period on such a property investment would above. The rentals have since been eroded by the a loss of -0.3% over the comparable duration as
add up to an unrealistic 44 years and 5 months devaluation of the current reporting currency, the general public has lost the tinniest confidence
on gross returns. Does this mean the Zimbabwe along with the continued scarcity of foreign cur- in the banking and monetary system of the coun-
property market is non-viable? The correct rency. This has prompted property owners to try. These two points to a colliding factor, the
answer is “it depends”. charge rentals in line with the current money currency of any nation determines the viability of
supply, factoring in the scarce foreign currency its asset classes.
and the devalued local currency.

Economic Analysis 9The AXIS XIII - Friday 04 February 2022

Zimdollar’s Second Death Imminent?

I n November 2020, Zimbabwe’s government the country, since the stable dollar RTGS
ruled out adopting the U.S dollar as its attracted some foreign investm-
default tender again, saying it won’t repeat its ent. Statistical analysis shows tainable way to de-dollarize is to
past mistakes of abandoning the local currency. that increased dollarization had achieve and maintain macroeconomic
At the time, Secretary for Finance George Guva- advertently reversed the spiralling stability by keeping inflation low and
matanga told business leaders in Harare that effects of hyperinflation that stable. This should then coincide with a
“One of the biggest mistakes was dollarizing and were prevalent prior to flexible exchange rate to crowd in
removing our own currency. We will build the 2009, although inflationary private capital thereby improving the
economy on the basis of the Zimbabwe dollar”. pressures still continued, country's current account balance and
That year inflation peaked at 837% in July, a albeit at a slower pace. reversing fiscal deficits. The central
month after the RBZ introduced the foreign cur- However, dollarization wasn't an bank should then focus on conducting
rency auction system with the aim of improving entirely smooth ride for the country, institutional reforms that attract invest-
the availability of foreign currency to businesses, and there were consequential ment.
as well as to stabilize the Zimbabwean dollar. drawbacks. All monetary policy Now, the apex bank in the country has
Today, although Governor Mangudya insists that would be devised and implemented failed to institute economic fundamentals
“the country is not re-dollarizing and we need to in Washington DC, thousands of miles that support successful de-dollarization.
find a home for our currency”, the RBZ’s failure away from Harare. Further, Zimbabwe The RBZ has failed to keep inflation
to win confidence in the Zimbabwean dollar is became disadvantaged when trading with low and stable. The bank has rejected a
brazenly evident. The government is currently local partners. The inability to devalue the floating exchange rate and is yet to
facing a serious push by state workers who are currency at will to make goods and services implementing institutional reforms that
demanding U.S dollar salary payments. Now, cheaper in the world market, stifled foreign could potentially see sanctions lifted, or
bankers are also making it clear that they no investment. In 2019, Zimbabwe reversed course by foreign investment spurred.
longer want local currency payments, favoring reintroducing a new Zimbabwe dollar known as the Not only was the Zimbabwean Dollar
the greenback instead. For the second time in Real Time Gross Settlement dollar with the exchange prematurely introduced, but the govern-
two decades, particularly after de-dollarization, rate pegged at US$1: Z$2.5, outlawing the use of the ment tried to use excessive regulations
key players in the economy are starting to aban- U.S. dollar and other foreign currencies in June. Almost to force de-dollarization with limited
don the local currency again. It’s not just idealis- three years later, inflation in the new Zimbabwe dollars political will and without addressing the
tic to say that the currency has failed anymore! has been steep and rampant, and substantial use of the key factors that led to economic instabil-
What’s even more concerning is that it’s a given U.S. dollar as a black-market currency persists. ity pre-dollarization. Some of these
that this is quickly going to gain traction in all include high levels of money printing to
sectors of the economy. 25 fund subsidies and quasi fiscal activities,
On the 27th of January at the CEO Business high levels of corruption that feeds on
Meeting, the governor presented the State of 20 public funds and diminishes public trust,
Economy and Outlook for 2022 to the country’s high debt levels and institutional flaws
major business leaders. Only one person raised 15 on property rights.
their hand when businessman Nigel Chanakira In addition, the Covid-19 pandemic
asked 100 CEOs if they were willing to use the 10 resulted in an unprecedented economic
local currency. According to Mr. Chanakira, “we crisis which introduced a composite
can’t deny the reality. When you get the Zimba- 5 challenge for the government. Zimbabwe
bwean dollar, you spend it quickly. No one wants already had a delicate economy before
to save in that currency”, he told Bloomberg. 0 the pandemic exposed the RBZ’s fragile
Whether you are filling up your tank, eating at 80' 82' 84' 86' 88' 90' 92' 94' 96' 98' 00' 02' 04' 06' 08' 10' 12' 14' 16' 18' 20' macroeconomic de-dollarization founda-
a restaurant, shopping in a supermarket or buying GDP (current US$bn) tion. With access to the world market
vegetables from your average street vendor, restricted, the effect on the Zim dollar
there’s hardly any economic incentive to use the 25 was particularly damaging to a currency
Zim dollar. Moreover, the unstable inflation rate 20 that only works domestically.
discourages saving in the local currency. The 15 Without cogent efforts to address these
apex bank has failed to devise any effective eco- 10 economic fundamentals, de-dollarization
nomic stabilization tools and the market has was always going to be exorbitant and
reflected that since de-dollarization. 5 unrealistic. From an economic perspec-
0 tive, there is no doubt that the second
A trip down memory lane life of the Zimbabwe dollar is coming
80' 82' 84' 86' 88' 90' 92' 94' 96' 98' 00' 02' 04' 06' 08' 10' 12' 14' 16' 18' 20' to an end. It’s only a matter of time!
The Zimbabwe dollar, at its inception in 1980 -5 Whether or not to dollarize again, adopt
had an exchange rate that was ZW$1 to US$1.47 -10 a basket of currencies, or to potentially
However, by July 2008 its value had dropped to -15 join the Common Monetary Union, peg-
ZW$10 billion to 0.33 US$, fuelled by the sub- -20 ging the local currency to the Rand is a
stantial increase in money supply of ZW$20.5 discussion the monetary authority should
trillion which led to a hyperinflation. GDP growth (annual %) start having with business leaders. If
Zimbabwe dollar inflation reached an estimated done effectively and early, a rigorous
annual rate of 250 million percent in July 2008, 600 free-market oriented monetary policy
and many Zimbabweans had already begun to 500
adopt foreign currencies for transacting business. 400 *To Page 10
By the end of 2008, most of Zimbabwe’s busi- 300
ness community stopped accepting the Zimbabwe 200
dollar. 100
Harare officially dollarized on the 9th of April in
2009 and adopted a basket of multiple currencies 0
led by the United States Dollar and South Afri- 00' 01' 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' 12' 13' 14' 15' 16' 17' 18' 19' 20'
can Rand. The local market rejected the Zimba-
bwean Dollar and started using foreign currencies -100
hoping to stave off high inflation and stabilize its Inflation, GDP deflator (annual %)
economy.
Dollarization immediately worked to reduce infla- bWwhey De-dollarization is failing in Zimba-
tion and introduced some macroeconomic stabili-
ty, increasing Zimbabweans’ buying power and Empirical evidence from over 30 failed attempts to
realizing increased economic growth. Additionally, de-dollarize demonstrates that local currencies issued
long-term economic planning became easier for without years of sustained economic stability, fiscal
reforms, improved confidence in monetary authorities,
inflation targeting measures, foreign reserves and a flex-
ible exchange rate mechanism have all failed.
Economists and analysts alike agree that the most sus

Economic Analysis 10The AXIS XIII - Friday 04 February 2022

*From Page 9 has also exacerbated inflationary pressures in the market. However, the same employees can only
black market. access USDs on the parallel market. In fact,
shift away for the Zimbabwe dollar has the USD payment demands gaining momentum according to Zimbabwe Confederation of Public
potential to minimize market panic and pre-dol- Zimbabwean bank workers are threatening to go Sector Trade Unions President Cecilia Alexander,
larization economic damage level. on strike after their demands to be paid in USD “It was demonstrably clear that the exchange rate
were rejected. Leaders in essence offered them a distortions and the resultant inflation no longer
What happens next? once-off 61% annual pay rise which coincides allow for meaningful Zimbabwe dollar negotia-
with the annual inflation rate which stands at tions, hence the need to focus on USD being the
The RBZ has been bankrolling the auction 60.61%. currency that is ruling the market”.
system from external loans from the Africa According to Peter Mutasa, the general secretary
Import and Export Bank (Afreximbank). By May of the Zimbabwe Banks and Allied Workers Final Word
2021, Treasury publicized that the central bank Union, “workers have rejected that as nuisance
was in arrears of over US$1,7 billion to Afrexim- and will embark on numerous protest actions. Zimbabwe’s oldest operational broker, Imara
bank borrowed between December 2017 and The bankers are demanding a minimum of Edwards Securities told Bloomberg that the local
December 2020. The apex bank is currently US$900 a month. currency will be largely obsolete by the end of
struggling to clear a backlog of foreign currency Although Ralph Watungwa, President of the the year. Gift Mugano, executive director at
allotment which stood at US$270 million in Bankers Association of Zimbabwe says the wage Africa Economic Development Strategies says
October 2021. rise is meant to guide the industry on minimum “Dollarization is the ultimate outcome of a failed
pay standards, individual banks are still free to economic policy”.
In a real market, the fundamentals of demand decide on pay, the message is clear. No one The government will not have a choice but to
and supply would simply converge towards an wants the Zimbabwe dollar! cave to the demands of its state workers. The
equilibrium exchange rate. In this case, the Moreover, the call to be paid in greenbacks is ripple effect is already evident in the banking
weighted average exchange rate would simply also being echoed by the country’s biggest sector and will undoubtedly be propelled to other
depreciate until demand equalled supply. The employee, the civil servants. Government employ- sectors. The inefficiencies of the foreign currency
reality is that the auction simply does not have ees want to receive their income in the form of auction system are becoming more prevalent as
adequate funding to meet demand and is there- the greenback. The civil servants are justifiably the apex bank struggles to meet demand.
fore not a sustainable stabilization tool. citing loss of earnings and exchange-rate distor- The parallel exchange rate has almost doubled at
tions when paid in the local currency. US$1: Z$230 from US$1: Z$120 in January last
However, there is resistance by the RBZ to let The government currently employees over year. The official exchange rate is also crumbling
fundamentals play out citing fears of divergence 300,000 people with the lowest salary being at US$1: Z$115,42 from US$1: Z$6,32 when the
and inflation implications. One immediate conse- Z$18000, an equivalent of $155.97 on the official platform was first introduced in June 2020. The
quence of the widening gap between supply and market has completely lost confidence in the
demand is the rapid depreciation in informal local currency, the economy is rapidly dollarizing
market exchange rates which now approach and sooner than later, the central bank will capit-
US$1: RTGS$250. In contrast, the exchange was ulate to the market fundamentals.
relatively stable at about 1:100 for the first six
months of the auction. Therefore, while the SME
Auction is playing a key role in the economy, it

Principles For Successful Change Management

T he growth of technology employed, mana- Numerous bosses have wrecked their firms by any firm today
gerial styles adopted, and new processes cultivating a poisonous culture and refusing to if it does not have
being established in today's business promote change. The culture of a company is methods to manage
climate has resulted in both the success and fail- completely the responsibility of management. change in the organiz-
ure of some firms. Change is an important aspect Everything is in the hands of management, for ation. The graph below is
of business evolution and growth. Change affects better or worse. The organization loses if man- simply a representation of how
the ability of companies to innovate. Businesses agement does not believe in change. Nokia Cor- the firm performed dismally after
that are dogmatic tend to suffer, but those that poration, and Blackberry are two companies that 007. Market capitalization declined by
are open to adjusting and accepting new tech- have collapsed as a result of their failure to 667 per cent between 2007 and 2020. The
niques tend to succeed. Most managers are now handle change. Change necessitates the capacity value of Nokia shares declined,
championing change in multiple projects to stay to manage new technologies, the ability to merge affecting the number of shares issued. Nokia's
current in their industry and acquire a competi- to form a stronger organization, and a cultural lack of innovation cost investors’ money. An
tive edge. Even if change fosters creativity and shift. Nokia Corporation was plagued by exces- example like this demonstrates why management
leads to improved company prospects, it may sive bureaucracy, which hampered its capacity to should take change culture seriously.
harm employee morale. Employees who are operate. The corporation was so complacent and
accustomed to doing things in a specific way content with its success that it failed to see the The list of firms that have collapsed because of
may be resistant to change. Managers are now threat its competitors represented. Nokia was a their incapacity to handle change is seemingly
confronted with the task of determining how to market leader until 2013 when it lost its position infinite. Another well-known firm that used to
best manage change while incurring the least owing to bad management decisions and a lack design its own phones is BlackBerry. At one
amount of waste and cost. Managers can utilize of change inside the organization. When the point, the corporation was the most valuable
a variety of change models while managing majority of its competitors switched to the company in the world. In 2016, the company
change. Android operating system, Nokia switched to stated that it will stop designing its own phones
This article will only focus on Kotter's change Windows Phone as their principal operating and instead license them to partners. The compa-
management strategy. Kotter's eight-step model is system. The corporation suffered a major setback ny's primary business has changed from phone
a typical framework that managers may use to as a result of the relocation. Microsoft purchased manufacturing to investments in cybersecurity,
assist them to manage change. The method was Nokia's mobile devices and mobile devices. autonomous driving, and the Internet of Things.
one of the first to address change management. According to Interbrand, Nokia's worldwide The failure of Blackberry was due to an overem-
The model's purpose is to instil a sense of brand value has dropped to 98th rank in 2014, phasis on enterprise over consumer tastes and
urgency, recruit powerful change agents, create, from fifth place in 2009. The failure is mostly inclinations. The failure of BlackBerry was due
and effectively communicate a vision, remove attributable to inflexible management that did not to a failure to adapt. The management was so
bottlenecks, accomplish quick wins, and capitalize recognize the importance of change. Nokia is adamant about not adopting change culture
on the momentum. This review will look at how now primarily focused on technology items such because they believed the firm was impenetrable.
managers may use the Kotter model and other as networking and network security solutions.
concepts to successfully manage change and Nokia is no longer the cell phone manufacturing When firms like Samsung and iPhone invested in
enhance productivity, as well as limit risk and behemoth that it once was. This may happen to camera and touchscreen technologies, Blackberry
increase productivity. Modern examples of organi- felt no need to adjust. Businesses pay a high
zations that have succeeded and failed in imple- price for failing to evolve. Blackberry did not
menting change policies will also be investigated
to get a more objective and comprehensive con- *To Page 11
clusion about how to successfully manage
change. The negative examples should be avoid-
ed, while the positive examples should be emu-
lated.

