The AXiS CI (101)

Cover Page Page 10 Page 14 Page 24 In Focus 4 5 17 18 Markets Guest Column World News 30 31 32 33 Capital Markets 20 21 22 22 24 25 Markets Watch ZSE Weekly Weekly Commodity Pulse Financial Markets At a Glance 8 10 11 12 14 14 Economic News and Analysis Reshaping Financial Dynamics : Pioneering the No-Frills Revolution for Enhanced Financial Access Unlocking Zimbabwe's Agricultural Potential : Ensuring Food Security Ahead of Drought Fertilizer Fiasco Looms : Fertilizer Shortage Solutions in Zimbabwe Rails Off the Trail : Zimbabwe’s 2024 Mining Outlook Murky Zimbabwe and Zambia : Currency and Debt Challenges Why Oil Prices are Falling : While War Rages in the Middle East Renewable Bonds as the Solution : Shining a Green Light on Zimbabwe's Electricity Woes Behind the Rebrand : Mutapa Investment Fund: Economic Gamechanger or Potential Pitfall? Latest Auditor-General Report : Local Authorities Are in Shambles Project Cashflow Forecasting Business around the world Politics around the world Regional Economic watch 28 29 30 The equityaxis.net @equity axis @equity axis zimbabwe @equity axis @equity axis @equity axis 08677 197 791 @ aaronc[at]equityaxis.net EQUITY AXIS Financial Insighs at your fingertips Tongaat Hulett's Sale Saga Continues : Creditors Hold the Key to Rescue Plan Afdis Defies Odds : Remains Afloat in HY2023 Mitigated Erosion : MTN Rwanda's 25% Loss Alleviated Unveiling the Ripple Effect : Assessing the Implications of Implats Job Cuts on Zimplats BYD's EVs Victory : Zimbabwe's Disguised Blessing Dulled Star Africa : Profits Plunge and Costs Surge in a Turbulent Year The AXiS CI 10 Nov 2023 ZSE ASI 158,748 VFEZ ASI 68.8 ZWL INTERBANK 5,718.98 161,050 67.4 5,719.72 167,717 67.3 5,720.00 170,207 68.1 5,720.31 172,188 67.9 5,738.72 173,584 67.7 5,739.06 9.35% -1.58% -0.35% ZSE TOP 10 MEDIUM CAP INDEX SMALL CAP INDEX 5,342,954 5,342,954 5,336,400 5,336,400 5,340,726 5,343,534 0.01% 70,248 644,502 71,537 648,559 74,947 666,737 76,167 674,602 76,741 688,676 76,998 701,522 9.61% 8.85%

The AXiS CI Friday 10 Nov 2023 4 imbabwe finds itself mired in an ongoing electricity crisis that shows no signs of abating, now expected to persist throughout the festive period. The situation is compounded by multiple factors, including plans for mandatory Class C Maintenance on Hwange Unit 8 follow- ing the completion of Unit 7 maintenance, which serves as the primary reason for the prolonged power shortage during the holiday season. The ageing infrastructure of the country's power stations and a lack of investment in the energy sector further exacerbate the current predicament. Urgent rehabilitation work on Hwange units 1 and 6 requires a substantial investment of $2.8 billion. Consequently, the persisting electricity supply issues are anticipated to have a significant impact on the economy in the 4th quarter of 2023 and beyond. Amidst a widening electricity crisis, Zimbabwe currently generates an average of 1200Mw per day, which falls significantly short of the peak demand of 2400Mw. Even with the expected restoration of 600Mw from Hwange in January next year, the nation will still face an energy deficit. Compounding the issue, power-intensive companies like Dinson and Iron are set to join the national grid by the end of December, further straining the already burdened electricity supply. Looking ahead, ZESA plans to add approximately 2300Mw of new connections by 2025, more than doubling the peak demand. This indicates that the electricity crisis shows no signs of abating. The consequences are far-reaching, with anticipated disruptions in production for businesses operating in the fourth quarter due to increased operational costs and reduced output levels. As energy costs soar, mining companies will bear the brunt of the impact, but even businesses with lower electricity requirements, like Delta, will still opt for ZESA (Zimbabwe Electricity Supply Authority) over alternative options. This choice is driven by the fact that a Genset typically costs USc22/Kwh, significantly higher than the recently hiked ZESA tariff of 14.21/Kwh. However, the tariff hike is poised to dent companies' profitabil- ity. National Foods, for instance, consumed 713,000 litres of fuel in 2023, amounting to nearly US$1.3 million at current market prices and over a third of the company's operating expenses of US$3.6 million. These figures indicate the imminent struggle that companies will face. In response, ZESA has already raised tariffs to US$14.21/KWh. They claim a staggering loss of potential revenue amounting to US$3.6 billion due to low tariffs, with an additional requirement of US$2.8 billion for the maintenance and rehabilitation of Hwange Units 1 to 6. On the other hand, Kefalos has emerged as a trailblazer in the dairy industry with the success- ful implementation of their DPA solar plant. This innovative solar plant now supplies up to 50 per- cent of Kefalos' energy requirements, a signifi- cant achievement when the factory operates at full capacity. Notably, this shift to solar power has resulted in a substantial reduction in their carbon footprint. The solar plant's annual energy production stands at an impressive 999.6 mega- watt hours (MWh), resulting in savings of 599,000 kilograms (kg) of carbon emissions and over 6,200 tonnes on an annual basis. By har- nessing solar energy, Kefalos has not only made strides in reducing manufacturing costs but has also managed to curtail their energy bill by up to 30 percent. This transition to solar energy signifies a remarkable step forward for Kefalos, as it ensures the uninterrupted operation of their essential operations at the Bhara Bhara Factory, located along Mubaira Road. In the past the occurrences of drastic energy cuts has resulted in low production and a low reported capacity utilization by industry players. We are of the view that the rolling power cuts will eat into GDP growth prospects despite the reduced longi- tude of the occurrence. If the power cuts are to run into year end as envisaged at least 10% of the projected growth will be shelved. The impact could have been more severe if companies are not seeking alternatives to circumvent the chal- lenge. As highlighted We are seeing companies creatively finding ways to avert the crisis through alternative energy sources. However given the rising prices of fossil fuels, this alternative is coming at a huge cost thus impacting negatively on operating costs and net margins. To address this pressing issue, a range of rescue plans is necessary to support the back- bone of the economy—the energy sector. One solution involves creating an asset class known as "renewable energy-backed" bonds (RE Bonds) that can be sold to pension funds, raising essential capital. These bonds would resemble pension funds' existing investments in other fixed-income assets. Collaboration with asset managers and financial institutions, such as banks with a higher risk tolerance, would be crucial in funding these projects. Additionally, the establish- ment of energy investment vehicles and a robust regulatory framework would provide the neces- sary support for investment in renewable energy. The government's redirection of subsidies and incentives toward these projects is also vital. By offering a renewable energy-backed bond or security, the credit rating from rating agencies is likely to be higher, considering the current state of the country's energy supply about demand. Through these strategic measures, Zimbabwe can navigate the challenges posed by rising energy costs and ensure a sustainable energy future. While grappling with its electricity crisis, ZESA also actively participates in the Southern African Power Pool, sourcing approximately 200-500 Mw of power from Electricidade de Mocambique (EDM), Hidroelctricia de Cahora Bassa (HCB), Zambia Electricity Supply Corporation, and Eskom in South Africa. Zimbabwe imports elec- tricity at an average cost of 10.9 cents/kWh, which has prompted ZETDC (Zimbabwe Electric- ity Transmission and Distribution Company) to advocate for a cost-reflective tariff ranging between USc12.3 and USc15/Kwh. This tariff adjustment is necessary for ZETDC to operate optimally, service its debt, and overcome other operational challenges. The issue of servicing the country's debt poses a significant problem. When countries like Mozam- bique have surplus electricity available for exports, the reluctance to allocate additional power to Zimbabwe grows. The lack of debt servicing undermines the willingness of exporting countries to supply Zimbabwe with more electric- ity. It is noteworthy that South Africa aims to capitalize on Mozambique's booming electricity production. However, it is intriguing that a sub- stantial portion of the electricity generated in Mo- zambique is exported to neighbouring countries, while a significant number of residents lack access to electricity. Two-thirds of Mozambique's population, totalling 32.8 million people, live without electricity. Mozambique's largest power plant, Hidroelectrica de Cahora Bassa, has suffered from neglect and insufficient investments over the years. Despite its potential, it exports most of the electricity it produces. Currently, HCB supplies 60% of its power to South Africa's Eskom and 35% to the Zimbabwe Electricity Supply Authority (ZESA). Mozambique consumes only the remaining 5%, leaving a mere 34% of the population with access to electricity. In the realm of electricity distribution, the Kariba North power station illuminates Zambia, while the Kariba South Power station electrifies Zimba- bwe. Yet, neighbouring countries seem to have evaded similar challenges. Zambia, in particular, eagerly awaits a staggering $1.7 billion influx of investments into its energy sector, heralding a power transformation with the mighty 750MW Kafue Gorge Lower (KGL) plant. Meanwhile, South Africa, like Zimbabwe, grapples with its electrifying woes. With a colossal installed capacity of 37,698MW across 13 coal-fired power stations, Eskom, South Africa's power utility, holds immense potential. However, this potential remains untapped, as mar- ket-rated tariffs, efficient privatization, and metic- ulous revenue accountability systems remain elusive dreams. In the African context, electricity tariffs tend to lean towards affordability, ensuring access for the majority of disadvantaged citizens. Despite relentless efforts to adjust tariffs, revital- ize the sector, and boost profitability, Eskom conRenewable Bonds as the Solution Shining a Green Light on Zimbabwe's Electricity Woes *To Page 5 z

Eskom continues to face an uphill battle. So, what lies on the horizon to illuminate Southern Africa's energy poverty? Southern African countries find themselves at a crossroads, grappling with energy crises that demand swift resolutions. Fortunately, a beacon of opportunity shines bright in Mozambique—a nation boasting a comparative advantage in the energy realm. The World Economic Forum has shed light on the lacklustre energy access and supply ratings of the Southern African Develop- ment Community (SADC) countries. Hence, it becomes not only logical but imperative for the Southern Africa Power Pool to redirect its resources towards Mozambique. Second, Southern African countries possess abun- dant resources that can fuel a transformative shift away from hydroelectric power. The sun graces these nations with consistent sunlight, while organic materials abound, offering a golden opportunity to diversify their energy mix. Moreover, Zimbabwe's remark remarkable 500 million tonnes of coal reserves present an untapped source that can effortlessly satisfy the region's insatiable energy appetite through coal-powered thermal power stations Governments across Africa must recognize the urgency of promoting sustainable energy practic- es, such as solar power adaptation, biogas utiliza- tion, and demand-side management. However, these crucial solutions often remain neglected. Additionally, addressing the issue of illegal con- nections and implementing stringent revenue collection systems are vital yet overlooked reme- dies. It is essential to acknowledge that maintaining utilities like Eskom, ZESA, and ZESCOM (Zam- bia) under state control hampers efficiency. Exploring alternatives like private-public partner- ships or outright privatization presents a medi- um-to-long-term option. Considering the dismal track record of corporate governance, it is unlike unlikely that state-owned enterprises can secure sufficient financing for the much-needed revital- ization of generation equipment and transmission infrastructure. Even in functional democracies like South Africa, corruption remains a significant obstacle, hindering progress despite the existence of well-intentioned constitutional frameworks. As the world races towards the 2030 SDG targets, achieving SDG7's vision of "affordable, reliable, sustainable, and modern energy for all" in Southern Africa remains a daunting challenge. Without a radical shift, particularly in corporate governance paradigms, it becomes increasingly difficult to envision the region's path toward this crucial goal. The persistent presence of energy poverty in Southern Africa not only hampers progress but also slows down the momentum towards industri- alization. In this context, the spectre of poverty and darkness looms, urging us to take decisive action. The AXiS CI Friday 10 Nov 2023 5 *From Page 4 n a bold and contentious move last September, President Emmerson Mnangagwa orchestrated significant transformations within Zimbabwe's sovereign wealth fund, previously named the Sovereign Wealth Fund of Zimbabwe and estab- lished in 2014 under President Robert Mugabe's administration. Enacted through special Presiden- tial Powers, the revised legislation has rebranded the fund as the Mutapa Investment Fund, a change that has sparked both admiration for its audacious ambition and concern over its potential pitfalls. Critics, quick to reference recent scandals like the gold mafia incident, emphasize the urgent need for rigorous oversight and transparen- cy in managing precious resources. Whereas its supporters argue that the President has effectively shifted control of critical Zimbabwean parastatals and the national sovereign wealth fund, away from political principles and civil servants to a professionally managed investment company led by financial experts overseeing investment capital, reserves, savings, and budgets of SOEs. In a pivotal step towards operationalizing the newly transformed Mutapa Investment Fund, the Zimbabwean government recently unveiled the appointment of a board, under the experienced leadership of Chipo Mtasa. Finance Minister Mthuli Ncube, who made the announcement says this strategic move, following extensive consulta- tions with stakeholders and President Emmerson Mnangagwa, is designed to breathe new life into State-owned entities (SoEs) and align them with Vision 2030 and National Development Strategy 1. The composition of the board, featuring nota- ble figures such as Lesley Ndlovu, Farai Mta- mangira, Thembelihle Khumalo, Bart Mswaka, Charity Jinya, and Prassad Bhamre, appears to signal a deliberate effort to instill effective per- formance management, reformulate corporate strategies, and fortify governance frameworks within SoEs. According to the finance minister SoEs and local authorities used to contribute 40% to the country’s gross domestic product. Howev- er, over the years, they have become a drain in the fiscus. Traditionally, sovereign wealth funds serve as financial reservoirs, funded by government reserves resulting from budget surpluses and natural resource exports. The world's largest sov- ereign wealth fund (SWF) as of December 2022 was China Investment Corporation (CIC), manag- ing assets reaching around 1.35 trillion U.S. dollars. The CIC is used to manage a portion of China's foreign currency reserves and was estab- lished in 2007. Countries like Kuwait and Norway have long exemplified the potential of these funds, amassing assets worth billions and trillions of dollars, respectively. Zimbabwe, too, had aspirations to channel revenue from its mining assets into this fund, envisaging a pros- perous future for its citizens. However, the eco- nomic challenges that have plagued the nation since President Mnangagwa assumed office in 2017 posed significant obstacles to generating surpluses. In September, President Mnangagwa wielded his executive power to promulgate a law that not only changed the fund's name but also granted him enhanced authority in appointing senior staff and board members. Furthermore, ownership of over 20 state entities spanning key sectors such as mining, transport, oil, railways, communica- tions, power, and agriculture has been transferred to the Mutapa Investment Fund. This executive order hailed as a strategic move to revitalize underperforming state-owned enterprises, has sparked widespread debate and concern. The Mutapa Investment Fund, in its essence, rep- resents a state-owned investment entity with the mandate to invest in a diverse array of assets, including stocks, bonds, real estate, and precious metals, both domestically and internationally. While President Mnangagwa's vision for the fund is rooted in bolstering the nation's economy, the recent changes have left many questioning the implications of concentrating such power in the hands of the executive branch. In this article, we delve into the intricacies of the newly formed Mutapa Investment Fund, analysing its potential to transform Zimbabwe's economic landscape and examining the concerns raised by experts and citizens alike. As the nation stands at a critical juncture, balancing hopes for develop- ment with the need for transparency and account- ability, we explore the implications of this trans- formative decision and its far-reaching conse- quences for Zimbabwe's future. The changes, enacted through special Presidential Powers, have raised a multitude of concerns and sparked heated debates regarding the transparency and accountability of the newly formed Mutapa Investment Fund. One of the most contentious alterations is the Fund's exemption from the provisions of Zimba- bwe’s Public Procurement and Disposal of Public Assets Act. This exemption, stated in General Notice 1546 of 2023, effectively releases the Fund from the stringent procurement procedures that ensure transparency, fairness, and efficiency in the acquisition and disposal of public assets. Although the government argues that this exemp- tion is essential for the Fund's competitiveness in international markets, critics fear that it paves the way for corruption, favouritism, and misuse of public funds. Furthermore, the Mutapa Investment Fund is no longer required to submit quarterly reports to Par- liament, limiting public scrutiny and oversight. Instead, the Board reports exclusively to the Pres- ident and the finance minister, hindering transpar- ency in the Fund's activities and investments. This lack of public assessment raises concerns about the potential exploitation and mismanage- ment of the Fund's assets without adequate accountability measures in place. The changes to the Fund's governance structure also raise constitutional questions, particularly in light of Section 298 of the Constitution, which mandates transparency and accountability in all aspects of public finance, including the operation Behind the Rebrand I Mutapa Investment Fund: Economic Gamechanger or Potential Pitfall? *To Page 6

operation and management of state-owned and managed funds. The broad powers granted to the President under Section 3(9) of the Public Pro- curement and Disposal of Public Assets Act have sparked worries about potential abuse of authori- ty, leading to corruption and unfair practices. Moreover, the alteration of procurement regula- tions may disrupt established protocols and create uncertainties in the procurement process, poten- tially causing delays and inefficiencies. This upheaval could jeopardize opportunities to pro- mote local industries, support small and medi- um-sized enterprises (SMEs), and drive job creation, as parastatals may not prioritize local content and sustainability in their purchase deci- sions. However, at the heart of this paradigm shift lies a robust commitment to efficiency, a cornerstone upon which the Fund stands poised to revolution- ize the nation's State-owned entities (SOEs). Effi- ciency, a linchpin in the Fund's operational model, manifests in various dimensions. Beyond stringent financial oversight, the Fund's unique position as a market-oriented entity minimizes bureaucratic hurdles that often plague government ministries and traditional State-owned enterprises. Freed from the constraints of cumbersome bureaucracies, the Fund can make nimble, com- mercially viable decisions swiftly, giving it a competitive edge in the market. By embracing a private fund model, the Fund introduces a level of agility and responsiveness previously unseen in the realm of public enterprises. This agility trans- lates into swift decision-making, allowing the Fund to capitalize on emerging opportunities, navigate market fluctuations adeptly, and maxi- mize returns on investments. Furthermore, the Mutapa Investment Fund oper- ates as a private trust, holding Zimbabwean public company shares, profits, revenues, and capital on behalf of the people of Zimbabwe. This unique status affords the Fund a certain insulation from the constraints of international sanctions or restrictions that previously hampered the nation's economic activities. These sanctions, imposed for various reasons, have historically posed significant challenges to Zimbabwe's eco- nomic growth, limiting access to international markets and impeding the smooth functioning of State-owned enterprises. However, the ingenious structuring of the Fund circumvents these obsta- cles, offering a path to economic stability and growth even in the face of external pressures. The concept of sustainable investing lies at the heart of the Mutapa Investment Fund's philoso- phy. Recognizing the finite nature of some of the country's resources and their pertinence not only to the present generation but also to posterity, the Fund advocates for their prudent management and strategic investment. In light of this, the Fund has strategically positioned itself to capitalize on the booming mining industry, which is anticipated to generate revenues reaching US$12 billion. This substantial influx of funds allows the Fund to establish and bolster commodity reserves, a move that not only safeguards Zimbabwe's resources but also positions the nation favorably in the global market. However, according to a survey published on Monday, Zimbabwean miners, who are among the leading producers of export earn- ings for the nation, are forecast to face an almost 15% decline in profits next year, with half of them predicted to declare a loss. The mining industry, renowned for its large reserves of gold, lithium, and platinum group metals (PGMs), is set to grapple with a combina- tion of domestic and international factors that are expected to curtail earnings. Last year, Zimbabwe increased royalties for platinum miners to 7% and for lithium to 5%, leading to a 10% rise in pro- duction costs when factoring in increased taxes and tariffs. According to the study, are generally pessimistic,” noting that they had voiced concerns about the investment outlook for the upcoming year and urged the government to modify the regulations governing foreign exchange retention and royalty payments. Mining companies also wish to keep up to 90% of their foreign currency revenues, an increase from the existing 75%. Commodity prices have been muted, mainly for PGMs and primary metals, and global mining infrastructure constraints have made the local problems worse. According to the analysis, min- eral income is only expected to stay lucrative for gold miners; they are expected to shrink by around a fifth this year and by another tenth in 2024. With a keen focus on strategic investments, the Fund can play a pivotal role in not only pre- serving the country's wealth but also multiplying it, ensuring a sustainable future for generations to come. In the wake of celebrating the brilliance encapsu- lated within the Mutapa Investment Fund, it is imperative to acknowledge the imperative need for meticulous oversight to safeguard Zimbabwe's economic sovereignty and integrity. The caution- ary tale of Zambia, where unregulated privatiza- tion eroded the nation's balance sheet and auton- omy, serves as a stark reminder of the pitfalls that must be avoided. The concerns raised echo the sentiments of a vigilant nation, worried about the fate of underperforming state enterprises and the Fund's potential vulnerabilities. President Em- merson Mnangagwa's reassurance, elucidating the formidable balance sheet created by these entities and the Fund's impressive financial foundation, offers a glimmer of confidence. As the Mutapa Investment Fund unfolds its chap- ters in Zimbabwe's economic narrative, the importance of transparency, accountability, and fidelity to national values cannot be overstated. Striking a delicate balance between innovative economic strategies and preserving Zimbabwe's identity and financial resilience is paramount. The Fund's trajectory, rooted in history and guided by a vision for a prosperous future, must be steered with wisdom and prudence. It is not merely a financial instrument but a legacy in the making, shaping Zimbabwe's destiny and preserving its dignity on the global stage. With careful over- sight and a steadfast commitment to national interests, the Mutapa Investment Fund has the potential to be more than just an economic entity; it can become a beacon of responsible governance, ensuring that Zimbabwe's wealth not only grows but also enriches the nation's spirit and secures a sustainable future for generations to come. The AXiS CI Friday 10 Nov 2023 6 *From Page 5