Why Managers Usually Fail to Manage
Change

Business Review 11The AXIS XIII - Friday 04 February 2022

*From Page 9 CAs dominate Zim, SA business
executive roles
update its problematic operating system, and it neglected new tech-
nological advancements introduced by its competitors. Such prob- Potential
lems Blackberry was facing, should have warranted a change of CEOs
doing things but the management ignored it. These factors contribut-
ed to Blackberry's demise. The graph below illustrates that Black-
berry was a prominent market participant in 2009. The business con-
trolled almost 20% of the worldwide phone market. By 2016, the
market share had dropped to less than 1%. This is a giant's collapse
because of dogmatic management that refuses to implement new
policies. Many organizations fail due to an inability to alter culture,
a lack of input from lower levels of employees, and a concern with
immediate success, as in the case of Nokia, which forgot that the
strategy of the future need as well.

Companies

Chartered
Accountant

Planning And Implementing Change P oor financial management is a have a huge influence of Accoun-
key cause of business failure. tants at the helm. Accountants play
Companies should follow the stages suggested by Kotter's 8 step Inability to regulate funds, an important role in the business
change model for the optimum implementation of change in a compa- funds, failure to manage cash flow, world.
ny. The eight stages may be broken down into three easy steps. To and overall bad accounting manage- Africa’s top 250 companies in 2021:
begin, management must foster a change-oriented culture. Culture ment skills are all examples of this. Chartered Accountants in Zimbabwe
change promotes an increase in innovation. Following that, manage- To address this issue, corporations Every year, AFRICAN BUSINESS
ment should get opinions from the rest of the company on potential have hired accountants to occupy publishes a list of the top 250 Afri-
changes. Finally, the improvements must be implemented and main- key managerial positions. Reporting can firms. The African Business
tained. Many successful organizations in the world today have effec- is increasingly seen as an important Top 250 Companies study is the
tively utilized such measures. The Coca-Cola Company is just an aspect of managing a company's most comprehensive yearly assess-
example of a well-known company that has successfully used change day-to-day operations. Who better to ment of the health of African busi-
models. report current performance and fore- nesses. The data covers firms that
Coca-Cola efficiently adapts to its surroundings. Coca-Cola created cast future financial trends than are publicly traded on a stock
Diet Coke and Coca-Cola Zero (no sugar) after seeing that customers accountants? Company failure exchange and includes the top Afri-
are becoming more health conscious. Change management is an appears to be rare when handled by can and African-focused corpora-
important component of Coca-strategic goal. The organization is quick an accountant, hence many corpora- tions based on the total market
to respond, and it anticipates shifting trends and client preferences. tions are increasingly appointing value of their listed shares, known
The research and development staff are constantly talking with man- accountants as CEOs. as market capitalization.
agement about new market trends and innovations. Because lower The sums in local currency are con-
levels of management may easily provide comments on suggested This article focuses solely on the verted to US dollars. Delta Corpora-
changes, this culture at Coca-Cola makes it easier for the corporation business environments of Zimbabwe tion, Econet Wireless, CBZ Hold-
to execute change. This is one of the reasons Coca-Cola has been a and South Africa. ings, Innscor Africa, Cassava
market leader for so long. SmarTech (now Ecocash Holdings),
Business schools do not teach lead- Hippo Valley Estates, and Simbisa
Bottom Line ership. Leadership and professional Brands were among the Zimbabwe-
credentials are not the same thing. an firms on the 2021 list. The prior
To be successful, management should encourage organizational A tertiary education may not neces- year, 2020, only had two firms
change, which leads to innovation. Management must truly believe sarily ensure success. However, in (Delta and Econet). The other five
the importance of creating a climate for change. Huawei Technologies the case of South Africa and Zimba- are all newcomers. It is worth
is an excellent example of a company with a successful and bwe, being a chartered accountant is noting that three of the new entrants
long-term transformation culture. Huawei's management embraced the not a terrible idea if you want to are led by CEOs with a background
concept of transformation. The management team is constantly willing advance your career to a top mana- in chartered accounting.
to experiment with new ideas. Under the context of their change gerial position. According to the According to the graph below, the
culture, the organization values innovation. Before adopting something research of the Johannesburg Stock top 250 African firms had a total
new, management consults with general staff members and solicits Exchange CEO profile, 52 percent market valuation of $598 billion in
opinions. This has resulted in fewer project failures and lower costs. of the corporate executives are certi- 2020. In 2021, market capitalization
To gain the best results from change management, managers must fied, chartered accountants. climbed by 16% to $710 billion.
communicate, lead, and engage other stakeholders. Change models What is notable about the growth in
such as Kotter's 8 stages are also critical if implemented consistently In the case of Zimbabwe, four out market capitalization of Africa's top
by management. of seven of the companies that made 250 firms is that most new members
the top 250 business in Africa list on the list are overseen by chartered
are managed by Chartered Accoun- accountants. Seventy-five percent of
tants. This is not a coincidental the new entries on the list are led
occurrence. Chartered accounting by CEOs who are chartered accoun-
CEOs are making strides in the tants. It is reasonable to believe that
industry. The remaining is distribut- the accounting expertise and finan-
ed among a pool of additional quali- cial reporting abilities possessed by
fied candidates. This demonstrates these CEOs contributed to the over-
that many JSE-listed businesses all increase in the market capitaliza-
prefer to have chartered accountants
at the leadership of company deci- *To Page 14
sion-making. The best performing
businesses in Zimbabwe seem to

Business Review 12The AXIS XIII - Friday 04 February 2022

*From Page 14 climbed by 16% to $710 billion. What is nota- Chartered Accountants in SouthAfrica
tion of the top 250 firms. bleabout the growth in market capitalization of
Africa's top 250 firms is that most new mem- According to a Robmormox study, 38% of the
Africa’s top 250 companies in 2021: bers on the list are overseen by chartered country's CEOs are Chartered, Accountants.
Chartered Accountants in Zimbabwe accountants. Seventy-five percent of the new Over a quarter of the directors of the top 200
entries on the list are led by CEOs who are businesses on the JSE by market capitalization
Every year, AFRICAN BUSINESS publishes a chartered accountants. It is reasonable to believe are chartered, accountants. Three of South Afri-
list of the top 250 African firms. The African that the accounting expertise and financial ca's top five banks are led by chartered accoun-
Business Top 250 Companies study is the most reporting abilities possessed by these CEOs con- tants as CEOs. Absa, Nedbank, and First Rand
comprehensive yearly assessment of the health of tributed to the overall increase in the market are the three banks in the big5 SA-banks led by
African businesses. The data covers firms that capitalization of the top 250 firms. chartered accountant CEOs. During the 2008
are publicly traded on a stock exchange and Chartered Accountants make excellent CEOs for economic slump, no South African bank
includes the top African and African-focused a variety of reasons. A CEO with accounting- collapsed, and no bank sought a credit crunch
corporations based on the total market value of and auditing competence can effectively guide a bailout. Most of the banking industry was run
their listed shares, known as market capitaliza- company to be financially sound. Company per- by chartered accountants. Such fortitude during a
tion. formance is expressed in financial terms. Stock slump like that may have persuaded more direc-
turnover, for example, is a measure of perfor- tors to choose additional chartered accountant
The sums in local currency are converted to US mance. Those ratios can then be applied to the CEOs.
dollars. Delta Corporation, Econet Wireless, CBZ firm by a chartered accountant. Many firms con-
Holdings, Innscor Africa, Cassava SmarTech trolled by chartered accountants are more con- Conclusion
(now Ecocash Holdings), Hippo Valley Estates, cerned with reporting as a guide to decision
and Simbisa Brands were among the Zimbabwe- making. Aside from knowing tax filing, accoun- To be a successful CEO, one must be the proper
an firms on the 2021 list. The prior year, 2020, tants do a thorough examination of a company's fit for a company and have the necessary leader-
only had two firms (Delta and Econet). The finances and develop a projection for the fore- ship skills. It is critical to maintain contact with
other five are all newcomers. It is worth noting seeable to keep the company running smoothly. staff to keep consumers pleased. That is some-
that three of the new entrants are led by CEOs Because finances are at the heart of the organi- thing that no degree or certificate can teach.
with a background in chartered accounting. zation, having a chartered CEO makes perfect Regardless, many businesses are increasingly
sense. Chartered accountants bring to the table a using preexisting Accounting Knowledge as a
7C5COC%OHMUOAPNFRATTTNRHEIIREEEESSNDOWEAWNECRTCEEHONEUMTTRNAOATNPNAATN2GS5TE0OSDAFBFRYICAN $710 BILLION disciplined and intelligent approach to business. yardstick for effective executives. Companies are
Many Chartered accountants achieve success as increasingly seeking Chartered Accountants to
$598 BILLION CEOs because of this understanding combined serve as CEOs. This does not imply that it will
with analytical skills. The modern CEO's posi- result in success. Because they are educated to
2020 2021 tion may have evolved slightly from deci- maintain organizations financially stable, Char-
sion-making to report-making. Old Mutual Zim- tered Accountants have a competitive advantage
TOTAL MARKET CAP AFRICAN COMPANIES(BILLIONS USD) babwe Limited is one such case. Most critical over other professions. This provides them with
decisions are often delegated from the parent a competitive advantage. Business success is
According to the graph, the top 250 African corporation in South Africa. The CEO in Zimba- judged in financial terms, thus CEOs who have
firms had a total market valuation of $598 bwe will be responsible for organizational report- chartered accountants have an advantage over
billion in 2020. In 2021, market capitalization ing. The CEO of Old Mutual Zimbabwe is a those who have not been schooled in the
chartered accountant, which is advantageous. As accounting field. The rise in the number of char-
a result, current CEOs are more focused on tered accountant CEOs has resulted in commer-
reporting than on decision-making. The board in cial success, and many organizations are capital-
such cases makes the most important decision izing on this trend by recruiting chartered
based on the reports accumulated by the CEO. accountant CEOs. The degree of success that
CEOs have purchased is staggering.

Technology Review 13The AXIS XIII - Friday 04 February 2022

The Growing Need
to Beef-Up
Zimbabwe's
Cybersecurity

Cyberspace Overview

As is the case with all property, a perceived
value associated with an item presents a
need for its protection from known,
unknown and potential harm. From this point
of view, cybersecurity can be described as
the collective effort to safeguard systems and
assets held online as well as those residing
in digital platforms from active and passive
dangers with a shared ability to bring about
undesirable loss of digital property.
Cyber-attacks can therefore be viewed as any
attempts to access or manipulate a set of
digital property which one doesn’t own or
have permission to access. Within the con-
text of a regulated environment, this
becomes a cyber-crime attributable to a
machine acting on behalf of a human.
Two immediate implications of cyber threat
exposure are:
• The need for a legal framework that pro

motes a threat-free cyberspace. Such a
framework would work hand-in-glove with
• Administrative procedures and technolo
gies within public and private organisa
tions as well as downstream at individual
and household level - empowered by the
enacted laws of a country.
But in the case of Zimbabwe where the
highest form of legislative backing in the
country’s cyberspace is the Data Protection
and Cybersecurity Bill of 2019, yet to be
enacted as a law, the responsibility of cyber-
security lies only in the hands of owners and
handlers of digital property.
However, any technical efforts to prevent or
minimise the downsides of cyber-attacks can
be guided by international best practices and
established safety nets such as the data
privacy and protection-oriented Global Priva-
cy Assembly principles of 2020 as well as
Europe’s seal-tight General Data Protection
Regulation enforced in 2018. These don’t
have legal backing beyond Zimbabwe’s bor-
ders but are still solid case studies for early
*To Page 16

COVID-19 Data 14The AXIS XIII - Friday 04 February 2022

Daily new confirmed COVID-19 deaths Daily new confirmed COVID-19 deaths Daily new confirmed COVID-19 cases

For some countries the number of confirmed deaths is much lower than the true number of deaths. This is because For some countries the number of confirmed deaths is much lower than the true number of deaths. This is because 7-day rolling average. Due to limited testing, the number of confirmed cases is lower than the true number of
of limited testing and challenges in the attribution of the cause of death. of limited testing and challenges in the attribution of the cause of death. infections.

70 Zimbabwe 500 South Africa 4,000 Nov 16, 2020 Zimbabwe
60 Nov 16, 2020 Feb 24, 2021 Jun 4, 2021 Sep 12, 2021 Feb 2, 2022 400 Namibia 3,000 Jun 4, 2021 Sep 12, 2021 Feb 2, 2022
50 300 Zimbabwe 2,000
40 200 Malawi 1,000
30 100 Botswana
20 Zambia 0
10 0 Mar 25, 2020
Mar 25, 2020 Nov 16, 2020 Jun 4, 2021 Sep 12, 2021 Feb 2, 2022
0
Mar 25, 2020

Daily new confirmed COVID-19 cases Daily share of the population receiving a COVID-19 vaccine dose Daily share of the population receiving a COVID-19 vaccine dose

7-day rolling average. Due to limited testing, the number of confirmed cases is lower than the true number of 7-day rolling average. All doses, including boosters, are counted. 7-day rolling average. All doses, including boosters, are counted.
infections.
Botswana
20,000 Namibia

0.6%

0.4%

0.5%

15,000 0.3% 0.4%

0.3%

10,000 0.2%

0.2%

5,000 0.1%
0
Mar 10, 2020 South Africa Zimbabwe 0.1% South Africa
Botswana 0%
Zambia 0% Jun 4, 2021 Jul 24, 2021 Nov 1, 2021 Feb 2, 2022 Feb 17, 2021 Jun 4, 2021 Jul 24, 2021 Nov 1, 2021 Zimbabwe
Zimbabwe Feb 19, 2021
Namibia Malawi
Malawi Feb 2, 2022

Nov 16, 2020 Jun 4, 2021 Feb 2, 2022

Share of people who received at least one dose of COVID-19 vaccine Share of people who received at least one dose of COVID-19 vaccine Daily COVID-19 tests per thousand people

Total number of people who received at least one vaccine dose, divided by the total population of the country. Total number of people who received at least one vaccine dose, divided by the total population of the country. The figures are given as a rolling 7-day average.