ince the launch of the National Financial Inclusion Strategy 2 in October 2022, significant progress has been made in improving access to formal financial services for marginal- ized groups such as women, SMEs, and youth. This article explores the promo- tion of no-frills bank accounts as a means to enhance financial inclusion and assesses its feasibility. Additionally, we delve into the implications of removing the 2% Intermediated Money Transfer Tax (IMTT) on the banking sector, comparing data from June 2022 and June 2023. In the effort to expand financial services to marginalized groups, finan- cial institutions have been encouraged to scale up financial inclusion through the opening of more no-frills, low-cost accounts. These accounts are designed to offer basic banking services, such as deposits, withdrawals, and limited trans- actional capabilities, at reduced fees or no fees at all. By providing affordable access to formal financial services, no-frills bank accounts aim to facilitate financial transactions and empower indi- viduals and businesses that were previously excluded from the banking system. The feasibility of promoting no-frills bank accounts depends on several factors. Firstly, financial institutions must invest in technology and infrastructure to support the efficient opera- tion of these accounts. This includes developing user-friendly mobile and online banking platforms to facilitate convenient and accessible account management. Furthermore, banks should establish partnerships with agents, such as local businesses or post offices, to provide physical access points for account opening and cash-in/cash-out services in areas with limited banking infrastructure. Secondly, banks can leverage the increasing adop- tion of digital payment systems and cashless transactions to promote the usage of no-frills bank accounts. By offering incentives, such as discounts or rewards, for using bank cards and other cash-lite payment methods, financial institu- tions can encourage customers to embrace elec- tronic transactions. Additionally, educational cam- paigns and financial literacy programs are essen- tial to raise awareness among marginalized groups about the benefits and functionalities of no-frills bank accounts. While no-frills bank accounts are designed to be low-cost or fee-free, financial institutions can still generate revenue through various means. One avenue is by offering value-added services, such as microloans, insurance products, or investment opportunities, to account holders. By tailoring these services to the specific needs and financial capabilities of marginalized groups, banks can create additional revenue streams while promoting financial inclusion. Moreover, banks can leverage the customer data obtained from no-frills bank accounts to develop targeted marketing strategies and cross-selling opportunities. By analyzing transaction patterns and account behaviour, financial institutions can identify suitable products or services to offer cus- tomers, thus increasing customer engagement and generating revenue through increased uptake of fee-based services. Source: RBZ & Equity Axis Research The removal of the 2% Intermediated Money Transfer Tax (IMTT) on transactions facilitated through plastic bank cards and other digital plat- forms can have a significant effect on the banking sector. Firstly, it is anticipated that the removal of this tax will incentivize individuals and businesses to conduct more transactions through formal bank- ing channels, leading to the increased usage of financial services. This, in turn, can enhance financial inclusion and contribute to the growth of the economy. Additionally, the removal of the IMTT tax can lead to a surge in the adoption of bank cards and other cash-lite pay- ment systems. As individuals and busi- nesses realize the cost savings associat- ed with digital transactions, they are likely to embrace these payment meth- ods more readily. This shift towards cashless transactions can streamline the economy, reduce the reliance on cash, and enhance transparency in financial transactions. In June 2022, there were a total of 6.95 million bank accounts, with 4.22 million of them being low-cost bank accounts. In June 2023, the total number of bank accounts rose to 7.33 million, while the number of low-cost bank accounts decreased to 2.25 million. This discrep- ancy can be attributed to several factors. Firstly, the increase in total bank accounts suggests a broader uptake of formal financial services across various segments of the population. This growth may include individuals with higher incomes or those who prefer more comprehensive banking services beyond the scope of no-frills accounts. Consequently, the proportion of low-cost bank accounts decreases relative to the overall expan- sion of the banking sector. The AXiS CI Friday 10 Nov 2023 8 Reshaping Financial Dynamics Pioneering the No-Frills Revolution for Enhanced Financial Access & Analysis *To Page 9 S

The AXiS CI Friday 10 Nov 2023 9 DID YOU KNOW According to the International Monetary Fund (IMF), South Africa is expected to overtake Nigeria and Egypt as the largest economy on the Continent next year. It projects that the size of SA's economy will reach $401 billion in 2024, surpassing Nigeria's $395 billion and Egypt's $358 billion. Despite the decrease in the number of low-cost bank accounts, the banking sector reported aggre- gate profits of ZWL4.55 trillion for the period ended June 2023, compared to ZWL181.25 billion reported in 2022. This growth in profit- ability can be attributed to the sector's reliance on non-interest income, which constituted 92.51% of total income (Z$6.01 trillion) as of June 30, 2023. Non-interest income includes revenue from services such as fees, commissions, and other non-lending activities. The profitability of banks can be affected by var- ious factors, including the cost of operating no-frills bank accounts. While these accounts are designed to be low-cost, financial institutions still incur expenses related to technology infrastruc- ture, agent networks, and customer support. How- ever, the potential revenue streams generated from value-added services and cross-selling opportunities, as mentioned earlier, can offset these costs and contribute to overall profitability. The promotion of no-frills bank accounts rep- resents a feasible approach to enhancing financial inclusion among marginalized groups. By offering affordable access to basic banking services and leveraging digital payment systems, financial institutions can facilitate financial transactions and empower individuals and businesses. The removal of the 2% IMTT tax further encourages the adop- tion of formal banking channels and cash-lite payment methods. While the number of low-cost bank accounts may decrease as the overall bank- ing sector expands, the profitability of banks can still be sustained through non-interest income and value-added services. By embracing technology, developing strategic partnerships, and fostering financial literacy, banks can continue to promote financial inclusion while ensuring their financial viability. It is important for the banking sector to continu- ally assess and adapt its strategies to meet the evolving needs of marginalized groups and the changing financial landscape. By prioritizing financial inclusion and innovation, banks can play a vital role in driving economic growth and reducing inequalities within society. *From Page 8

The AXiS CI Friday 10 Nov 2023 10 ccording to recent credible forecasts, Zim- babwe stands at a very strong likelihood of an El Niño event in 2023-24, which is expected to result in a severe drought. Conse- quently, the country proceeded to activate an Early Action Protocol (EAP) for Drought. Drought comes as a threat to food security, par- ticularly at a time when the global economy is expected to recess in 2024. Through its rich agri- cultural heritage, Zimbabwe has the potential to revitalize its farming sector and sustain food security despite a looming drought by increasing its focus on small-grain farming. Small grains, such as wheat, barley, oats, rye, millet, sorghum, and finger millet, have been cultivated for centuries and offer numerous bene- fits that can contribute to the country's food security, economic growth, and environmental sustainability. However, in recent years, the demand for small-grain products has faced chal- lenges due to changing consumer preferences and increased competi- tion from alternative grains such as maize and the famous ‘white’ maize meal. This is despite benefits that are tagged along small grains farming, distribu tion and consumption. Before addressing how to increase the consump- tion of small grains during peak economic performance, it is important to assess the relative benefits. In per- spective, economic downturns tend to force the consumption of small grains as witnessed in 2008 across divide divides of Zimbabwe, which reverted following the recovery of the economy. Small grains are well-adapted to Zimbabwe's semi-arid climate and can withstand drought con- ditions better than traditional crops like maize. By diversifying crop production with small grains, Zimbabwean farmers can mitigate the risks associated with the looming climate change-induced drought. These crops require less water and have shorter growing seasons, making them more resilient in times of water scarcity. In line with this, the grains have deep root systems that improve soil structure by enhancing water infiltration and nutrient cycling. Additionally, small grains are highly nutritious and offer a range of health benefits as they are rich in dietary fibre, protein, vitamins (B-com- plex), minerals (iron, calcium), and antioxidants. Promoting small grain consumption can, thus, also help combat malnutrition and improve public health outcomes in Zimbabwe. Despite subdued consumption locally, demand for small grains is steadily increasing in international markets due to their nutritional value as highlighted, and glu- ten-free nature. By focusing on small grain pro- duction, Zimbabwean farmers can take advantage of the looming drought in the region and tap into these markets to generate additional foreign income streams. Encouraging value addition through processing techniques like milling or fortification can further enhance market opportu- nities. Nevertheless, as the millennial generation contin- ues to shape consumer trends, the agricultural industry needs to adapt and cater to their prefer- ences. Small grains compared to alternatives have had a low reception level among millennials. However, instead of completely dumping the product, there lies untapped potential to encour- age consumption of these grains among millenni- als, while subsequently improving the economy in the face of a looming drought. Before increas- ing the supply of the product, prospective suppli- ers in conjunction with the government can work to first raise awareness and demand for small grains and subsequently match the demand with relative supply. This can be done through various methods as the nation braces for hard times ahead. Outside the promotion of nutritional advantages of small grains like protein, fibre, vitamins, and minerals, social media platforms can play a significant role in shaping millennial's consump- tion behaviour. Utilizing platforms like Instagram, Facebook, Twitter, and YouTube to showcase visually appealing content related to small-grain recipes, cooking tips, and health benefits can be imperative, along with collaborative efforts with ‘social media influencers’ or food bloggers who align with millennial values of healthy eating and sustainability. Additionally, partnering with restaurants or cafes can also significantly boost the visibility of small grains among millennials. Encouraging these establishments to include dishes featuring small grains on their menus or create special promo- tions around them can help introduce small grain options to a wider audience while leveraging existing customer bases. This will also boost access-convenience to small grain products by ensuring availability in frequently visited places. To a greater extent, compared to the other mea- sures, value addition on small grains can play a crucial role in overcoming obstacles around demand and consumption, and boost appetite for small grains products. Value addition refers to the process of enhancing the quality, functionality, and appeal of a product to meet consumer needs and preferences. By adding value to small-grain products, producers can differentiate the products from alternative grains and create a unique sell- ing proposition that attracts millennials and thus boosts consumption and alters preferences. Different value-addition techniques can be employed to attract the attention of customers. Milling is one plausible technique, as it involves processing the grains into various products like flour or meal with different textures (e.g., fine or coarse) suitable for various culinary applications like baking bread, making pasta, or creating breakfast cereals. This can allow small grains to be integrated into meals most preferred by mil- lennials. The process can also be buttressed by fortifica- tion as a further value addition, which involves adding essential nutrients like vitamins and min- erals into the small-grain products and subse- quently enhancing their nutritional profile and appeal to health-conscious consumers. Value-add- ed small-grain products can offer the target con- sumers a wider range of options beyond tradition- al grain commodities. This diversification helps capture niche markets and cater to specific dietary requirements or pref- erences. Infusing small-grain products with natural flavours such as herbs, spices, fruits, or even chocolate can also create exciting taste experiences that appeal to a broader range of consumers. Value-added products often command higher prices than raw commodities due to their enhanced quality or unique characteristics. This allows producers to generate higher profit mar- gins, and compete in new markets. This can also open up opportunities for small-grain producers to enter new markets or expand their presence in existing ones by offering innovative products that meet evolving consumer trends. Furthermore, developing ready-to-eat snacks or meals made from small-grain ingredients can pro- vide convenience for consumers not willing to go through the process of preparing meals from small grains, or those with little to no idea of using small grains in a cuisine. By addressing consumer (millennials) demands for convenience, health benefits, or novel flavours, value-added small-grain products can attract new customers who may not have previously considered these grains. Increasing demand and consumption levels for small grains among millennials requires a multi-faceted approach that combines education about health benefits and sustainability practices with engaging content on social media platforms alongside collaborations with food businesses and convenient access points for purchasing products. Value addition also comes as the most essential strategy for increasing demand for small-grain products in today's competitive market landscape. By implementing these strategies effectively, we can tap into the millennial market's potential while ensuring food security amidst a drought, promoting healthier eating habits and supporting sustainable agriculture practices simultaneously. Unlocking Zim's Agricultural Potential Ensuring Food Security Ahead of Drought A

The AXiS CI Friday 10 Nov 2023 11 imbabwe is currently grappling with a significant food security challenge, with a sharp rise in acute food insecurity observed in recent years. The country's agriculture sector plays a crucial role in addressing this issue, par- ticularly in maize production. However, the sector is now facing a looming fertilizer shortage, which has the potential to further exacerbate the existing challenges. This article will analyze the implica- tions of the fertilizer shortage on maize produc- tion, food security, local maize prices, and the likelihood of achieving agricultural targets. Addi- tionally, alternative strategies to reduce reliance on fertilizers will be explored. According to the latest Cabinet briefing, the national demand for fertilizers in Zimbabwe is estimated at 400,000 metric tonnes of basal (Compound D) and 380,000 metric tonnes of top dressing (Ammonium nitrate) per annum. Howev- er, the local fertilizer industry is experiencing challenges in meeting this demand, leading to an increasing supply gap. To mitigate the shortfall, farmers have been granted permission to import fertilizers directly using free funds. Zimbabwe's acute food insecurity situation, with approximate- ly 3.8 million individuals affected, represents a 30 percent increase compared to the previous year, as highlighted by the Food and Agriculture Organization (FAO). The fertilizer shortage poses a significant threat to food security, particularly in maize production. Fertilizers play a vital role in enhancing soil fertility and optimizing crop yields. Without adequate fertilizer availability, farmers may struggle to achieve optimal yields, leading to reduced maize production and further exacerbating food insecurity. The shortage of fertilizers is likely to have reper- cussions on the dynamics of maize prices in Zimbabwe. Currently, the government imports white maize primarily from South Africa, with a Free on Board (FOB) price of US$208 per tonne. However, the increased reliance on imports due to lower domestic production resulting from the fertilizer shortage is expected to drive up maize import expenditure. Already, the country has experienced a significant increase of approximate- ly 143% in maize import expenditure, amounting to US$63.2 million compared to US$26.0 million during the same period last year, as indicated by the latest trade data. The government's efforts to boost domestic agri- cultural production include plans by the Agricul- ture and Rural Development Authority (ARDA) to plant 20,000 hectares under irrigation. Howev- er, achieving this target is likely to be hampered by the shortage of fertilizers. Fertilizer plays a critical role in optimizing yields and increasing productivity. With the limited availability of fertilizers, farmers may struggle to achieve the desired agricultural targets. The government's goal of reaching 90,000 hectares under irrigation is likely to fall short, further hindering efforts to achieve self-sufficiency in maize production. Given the challenges posed by the fertilizer short- age, exploring alternatives that are cost-effective and reduce reliance on traditional fertilizers becomes crucial. One such alternative is organic farming practices, which emphasize the use of organic matter, crop rotation, and biological pest control methods. These practices can improve soil fertility, reduce input costs, and mitigate the adverse environmental impacts associated with conventional fertilizers. Additionally, the promo- tion of sustainable farming techniques, such as agroforestry and integrated soil fertility manage- ment, can enhance soil health and productivity. The impending fertilizer shortage in Zimbabwe poses significant challenges to the agriculture sector, food security, maize prices, and the achievement of agricultural targets. The limited availability of fertilizers threatens to reduce maize yields, exacerbate food insecurity, and increase the country's reliance on costly maize imports. Exploring alternative strategies, such as organic farming practices and sustainable farming tech- niques, can help mitigate the adverse effects of the fertilizer shortage, reduce reliance on tradi- tional fertilizers, and enhance long-term agricul- tural sustainability. To secure a stable food supply and overcome the fertilizer shortage, concerted efforts and strategic interventions are required to address the underlying issues and ensure the resilience of Zimbabwe's agricultural sector. Addressing the impending fertilizer shortage in Zimbabwe requires exploring alternative solutions that can mitigate the adverse effects on agricul- tural productivity and food security. Here are sev- eral potential strategies that can help alleviate the fertilizer shortage and promote sustainable farm- ing practices in the country. Organic Farming Practices Encouraging and supporting farmers to adopt organic farming practices can be a viable solu- tion. Organic methods, such as composting, using animal manure, crop rotation, and green manure, help improve soil fertility naturally. These practic- es enhance nutrient availability, promote benefi- cial soil microorganisms, and reduce the reliance on chemical fertilizers. Government initiatives can include providing training, resources, and incen- tives to farmers interested in transitioning to organic farming. Agroforestry Systems Promoting agroforestry practices can contribute to enhancing soil fertility and reducing the depen- dence on synthetic fertilizers. Agroforestry involves inte- grating trees and shrubs into agri- cultural land- scapes, which can improve nutrient cycling, prevent soil ero- sion, and pro- vide additional sources of organic matter. The deep-rooted trees in agrofor- estry systems can access nutri- ents from deeper soil layers and make them available to crops, reducing the need for external fertilizers. Integrated Soil Fertility Management (ISFM) Implementing ISFM approaches can optimize nutrient use efficiency and reduce reliance on chemical fertilizers. ISFM combines the use of organic and inorganic fertilizers with other soil and crop management techniques. By integrating practices such as crop rotation, cover cropping, and judicious use of mineral fertilizers based on soil testing, farmers can achieve better nutrient balance and improve soil health. Biofertilizers Biofertilizers, which consist of beneficial micro- organisms such as nitrogen-fixing bacteria and mycorrhizal fungi, can play a significant role in enhancing soil fertility without relying heavily on synthetic fertilizers. These microorganisms form symbiotic relationships with plants, promoting nutrient uptake and improving soil structure. Government agencies and research institutions can facilitate the production, distribution, and awareness of biofertilizers among farmers. By implementing a combination of these strate- gies, Zimbabwe can reduce its reliance on imported fertilizers and enhance long-term soil fertility and agricultural sustainability. However, it is crucial to consider the unique socio-economic and environmental contexts of different regions within the country and tailor the solutions accord- ingly. A multi-stakeholder approach involving government agencies, farmers, research institu- tions, and agricultural extension services will be essential for the successful implementation and widespread adoption of alternative fertilization strategies. Fertilizer Fiasco Looms Fertilizer Shortage Solutions in Zimbabwe z

The AXiS CI Friday 10 Nov 2023 12 n October 2023, Sibanye-Stillwater, a multina- tional mining company, implemented a restructuring process aimed at reducing costs, which could potentially lead to the loss of over 4,000 jobs and the closure of certain platinum mining shafts. Around the same time, Anglo American Platinum (Amplats) suggested the pos- sibility of job cuts at its head offices in South Africa and globally, as part of cost-saving mea- sures. These three major conglomerates, Implats, Sibanye-Stillwater, and Amplats, all have opera- tions in Zimbabwe. Implats owns Zimplats, Sibanye-Stillwater shares ownership of the Mimosa mine with Amplats, and Amplats has a joint venture with Implats for the Ngezi mine. In a trading update in November 2023, the CEO of Impala Platinum (Implats) announced plans to reduce spending across all operations, including scaling back a planned investment of US$1.8 billion in Zimbabwe's largest platinum mine, Zimplats. This implies the significant challenges mining companies are facing and Zimbabwe is not on its island. In response to weakening global metal prices, Implats has cut US$1.8 billion in spending at Zimplats Zimplats allocates nearly 47% of its spending to local suppliers, particularly in procurement. In 2022, this figure was over 50%, but it has reduced to 47% this year. Against this background, major mining companies with huge investments in Zimbabwe incurring such setbacks, this article seeks to unravel Zim- babwe’s 2024 mining sector’s outlook. Since assuming office in 2018, President Emmer- son Mnangagwa has placed significant emphasis on the mining sector as a key driver of his eco- nomic agenda. His ambitious objective is to gen- erate substantial revenue of US$12 billion by 2023, as outlined in his economic blueprint, the National Development Strategy 1. The focus is primarily on gold, platinum group metals, and diamonds. Additionally, emerging minerals such as chrome, coal, and lithium, often referred to as "white gold," are expected to contribute to the growth of mining revenues in Zimbabwe. The government has been actively implementing various policies to revitalize the mining sector in Zimbabwe. However, it has failed to give suffi- cient attention to crucial issues such as taxes, capital, and electricity, which have a significant impact on the weakening metal prices. Although mining may not be the primary contributor to Zimbabwe's GDP, it remains the leading source of foreign currency earnings for the country. In 2022, mining foreign exchange receipts amounted to a total of 5 billion US dollars, and the govern- ment has set an ambitious target to more than double these receipts in 2023. This target is not only ambitious but also challenging, considering the complex dynamics of the mining industry and the broader economic variables in play. In 2022, mineral exports surged to US$5.62 billion, com- pared to US$2.7 billion in 2017. The mining sector has made a posi- tive contribution to the country's fiscal revenue, with its share increasing from 9% to 12% over five years. However, there is a pre- vailing sense of pessi- mism regarding Zimba- bwe’s mining outlook. The mining index, as measured by the Zimba- bwe National Chamber of Commerce (ZNCC), experienced a notable growth of 9.4% in 2022. However, the most recent survey conducted by the ZNCC indicates a decline in this positive trend, with the index falling to -0.3%. This marks the first time during Mnangagwa's administration that the index has dipped below zero, despite his emphasis on plac- ing mining at the forefront of his economic poli- cies. Zimbabwe's mining outlook, except for gold which is not being affected by geoeconomic fragmentation, but rather used as a haven asset is significantly impacted by the downward trend in commodity prices due to geopolitical tensions. This geopolitical event has led to the fragmenta- tion of major commodity markets, prompting countries to impose trade restrictions on commod- ities and investors to shun other commodities less gold and US dollars as a haven. Poor global metal prices Global metal prices, especially for platinum group metals and lithium, are expected to remain low. One significant element affecting platinum is the emergence of lithium, which has reduced the demand for the mineral. The rise of battery elec- tric vehicles poses a threat to the demand for platinum now and beyond and other metals used in emissions-curbing catalysts, as these vehicles do not require the same level of platinum usage. However, lithium itself is not immune to chal- lenges. Geopolitical conflicts and economic uncertainties have impacted lithium demand. Rus- sian war on Ukraine resulted in sanctions on Russian natural gas, which previously accounted for 45% of European needs. This situation has made transitioning away from fossil fuels more difficult, leading nations to rely on fossil fuels and reducing demand for lithium including in China, the largest producer of electric vehicles. This trend is expected to worsen beyond 2023 due to the emergence of new conflicts, such as the Israeli-Hamas War and the failure of a cease- fire in Ukraine. Ukraine is planning another major offensive. These conflicts further reinforce reliance on fossil fuels and reduce demand for lithium-made products, thereby affecting both lithium and platinum prices. Year to date, lithium prices have experienced a substantial decrease of 72%, while platinum prices have fallen by 45%. To mitigate the impact of poor prices, miners may consider increasing production. However, expanding production comes with high production costs, which may not be feasible given the cur- rent economic conditions. The combination of reduced profitability, declining revenues, and the high cost of production poses significant chal- lenges for miners in navigating the current market conditions. Since the beginning of the year, platinum prices have decreased by 15%, while lithium prices have dropped by over 50%, nearly doubling on a year-on-year basis. According to the Interna- tional Monetary Fund (IMF), geoeconomic frag- mentation will heighten platinum and lithium price headwinds, potentially slowing down the progress of the green revolution by one-third by 2030. ZNNC report indicates that miners antici- pate a 15% decrease in profitability and a 20% decline in revenue for the current year, with an additional 10% drop expected in the following year, primarily due to weak commodity prices. Commodities, given their concentrated production, challenging substitution possibilities, and critical role in various technologies, are particularly sus- ceptible to geoeconomic fragmentation. GeoecoRails Off the Trail Zimbabwe’s 2024 Mining Outlook Murky I *To Page 13