Zimbabwe Botswana 0.8

25% 0.7

20% 40% 0.6
30%
20% South Africa 0.5
Zimbabwe

15% 0.4

0.3

10% Zimbabwe
tests performed
0.2

5% 10% 0.1

0% 0% Malawi 0 Nov 16, 2020 Feb 24, 2021 Jun 4, 2021 Sep 12, 2021 Jan 31, 2022
Feb 18, 2021 Feb 16, 2021 Zambia May 13, 2020

Jun 4, 2021 Jul 24, 2021 Nov 1, 2021 Feb 2, 2022 Jun 4, 2021 Jul 24, 2021 Nov 1, 2021 Feb 2, 2022

Case fatality rate of COVID-19 Case fatality rate of COVID-19 Number of COVID-19 patients in hospital

The case fatality rate (CFR) is the ratio between confirmed deaths and confirmed cases. The CFR can be a poor The case fatality rate (CFR) is the ratio between confirmed deaths and confirmed cases. The CFR can be a poor
measure of the mortality risk of the disease. We explain this in detail at OurWorldInData.org/mortality-risk-covid measure of the mortality risk of the disease. We explain this in detail at OurWorldInData.org/mortality-risk-covid

30% 30% 140,000
120,000
100,000 United States

25% 25% 80,000
60,000
20% 20% 40,000
20,000
15% 15%
0
10% 10% Mar 2, 2020 Aug 8, 2020 France
5% Spain
5% Zimbabwe 0% Malawi United Kingdom
0% Jun 4, 2021 Sep 12, 2021 Feb 2, 2022 Mar 23, 2020 South Africa Canada
Namibia Israel
Mar 23, 2020 Zimbabwe Switzerland
Botswana Denmark

Nov 16, 2020 Jun 4, 2021 Feb 2, 2022 Feb 24, 2021 Feb 2, 2022

Nov 16, 2020

Number of COVID-19 patients in intensive care (ICU) Number of COVID-19 patients in hospital, Feb 3, 2022 Daily new confirmed COVID-19 cases per million people, Feb 2, 2022

7-day rolling average. Due to limited testing, the number of confirmed cases is lower than the true number of
infections.

25,000 United States
20,000
15,000 France
10,000 Germany
Spain
5,000 Italy
0 Canada
Mar 1, 2020 Aug 8, 2020 United Kingdom
Belgium
Israel
Netherlands

Feb 24, 2021 Feb 2, 2022 No data 0 200 500 1,000 2,000 5,000 10,000 20,000 50,000 No data 0 10 20 50 100 200 500 1,000 2,000 5,000

COVID-19 15The AXIS XIII - Friday 04 February 2022

From Pandemic to Endemic: have an expected and anticipated the region is moving towards a kind
number of cases over a time period of pandemic endgame,” Kluge told
in a geographical region.” news agency AFP in an interview,
Is Humanity Triumphing Against Covid-19? Mike Ryan, executive director of the adding that Omicron could infect 60
WHO’s health emergencies pro- percent of Europeans by March.
Governments around the globe gramme, recently noted, “Endemic
are starting to loosen corona- disease, elevated natural immunity in itself does not mean ‘good’. He said Europe could expect months
virus restrictions, prompted to and with new pill-based treatments, Endemic just means ‘it’s here forev- of global immunity once the current
some extent by public exhaustion such as Paxlovid, developed by er’. When authorities decide to tran- wave subsides due to the vaccines
with lockdowns, masks and Pfizer. sition to treating a disease as or the infection. “We anticipate that
social-distancing. It’s a risky deci- The risk is that a more severe vari- endemic, it sometimes affects the there will be a period of quiet
sion. Yet, evidence that omicron is ant could emerge. Hence why the measures that were previously before COVID-19 may come back
less deadly than previous variants World Health Organization says it is implemented during the pandemic towards the end of the year, but not
compounded by the high vaccination too early for countries universally to stage. necessarily the pandemic coming
rates, plus the reality that measures lower their guard — some are ready back,” Kluge said.
to control its spread have largely to, others are not, particularly devel-
failed calls for Covid-19 policy oping countries with relatively low Is COVID-19 transitioning The key thing is to reduce the emer-
changes, at least in some parts of vaccination rates. Unfortunately, vac- to an endemic disease? gence of new variants is to ensure
the world. The message rippling cine hesitancy and misinformation that we optimise vaccination pro-
throughout the U.S, Europe and even still exist, some of it politically mo- grammes globally. Rates of vaccina-
parts of Africa is that Covid-19 is tivated. This obstacle is likely to Any potential transition would vary tion against COVID-19 have
moving from a pandemic to an disrupt the transition towards from country to country, depending remained low in Africa, with about
endemic phase. endemic status as that largely hinges on several factors such as how eight percent of the continent’s pop-
Over two years into the pandemic, on a simultaneous increase in both widespread the disease is within ulation fully vaccinated against the
some countries have declared their vaccination and infection rates national borders and the level of disease.South Africa now has a new
intention to start treating COVID-19 amongst other factors. immunity within the population. vaccine manufacturing facility, situat-
like other endemic diseases, such as As covid enters its third year, the According to the United Nations, ed at Brackengate Business Park in
the seasonal flu. Despite witnessing virus has taken a horrific toll. More two out of three people have been Brackenfel. It is the first facility in
relatively high infection rates amid than 5.7 million lives lost globally, vaccinated with at least one dose in the country to offer end-to-end man-
the frenzied spread of the Omicron economies battered, businesses high-income countries. However, in ufacturing for COVID-19 vaccines.
variant, countries including South closed forever, mass layoffs, lost low-income countries, one in nine We need to keep making new vac-
Africa, Denmark, Spain, Malawi school years, widespread mental people have been vaccinated with at cines, and understanding how long
England and Ireland have drastically health issues and families disrupted. least one dose as of January 19. For that immunity lasts. We also need to
loosened restrictions on public life. The Omicron variant continues to policy to transition from pandemic scale up the production of every
Denmark has announced plans to lift cause surges of infection, which to endemic world-over, vaccination tool that we have, antivirals, testing,
all restrictions next week, as its have increased pressure on public rates have to be equitable. Vaccine monoclonal antibodies, and make
health ministry announced that health systems. According to the inequality will not only result in a sure they are widely accessible.
COVID “will no longer be catego- WHO, 21 million new coronavirus prolonged transition but also affects
rised as dangerous to society. ”Offi- cases were reported globally last the speed at which global supply
cial messaging from political leaders week, the highest number of weekly
in Spain, the United Kingdom, and infections since the pandemic began. chains and economies can loosen up. Zimbabwe’s Covid-19 Status
elsewhere has stressed that societies Last year, these statistics would
need to learn to live with the virus. have been catastrophic. However, Dr Amesh Adalja, of the Johns
According to Sajid Javid, the UK vaccination rates are now signifi- Hopkins Centre for Health Security
health minister, “COVID is not cantly higher, and more people are recently iterated that “Once As at 03 February 2022, Zimbabwe
going away. It’s going to be with us developing natural immunity as a COVID-19 loses that ability through had 230,170 confirmed cases,
for many, many years, perhaps consequence of high omicron infec- enough immunity … I think the including 220,355 recoveries and 5
forever, and we have to learn to live tions. world is going to get to endemicity, 357 deaths. To date, a total of
with it, “I think we are leading Meanwhile, much of the developing but it’s going to be on different 4,281,905 people have been vacci-
Europe in the transition from pan- world has not been fully vaccinated timelines depending upon where you nated against COVID-19.
demic to endemic and we’re leading against COVID, increasing the
the way in showing the world how chances of more severe disease are at,” he added. As the omicron variant continues to
you can live with COVID”, he said. among them. Low vaccination rates According to Adalja, endemicity is hit Zimbabwe, multiple impacts have
This week, the South African gov- in these countries also make the inevitable in the case of COVID. “I been evident. However, despite the
ernment announced sweeping chang- emergence of a new variant more think that from the very first day in global concern about the potential
es to many of the remaining likely, derailing attempts to treat the COVID-19 pandemic, it was spread of what may be a highly
COVID-19 regulations. From now COVID as endemic. always going to be the case that this transmissible, immune-escaping vari-
on, anyone without symptoms can became an endemic respiratory ant, things on the ground have been
continue to live life as normal. What does endemic mean? virus”. “Omicron has accelerated very different.
Anyone who comes into contact this process … we are basically at
with a COVID-positive person and The United States Centre for Dis- the cusp of endemicity and it may
has no symptoms can also continue ease Control and Prevention (CDC) be the case that after Omicron surge And now that the omicron wave has
as normal. No testing. No isolation defines endemic “as the constant washes over the countries of the peaked in Zimbabwe, our experience
The scientific consensus suggests presence and/or usual prevalence of world, we will be clearly in the coincides with the global narrative;
that covid will be with us for a long a disease or infectious agent in a endemic phase,” Adalja added. a huge rise in infections that has not
time and the world will just have to population within a geographic been matched by a commensurate
live with it. That should be easier area”. spike in hospitalizations and death.
with rising vaccination levels, which According to Dr Ebere Okereke, an How close is the world to Besides the abrupt lockdown mea-
at least offer protection from serious honorary senior public health adviser exiting the pandemic phase? sures in December in an effort to
to Africa CDC, one key factor is curb the spread of the variant, the
“predictability and stability”. In There is a consensus among most country has largely been unaffected
public health [during endemicity] we health experts that the way of by the new variant. Hospitalizations,
ending this pandemic is by making new cases and new deaths are on a
vaccines and treatments available on decline as vaccination rates continue
a global scale. Hans Kluge, the to climb. However, Zimbabwe is
WHO Europe director, said on still considerably far from endemic
Sunday the Omicron strain has status, just like most African coun-
moved Europe into a different stage tries.
of the pandemic. “It’s plausible that

Did you know? Mining operations at Mimosa The proven and probable ore
platinum mine began in 1926 reserves at the Mimosa plati-
Owned by Mimosa Mining and two vertical shafts were num mine as of December
Company, a joint venture be- sunk with trial mining starting 2018 were 152.7Mt with 6E
tween Sibanye-Stillwater and in 1966 when 40,000t of plati- PGM graded at 4.2g/t. Con-
Impala Platinum, Mimosa is num was processed. tained resources are estimated
the oldest platinum mine in to be 20.8Moz of 6E PGM.
Zimbabwe.

COVID-19 16The AXIS XIII - Friday 04 February 2022

*From Page 13 deployment of protection or some form of a ty at the forefront, effectively minimising risks
cybersecurity adopters and data protection enthu- counter-attack; related to human errors. Adaptable and compe-
siasts in Zimbabwe. • Treating cybersecurity as an ongoing concern tent software is likely to come at a premium, but
An increasingly digital Zimbabwe as opposed to a once-off issue. such investments outweigh potential data loss in
With Zimbabwe’s banking sector as a posterchild From a management point of view, this may the long-run.
of digital transitions, more so in a 2020-2021 involve:
peak COVID-19 period, the development of digi- Parting Thoughts
tal platforms to: • Organisation or regular participation in cyber-
1. Facilitate commercial transactions for the con security workshops to stay informed about the Understandably, the idea of stepping into the
latest cyber developments and loss prevention cybersecurity space as an individual, organisation
venience of customers and measures recommended and practiced worldwide; or country as a whole may seem overwhelming
2. Expand earning capabilities of a business • Financial investment in data protection hard- at first but it’s a necessary journey in an increas-
have come with a responsibility to maintain ware as a data reserve; ingly digital and interconnected world – more so
privacy of sensitive customer data. • Creating clear operational frameworks for data at a microeconomic level in an age of “the inter-
In the wrong hands, customer data could easily management and penalties in the event that these net of things”.
become a bargaining chip for financial compen- aren’t followed. Perhaps a more palatable approach would be one
sation in a cyber-attack. But as Zimbabwe’s cyberspace evolves and soft- similar to the insurance industry where the cost
Pending local legislative developments, data pro- ware engineering skillsets improve, what’s of risk aversion and managing unforeseen risks
tection can be as simple as: known as “Data Protection By Design” should is less than the potential loss that could be
• Educating people on the range of issues cyber- increasingly play a leading role in Zimbabwe. incurred if no buffer is in place at all.
security covers to be able to identify existing With this system in place, sector-specific vulner- In the unchartered digital terrain that lies ahead,
and incoming threats; abilities can be addressed at a foundational level, gambling with digital assets through inaction or
• Outsourcing reputable cybersecurity services to meaning that hardware used for interactions with inadequate investments directed towards cyberse-
cut the time lag between threat identification and online platforms automatically places data securi curity and data protection will simply lead to
heaps of immediate and mid-to-long-term conse-
quences.