The AXiS CI Friday 10 Nov 2023 13 economic fragmentation leads to significant fluctuations and increased volatility in commodity prices. This volatility predominantly affects low-income countries that heavily rely on export- ing raw minerals for their economic sustenance. Fragmented mineral markets result in higher costs for the energy transition, reducing investments in renewable energy and electric vehicles, thereby impacting profitability. Electricity Crisis One of the major challenges Zimbabwe will face in 2024, which is a carryover from 2023, is the escalating electricity costs. Currently, electricity costs account for 20% of miners' overall expens- es, and they have seen a significant increase of 40% year-to-date. In the upcoming year, the Zim- babwe Electricity Supply Authority (ZESA) is planning to raise power tariffs for the third time, which will further drive up costs. The tariff increase will raise power costs to 24% of overall expenses, up from the current 20%. Another challenge is the depletion of electricity output, which falls short of the required capacity. The government has stated that peak demand necessitates up to 1.8 gigawatts, but analysis sug- gests that the mining and manufacturing sectors' development requires up to 2.5 gigawatts to sus- tain peak demand. Insufficient electricity output, coupled with high tariffs, will result in a produc- tion cost increase of up to 10% in the coming year. The industry will continue to rely on generators or solar systems as Hwange Power Station's Unit 1-6 requires substantial investment, estimated at US$2.8 billion, for rehabilitation, repowering, maintenance, and construction. Hwange Power Station serves as Zimbabwe's primary electricity buffer, as Kariba is significantly impacted by climate change, leading to reduced power genera- tion due to recurring drought spells. This means companies will continue to rely more on genera- tors which are expensive amid poor metal prices. this translates to high costs and profits in 2024. The combination of high electricity tariffs, limit- ed output, and reliance on alternative power sources poses significant challenges to the mining industry in terms of cost competitiveness and operational sustainability. Royalties Last year, the Zimbabwean government proposed an increase in royalties for platinum miners from 2.5% to 7%, and for lithium from 2% to 5%. It is worth noting that Zimbabwe's tax contribution from mining is currently less than 2%, which is below the average contribution of 2% from coun- tries within the Southern African Development Community (SADC) and above. However, it is challenging to make a direct comparison between Zimbabwe and other countries like South Africa and Zambia due to their differing economic land- scapes and circumstances. However, one significant development to consider is the introduction of a beneficiation tax on plati- num, scheduled to take effect in January 2024. This will heavily weigh on Zimplats, Unki and Mimosa which are already struggling from poor commodity prices. This tax is unnecessary given the lower prices of platinum group metals and that Zimplats, is currently constructing a refinery and has agreed to process platinum within Zim- babwe. For a better 2024 outlook, the government should reconsider and potentially revise the proposed increase in royalties, as mining companies already contribute substantial taxes. It is import- ant to strike a balance between ensuring a fair share of revenue for the country and maintaining an attractive investment environment for mining companies, especially considering the current challenges faced by the industry, such as lower PGM prices and the need for infrastructure devel- opment. Capital Restraints Due to unfavourable commodity prices and high electricity costs, coupled with the necessity to increase production to compensate for these chal- lenges, the sector is currently experiencing a significant shortage of capital influx which will worsen in 2024 due to a slow global and Zimba- bwe’s projected economic recovery. The mining industry requires a total of US$2 billion within the next year to bolster production levels and ensure its sustainability in the market. The situation will be further aggravated by the export retention fee policy. Under this policy, the government pays exporters 75% of their earnings in USD and 25% in local currency. However, due to the depreciation of the Zimbabwe dollar, miners are experiencing a loss in the value of their earnings. For effective production going forward, miners should at least be permitted to retain at least 90% of their earnings in foreign currency. This would enable them to adequately fund their operations and mitigate the adverse effects of currency devaluation and global geo- economic fragmentation. Therefore, Zimbabwe's mining sector is facing numerous challenges and uncertainties in the year 2024. The industry will continue to grapple with the impact of poor global metal prices, particular- ly for platinum group metals and lithium, which have been affected by geopolitical tensions and shifts in demand. Electricity costs will continue to escalate and inadequate electricity output will pose significant obstacles to the sector's cost competitiveness and operational sustainability. High tariffs and limited power supply are driving up production costs amid poor metal prices. The proposed increase in royalties, including the introduction of a beneficiation tax on platinum, adds further financial strain to mining companies already struggling with poor commodity prices. While the government needs to ensure a fair share of revenue, striking a balance between gen- erating revenue and maintaining an attractive investment environment is crucial for the sector's growth. The depreciating Zimbabwe dollar and the export retention fee policy will further com- pound these challenges. In light of these circumstances, the government must reassess its policies and consider measures that support the mining industry's growth and resilience. This may include revisiting the pro- posed increase in royalties, providing incentives for foreign investment, improving infrastructure development, and allowing miners to retain a higher percentage of their earnings in foreign currency. Addressing these challenges will require a collaborative effort between the government and mining companies to create a conducive environment for sustainable growth and attract much-needed investment in the sector. Send USD with ZIPIT. *From Page 12

The AXiS CI Friday 10 Nov 2023 14 imbabwe’s currency has been on a roll- ercoaster, sharply weakening in the first half of the year in line with its underlying economic volatility. It would be expected that would rank as the worst per- formance of any currency globally, but it is not. Neighbouring Zambia, which enjoyed currency appreciation in 2022, has rolled back, particularly in the second half of the current year, recording a depreciation that is seen as one of the world’s worst and second to only Argentina’s Peso. Argentina, like Zimbabwe, has historically faced currency and broad economic stability challenges, which it continues to battle to this day. The peso is down 35% against the US dollar since the beginning of the second half of the current year. Likewise, the Zambian Kwacha has lost 21% to the greenback over the same period making it a very close contend- er among the worst performers. Interestingly Zimbabwe, which has hogged the limelight since the beginning of the year, in terms of currency underperformance, is recording an appreciation in the Zimdollar, over the same period. The local unit is up 10.3%. Zambia has been on a path to reformation since 2020. It has focussed on economic restructuring targeted at its debt overhang. The country’s external debt, which has been in default is estimated at near US$20 billion levels. The new President Hichile- ma Hakainde has been on an offensive, charming creditors and managed to reach a financing deal with the IMF. This deal followed an agreement with most of the lenders, particularly the Europe- an ones. China which is a key creditor, later came to party. The country now awaits a finalisa- tion of the deals and subsequent financing. The conditions against these agreements required structural adjustments to the economic manage- ment of Zambia. IMF particularly require adjust- ments which result in fiscal tightening and in particular these adjustments have netted in on fuel, electricity and agriculture subsidies, previ- ously offered by the government. Besides subsi- dies, parastatal reforms and reviews of prior con- tracts to ensure efficiency have been instituted. Overall these adjustments tightened fiscal spend to optimise the budget and limit the bleed con- tracted through budget deficits. The country has made progress in limiting the deficit which pres- ently sits around 7% from 9% in 2019. A healthy deficit would range below 5%. Equally, the coun- try aims to bring down its debt-to-GDP ratio to acceptable levels once the reform agenda gathers pace. Fiscal tightening has lowered the pace of GDP growth and general spending in the econo- my, which would favour price stability and lower demand for forex. However, a double-barrelled challenge has emerged as global commodities go into a tailspin. The country, whose earnings are largely concen- trated on one currency has suffered a blow on its earnings at a time when consumer spending is low. Copper, which accounts for over 70% of the country’s foreign currency earnings is down by an average of 10%-15% over the 10 months to October compared to the same period in 2022. This has hit the currency badly driving the sec- ond-half performance into a tailspin. Zambia expects to receive a boost from the IMF in the very near term and this is likely to change the country’s fortunes, all else being stable. Zim- babwe on the other hand continues to pursue domestic means of stabilising its currency. The gains accrued in the second half as highlighted earlier are largely cosmetic in our view. These gains came following a massive intervention by the government and the RBZ. The RBZ ramped up liquidity mop-ups through issuances of gold coins and other government securities. In the latest instances, the government is rolling out TBs to help finance its budget and consequently expects a wider deficit for the full year. We are of the view that the Zim dollar gains highlighted above for the second half period of the year were largely cosmetic. The currency market remains largely manip- ulated by the RBZ and government and therefore distorting the exchange rate. Over- all the Zim dollar is down 86% year to date and is the worst-performing currency global- ly. We expect this trend to be maintained into the coming year. The real challenge with Zimbabwe lies in the inability to clear international debt or seek a resolution. Efforts made so far have been fruitless and this is worsened by further isolation given the latest political developments. Zimbabwe needs solutions which will not in any way be organic driven. The country has a rolling legacy debt which is at near Zambia levels. The only difference is that the former’s debt has been running on default for over 20 years. There is no fiscus room to solve the debt crisis as reflected by Zimbabwe’s token interest payments and a generally depressed fiscus position. These challenges have increased the country's risk premium and the overall cost of acquired capital or lines of credit. A good fraction of the expected flows coming from IFIs have been closed out due to the debt crisis. In the absence of these flows, the government has largely relied on its funds for developmental projects whose return is largely in the long term. Likewise, a lot of necessary services have been forgone, thus impacting general business returns. These chal- lenges have increased the risk of currency failure. However real challenge failures have been spurred by overdrive in money supply, which again has a relationship to external debt. The failure to seek external funding to support the budget and also to cushion other shocks has resulted in the government resorting to short-term borrowings on the domestic market. these have created problems in the past through extensive credit creation. In the latest instances, the govern- ment has used its monetary policy arm to simply issue currency thus driving the money supply haywire. Zimbabwe will need to quickly solve its external debt position to effectively position the country on a path to sustainable growth and recovery. Zimbabwe and Zambia Currency and Debt Challenges Why Oil Prices Are Falling While War Rages in the Middle East mid escalating tensions between Israel and Hamas in the Middle East, conventional wisdom might anticipate a surge in oil prices due to potential disruptions in the region's oil supply. Paradoxically, the prevailing reality defies these expectations. Despite the ongoing conflict, oil prices have experienced a downward trajectory instead of the anticipated ascent. This peculiar occurrence prompts a fundamental inqui- ry: why are oil prices diminishing amid the per- sistent warfare in the Middle East? To unravel this enigma, a comprehensive exploration of mul- tifaceted factors shaping oil prices becomes imperative. These include the intricate interplay between the Israel-Hamas conflict, global economic conditions, geopolitical risks, and the intri- cate dynamics of the market. Through a meticu- lous analysis of these intricate elements, valuable insights emerge, shedding light on the intricate and nuanced dynamics of oil markets in times of conflict. Price Movements and Investor Sentiment The Israel-Hamas conflict has certainly had an impact on oil prices, albeit in a somewhat unex- pected manner. On Friday, oil prices experienced a significant rally, with Brent crude and West Texas Intermediate (WTI) crude posting their highest daily percentage gains since April. However, this rally was short-lived, as prices began to fall again on Monday. According to Bob Mc- Nally, President of Rapidan Energy Group, market concerns about the health of the global economy and the implications for oil demand have been the primary reason for the recent declines in oil prices. This sentiment is further reinforced by indications of softening global oil demand, particularly in Europe. While the conflict in Gaza has had minimal impact on global oil and gas supplies, the poten- tial for a broader regional conflict involving other countries poses a significant risk. This risk has been highlighted by the World Bank, which A z *To Page 15

The AXiS CI Friday 10 Nov 2023 15 which warns that a ratcheting up of the fighting in Gaza could push global commodity markets, including oil markets, into uncharted waters. Market participants are particu- larly concerned about the implications of a wider conflict for oil supplies from major oil-producing countries such as Saudi Arabia, Iran, and the United Arab Emirates. Any disruption to oil supplies from these countries could have a significant impact on global oil prices. Softening Global Demand and Economic Growth Concerns One of the key factors contrib- uting to the falling oil prices amidst the Israel-Hamas con- flict is the softening global demand for oil. Several eco- nomic indicators suggest that global economic growth is slowing down, which has raised concerns about the future of oil demand. The recent report from Germany, Europe's largest economy, indicating a contraction in its gross domestic product (GDP) in the third quarter, further underscores the concerns about global economic growth. This economic slowdown has a direct impact on oil prices, as lower economic activity translates into reduced oil demand. Europe, in particular, has been experiencing an economic slowdown, which has dampened oil demand. The Eurozone's October inflation rate, at its lowest level in two years, indicates that the European Central Bank is unlikely to hike inter- est rates soon. This low inflation rate reflects subdued economic activity in the region, which can have a direct impact on oil prices. The combination of softening global demand and the European economic slowdown has contributed to the downward pressure on oil prices during the Israel-Hamas conflict. Escalation Risks and the Potential for a Wider Conflict The Israel-Hamas conflict poses significant geo- political risks to oil markets, comparable to the risks associated with Russia's invasion of Ukraine last year. While Israel and the Palestinian territo- ries themselves are not major oil players, the conflict's location in a key oil-producing region raises concerns about potential escalation and its impact on oil supplies. The recent ground offen- sive by Israel in Gaza, along with the threat of a broader regional conflict, has heightened these risks. The US National Security Advisor, Jake Sullivan, has acknowledged the "elevated risk" of the conflict spreading to other parts of the Middle East region, further adding to market uncertainties. Iran, as Israel's most powerful foe and a growing force in oil markets, plays a crucial role in the geopolitics of the region. The country's alliance with Hamas and its involvement in the conflict add another layer of complexity to the situation. The potential for Iran to disrupt oil supplies in response to the conflict raises concerns about the stability of oil markets. Any disruption in oil supplies from Iran, a major oil-producing country, could lead to a significant increase in oil prices. The World Bank's Outlook on Oil Prices The World Bank's Commodity Markets Outlook report provides insights into the expected trajecto- ry of oil prices amidst the Israel-Hamas conflict. The report predicts that global oil prices will average around $90 a barrel in the fourth quarter, before dropping to an average of $81 a barrel in the following year due to slowing global econom- ic growth. However, the World Bank also highlights the potential for a surge in oil prices if the conflict escalates. In a worst-case scenario, with a disrup- tion comparable to the 1973 Arab oil embargo, oil prices could jump as much as 75% to $157 a barrel. The World Bank outlines three potential scenarios for oil price surges in the event of further escalation in the Israel-Hamas conflict. A smaller disruption akin to the Libyan civil war in 2011 could push oil prices to $103 a barrel. A medium-level disruption comparable to the fallout of the Iraq war in 2003 could result in prices reaching $121 a barrel. And in the worst-case scenario, similar to the impact of the Arab oil embargo in 1973, prices could soar to $157 a barrel. These scenarios highlight the potential for signifi- cant oil price volatility if the conflict intensifies and disrupts oil supplies in the region. Impact of US Sanctions and Supply Curtailment In addition to the Israel-Hamas conflict, the imposition of sanctions by the United States on owners of tankers carrying Russian oil priced above the G7's price cap of $60 a barrel has also influenced oil prices. These sanctions aim to close loopholes and punish Russia for its invasion of Ukraine. The tighter scrutiny of Russian oil shipments and the potential curtailment of supply have added to market uncertainties and could further impact oil prices, depending on the extent of the supply disruption. The combination of the Israel-Hamas conflict and the US sanctions on Russian oil raises concerns about potential supply disruptions in the oil market. Any significant disruption to oil supplies, whether from the Middle East or Russia, can have a profound impact on oil prices and market dynamics. Market reactions to supply disruptions can vary, with prices often experiencing signifi- cant volatility. Therefore, market participants closely monitor geopolitical events and their potential impact on oil supply to anticipate price movements. The recent ground operations by Israeli forces in Gaza have raised concerns about the potential intensification of the conflict. While the ground assault has been limited so far, there is still a risk of further escalation and its impact on oil supplies. The ongoing conflict and the uncertainty surrounding its outcome contribute to market vol- atility and can influence oil prices in the coming days and weeks. The risk of regional escalation in the Middle East remains a significant concern for oil markets. The involvement of other countries and the potential for a broader conflict could have far-reaching consequences for oil supplies and prices. Market participants closely monitor developments in the region, including diplomatic efforts and state- ments from key players, to assess the likelihood of further escalation and its impact on oil markets. Implications for Oil-Producing Countries The Israel-Hamas conflict raises concerns about the stability of major oil-producing countries in the Middle East. Countries such as Saudi Arabia, Iran, and the United Arab Emirates play a crucial role in global oil markets, and any disruption to their oil supplies can have a significant impact on prices. Market participants assess the risks faced by these countries and their ability to main- tain stable oil production and exports amidst regional tensions. Saudi Arabia, as the world's largest oil exporter, is of particular importance in assessing the impli- cations of the conflict. Any escalation that threat- ens Saudi Arabia's oil infrastructure or disrupts its oil exports could have a profound impact on global oil markets. Iran, with its alliance with Hamas and its growing influence in oil markets, also faces potential consequences. The country's involvement in the conflict raises concerns about its ability to maintain stable oil supplies and the potential for retaliatory actions. The United Arab Emirates, another major oil producer in the region, is also at risk of supply disruptions and market volatility if the conflict escalates further. The outlook for oil prices amidst the Isra- el-Hamas conflict is influenced by the overall demand-supply balance in the oil market. While geopolitical events can have a significant impact on prices, the broader market sentiment and fun- damental factors such as supply and demand dynamics also play a crucial role. Market participants closely monitor the balance between oil supply and demand, along with geo- political risks, to assess the overall market out- look and anticipate price movements. Economic data, particularly indicators of global economic growth, have a direct impact on oil prices. Weak economic data, such as the contraction of Germa- ny's GDP, can contribute to downward pressure on oil prices. Market participants analyse eco- nomic indicators to gauge the health of the global economy and its implications for oil demand, which in turn influences oil price trends. Final Thoughts The falling oil prices amidst the Israel-Hamas conflict can be attributed to a combination of factors, including concerns about the global econ- omy, softening oil demand, geopolitical risks, and market dynamics. While the conflict itself has not significantly disrupted oil supplies, the potential for escalation and the involvement of major oil-producing countries raises the stakes for oil markets. The future trajectory of oil prices will depend on the resolution of the conflict, global economic conditions, and the stability of oil sup- plies from key oil-producing countries in the Middle East. *From Page 14

By Zvikomborero Sibanda he Office of the Auditor-General (OAG) periodically publishes audit reports that serve as an evaluation tool for internal con- trol mechanisms within the public sector. In turn, this stimulates good governance through enhanc- ing efficiency, transparency, and accountability in the use of public funds. As such, this column seeks to identify key implications that can be drawn from the audit findings on Local Authori- ties for the financial year ended 31 December 2022. Background The Public Finance Management Act [Chapter 22:19] and the Audit Office Act [Chapter 22:18] direct the Auditor General (AG) to prepare and submit to the Minister of Finance and Economic Development, not later than the 30th of June each year, a report on the outcome of an exam- ination and audit of the financials prepared by the government and its entities. Accordingly, the currently acting Auditor-General Kujinga submitted the audit report (Local Author- ities) for the year ended 31 December 2022 on the 24th of June 2023. This high level of compli- ance with relevant laws shown by the OAG amid increased shortages of essential resources is highly commendable. The feat was attained amid increased shortages of essential resources as evidenced by a significant number (64) of finan- cial statements from 58 LAs which was still in progress by the time of the conclusion of the audit report. While submission of public financial statements for scrutiny by the OAG is required by law, many Local Authorities (LAs) are failing to submit their financial reports for thorough audit. The latest report shows that a total of 109 finan- cial statements were not yet submitted for audit as of May 31, 2023. Also, almost all LAs are not fully implementing OAG recommendations. Out of the 221 findings reported in the prior years, only 39 (17%) were fully addressed, 28 (13%) were partially addressed and 154 (70%) were yet to be addressed. As evidenced by the nature of findings in the 2022 audit report, the delayed submission of financial statements and lack of implementa- tion of prior year recommendations are most likely indicative of cover-ups of gross incompe- tency and corruption by the senior management. Implications of Audit Findings The OAG performance audit reports assure service delivery as they respond directly to the bill of rights and social rights of citizens such as access to affordable and quality health care, hous- ing, clean and safe water, education, transporta- tion, and social security. As such, this analysis indicates major implications from the latest OAG findings on the realization of the socio-economic rights of residents in particular and citizens in general. Infrastructure Development Local Authorities (LAs) are mandated to maintain key infrastructure like local road networks. Gen- erally, a good road network helps in reducing fatal accidents and lowering the cost of doing business. This leads to increased investment, commerce, job creation, ease of access to mar- kets, and powering inclusive economic growth. Since 2019 the government has set aside 5% of the national budget for resourcing the Devolution Fund. The LAs are then allowed to invest their devolution funds allocations in capital projects like the maintenance of local roads. However, the OAG discovered that some LAs are not using their devolution funds as intended. For instance, Bindura Municipality failed to prepare acquittal reports to show how it utilized its devo- lution funds. Gokwe Town Council used devolu- tion funds worth ZWL7.3 million in 2020 but failed to document evidence of project implemen- tation. All this shows that LAs are too prone to financial loss caused by misappropriation of funds. Also, the OAG report has shown that infrastruc- ture development in LAs is being inhibited by a lack of compliance with the dictates of the Public Procurement and Disposal of Public Assets Act together with other procurement laws & regula- tions. It was established that many LAs are undertaking unsupported expenditures (no valid quotations, invoices, receipts, payment vouchers, etc.), purchasing assets without going to tender, fully paying for goods & services that never get delivered, and sometimes overpaying suppliers. All these tendencies prop up corruption & bribery and increase suboptimal use of public resources. In addition, disregard for procurement regulations is a gross violation of basic human rights because it impacts the enjoyment of these rights through poor delivery of public services, high unemploy- ment, poverty, and low life expectancy. Environment Protection Climate change has become an existential threat to human life. Averting the danger and protecting all citizens requires a whole of government approach. This approach includes full protection of the environment to reduce pollution, limit global warming, prevent natural disasters, pre- serve species diversity, increase biodiversity, and ensure sustainable use of resources. However, the 2022 OAG report established that actions by many LAs are harming the environment. Such actions include poor maintenance of drains & culverts, allocation of stands in wetlands, sewer bursts & spillages, and poor solid waste manage- ment among others. The degradation of the envi- ronment creates life-threatening hazards, inhibits rapid response to emergencies, and extinction of species & biodiversity disproportionately affects young and future generations. Education The latest OAG report on Local Authorities (LAs) has laid bare the challenges being faced in the public education sector, a sector that sustains the majority of the population. Investments into the education sector by LAs to increase education infrastructure like classroom blocks are inade- quate leading to hot sittings. For instance, 2022 enrolment statistics for a school in Redcliff Mu- nicipality show that there were 47 classes against the available 17 classrooms hence the school required an additional 30 classrooms to alleviate the shortage. Many public schools particularly in urban areas are operating on hot seating arrange- ments to accommodate learners. Public education is relatively affordable when compared to the private sector, a sector that has largely dollarized at a time when many house- holds continue to largely earn in volatile local currency. However, classroom shortages in public schools are causing many learners to attend lessons outside classrooms, exposed to extreme weather conditions. Also, the available classrooms are overcrowded thus limiting available resources for learning, disadvantaging children with addi- tional needs, reducing teachers’ ability to give individual feedback, and increasing distraction which affects focus & concentration. So, the lack of investment in public education by LAs is entrenching inequalities and trapping many people in vicious cycles of poverty. Health Care The Local Authorities (LAs) are expected to pro- vide residents with affordable state-of-the-art healthcare infrastructure and services. These are crucial as they allow citizens to be able to realize their potential and play an important role in social & national development. From an econom- ic perspective, a healthy population helps in building a productive workforce and makes the country strong in many economic spheres. How- ever, the OAG report has shown that many LAs are failing to provide adequate healthcare services to residents. For instance, clinics in Kadoma City Council are operating with a shortage of regis- tered general nurses & sisters in charge and have no functional ambulances. Zvishavane Town Council does not have any clinic or hospital thus it relies on one (1) district hospital and govern- ment clinic, the facilities of which are inadequate to cater to the district’s population. Dilapidating infrastructure, poor remuneration, and shortage of medical drugs, medical equip- ment, and healthcare personnel in council-owned healthcare institutions are increasing costs for residents in the form of higher out-of-pocket costs, higher insurance premiums, and increased prices of drugs. It is also leading to increased avoidable deaths due to limited rapid response mechanisms and postponement/ jeopardization of medical procedures coupled with low health worker morale. This is disproportionately affect- ing vulnerable groups like people with disabilities (PWDs), and pregnant women. In light of all this, one can conclude that by not improving health- care services, LAs are playing a huge role in leaving vulnerable groups behind. Housing Local Authorities are mandated to provide hous- ing to residents. As such, they are expected to develop & maintain up-to-date plans that meet the housing requirements of their communities, *To Page 18 T The AXiS CI Friday 10 Nov 2023 17 Latest Auditor-General Report Local Authorities Are in Shambles