1 Feb 2022 ZPC Status

1-Feb-22 808 MW 0 MW
ZPC

(Gigawatts)

386 MW

25 MW

0 MW

Non-Renewable Renewable

Transparency International - Corruption Perception Index Zimbabwe

24

23

22

21

20

2012 2014 2016 2018 2020 2021

100very clean

88

61
53

23
11

0 highly corrupt

Economic News 18The AXIS XIII - Friday 04 February 2022

Credit to agriculture, all sectors soars, but… have started seeing growth prospects where agri-
culture is concerned, hence the desire to have a
L ending to the agriculture sector in Zimba- financial organisations, and conglomerates wid- slice of the cake too.”
bwe by commercial banks grew by 233% ened by 173% to a total of ZW$170.984 billion “This might also see a continued recovery in the
year-over-year to ZW$48.945 billion in compared to ZW$62.620 a year earlier. agric-sector, which will contribute positively to
November 2021 compared to ZW$14.705 billion “Credit to the private sector was mainly extended the economic rebound,” she added.
in Nov. 2020, as the country tries to scale up towards agriculture, 28.62%; households, 23.39%; However, there are various arguments to be made
productivity which has been lagging for the last distribution, 12.28%; manufacturing, 11.33%; for the widening value in lending activities. It is
couple of years. financial organizations, 9.98%; and mining, worth noting that the increase in loans and
6.32%,” stated the report. advances also comes on the back of continuous
The Reserve Bank of Zimbabwe (RBZ) monthly An increase in commercial lending to the agricul- depreciation of the local currency which has, in
economic review data shows that there has been ture and other productive sectors is a welcome the process, kept inflation at worryingly higher
a sustained increase in banks' appetite to lend to move as far as prospects for economic growth levels.
the agriculture sector ahead of other sectors like are concerned. Whilst annual inflation closed 2021 much lower
construction, mining, services, communication, According to Equity Axis’ agriculture correspon- at 60.74% compared to 348.6% in 2020, price
manufacturing, transport, and distribution. dent, Faith Nyaude, “The increase in lending to pressures remain high in line with the continued
the agricultural sector is indicative of the positive decline of the local currency against the U.S
Following agriculture is lending to individuals at sentiments among farmers and interested stake- dollar, which points to waning confidence in the
ZW$40.009 billion, which was up 405% from holders. Following the bumper harvest recorded currency. This has heightened calls for re-dollari-
ZW$7.919 billion in November last year. during the 2020/2021 agriculture season, many sation in the country.
The government remains confident that the econ-
Overall, loans and advances to all the sectors omy is on the right trajectory and has since
which also include finance and investments, dismissed prospects for the scrapping of the local
currency, like what happened in 2009. Finance
Category Total as of November 2021 ZW$ (000) Annual % Change and Economic Development Minister Mthuli
Agriculture ZW$48,945,526.55 233% Ncube is on record saying that the government
Individuals ZW$40,009,482.19 405% will not adopt the U.S. dollar as the sole curren-
Distribution ZW$20,998,777.03 106% cy, arguing that this could lead to a shortage of
Manufacturing ZW$19,372,274.14 160% foreign currency and deflation.
Financial Organisations ZW$16,621,266.44 76% The country’s GDP is projected to have grown
Mining ZW$10,802,887.56 58% by 7.8% in 2021, according to the Ministry of
Distribution ZW$8,904,904.88 112% Finance. The positive economic growth is
Transport ZW$2,882,220.06 201% anchored on a 2020/21 bumper harvest on the
Construction ZW$1,598,923.06 189% back of favourable rain patterns and firm com-
Financial and Investments ZW$434,931.56 1530% modity prices that have seen several mined prod-
Communication ZW$394,575.79 32% ucts reach historical highs during the pandemic.
Total ZW$170,984,044.50 173% Meanwhile, the manufacturing sector is enjoying
the larger chunk of forex allocations on the
Sectoral Analysis of Commercial Banks Loans and Advances. Source: RBZ RBZ’s weekly foreign currency auction market as
the government tries desperately to save the
economy from collapse.

Climate transition adds to mounting Netflix.
inflationary pressures Adding support to households’ buying power are the
stimulus checks and other pandemic-related aid that
major economies like the US rolled out to support
families during the pandemic.
On the other hand, while the increased demand might
not be too bad for inflation on its own, the global
economy also had to deal with significant supply
chain problems tied to the Covid-19 pandemic. This
has the effect of driving up the cost of production
and reducing the supply of goods, also pushing up
prices.

As the global leaders met at the COP26 increase in consumer spending on durable goods, a Impact of Climate Transition on Infla-
Climate Summit in November 2021, one bigger rise in core consumer goods prices, and clear- tion
object was of particular emphasis; defining the er evidence of rising services and wage inflation.
global solutions to the climate crisis already affecting US consumer inflation hit 6.8% in November 2021 – According to a recent report by Bridgewater Associ-
many countries. Nations, corporates, and influential the highest annual increase in 39 years. The eurozone ates, an American investment management firm
individuals have made various pledges towards the recorded its highest inflation rate since the monetary founded in 1975, the climate transition adds to
net-zero carbon emissions drive. union at 4.9%, with German inflation at a 29-year mounting inflationary pressures.
high of 5.2%. “Stepping back, the task ahead to transition the
The efforts come at a time when the world is In Zimbabwe, annual inflation peaked from 50.2% in global economy away from emitting carbon and
battling the coronavirus (Covid-19) pandemic which August 2021 which had marked a 14-month succes- toward green energy is enormous and quite likely to
has brought biting economic consequences. The sive decrease since July 2020 to 51.5% in Sept. exacerbate inflationary pressures,” the report stated.
Covid-19 induced recession that kicked in 2020 was 2021. The year-on-year inflation continued on an The analysis is based on the consideration that previ-
followed by inflation gains in 2021, as world nations upward trajectory from 54.5% in Oct. 2021 to 58.4% ous energy transitions tended to be driven by the
began to implement economic recovery models. and 60.7% in November and December respectively. development of new energy sources that unfolded
About global inflation dynamics, two basic reasons over long periods as economic actors gradually chose
The global inflation shock intensified towards the end are stoking inflation: supply and demand. Starting to build capacity using newly available and cheaper
of 2021as annual inflation rates for many of the larg- with the latter, consumers are on a spending spree
est economies climbed to their highest levels for after having spent most of 2020 at home bingeing on * To Page 19
years or even decades. The US stands out among the
major developed economies that have seen a larger

Economic News 19The AXIS XIII - Friday 04 February 2022

*From Page 18 The most extreme example has been in Europe. The now the global leader in both.
continent is home to the largest emissions trading In the US, free-market ideologies have often con-
energy options, making these transitions deflationary. schemes in the world, and many countries proactive- strained such policies, though growing competition
By comparison, the green energy transition is intend- ly restricted energy supply from coal and nuclear with China is gradually changing this narrative (for
ed to rapidly replace existing energy sources with sources. example, advanced energy technologies was one of
new ones, turning over the world’s energy base over Bridgestone noted that as rising energy prices started the focus areas designated in the US Innovation and
about 30 years (most countries have pledged to reach to bite in 2021, it prompted widespread questions Competition Act, designed to compete with China).
net-zero carbon emissions by 2050). around how climate change can be tackled in a polit- However, coordination is still low to transition the
“Achieving a shift of this scale is likely to be infla- ically palatable way. global energy system rapidly. Instead, there are large
tionary as proactive spending to transition existing “European governments have stepped in to offset divergences between policies across players and
energy capacity adds marginal spending into already rising energy costs for the most vulnerable house- regions.
hot economies, and many of the proposed mecha- holds, and some businesses that are unprofitable at It should be noted that as the world gradually transi-
nisms to accelerate such replacements are inherently high energy prices were forced to stop production,” tion away from carbon-intensive energy sources, it
inflationary,” Bridgewater said. said Bridgestone. will need a massive amount of other commodities
There is little doubt that climate change represents Meanwhile, in the US, the Biden administration is like iron, copper, and nickel to build the renewable
one of the greatest societal and economic challenges trying to curb climate change through GreenMP3 power grid, build charging stations and electric vehi-
of this century (Weder di Mauro 2021). policies which involve using government’s resources cles and the supply of industrial commodities will
The Bridgewater report highlighted four types of to subsidise renewable electricity or electric vehicles, also lag, taking years to come online.
mechanisms that can accelerate the climate transition as well as directly spending government money on High commodities prices, in turn, add to already
– but with the effect of stoking inflation. These are the transition, for example building out electric vehi- mounting inflationary pressures.
carbon pricing, supply squeeze, green MP3, and cle charging infrastructure. Despite the highlighted inflationary risk, it is of para-
green tech breakthrough. Global wise, most governments are also likely to try mount importance that the global nations and key
Transitioning to a net-zero carbon emission world to pursue that same strategy. stakeholders speed up the implementation of net-zero
may imply, at least for some time, sharp increases in Although this path has the potential to be much less enabling frameworks.
the price of carbon to encourage a switch to cleaner painful than carbon pricing or supply constraints The impact of climate change on economic activity
energy, in turn affecting consumer prices directly because each economic actor involved sees lower has far greater consequences than inflation whose
through higher electricity, gas, and petrol prices. Indi- prices (through subsidies) or receives government lasting effect depends crucially on the credibility of
rectly, consumers are affected by the increased costs cash directly, rather than experiencing higher prices the monetary policy regime.
of production for firms across a broad range of and scarcity, MP3 is still inflationary through The world should be more worried about the effect
sectors. supporting aggregate demand, and today’s already of disasters triggered by natural hazards, particularly
But raising prices is nonetheless directly inflationary, inflationary conditions. the ‘Big Four’ of floods, droughts, windstorms, and
at a time when inflation is broadly rising. Cautiously, In contrast, technological transformation is a defla- earthquakes. The consensus is that such events gener-
energy inflation also tends to be the most politically tionary process. Green Tech Breakthroughs can lead ally reduce economic activity in the near term,
sensitive type of inflation around the world. to lower costs for renewables than fossil fuels. The particularly in developing economies and for more
Squeezing supply of dirty energy sources is similarly Chinese government, for example, has spent signifi- severe events.
inflationary but it is also stagflationary - as the cant sums subsidising the early-stage development of
supply of fossil fuels is removed without necessarily electric vehicles and solar technologies, and China is
adding alternative supply, economic activity will fall
without adequate energy to fuel it.

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Economic News 20The AXIS XIII - Friday 04 February 2022

Tropical cyclones:

Threat to Zimbabwe’s food security

I n recent weeks, tropical cyclones have been One farmer Edward Kwashiri within the Nyanga
the most topical issue in Zimbabwe and District lamented the huge loss that he encoun-
across the region, with the already past and tered due to Cyclone Ana after three-quarters of
hovering threat of yet another tropical disaster his 35ha farm was swept away.
spelling doom for the country’s 2021/2022 agri- “I look at my farm and all I see is the rumble
cultural season. that was washed into my farm, my maize and
Tropical Cyclone Ana racked havoc in neighbor- other crops floating away with the rivers, the
ing countries and Zimbabwe was not spared as it hard work I put into this farm destroyed. The
left devastating effects in areas like Mudzi, Mu- only thing I can do now is to start adopting other
zarabani, Chipinge, Chikomberedzi, Beitbridge, farming methods and adjust in the wake of other
with another cyclone expected to hit the country tragic disasters’ otherwise the losses are going to
soon. be hectic,” said Kashiri.

Forecasted Cyclone Batsirai that is evolving from However, the 2021/2022 farming season was the losses that people encountered and might
the southwest Indian Ocean, is expected to make already riddled with problems that threatened pro- encounter during this rain season alone.
landfall within the SADC region, including Zim- ductivity way before it started and the tropical The cyclones ravaging the region are a reflection
babwe. cyclone only came to frustrate farmers even of the impacts of climate change that are increas-
According to meteorological reports, if the more. ingly becoming a cause for concern despite
cyclone weakens over Madagascar the country Initially, the season had a late start with most global efforts to mitigate them through the going
might be in the clear but if it is to intensify over places receiving the first planting rainfall during green pledges.
the Mozambique border basin, then countries like the last quarter of December, and with that came
Mozambique, Zimbabwe, South Africa, and soaring prices of input costs which saw some
Eswatini should brace for severe weather. farmers reducing their hectarage for the season.

According to the latest report by the Meteorologi- After the period started, farmers failed to meet The Southern Africa Development Community
cal Services Department (MSD), Tropical some of the hectares that they had initially Climate Services Centre (SADCCSS), has warned
Cyclone Batsirai is too far from affecting the wanted to plant due to the limited time that they of at least five more cyclones that are expected
country this week as initially projected, but its were faced with, and now a tropical depression to hit the Southern African nations before March
threat is not yet dismissed as its likeliness to came into play. if they do not die down within the seas.
reach the country this month remains a possibili- According to a recent report by Carbon Brief, it
ty. This season, a total of 2.5 million hectares were was discovered that climate change has been
put under farming a decline from the 2.8 million evident in the changing of the global distribution
While the rain is a welcome reprieve, the inces- hectares last season, meaning output was project- of tropical cyclones over the last 40 years.
sant and heavy rains that have continued to blaze ed to be lower even without the mention of “What is expected with climate change is that
throughout most of the country have become a cyclones. there is an increase in tropical cyclone activity,
potential threat to food security as many agricul- which means increases in number, duration,
tural areas are flooded and are prone to leaching. Food inflation might be ahead of the country, frequency, lifetime, size, and intensity,” the report
Cyclones affect crops through direct damage by considering the current events and unless there is said.
highspeed wind, torrential rain, and extensive a miraculous turnaround before February ends, When Cyclone Ana swept through the country
flooding, while high tides may bring in saline the country might not be able to reach half of destructions were in places like Chimanimani
water and sand mass making the fields unsuitable the tonnages that are required to be deemed be where the most vulnerable communities are usu-
for agriculture. self-sufficient. ally housed, the ones who are, marginalized, and
without access to a formal safety net become the
In 2019, the country suffered the devastating In essence, the country does not even have mea- most are exposed to these dangerous disasters.
effects of Cyclone Idai when some parts of the sures to curb the disastrous effects these cyclones If anything, right now is the time to take strides
country received rainfall of over 200mm, that are likely to have on the agricultural sector as towards decreasing the world’s carbon emissions
was coupled with destructive winds and thunder- well as human livelihoods as a whole. Even before the world goes underwater. The trick-
storms, and more than 700,000 hectares of crops though the scale and magnitude of that cyclone le-down effects of global warming are being felt,
were destroyed and the looming threat of yet are still less than that of cyclone Idai, its trail of and yet countries like China, which is one of the
another loss of crops through flooding is upon destruction reminiscences that of Idai. major contributors to global warming, are still
the country. In the country’s 2022 national budget, the gov- making commitments to reduce their carbon
Waterlogging has already been experienced in ernment allocated ZWL825 million aimed at emissions.
some parts of the country where the rain hit disaster relief, which is approximately US$7 mil-
hard, with the excessive rainfall having damaged lion when converted with the prevailing interbank
over a hundred thousand planted crops. rate, but this is a meager allowance considering