The AXiS CI Friday 10 Nov 2023 18 *From Page 17 By Girison Afia he inflow and outflow of funds into and out of a business over a certain time, often monthly, is known as cash flow, and it is the lifeblood of the construction sector. A cash flow prediction is typically used in construction contracts to advise the employer of their financial obligations and the timing of those obligations. Both long- and short-term projections are accept- able, and both should be updated and modified whenever new, more precise data becomes avail- able or when the model is altered in any way—for example, by not using preliminary amounts, making claims, or extending deadlines. Throughout the project life cycle, the cost manag- er is supposed to advise the customer on cash- flow predictions, regardless of the specifics of any appointment or contractual obligation. The project financing path is determined by the finan- cial resources, debt, and various alternative fund- ing choices that are available. It is essential of the cost manager to obtain an initial brief from the employer to comprehend their needs regarding a cash flow prediction. The project sponsor must be able to specify the amount of money coming in and going out, as well as when these things happen in relation to the project timeline. If the project is financed by a bank loan and the resources are issued in phases that correspond with the project workflow, the bank must be informed about the anticipated financing schedule for each step. At this point, early project delivery plans are established, and stage payments are coordinated to encourage the project's prompt completion. At this point, it is necessary to identify the antic- ipated dry cash inflows and make measures to address project delays brought on by irregular cashflows. To inspire the contractor and the rest of the project team, the cost manager must utilize his expertise to recommend to the customer the greatest cash flow solutions. To help the employer understand their anticipated responsibilities, the quantity surveyor is required to provide an initial cash flow estimate during the feasibility stage, after the initial brief. Throughout the project lifespan, potential interest rate increases and escalations must be included in the original cash flow estimate. This phase estab- lishes the cash and debt structure, work schedule, and allocation plan for resources. The cost manager may require documentation of the funds' availability and a project account pool- ing resources when the funding basket is made up of contributions from several stakeholders. To address the bottlenecks noted in the project cash- flow timeline, the cost manager and the client may consult with the expert team. The project team must focus on resolving any delays since the project cashflow timetable resembles a project twin of the scheduled work schedule. The project scope may alter in tandem with modifications made to the budget, and vice versa. A project's cash flow fluctuates as it undergoes modifications, escalations, cost of capital, and other adjustments. To stay up to date with the constantly evolving project scope and process, it must be updated during the design, tendering, and contract phases. A reliable budget estimate is created during the design phase, when most adjustments are made and coordinated with the resources at hand. At this point, the client and the design team collaborate with the cost manag- er, and tendering is predicated on the preliminary cash flow estimates. The quantity surveyor tracks real payments against the cash flow projection as soon as the project begins and clarifies any d i f f e r e n c e s . The suggested changes are processed via the informa- tion request c h a n n e l s , reviewed, and sent to the customer for further financ- ing or scope reduction. To summarize, the funding path for a project is dictated by its available financial resources, debt, and alternative funding options. The project spon- sor should be able to provide details on the quan- tity of money coming in and going out, as well as the timing of these transactions in respect to the project schedule. After the first brief, the quantity surveyor is needed to offer an initial cash flow forecast at the feasibility stage to help the employer understand their anticipated respon- sibilities. To keep up with the constantly evolving project scope and workflow, the cashflow must be updat- ed during the design, bidding, and contract phases. The quantity surveyor tracks real pay- ments against the cash flow projection as soon as the project begins and clarifies any differences. Digital tools such as Cost X provide for 5 dimension designs that include the time and cost aspects in the design and construction of a proj- ect. Girison Afia MRICS is a researcher, thought leader, and chartered surveyor who is also a member of the Royal Institution of Chartered Surveyors. The opinions he expresses in this piece are his own, not those of his employer. Email: AfiaGirison@out- look.com communities, decide development applications promptly, and ensure the homes they have planned for are built on time. This is key to reducing poverty, ensuring that households afford housing, and reducing illegal settlements and homelessness. Nevertheless, the OAG report showed that many LAs are failing to take their housing responsibility seriously. The audit report established that some LAs like Chegutu Munici- pality lack proper controls of stand registers to avoid manipulation, some like Gweru City Coun- cil are not maintaining stand registers at all while some like Harare City Council are selling unser- viced stands. The lack of effective housing policies coupled with the sale of unserviced stands is leading to housing shortages and illegal settlements which fuel the spread of diseases and crime rate. Unfor- tunately, the gross mismanagement of residential stands by LAs occurs at a time when Zimbabwe is grappling with acute housing shortages. It is estimated that the nation faces a housing backlog of about 1.5 million units. To highlight the grav- ity of the housing crisis is Matapi Flats in Mbare which were designed to house bachelors but are now being used by hundreds of families. In 2022, official statistics established that at 42.7%, urban areas have the highest proportion of lodger occupancy. This shows that almost half of urban dwellers are exposed to rising and dollarized rentals thus further constraining their budgets amid persisting depreciation of the local currency and food inflation. Social Welfare Social welfare refers to government support intended to ensure that disadvantaged members of society such as the poor, PWDs, elderly, and unemployed can meet basic human needs. A granular analysis of the 2022 OAG shows that local governments are failing to provide adequate social safety nets to deserving residents due to poor revenue collection and debt recovery. Many LAs are not performing reconciliation of debtors & payables, not keeping securities items register/ issuing vouchers for traffic ticket books, not maintaining records of lease agreements, not maintaining a database of business operators, not checking the completeness of revenues earned from beer levies, not curbing non-revenue water, awarding unapproved allowances for senior man- agement, and not billing stand sales. If these anomalies are corrected, the tax revenue earned by LAs will increase. This will boost expenditure on social welfare programs to reduce poverty and inequality. Safe Sanitation & Social Amenities Zimbabwe remains a major country in the South- ern African Development Community (SADC) region struggling with the repeated outbreaks of medieval diseases like cholera, an exception for the 21st century. These are results of the under-provision of sanitation services by LAs as investment in infrastructure is being outpaced by the rising urban population. Citizens are flocking in droves from rural to urban areas in search of greener pastures. The OAG report established that many LAs are battling sewer blockages along the sewer network due to the continued use of aged pipes, erratic power supply, and outdated sewer designs. The communities are also struggling with sewer spill- ages causing a flow of raw effluent into sources of water. Refuse is not being collected consistent- ly leading to the mushrooming of dumpsites near residential areas, particularly in high-density sub- urbs. Parting Short Local Authorities (LAs) have close proximity to ordinary citizens compared to the central govern- ment. As such, they are expected to always have increased operational efficiency and effectiveness to ensure the delivery of quality and affordable social services. However, the 2022 OAG report on LAs has shown massive deterioration of service delivery; poor revenue collection, manage- ment, and debt recovery; compromised gover- nance systems; weak procurement procedures and processes; and poor management of assets. As such, the strengthening of existing PFM systems must take center stage. This will complement central government efforts to deliver an upper-middle income economy by 2030. Zvikomborero Sibanda is an Economic Analyst for Zimbabwe Coalition on Debt and Development (ZIM- CODD). He writes in his own capacity; his views do not represent those of the organization he works for. Email: [email protected]. Twit- ter: @bravon9 T Project Cashflow Forecasting