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Economic News 21The AXIS XIII - Friday 04 February 2022

Climate change takes This will mean that globally, a reduction in food
a toll on key cash crops consumption will be evident and hunger will be
more prevalent going forward.
A s the world continues to be slow in taking be witnessed for coffee.
action in the fight against climate change, For most small-scale farmers who grow coffee to Production of coffee, cashews and avo-
its climate change, its effects are sparing earn a living by selling it locally, this will be a cados in Zimbabwe
none is understood to have greater consequences setback, as most will not be able to afford the
on every economic sector. Usually identified by cost of production, affecting their livelihood. Coffee and avocados are commercially grown in
shifts in the mean or variability of temperature On a larger scale, for countries like Ethiopia, the Eastern Highlands. For coffee, the area is
and precipitation, climate change results in more Brazil, and Uganda that rely on the crop for rev- well suited for growing arabica coffee. Over the
externalities and uncertainties, especially in agri- enue generation through exporting it, this means years, more farmers are beginning to grow coffee
cultural production. they will start bargaining for more money for the as they have realised its potential to better their
During the past years, the world has witnessed crop from the importing countries to cover the livelihoods.
more frequent and intense droughts, storms, heat- production costs and earn a profit. Besides being a way of earning a living for small
waves, rising sea levels, melting glaciers, and They will, however, be in a losing position if the farmers, the country also exports some of the
warming oceans, and this has had a direct impact importing markets do not offer more for the products which add to national revenue.
on crops and animals. product. The country exports coffee categorised as coffee,
According to recent research published in the For avocados and cashews, climate change is roasted coffee, decaffeinated coffee, coffee husks
journal PLOS One titled ‘Expected global suit- expected to cause a shift in the regions that will and skins, and coffee substitutes containing
ability of coffee, cashew, and avocado due to be suitable for growing these crops, and as a sus- coffee. According to Zimstat trade data for the
climate change,’ a significant change will be wit- tainability measure, the research is encouraging 11 months to November 2021, the country real-
nessed in the next 30 years in the growing condi- farmers to opt for identifying the areas that will ised a total of US$0.851 million.
tions for the three crops. now be suitable for growing the crop and utilis- For avocados, the country got US$2.5 million
Coffee, cashew nuts, and avocado are among the ing the land that was initially used to grow the from exports over the same period.
most important cash crops globally and contribute crop for other purposes. However, the crops’ potential has been underuti-
substantially to the livelihoods of smallholder This will mean that other areas that initially were lised in the country as production levels are low,
farmers around the world. good for producing the crop will be bad for it hence there has not been much realised income
In the research, coffee proved to be the most vul- in the future, and this will also reduce their pro- from them.
nerable, with negative climate impacts dominating duction capacity. As such, for countries that
in all the main producing regions. For both export this crop, their production capabilities will Conclusion
cashew and avocado, areas suitable for cultivation reduce and also impact the amount of revenue
are expected to expand globally, while in most they get, taking a toll on economic growth. Climate change is evident that it will be there for
main producing countries, the areas of highest Furthermore, the expected impact of climate a long time, and as time moves forward, agricul-
suitability may decrease. change on the aforementioned crops will lead to ture will be affected in a more significant way.
The research concluded that climate change adap- reduced production with time. This will in turn Globally, farmers will have to adapt to the mea-
tation will be necessary for most major producing push demand up and the crop prices will relative- sures mentioned above for the sustainability of
regions for all three crops. ly go up. the three crops going forward.
The adaptation measures can include site-specific This might be a good thing for countries that can There is also a need for countries to look for
management options, plant breeding efforts for sustain the growth of these crops, as they will other alternatives like increasing dam capacity so
varieties that are better adapted to higher tem- have the advantage of getting more from what that they will not be affected by the high tem-
peratures or drought, or in the case of coffee, the they initially get when the supply is normal or peratures and low rainfall effects that are associ-
replacement of arabica with robusta coffee in high. The same goes for families that earn a ated with climate change.
certain regions. living through growing and selling these crops. Furthermore, agriculture is also taking the same
For most African countries, however, the imple- direction as mineral commodities in that, at a
What does this mean? mentation of these sustainability measures might certain time, areas that were once productive will
prove to be a difficult task, as most farmers lack no longer bear the expected fruits. This will be
In line with coffee, the consideration of opting the capacity to apply these measures, considering a huge disadvantage to most countries, and farm-
for varieties that adapt better to higher tempera- the high costs they come with. ers globally as their economies and lives are
tures or drought will push the cost of production As much as the above-mentioned crops are cash agriculture-dependent.
up as these varieties are usually more expensive crops and will not pose a threat to food security, As such, in the long run, countries have to con-
compared to the ones that were originally used. there is little to no doubt that soon, the threat sider diversifying and investing more in other
For example, for maize, over the years due to that climate change has on them will also extend areas such as technology, in which high value
climate change, scientists have come up with to other key crops like grain, posing a threat to will be gained.
short-term varieties that adapt to specific condi- global food security. By diversifying and exploring other options,
tions and they are more expensive compared farmers will be able to minimise the loss that
tothe ordinary ones, hence pushing the cost of they will get from the commercialisation of the
producing maize per tonnage up. The same will three crops going forward.

Business and Finance 22The AXIS XIII - Friday 04 February 2022

Star Africa eyes sustained output for all product lines
Star Africa Corporation says it expects a sus-
tained improvement in throughput in all its “Water supply to the plant was adversely affected strategy that positioned its products among the
product lines as the Group continues to by supply-side constraints from the Harare City most affordable in the market.
pursue high levels of operating efficiencies, Council resulting in a disproportionately higher Sales volumes for the unit increased by 27%
health and safety standards, and maximisation of amount of water being sourced from private sup- compared to the prior period.
shareholder value. pliers which pushed production costs upwards.”
This comes on the back of a positive half-year
year performance to 30 September 2021 during Mbire added that the procurement and commis- Going forward, the procurement and commission-
which the Group recorded a 38% increase in rev- sioning of two new centrifugal machines, an ing of the syrup filling machine and the icing
enue to ZWL3.9 billion from ZWL2.8 billion effluent treatment plant, an injector pump, cou- packing machine in the second half of the year
recorded in the prior year. pled with the rigorous plant maintenance regime are expected to further boost production at the
The outturn was anchored by the stellar perfor- that has been put into effect, are expected to aug- unit through automation of some production pro-
mance at Goldstar Sugars Harare (GSSH) and the ment throughput in the second half of the year cesses.
strength of the demand for all the Groups prod- to fully satisfy local demand. CCF continued to make headway for exploring
ucts which were high during the period. The rehabilitation of the raw sugar warehouse, trade channels and expanding its product portfolio
In a statement accompanying half-year results which was razed down by a fire last year, is still after it launched new products into the market
ended 30 September 2021, Acting Chairperson underway and it is expected to be completed by namely, chocolate, lemon, mint icing, and bun
Rungamo Mbire said the Group was confident end of March 2022, once completed, it is expect- and bread premixes during the period under
that the gains achieved to date will be sustained. ed to house 15 000 tons of raw sugar. review.
The Group’s Gold star sugars recorded a 46%
increase in sales to 39,294 from 26,959 tonnes “The plant continued to be certified by The Coca Meanwhile, the Properties Business revenues
recorded during the prior period despite erratic Cola Company (“TCCC”) as well as Food Safety remained largely stagnant with ZWL$12.57 mil-
electricity and water supplies. Certification under the FSSC 22000 series. This lion worth of revenue recorded as compared to
“This 46% improvement in sales was possible enables the Group to supply products to TCCC the ZWL$12.41 million in the prior year hinged
due to the demand for white refined sugar in the franchisees in the Southern Africa region and on the adverse effects of the COVID-19 pandem-
market which remains high,” Mbire said. beyond,” Mbire said. ic which have reduced tenants’ ability to generate
Country Choice Foods (CCF) CCF products con- income and meet their rental obligations.
tinued to dominate the market with the unit Going forward, the Group plans to focus on com-
having successfully implemented a cost leadership pleting the outstanding capital investment proj-
ects.

Amplats Announces Sale of 2 Mines to Rival Sibanye

I n a move that it says will unlock “greater billion in EBITDA between 2017 and 2020 for “We are unlocking the true potential of these
value” for both parties, South Africa-based Anglo American Platinum. adjacent mines by utilising the mechanised and
Anglo American Platinum (Amplats) “The next step for value creation was to optimise low-cost Kroondal operation to mine across the
announced on Monday that it was selling a 50% the mine plan to include resource from boundary with the Rustenburg operation.“This
stake in two of its low-cost mines, the Kroondal Sibanye-Stillwater’s adjacent operations to miti- will accelerate the extraction of more remote
and Marikana operations to rival South African gate the impact of declining production as the parts of the Rustenburg operation orebody, sustain
miner, Sibanye-Stillwater (Sibanye). mine approached its end of life, and for the employment for more than 2,500 people until
Sibanye currently operates Kroondal but the mine Company to exit its interest in Kroondal,” the 2029 and ensure the creation of significant value
is subject to a 50/50 "pool-and-share agreement" world’s largest primary producer of platinum for all stakeholders in the region,” said Froneman.
(PSA) between Kroondal Operations Proprietary said.
Limited – a wholly-owned Sibanye subsidiary – As at 31 December 2020, Kroondal had Mineral Amplats and Sibanye’s Mining Opera-
and Rustenburg Platinum Mines, an Amplats sub- Reserves of 0.7 million 4E ounces (and an inclu- tions in Zimbabwe
sidiary. sive Mineral Resource of 1.30 million 4E
The deal between the two Johannesburg Stock ounces). The Mineral Reserve could be economi- Both Amplats and Sibanye have operations in
Exchange-listed platinum giants will likely spark cally extracted, under the existing Kroondal PSA Zimbabwe. For Sibanye, it has a 50-50 stake in
investor interest as it is set to allow for the Kro- arrangement, over the remaining life of mine to Mimosa platinum mine shared with another South
ondal life-of-mine to be extended under 2025. Africa-based top rival, Impala Platinum. The
Sibanye-Stillwater’s ownership, sustaining Under the terms of the new agreements, Kroon- mine is accessed through the Wedza and Mtshin-
employment at the operation for longer. dal’s infrastructure will be used to mine into gwe shafts, of which Wedza has been extensively
The life of the mine is seen being extended to Sibanye-Stillwater’s adjacent Rustenburg resource. mined. The Mtshingwe shaft is currently in the
2029, sustaining employment for more than 2500 As a result, Amplats will generate cash flows development stage, which is expected to take the
people. from its 50% share of the 1.35 million 4E ounces life of mine beyond the currently estimated 2032.
Amplats CEO, Natascha Viljoen said, “We are earlier (by the end of 2023), at a lower cost of Sibanye purchased 50% in the mine by acquiring
pleased to have agreed to sell our 50% interest production (after optimising the mine plan to Aquarius in 2016, with Impala Platinum owning
in the PSAs (Kroondal and Marikana) to extract the resource from both the Kroondal and the remaining 50% in the project. Implats is also
Sibanye-Stillwater. Whilst the Marikana operation Rustenburg mining right areas) and under the the parent of the country’s largest platinum mine,
is on care and maintenance, the Kroondal opera- pre-existing Kroondal purchase of concentrate Zimplats.
tion has a short mine life under the current PSA terms. On the other hand, Anglo American has opera-
terms. Thereafter, Amplats will exit its interest in the tions in Zimbabwe through the Unki platinum
“By enabling Kroondal to mine through the PSAs, transferring all assets and liabilities to mine. Located in Gweru, Midlands Province,
boundary at Sibanye-Stillwater’s Rustenburg oper- Sibanye, with no outstanding economic interest in Unki represents one of the largest platinum
ations, we will extract our attributable share of the Kroondal mining operation. reserves in Zimbabwe having estimated reserves
the Kroondal reserves more quickly and efficient- Meanwhile, the Marikana PSA has an inclusive of 34 million oz of platinum. The mine produces
ly than under the previous mine plan, unlocking Mineral Resource of 4.7 million 4E ounces attrib- around 64,000 oz of platinum/year.
greater value for Anglo American Platinum and utable to Anglo American Platinum. The Mineral
Sibanye-Stillwater.” Resource in Anglo American Platinum’s view EQUITY AXIS
The Kroondal operation which is located adjacent cannot be economically extracted, and therefore
to, and up-dip of Sibanye’s Rustenburg operation the Marikana operation was placed on care and www.equityaxis.net
and the shallow Klipfontein open pit operation, is maintenance in 2012.
at current standing not considered a strategic Sibanye’s CEO, Neal Froneman welcomed the To advertise Call: 08677 197 791
asset under Amplats’ portfolio due to its short “mutually beneficial transaction” and reckoned Email: aaronc[at]equityaxis.net
remaining life. that the “operating life of the Kroondal operation,
The Kroondal operation has delivered over R8 which as a standalone operation, was constrained Equity Axis
by the existing PSA agreement.”

Mining 23The AXIS XIII - Friday 04 February 2022

Base metal prices fall as oil remains vigilant

T he majority of the commodity market monthly showing since September 2021. The U.S prices headed towards their biggest weekly
slumped in the week under review as the Federal Reserve’s hawkishness is largely un- decline since October 2021 as the prospect of
U.S. Federal Reserve officials planned to matched by other major central banks, strongly Central Bank tightening policy reduced investor
increase interest rates. As inflation continues to supporting the dollar which represents quite a appetite for risk assets and boosted the dollar.
haunt the U.S. economy, the monetary policymak- headwind for gold. The dollar index rose slightly European copper fell again and Chinese equities
ers are in a bid to fight the issue in the coming higher but is still in the route to a monthly gain, slumped to 16-month closing lows, though U.S.
month (March 2022). When the Fed takes a solid limiting gold demand as a firmer greenback markets steadied. The dollar touched its strongest
decision about hiking rates next month, investors makes bullion more expensive for holders of against a basket of major rivals since June 2020,
will get a direction, and this will put a lacklustre other currencies. making metals costlier for non-U.S. buyers.
price outlook on many metals. Rate hikes would
raise the opportunity cost of holding non-yielding Platinum Oil/Brent
bullion, and investors will start to scramble for
the dollar investment. Platinum prices closed the last week of the first In the week of January 28, oil rose by 2.4% as
month down 1.9%. Meanwhile, investors are supply shortages, as well as political tensions in
keen to buy platinum while it is trading for less Eastern Europe and the Middle East, put prices
than gold on a per ounce basis, with demand on track for their biggest monthly gain in almost
being driven by both investors and industrial a year. The benchmarks recorded their highest
off-takers. levels since October 2014 on Friday 21st at
US$91.70 and US$88.84 respectively - their sixth
According to Equity Axis research, given the straight weekly gain. They were headed for about
weak automotive demand, fuelled by the shortage 17% gains this month, the most since February
in semiconductors, this is likely to keep the pres- 2021. In the week, it is above all the concerns
sure on platinum group metal (PGM) prices about supply outages in connection with the
through 2022 as worries over uptake in catalytic Ukraine crisis that keeps pushing prices even
converters continues to mount. further up.

Aluminium Conclusion:

Aluminium prices increased due to a spike in Other things remaining constant, the decline over
demand from Chinese steel manufacturers. In the metal prices experienced in the week under
week to the close of January, the metal rose by review acts as a windfall in the long run. The
1.38% to settle at US$3,083 per tonne from global outlook prices for metals are still bullish,
US$3,041 per tonne recorded in the previous given the shortage of micro-chips in the market
week. and the increase in electronic vehicles (EVs) man-
ufacturing. Meanwhile, the coronavirus omicron
Gold In other news, China's aluminium imports in variant is adversely influencing oil demand as
December eased from the previous month, snap- previously anticipated. While there have been
Although gold is considered a hedge against ping three monthly gains; although imported vol- some travel restrictions, those are being rolled
inflation, prices edged lower, moving away from umes were strong enough to solidify 2021's posi- back currently. The regional lockdowns that were
the key psychological level of $1,800. The shift tion as a record year of shipments. China, the introduced were short-lived. In the week under
towards a more risk-on approach by investors is world's biggest aluminium producer and consum- review, the oil market has also been closely
probably gold-negative, however, the resultant er imported 3.2 million tonnes of unwrought following geopolitical developments, given their
weakness in the dollar helps gold. In the week,- aluminium and products - which include primary potential impact on global supplies. Unrest in
gold prices fell by 2.6%, tallying the worst metal and unwrought, alloyed aluminium - in Kazakhstan earlier this month raised concerns
2021, a new record high and up from 2.7 million over the nation’s oil production, an attack on oil
tonnes in 2020 infrastructure in the United Arab Emirates. The
tension temporary disrupts the crude flows
Copper through the Kirkuk Ceyhan pipeline, and this, in
turn, caused the climb in oil prices. Demand
Down over 2% in January Year-To-Date, Copper growth could roar back if omicron peaks in the
next month in the Eurozone and other importing
countries.

Tanganda bounces back on ZSE

T anganda Tea Company has relisted on the The total costs associated with the listing
Zimbabwe Stock Exchange (ZSE), 14 were projected to amount to approximately
years after exiting the bourse. Tanganda US$186,100 which relate to professional
was once listed on the ZSE but voluntarily delist- fees as well as regulatory, advertising,
ed in 2007 following its merger from the parent printing, and postage charges.
company, Meikles Limited. Tanganda is the largest producer, packer,
The move to re-list separately was propped by and distributor of tea in Zimbabwe.
the company being in a solid financial and agri- To date, it has developed the largest
cultural position. hectarage of both macadamia nuts
The company made its first trade on ZSE on 3 and avocados to become the single
February 2022, with a starting share price of largest producer of both crops in
ZWL75 and a closing of ZWL67.0601, ultimately Zimbabwe.
leading the risers for the day. Tanganda was the The Company is also involved in coffee
most trading stock at 109 trades and it anchored production and spring water bottling and
volume aggregate trading 1 011 600 shares. is divided into three operating divisions,
Initially, Tanganda was supposed to re-list on the agriculture, beverage, and the corporate and
ZSE on December 9, 2021, but the move was administration divisions.
delayed as Meikles sought the Zimbabwe Reve- Over the years, Tanganda has transformed
nue Authority's approval for capital gains tax itself from being just a tea business to
relief. diversified agricultural export business.
The tax relief was later granted for 51.39% of
the issued shares and the directors authorised the
company to pay the residual capital gains tax
liability.

Around the world business 24The AXIS XIII - Friday 04 February 2022

Meta shares sink 20% as Facebook loses Most City economists said the majority of rate the sluggish recovery in international
daily users for the first time members on the Bank’s rate-setting committee travel.
would increase the base rate from 0.25% to “Doing so is justified by the pervasiveness of
Facebook owner Meta Platforms Inc's (FB.O) 0.5%, with the likelihood that at least two COVID cases in all 50 states, increased immu-
shares plunged more than 20% late on Wednes- more increases would follow during 2022. nity and higher vaccination rates as well as
day after the social media company posted a On the eve of the Bank’s decision, 29 econo- new treatments,” said an industry letter to
weaker-than-expected forecast, blaming Apple's mists from 45 respondents to a survey by Reu- White House coronavirus response coordinator
privacy changes and increased competition for ters predicted that the monetary policy commit- Jeffrey Zients, which was seen by CNBC. “Re-
users from rivals like TikTok. tee (MPC) would go ahead with a rise, while moving the requirement will greatly support the
Facebook’s global daily active users declined 16 forecast that rates were likely to remain on recovery of travel and aviation in the United
from the previous quarter for the first time, to hold. – The Guardian States and globally without increasing the
1.929 billion from 1.930 billion. spread of COVID-19 and its variants.”
Meta said it faced hits from Apple Inc's Natural gas spikes 16% ahead of winter The letter was signed by Airlines for America,
(AAPL.O) privacy changes to its operating storm a lobbying group that represents Delta, Ameri-
system, which have made it harder for brands can, and United, Southwest and others, along
to target and measure their ads on Facebook Natural gas futures soared Wednesday as with more than two-dozen other industry asso-
and Instagram. It also cited macroeconomic energy markets brace for a powerful winter ciations representing airlines, hotels, airports
issues like supply-chain disruptions. – Reuters storm that threatens to derail production just as and aircraft manufacturers. – CNBC
demand rises.
OPEC and Russia keep promising to The latest spike will keep home heating costs Economic pain threatens social and
pump more oil. They're not delivering for millions of Americans elevated, adding to political chaos in Tunisia
a long list of inflationary headaches.
Here's one big reason oil prices are near a sev- Natural gas futures surged 16% Wednesday to President Kais Saied says he will remake Tuni-
en-year high: OPEC and Russia are producing close at $5.50 per million British thermal unit sian politics in 2022 with a new constitution
less than they promised. (BTU). That's near the highest level since last and parliament after seizing executive power
The Organization of the Petroleum Exporting November. Natural gas futures have spiked last year in a move his foes call a coup - but
Countries and 10 other major crude oil produc- 55% since sinking to $3.56 on December 30. the threat of national bankruptcy may upend
ers, including Russia, have been gradually Trading in natural gas can be extremely vola- his plans.
increasing their output after taking 9.7 million tile, especially during the winter when supply The country requires an international rescue
barrels per day out of the market as demand and demand can swing sharply. package to avert a disastrous collapse in public
collapsed in the early days of the coronavirus Analysts blamed forecasts for a major winter finances, with some state salaries delayed in
pandemic. storm that is expected to bring snow and ice January. But as time runs out, donors say Saied
But the group, known as OPEC+, has repeated- to much of the United States. More than 100 has not done enough to bring them on board.
ly failed to meet its monthly target of adding million people are under winter weather alerts, They want him to embrace a more inclusive
back 400,000 barrels per day due to production from the Rockies to New England -- including political process to ensure Tunisia's young
shortfalls in several countries. the energy powerhouse of Texas. – CNN democracy survives, and strike a publicly
Despite huge pressure from major energy con- acknowledged agreement with his major rivals
suming nations, including the United States, to Nokia says revenue and margins to rise on unpopular economic reforms to tame spend-
help tame high prices that are fuelling global as turnaround gathers pace ing and debt. - Reuters
inflation, it will be difficult for the coalition to
quickly increase output because of limited Finnish telecoms equipment maker Nokia Biden administration urges against U.S.
spare capacity and a fraught geopolitical back- (NOKIA.HE) said on Thursday it expects its Postal
drop. - CNBC revenue to grow this year and set a higher
target for long-term earnings margins as the Service plan to spend billions on gas vehicles
Nigeria eyes Standard Chartered rail company's recovery gathers pace after years of The Biden administration on Wednesday
project loan after Chinese hold up restructuring. attempted to halt the U.S. Postal Service’s plan
Nokia predicted its 2022 revenue will amount to spend up to $11.3 billion to replace its
Nigeria has approached Standard Chartered to between 22.6 billion euros and 23.8 billion delivery fleet with thousands of gas-powered
Bank (STAN.L) for funding of two rail proj- euros ($25.5 billion-$26.9 billion), up from vehicles, arguing that the vehicles will worsen
ects, its Transport Minister Rotimi Amaechi 22.2 billion last year. Analysts on average climate change and public health.
said on Wednesday, after delays from Chinese expected revenue of 23.06 billion, a Refinitiv The EPA and the White House Council on
lenders. poll showed. Environmental Quality, in a letter to the Postal
President Muhammadu Buhari has made Service, urged the Postal Service to conduct an
upgrading transport networks and improving "Our long-term updated and more detailed technical analysis
outdated power grids the pillar of his adminis- and hold a public hearing on its plan.
tration, with a view to boosting agriculture and target is to grow faster than the market and The Postal Service’s plan would blunt the pres-
other non-oil industries to cut dependence on to achieve a comparable operating margin of at ident’s pledge to replace its federal fleet of
dwindling crude revenues. But funding has least 14%," Chief Executive Pekka Lundmark 600,000 cars and trucks to electric power and
been a major constraint. said in a statement. slash the government’s carbon emissions by
Its parliament last year approved several The producer of 5G technology and other 65% by 2030. The administration has also
billions of dollars in project-tied loans from the network gear proposed a dividend of 0.08 euro committed to cutting U.S. greenhouse gas emis-
Chinese and other international lenders but per share for the 2021 financial year, the first sions nearly in half by the end of the decade
funds have yet to materialize. – Reuters owners will receive since a quarterly pay-out in and transition the economy to net-zero emis-
mid-2019. – Reuters sions by mid-century. - CNBC
UK interest rate rise predicted as cost of
living crisis deepens Airlines, travel groups ask Biden
administration to drop Covid testing
Britons are braced for the Bank of England to before international flights
increase interest rates on Thursday as the cen-
tral bank seeks to tackle price pressures that Airlines and other travel-industry groups asked
have pushed annual inflation to a 30-year high the Biden administration on Wednesday to drop
of 5.4%. Covid test requirements for vaccinated passen-
gers before U.S.-bound flights, a bid to invigo

Around the world politics 25The AXIS XIII - Friday 04 February 2022

Burkina Faso restores constitution, er Monday by the West African country's sion to reshuffle his Cabinet last week after-
names coup leader president foreign ministry and instructed to leave over graft allegations surfaced against several of his
"hostile and outrageous statements" by French ministers, highlights intensifying public disillu-
Military restores constitution suspended after authorities targeted at the junta, a military sionment with the country’s direction since he
takeover and appoints coup leader Paul-Henri spokesman said in a statement. took office in June 2020. Chakwera had also
Sandaogo Damiba as interim president. "The government of the Republic of Mali been facing increasing pressure from within his
Burkina Faso’s military government said it has informs the national and international commu- ruling Tonse Alliance coalition, with many of
restored the constitution a week after taking nity that this day, Monday, 31 January 2022, its smaller members accusing the dominant
power and has appointed the coup’s leader as the ambassador of France to Mali his excellen- Malawi Congress Party, or MCP—the country’s
head of state for a transitional period. cy Joel Meyer was called by the Minister of oldest political party, which Chakwera
The move came shortly after the African Union Foreign Affairs And international cooperation, heads—of corruption and nepotism.
(AU) suspended Burkina Faso for the takeover who notified him of the decision of the gov- In recent weeks, street protests have sprung
and diplomats from West Africa and the United ernment instructing him to leave the country back up across the country, in response to a
Nations pressed demands for a return to civil- within 72 hours," the statement said. call from Bon Kalindo, a former parliamentari-
ian rule. The ultimatum comes barely one week after an and political activist, to resume them after
In a statement read on television on Monday, Mali severed diplomatic ties with France, a brief pause over the Christmas holidays.
the military government announced it had announcing a change to its official language Kalindo organized nationwide anti-government
approved a “fundamental act” that “lifts the from French to Bambara, and ordering French protests last year, including one in December
suspension of the constitution”, a move that troops to evacuate its territory, according to a in which more than 10,000 Malawians descend-
had been declared after the January 24 coup. recent communique. - CNN ed on the streets of Lilongwe, the country’s
The 37-article document guarantees indepen- capital, to protest the dire state of affairs in the
dence of the judiciary and presumption of inno- Orban pledges cooperation with Putin country. - World Politics Review
cence, as well as basic liberties spelled out in in the storm of Ukraine crisis
the constitution such as freedom of movement China: What does it want from the
and freedom of speech, according to the state- Hungarian Prime Minister Viktor Orban met Ukraine crisis with Russia?
ment. with Russia's Vladimir Putin in the Kremlin on
Under the “fundamental act”, it said, the mili- Tuesday, pledging cooperation with Moscow for As the war of words between the US and
tary government – officially named the Patriot- years to come in a trip criticised by his EU Russia grows louder over Ukraine, one major
ic Movement for Preservation and Restoration allies. player on the international stage has spoken up
(MPSR) – “ensures the continuity of the state Orban traveled to Moscow despite Hungary's firmly as well: China.
pending the establishment of transitional opposition accusing him of betraying national In recent days, Beijing has called for calm on
bodies”. interests in doing so and with fears growing in both sides and the end of a Cold War mentali-
The statement did not give a timeline for the the West of a Russian attack on Ukraine. ty, while also making it clear it supports Mos-
transition period. - Al-Jezeera But Orban, who has led NATO-member Hun- cow's concerns.
gary since 2010, has had friendly relations with It would seem obvious that China would side
Guinea-Bissau launches major probe Putin while presiding over deteriorating ties with its longtime ally and former Communist
into foiled coup with Brussels. comrade Russia. But how and why it is doing
"This is our 13th meeting. That is a rarity. this goes deeper than their history.
Guinea-Bissau has launched a major investiga- Practically all those who were my colleagues Last week, China's foreign minister Wang Yi
tion into a foiled attempt to overthrow Presi- in the EU are no longer," Orban said, sitting called Russia's security concerns "legitimate",
dent Umaro Sissoco Embalo, who survived a opposite Putin in the Kremlin. saying they should be "taken seriously and
gun attack on Tuesday in the uprising that Orban said he has no plans to leave power and addressed".
claimed 11 lives, according to the government. that he expected to win an election in April, On Monday, Chinese ambassador to the UN
“The government mourns … the loss of 11 which is set up to be his toughest contest since Zhang Jun went further and said outright that
valiant men during the attack. Eleven victims – taking office. - France 24 News China disagreed with US claims that Russia
soldiers and paramilitaries, four civilians was threatening international peace. He also
including a top agriculture ministry official and Military junta in Burkina Faso lifts criticised the US for convening a meeting of
his driver,” government spokesman Fernando nationwide curfew in force since coup the UN Security Council, likening it to "mega-
Vaz said on Wednesday, who is also the West phone diplomacy" that was "not conducive" for
African country’s tourism minister. Burkina Faso's junta lifted Wednesday a negotiations.
Heavily armed men on Tuesday afternoon nationwide curfew they imposed after seizing Couched in diplomatic speak, China's official
surrounded government buildings in the capital power in a coup last month, the military line on the crisis has been cautious and
Bissau where Embalo and his prime minister announced. nuanced, stopping short of actual support for
were believed to be attending a cabinet meet- The restrictions were imposed on January 24 Russia using military force against its former
ing. after mutinous soldiers arrested President Roch Soviet neighbour. - BBC News
Embalo, 49, later told reporters that he had Marc Christian Kabore following a revolt at
been unharmed during a five-hour gun battle, several army barracks in the capital over the U.S. forces kill ISIS leader during coun-
which he described as a plot to wipe out the handling of jihadist attacks in the Sahel nation. terterrorism raid in Syria, White House
government in Guinea-Bissau, one of Africa’s "The President of the Patriotic Movement for says
most unstable countries. Preservation and Restoration, President of Faso,
Guinea-Bissau’s capital appeared calm on Head of State, updates... the total lifting of the U.S. forces killed the leader of terrorist group
Wednesday the day after Embalo survived the curfew measure as of this day, February 2," ISIS, Abu Ibrahim al-Hashimi al-Qurayshi,
attack, as France joined condemnation for what Colonel Paul-Henri Sandaogo said in a press during a counterterrorism operation in Syria,
has been called an attempted coup. release. the White House said Thursday.
Life was slowly returning to the streets of The nation's nightlife will not completely President Joe Biden is slated to address the
Bissau as shops and banks reopened, according resume as "popular celebrations and festive nation on the details of the raid at 9:30 a.m.
to AFP correspondents. events are prohibited after midnight from ET from the White House.
Soldiers were patrolling the streets, however, Monday to Thursday and after 2 am from All U.S. service members involved in the mis-
and also blocked access to the Palace of Gov- Friday to Sunday", the junta said in a televised sion returned safely from the operation.
ernment complex where the attack took place. statement. A U.S. official, who spoke on the condition of
- Al-Jezeera The coup leaders said the measure was taken anonymity ahead of the announcement, con-
"in view of the security context and in solidari- firmed to NBC News that the ISIS leader was
Mali's military rulers say French am- ty with the victims of insecurity". on the third floor of a building in northern
bassador has 72 hours to leave the coun- Initially imposed from 9 pm to 5 pm, the Syria when U.S. Special Operators arrived.
try national curfew was later reduced to midnight Al-Qurayshi detonated a bomb that killed him-
to 4 am before being lifted entirely. self and several members of his family, a
Mali's military authorities have expelled the - France 24 News senior administration official told NBC News.
French ambassador to the country in a 72-hour During the operation, a U.S. military helicopter
deadline announced Monday. Chakwera’s Promise of a ‘New Malawi’ experienced a maintenance issue and was
French envoy Joel Meyer was summoned earli Hasn’t Panned Out deemed unsafe to fly. The servicemembers on
the ground detonated the aircraft on-site.
Malawian President Lazarus Chakwera’s deci - Al-Jazeera

Guest Column 26The AXIS XIII - Friday 04 February 2022

CEO Legacies Vs Legacy Corporations referring to a particular organisation.
Deductions can be made that in such a case, the
WBy Cathrine Denga Platinum CEO brand has a certain pull that exceeds that
of the company itself which might be influenced
hen there is mention of social media Platinum prices closed the last week of the first by the visibility of the Executive through publici-
influencers, the common image in the month down 1.9%. Meanwhile, investors are ty, industry expertise, a wide network amongst
minds of many is that of millennials keen to buy platinum while it is trading for less many different possible factors.
and Gen-Z boys and girls spending most of their than gold on a per ounce basis, with demand Does that make a CEO an influencer though?
time on the various online platforms against the being driven by both investors and industrial No, it does not. However, it does show the
wishes of their parents. Or it could be the off-takers. power and influence of the position in question
thought of entertainers wearing branded regalia as well as how there is an opportunity for com-
running a sponsored campaign for a big corporate panies and leaders to use these as leverage. It has
client. Whatever it is, it is rarely the visualisation According to Equity Axis research, given the been easier for entrepreneur CEOs to utilize this
of a CEO or such high-ranking officials with weak automotive demand, fuelled by the shortage prospect possibly because they embody the com-
fancy titles pushing a brand, product, or agenda. in semiconductors, this is likely to keep the pres- pany and what it stands for since they are the
sure on platinum group metal (PGM) prices visionary in the equation. The likes of Elon
through 2022 as worries over uptake in catalytic Musk or Strive Masiyiwa can be said to fit in
Unfortunately, this proves to be a myopic view converters continues to mount. this category because even their personal stories
of both the power of social media and the influ- of the dream, the struggle, and the big break are
ence of a well-branded corporate chief executive. the same as that of their companies. Great story-
Many have not yet heard of the terms “CEO Aluminium telling and emotional appeal that creates an indis-
branding” and “human-brands” in relation to putably solid bond with the audiences which is
influential leaders in high-ranking positions. Per- Aluminium prices increased due to a spike in not easy to compete with, but that’s a story for
haps we have heard of it but are yet to put much demand from Chinese steel manufacturers. In the another day.
thought into it because indeed all such personnel week to the close of January, the metal rose by Usually, CEOs who get the opportunity to lead
know the name Barrack Obama and have been 1.38% to settle at US$3,083 per tonne from legacy organisations are overshadowed by the
inspired or motivated by the former United States US$3,041 per tonne recorded in the previous power of the brand and seem almost easily
President and or what he stands for at some week. replaceable due to this factor alone, despite their
point in their lives. To this day, what Barack brilliance and expertise. By the time their tenure
says holds immense value so much so that his In other news, China's aluminium imports in expires, some quickly become “has-beens” as if
price tag for speaking engagements is a hefty December eased from the previous month, snap- they were just ordinary employees, yet they held
one. ping three monthly gains; although imported vol- a prestigious position in a greatly respected com-
umes were strong enough to solidify 2021's posi- pany and implemented many great strategies that
Chief Executives in corporate Zimbabwe are yet tion as a record year of shipments. China, the took the organisation to greater heights.
to fully utilise the benefits of the social media world's biggest aluminium producer and consum- One of the reasons is that they fail to use their
platforms available as a way of leveraging the er imported 3.2 million tonnes of unwrought voice, or the voice awarded to them by their
influence of the same for their personal branding aluminium and products - which include primary position. Should the company’s character over-
agenda. Of course, there are a few exceptions, metal and unwrought, alloyed aluminium - in shadow that of the leader’s in a positive way,
leaders who have not only gained popularity for 2021, a new record high and up from 2.7 million then the way forward is to mimic it, transfer the
taking the reigns of certain reputable institutions tonnes in 2020 same qualities thereof, and create a CEO brand
but have taken the opportunity of the spotlight that leaves a legacy and opens doors for the indi-
that comes with it to inspire, motivate, teach, vidual. Taking advantage of such low-hanging
persuade, or simply communicate with the many Copper fruits allows ambitious leaders to push both per-
audiences that have a respect for the office. sonal and career agendas. However, the first step
Down over 2% in January Year-To-Date, Copper is to find your voice so that you understand how
monthly showing since September 2021. The U.S Interestingly, research has shown that the brand best it can serve you.
Federal Reserve’s hawkishness is largely un- equity of a company and that of a CEO are shar- Cathrine Denga is a Sustainability, Public Rela-
matched by other major central banks, strongly able. The brand equity of each of these two enti- tions, and Communications expert at Kat Mezza-
supporting the dollar which represents quite a ties is transferable from one to another, whether nine & Associates, a Sustainability & PR Firm
headwind for gold. The dollar index rose slightly positive or negative depending on the more influ- based in Zimbabwe.
higher but is still in the route to a monthly gain, ential entity. One can easily verify the transfer- Email: [email protected]
limiting gold demand as a firmer greenback able nature of various characteristics between the
makes bullion more expensive for holders of two entities by using a simple example whereby
other currencies. some stakeholders use the CEO’s name when

Tourism & the Covid-19 pandemic

By Girison Afia MRICS

R ecently Bill Gates described the weaken-
ing of the Corona Virus pandemic as
eventually translating to a seasonal flue
that the world can manage and live with. These
comments are probably coming realizing the
reduced number of hospital admissions and
deaths globally. The response by the European
Union and the United States to isolate the
Sub-Saharan African nations after the discovery
of the Omicron variant was not necessary. The
variant is highly infectious but the illness was
not severe and the number of deaths was less as
compared to the earlier waves. Africa is pushing
for access to intellectual property to the manufac-
ture of Covid 19 vaccines so that she can process
her own and serve the continent. To the tourism
sector, the issue is on recovery and sustainability
should the pandemic fail to disappear.

Recent research by Airbnb explored the issue of The tourism sector has to make an initiative to create leisure, living and working places that visitors
cleanliness to lure and retain visitors. Facilities can enjoy and use without the need to go back to the office. Virtual working spaces were
that are known for cleanliness will be favourable
places for accommodation, conferencing, meals, *To Page 27
and bar services. Properly and frequently sani-
tized places make it convenient and safe for visi-
tors and occupants to spend more time at the
facility. Coronavirus may not be the last pandem-
ic to shock the world, hence, measures such as

Markets 27The AXIS XIII - Friday 04 February 2022

Stocks Monthly:

ZSE All Share Index firms while turnover
records a record low
an upsurge for 3 straight months to December
before the halt in the month under review. Mean-
Stock Market Turnover: while, foreign outflows came off 38% lower than

The ZSE opened the year 2022 on a weak note the prior month's record. At ZWL$254 mil-
with activity significantly plunging as aggregate lion,outflows closed at a 5-month low. On the
turnover dipped by -77% to a 5-month low of upside, foreign outflows have been falling in the
ZWL$4 billion. This was driven by a 64% past 2 months while inflows were growing,
decline in total volumes to a more than 2-years which shows a positive sentiment in foreign
low of 82.4 million shares. Demand in the month investors. In US$ terms, overall foreign trades
was highly curtailed by uncertainty as investors totaled US$592,592 which is a 4-month low
sold off in December and awaited a clear trajec- record as liquidity stifles.
tory the bourse will take.
Overall Comment:
In December, the market recorded the highest
monthly aggregate turnover, since de-dolarisation, The ZSE opened the first month of 2022 on a full scale has widened the net of investments
of ZWL$17.6 billion. This was attributable to positive note in price terms, with the mainstream bypotential traders and investors. Meanwhile, the
heightened trades in market heavies as seen by a All Share Index notching 11.62% over the period reduced momentum in inflation has also trimmed
subdued growth in volumes which totaled a mere to close the month at 12079.74 points. This was investor appetite for hedge-seeking as prospective
231 million shares. Aggregate turnover had been stimulated by a 14.77% growth in the top 10 gains on ZSE soften along with inflation and the
growing for the five (5) consecutive months to counters, outweighing a -5% decline in penny value of investor-funds is also preserved in a
December 2021, before the halt in the month stocks. The rise in prices was also driven by a prolonged period than before. On VFEX, Padenga
under review. The decline is also attributable to recovery from the heavy loss incurred in the remains the most active counter on BNC, having
tightened liquidity which has left investors and prior month of December as investors took out traded in 12 sessions in the month, out of the
traders with fewer savings. The declining infla- gains. overall 21 sessions.
tion has also lessened investor appetite for hedge
seeking. An aggregate of
US$191,708
exchanged hands on
the VFEX, with
ZSE Market Capitalization: Padenga contributing

On the upside, a 12% increase in the mainstream US$102,064 while
ZSE All Share Index drove up the market capi- SeedCo traded a
talisation by an equivalent 12% to ZWL$1.5 total of US$85,704.
trillion. Market capitalisation is a function of BNC dominated
share prices against issued shares per each 2.1% of the aggre-
respective stock. The ZSE is now at its highest gate market turnover
market capitalisation since de-dollarisation, both while Caledonia did
in nominal and real terms. In real terms, the ZSE not record any trade
is valued at US$13.26 billion based on the aver- in the month.
age interbank exchange rate for January. This is
a 2nd record high in over 4 years. However, on In the currency
a parallel market basis, the bourse is valued at market, the resump-
approximately US$7.4 which still shows a posi- tion of the interbank
tive growth historically. market was extended
to mid-January due
Foreign Participation: to fears of Covid-19.

Foreign participation recorded a slowdown in the However, aggregate turnover took a huge dive in The ZWL has, however, depreciated by -6.2%
month under review, in line with the overall turn- the month as trades were dominated by minorities against the greenback to trade at
over. Foreign inflows were -93% lower than the amid a resurgence of the viability of other asset US$1:ZWL115.422.
prior month's record, falling to a 4-month low of classes and other investment vehicles as the
ZWL$52.64 million. Foreign inflows had been on Covid-19 restrictions are almost fully relaxed.
The resumption of other economic activities at

*From Page 26 South African operators advertise Victoria Falls the pandemic, discounted pricing can pull back
fortified and used effectively when the movement as if it is within their county. This is a very good the tourists. The pandemic affected everyone
of people was restricted. Although the virtual initiative and local operators must pursue collabo- including the ones financially strong western mar-
working option has its disadvantages such as rative ways to work with their neighbours for the kets.
security and confidentiality of information, it growth of the local industry. The approach is to The tourism sector generates foreign currency for
made it easy for employees to adopt flexi-time. try and keep the visitors longer by providing the country. When the pandemic struck, the
The world is a time when leisure and work can world-class facilities and local activities with a foreign currency position of the country dwin-
be aligned to motivate productive employees. memorable experience. On the same note, the dled. If Covid 19 does not go, or; as stated earli-
Aggressive marketing is required in the tourism tourism and the civil aviation authorities must er on, another pandemic strikes again, the current
sector because the desire to travel was dampened seek to attract direct flights to the country. In the protocols, vaccine research, and manufacturing
by the pandemic after serious illnesses, loss of short, to medium term, international roadshows facilities must be developed, ready for the
life, and failure to cure or control the pandemic. may be done in major cities of the world to epidemics that may rock the world into the
The operators in the tourism industry, the govern- market the country. It can be done economically future. The tourism sector must learn to survive
ments, and all stakeholders must work together to and effectively if the government works with the with it. The Coronavirus protocols are key health
give confidence to prospective travelers. Resourc- Zimbabweans in the Diaspora. activities to observe in our daily lives with or
es should be channeled towards the development The operators and the authorities must offer without the pandemic. This may be the best time
of upmarket facilities and promotional activities incentives for the visitors, including local tourists. to improve the facilities to the extent of design-
that convince the world to want to travel again. Zimbabwe is regarded as one of the most expen- ing well-ventilated rooms, leisure-liv-
This is the time to consider hybrid packages like sive places to visit because of expensive accom- ing-cum-working spaces.
the health tourism facilities; where visitors come modation, food, and related activities. Correct Girison Afia MRICS is a chartered valuation
and benefit from professional and affordable pricing of tourism services and benefits attracts surveyor, a member of the Royal Institution of
health facilities. If working spaces can be provid and captures repeat visits. If the hospitality sector Chartered Surveyors, researcher, and a thought
ed, health care must also be extended to the visi- was decimated to negative income levels during leader in real estate. Twitte
tors.

Markets 28The AXIS XIII - Friday 04 February 2022
PageKenyan January inflation rate eased to a

12-month low of 5.39% compared to the Decem

watch ber inflation rate of 5.73% as measured by the
consumer price index. The Consumer Price
Index increased by 0.31% from an index of
118.274 in December 2021 to 118.642 in Janu-
ary 2022. The month-to-month Food and
Non-Alcoholic Beverages Index increased by
1.07% between December 2021 and January
2022. The increase in the Consumer Price Index
was attributed to the increased price of some
food commodities that outweighed the price of
other food items.

Meanwhile, Kenya’s economy is expected to
grow at the fastest pace in 2022 which is an
election year. A consensus outlook from 14
world-leading banks, consultancies and
think-tanks suggests the economy as measured
by gross domestic product (GDP) — will likely
grow 5.4% in 2022.

Consistent fall for the Zimbabwe expectations following a modest 25-basis-point This will be the first time Kenya’s economy will
dollar rate hike last week. record an upswing since the onset of the multi-
party political system two decades ago. The
The local currency depreciated by 1% during its Still, further gains were limited by the prospec- growth in Kenya’s economy is expected to be
first trading session for February 2022. The tof a faster policy tightening by the US Federal- tied to increased expenditure, a projection of
decline was from a trade performance of Reserve and worries about a potential military global economists suggests.
ZWL115.4 against the greenback during last conflict in Eastern Europe.
week’s trading session to 116.7 on Tuesday this Pula YOY gains stretch over 5% amid
week on the RBZ’s auction market. At the same time, concerns over South Africa's 64% jump in diamond sales
economic outlook persist due to its fiscal, politi-
In the past year, markets have been increasingly cal and structural shortcomings, as well as The Pula traded at 11.5 against the greenback
rejecting the free-falling local currency in favour uncertainty around the pandemic and efficient yesterday, taking a year to date gain to 5.18%.
of the United States dollar. power supply. The gains come after sales of rough diamonds
by Debswana Diamond Company jumped 64%
Since the re-introduction of the local currency in Naira appreciates amid fall in FX in 2021 according to the statistics released by
2019, it has been depreciating by wider margins, turnover the Bank of Botswana showed on Monday,
triggering fears of the return to the 2008 infla- driven by the reopening of key global consumer
tion crisis. The Naira traded at 415.3300 on Thursday, Feb- markets.
ruary 3 reaching an all-time high since the start
This has prompted teachers and bank operators of the year, indicating a strong month for the The total value of Debswana’s diamond exports
to threaten a strike unless they are paid in US local currency. The gain dates back to Monday stood at $3.466 billion in 2021 compared with
dollars. when it appreciated against the US Dollar at the $2.120 billion in 2020, the central bank data
Investors and Exporters (I&E) window of the showed.
Zimbabwe’s 2008 hyperinflation features top five foreign exchange market by 0.16%. Then, the
of the world’s worst hyperinflation rates in the domestic currency was sold for N415.33/US$1 at Debswana, a joint venture between Anglo Amer-
world. Worrisomely, it competes with nations the I&E yesterday compared with N416.00/US$1 ican Unit De Beers and Botswana’s government,
that were affected by the greatest wars: World it was traded at the preceding trading session, sells 75% of its output to De Beers with the
War 1 and World War 2. Therefore, there is a which was last Friday. balance taken up by the state-owned Okavango
concern for Zimbabweans to flag a red sign-on Diamond Company.
using the Zimbabwe dollar given its free-fall’s The strengthening of the Nigerian currency was
consistency. bolstered by a decline in FX turnover at the Debswana sales fell by 30% in 2020 as the
market window as the value of trades weakened coronavirus pandemic hit demand while global
Regional Markets 16.9% or $13.78 million. travel restrictions impacted trading. Since
mid-2020 De Beers has shifted some of its
Rand continues on a positive trajecto- During the opening trading session of the week, rough diamond viewings to international
ry… but a turnover worth $95.07 million was recorded diamond centres such as Antwerp to cater for
against the $81.29 million worth of transactions customers unable to travel to Gaborone.
The South African rand traded at 15.3 against published at the preceding session.
the greenback on Thursday, recovering from an Kwacha trades at a 4-week low
over two-week low of 15.6 hit in late January. Also, the domestic currency recorded a good
The rand is recovering after last week's ease as performance against the greenback at the inter- The Zambian Kwacha saw its biggest decline
bets for U.S. interest rate hikes increased on a bank segment of the market during the week. since the beginning of the year on shedding 2%
hawkish shift by the Federal Reserve at a time- to 18.2000 on Thursday, February 3 from the
when the South African Reserve Bank's forward However, corruption, terrorism and greenback prior week’s 17.800 against the United States
guidance was seen less hawkish than market shortages for the manufacturing industry remains dollar. Historically, the Zambian Kwacha reached
a major concern. an all-time high of 22.65 in July of 2021.

Shilling gains as inflation hits However, the currency has appreciated by 20%
12-month lowShilling gains since July 2021. The interest rates at 9% are
expected to buoy the customer’s purchasing
hits 12-month low power which is a core to promote economic
The Kenyan shilling traded at 113.5 on Thursday growth.
appreciating 3.37% year to date amid a decline
in inflation performance. The interest Rate in Zambia averaged 15.79%
from 2001 until 2021, reaching an all-time high
of 68.40% in March of 2001 and a record low
of 3.90% in April of 2010.

Markets 29The AXIS XIII - Friday 04 February 2022

ZSE Weekly Review shares. Meanwhile, in foreign trades, outflows
continued outweighing inflows, with sell-offs
Overall Comment: dominating an average 31% of the aggregate
turnover while inflows held a foothold of 5% of
the total turnover.

In the opening week of February, 2022, the ZSE turnover while inflows held a foothold of 5% of
mainstream index, the All Share Index, surged the total turnover.
by 1.7% week-on-week to Thursday, to close at
a 2-months high record of 12304.52 points. The VFEX:
positive start into the month was stimulated by
resurged demand as investors buy in lows On the United States Dollar (US$) denominated
following a heavy dip in December of the prior bourse, VFEX, SeedCo is now the best perform-
year. Gains in the week were spread among ing stock on a year-to-date basis, at 1.6%, while
market heavies and penny stocks, notching 2.4% BNC is the worst performing after dipping by
and 5.5% respectively. On the downside, medium -9.09% to a price of US$0.05. An aggregate of
caps partially weighed on the market on slump- US$26,076 was traded on VFEX in the week
ing by -0.6%. under review, significantly down from
US$93,403 in the prior week. Trades in the
Sectoral Comment: week were only recorded in Padenga and
SeedCo, with Padenga leading the count.
On a sectoral review, the real estate sector Turnover:
emerged the best performer in the week on gain- Interbank:
ing 4.46%, recovering from a weak start into the An aggregate of ZW$1 billion exchanged hands
year as Mashhold rose by a whopping 57% in in the 5 days to Thursday, up from ZW$0.8 In the currency market, the ZWL depreciated by
the week. The industrials sector came out as the billion in the prior week. This was due to a -1.06% in the 3rd interbank trading week of
worst performing sector in the week on plunging relative growth in prices along with an increase 2022. The momentum of depreciation has been
by -3.66%. However, on a year-to-date basis, in volumes from 14.4 million shares in the prior decreasing in each of the 3-weeks, with a loss
the real estate sector is still the worst perform week to 15.1 million shares in the week review. of -3.83% in the first week of the year, followed
ting, with a loss of -13.1%, trailed by the indus- A total trade of ZW$67.8 million in Tanganda by -2.3% in the prior week against the USD.
trials sector which has dipped by -4.9% while Tea Company also buttressed up the growth in Meanwhile, the premium between the formal
he other 5 sectors are sailing on a positive volumes. Tanganda Tea Company is a spin-off market and the parallel market has exceeded
trajectory. Meanwhile, the All Share Index scaled of Meikles which listed in the week under 100%. Across the border, South Africa’s rand
up its year-to-date gains to 13.7% as market- review at a price of ZW$67.0601 and debugged firmed up, holding on to gains made in the pre-
heavies closed at 18.1% while penny stocks in the same week with an exchange of 1,011,600 vious session after the dollar fell as investors
closed at a loss of -3.4%. consolidated recent gains in the greenback.

08677 197 791
equityaxis.net
@ aaronc[at]equityaxis.net

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FINANCIAL MARKETS AT A GLANCE 2022

ZSE All Share Index ZSE Top 10 Index ZSE Small Cap Index Interbank Market Rate

12304.52 12304.52 388954.09 116.65
1.7% 1.7% 5.5% -1.06%

REGIONAL MARKETS MOVEMENT OVER 30-DAYS

Company Latest Price Previous Week Consumer Latest Price Previous Week Materials Latest Price Previous Week Materials Latest Price Previous Week
Staples ZWL Cents ZWL Cents ZWL Cents ZWL Cents Sector ZWL Cents ZWL Cents Sector ZWL Cents ZWL Cents
African Sun
AFDIS 12600 12600 AXIA 699.78 652.58 ARTZDR 1020 1020 First Capital Bank 350 343.14
ARISTON 331.92 352.66 EDGARS 4399.48 4341.33 LAFARGE 8205 8202.32 CBZ 8444.44 7899.21
BAT 299900 299900 NTS 442.86 450 PROPLASTICS 2700 2700 FBCH 2912.5 3008.33
CFI 10200 10200 RTG 672 511 TURNALL 500 498.33 FIDELITY 1135 1140
DELTA 19511.82 18782.84 SIMBISA 736.36 750 Willdale 362.04 321.82 FML 2100 2198.42
DAIRIBORD 3500 3760 TRUWORTHS 13490.54 13142.9 RioZim 4372.72 4500 GBFS 500 504.67
HIPPO 26000 26005 199.81 200 NMBZ 1300 1300.22
INNSCOR 22205.81 20904.08 ICT Real Estate Latest Price Previous Week ZBFH 7100 7300
MEDTECH 2498.75 2310 Sector Latest Price Previous Week Sector ZWL Cents ZWL Cents ZHL 342.15 347.33
MEIKLES 12500 12019.23 CSZL ZWL Cents ZWL Cents MASHHOLD 313.68 230
NATFOODS 130500 130014.63 ECONET 5801.15 FMP 620 700.31
OK 2500.52 2701.12 ZIMPAPERS 5665 9797.73
SEEDCO 12947.37 12500 10032.73 278.01
STAR AFRICA 140.49 150.99 278
TSL 8000 8000

JSE All Share Index BSE All Share Index LUSE All Share Index NGSE All Share Index

75021.67 7062.63 6359.56 47329.8
1.7% 0.1% 4.2% 1.7%