n a dramatic twist to the ongoing sale of Tongaat Hulett, the financially distressed sugar conglomerate, recent developments highlight the pivotal role that creditors will play in determining the company's future. In a recent interview by Moneyweb, Metis Strategic Advi- sors, business rescue practitioners (BRPs) con- firmed that creditors hold the final say, and the fate of Tongaat Hulett hangs in the balance. Initially, Tanzania-based Kagera Sugar emerged as the preferred bidder for Tongaat Hulett, with a proposed deal worth over R3 billion. However, new reports suggest that businessman Robert Gumede's Terris Sugar-led consortium has acquired the banking lender group's claims and security against Tongaat Hulett, potentially alter- ing the course of the sale process. The BRPs, Metis Strategic Advisors, have emphasized that creditors will ultimately decide the fate of the proposed rescue plan, highlighting the credi- tor-driven nature of the process. The entry of the Terris Sugar-led consortium into the sale process has introduced a new dynamic, potentially reshaping Tongaat Hulett's future landscape. Shareholder activist Chris Logan sug- gests that Gumede's consortium has outmanoeu- vred Kagera Sugar by directly approaching the lenders and purchasing their debt at a discount. This strategic move empowers Gumede to dictate the terms of the sale, potentially leading to sub- stantial profits for the consortium. However, the exact discount at which the debt was acquired remains undisclosed. Logan raises concerns about the role of the Industrial Development Corporation (IDC) in shaping the sale process. He suggests that the IDC's insistence on selling Tongaat Hulett's sugar operations as a combined entity, including operations in Zimbabwe, Mozambique, and South Africa, limited potential bidders and potentially resulted in lower bids. The exclusion of interna- tional bidders due to sanctions on Zimbabwe further complicated the sale process. These factors may have impacted the overall value of the assets and the potential for higher bids. Beyond Tongaat Hulett, the ongoing sale process holds implications for the broader African sugar industry. The industry faces challenges such as persistent supply shortages and logistical hurdles, hindering its growth potential. However, Tongaat Hulett's potential strategic equity partner could bring opportunities to address these challenges and tap into the European quota on sugar supply from less developed nations. The outcome of the sale and the future direction of Tongaat Hulett will undoubtedly impact the industry's dynamics. Creditors will have the final say on Tongaat Hulett's proposed rescue plan, with voting on the business plan scheduled to take place by the end of November 2023. A business rescue plan requires support from the majority of creditors, including independent creditors, for adoption. The BRPs, Metis Strategic Advisors, have committed to keeping the market informed through formal communication channels, including the Stock Exchange News Service (SENS). The completion of the transaction with the Terris Sugar-led con- sortium is awaited, and its impact on the busi- ness rescue process remains to be seen. The African sugar industry faces various chal- lenges, including persistent supply shortages in certain countries and logistical complexities in distribution networks. However, opportunities abound for the industry to capitalize on its vast arable land and favourable climatic conditions. By leveraging these advantages, forging strategic alliances, and addressing logistical bottlenecks, African sugar producers can tap into domestic and international markets, driving economic growth and development. While Tongaat Hulett may not surpass Illovo's position as the largest sugar producer in Sub-Sa- haran Africa, it possesses unique advantages. With its processing capacity and production capa- bilities, Tongaat remains a significant player in the region. Its operations in climate-friendly areas contribute to high-quality production and relative- ly firm yields, driving profitability. Furthermore, Tongaat has diversified its asset base by acquir- ing prime developmental land in KwaZulu Natal, providing opportunities for future urban develop- ment and potential debt restructuring. Tongaat Hulett Sugar South Africa, and Voermol Feeds rescue plan have undergone amendments, and the publication dates have been extended until no later than 24 November 2023. The meet- ings to vote on these plans will take place no later than 30 November 2023. According to Metis Strategic Advisors, for a business rescue plan to be adopted, it must be supported by hold- ers of more than 75% of the creditors' voting interests, including at least 50% of the indepen- dent creditors' voting interests. The initial release of the business rescue plan on 31 May 2023 was described as "conditional" by the BRPs because certain creditors requested a plan that focused on the process rather than pro- viding detailed outcomes at that time. The BRPs would have preferred to include specific transac- tion outcomes in the plan, subject to the approval of a business rescue plan. However, they have received agreement from creditors for extensions to allow for the conclusion of sale transactions and the incorporation of transaction information into the plans. This extension also enables the specification of recoveries and expected distribu- tions to different classes of creditors. According to Peter van den Steen in a Money- web article, one of the joint BRPs, the intention to delist Tongaat Hulett was already part of the initial version of the rescue plan and will be included in the amended business rescue plan. Furthermore, the plan entails selling the business assets out of the existing legal entities, with the remaining entities expected to be wound down and eventually liquidated. Hippo Valley Estates based in Zimbabwe may be affected if the BRP’s choose this root. Van den Steen stated, "The shareholders will retain their shares but will receive no value for their shares. Unfortunately and regrettably, that is not the news that... people wanted to hear. I am very sorry to be the bearer of bad news." This suggests that the delisting of Tongaat Hulett and the liquidation of certain enti- ties are part of the plan to address the company's financial challenges. The ongoing sale of Tongaat Hulett has entered a critical phase, with creditors holding the power to shape the company's future. The entry of the Terris Sugar-led consortium has introduced new dynamics, potentially altering the course of the sale process and raising questions about the role of the IDC. As the fate of Tongaat Hulett hangs in the balance, the implications extend beyond the company itself, impacting the African sugar industry at large. The outcome of the creditor vote and the subsequent direction of Tongaat Hulett will be closely watched by industry stake- holders and investors alike. The AXiS CI Friday 10 Nov 2023 20 Tongaat Hulett's Sale Saga Continues markets Creditors Hold the Key to Rescue Plan I

The AXiS CI Friday 10 Nov 2023 21 Remains Afloat in HY2023 Afdis Defies Odds frican Distillers, a manufacturer of spirits and wines listed on the Zimbabwe dol- lar-denominated exchange ZSE, maintained a steady growth rate of 11% in its volumes after achieving the same growth in the first quarter of June 2023. This comes despite the company facing intense competition from smuggled alcohol which is costing beverage producers millions. The country is battling immense competition from smugglers as the laws are too soft on imports. Currently, the most affected sectors are the food, clothing and beverages sectors. This smuggling effect presents a gigantic cost to formal retailers given the acute economic condi- tions in Zimbabwe. In light of the prevailing eco- nomic conditions within the country, the signifi- cance of alcohol quality or brand is not particu- larly prominent. What holds greater importance for individuals with alcohol dependency is the objective of achieving intoxication rather than the specific attributes of the alcohol itself. This in turn affects the top line and bottom line of the companies. Due to the intense smuggling of goods leading to higher competition, the corporate rescue process has been initiated for wholesalers Metro and Peech. OK Zimbabwe's sales, on the other hand, failed to reach a break-even point, suggesting difficulties in generating sufficient revenue. Edgars and Truworths are currently facing strug- gles as their sales are affected by the presence of high competition from the informal sector. Hippo Valley faced a 5% decrease in sales vol- umes during the half-year to 2023 due to the smuggling of over 15 brands of cheap sugar. These examples highlight how a porous border system in Zimbabwe is not only detrimental to formal businesses but also has broader implica- tions for the national fiscus. The influx of cheap smuggled goods is negatively impacting the econ- omy as a whole. In January of this year, the police intercepted a 30-ton truck in Bulawayo carrying smuggled alcohol valued at US$110,000. It is not uncom- mon for spirits, wines, and whiskies to be priced lower in neighbouring countries such as South Africa, Mozambique, and Zambia compared to their prices in Zimbabwe. This price disparity creates an incentive for smuggling activities, as individuals seek to take advantage of the price differences and import these products illegally into Zimbabwe. Individuals and or companies involved in smug- gling operations acquire these goods from external sources and con- ceal them within transportation trucks, enabling them to evade taxes and obtain more favour- able prices within Zimbabwe. The smugglers commonly exploit Forbes Border Post, Sango, Beit- bridge and Mount Selinda entry points to illicitly transport beverages and food items. It is important to note that the vulnera- bility of these border posts or inadequate security control mea- sures is not the primary factor facili- tating smuggling. Instead, various methods are employed to enable the passage of these goods by security personnel in exchange for bribes. This practice serves as a means for security agents to supplement their meagre government salaries. The prevalence of corruption among government employees, in this case, law enforcement officials like the police and customs officials, has created significant challenges in effectively addressing the issue of smuggling within the country. It is important to highlight that not all alcoholic products being smuggled into the country are imported. Some of these products are counterfeit items produced within Zimbabwe, specifically in areas like Mbare. These fake products pose addi- tional risks to public health and safety, as they do not meet quality standards or adhere to regu- latory guidelines. The combination of corruption among law enforcement officials and the production of coun- terfeit goods locally exacerbates the problem of smuggling and underscores the need for compre- hensive measures to address these issues effec- tively. To effectively combat the smuggling of cheap products, the government must prioritize address- ing the income levels of civil servants. When government employees, including customs offi- cials and the police, are struggling to meet aver- age living standards, they become susceptible to bribery and corruption. Even if efforts are made to increase patrols and close customs loopholes, these officials will con- tinue to be vulnerable to illicit offers due to their financial circumstances. Therefore, the govern- ment must first focus on improving the earnings of civil servants to mitigate the incentives for corruption and enhance the effectiveness of anti-smuggling measures. Financials During the initial quarter of this year, Afdis experienced a decline in sales volumes within the Wines and Spirits categories. Specifically, wine sales decreased by 13% as a result of intense competition from smuggled products, while spirits only saw a sluggish growth of 1%. In the reviewed half-year period, there was an improve- ment in wine sales, which grew by 7%, and spir- its sales, which increased by 8%. However, the Ready to Drink segment shed 12 percentage points from the sales recorded in the first quarter to an increase of 14%. This decline quarterly indicates the impact of cheap imports, which have deprived any significant increase in sales volumes. However, it is worth noting that the Wines cate- gory experienced a notable turnaround, transition- ing from a decline to an increase in volumes primarily driven by increased market penetration. This indicates that the company successfully expanded its presence and captured a larger share of the wine market during that period after a major blow from smuggled brands in the initial quarter. Spirits benefited from the success of the Whitestone brand. Despite being a premium brand, the company strategically adjusted prices to effectively compete with smuggled products in the market. Also, despite facing intense competition, the RTD segment managed to achieve growth although this growth rate was lower compared to the initial quarter. It is still noteworthy considering the chal- lenging competitive landscape. Despite mixed performance on volumes, the company successful- ly managed to make a transition from negative territory in all categories during the half year. The company's earnings witnessed significant growth in inflation-adjusted terms. Revenue surged from ZWL52 billion in the previous half-year to ZWL134 billion this year, while operating profit increased to ZWL28 billion from a previous figure of 6 billion. This substantial improvement resulted in a profit after tax of ZWL22 billion, a significant increase compared to the ZWL2 billion achieved during the same period last year. Despite the company's efforts to navigate through challenging circumstances, smuggling continues to be a concerning issue. According to government sources, smuggling costs the country over US$2 billion annually. As said, this illicit activity, which extends beyond alcohol to include various goods such as grocer- ies and apparel, has significantly impacted Zim- babwe's formal sector. It has become a major challenge for many companies, leading to some gradually being forced out of business. A

mpala Platinum (Implats) according to the latest reports is offering voluntary job cuts to workers at some of its platinum group metal (PGM) shafts in South Africa. The shafts are one of the world's deepest and the proposed job cuts are coming on the back of the group's need to cut costs amid a fall in PGM prices. PGMs con- sist of six silver-white metals namely platinum, palladium, rhodium, ruthenium, iridium, and osmium. They occur together in nature and are produced from the same ore. They are mined mainly in South Africa, Russia, and North Ameri- ca. Platinum, the primary metal, has fallen by over 14% this year whilst palladium has plunged by around 40%. Weakening palladium demand in China has also hit the performance of the metal. The market wonders if job cuts taking place in South Africa will also spill into Zimbabwe's operation, Zimplats. Implats' operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe, the two most significant PGM-bearing ore bodies in the world, and the Canadian Shield. The group employs more than 70,000 people across all operations. Up to 4,095 jobs would be affected by the South African PGM restructuring at its closed two shafts that were economically mined out and looked to lower costs at another. According to reports made in June 2023, labour costs will soon beat oil as mine's biggest expense as inflation impacts operating expenses more than capital costs. Labour costs are rising in Canada and the US at a similar pace when accounting for foreign exchange. Until 2021, wage cost increases largely matched inflation at around 2% to 4%, but last year saw some pay increases of 5% to 12%. It is on that background that Implats is seeking to cut labour costs to attain better profitability. The group could have avoided sending employees packing but the fact that the shafts are no longer economically viable leaves management with no option. Platinum mines in South Africa are said to be amongst the world's deepest, oldest and most expensive to operate. Such austerity measures are not only at Implats but across so many mining operations globally. The same PGM price weakness has caused Thari- sa Plc to delay commissioning its Karo Mine in Zimbabwe by up to a year to June 2025. The The AXiS CI Friday 10 Nov 2023 22 TN Rwanda, a leading telecommunica- tions company in the country with a cur- rent market share hold of 68%, is experi- encing a dive in its financial performance for the first nine months of 2023. Despite recently cele- brating its 25th anniversary and receiving recog- nition for its positive contributions to Rwanda, the company has faced a decrease in its net profit. However, this setback has not deterred MTN Rwanda from its commitment to driving growth and connectivity in the country. Through strategic initiatives aimed at addressing smart- phone affordability, the company has witnessed substantial growth in service revenue and an expanding subscriber base. In this article, we delve into MTN Rwanda's financial performance, its significant investments in infrastructure, and the proactive measures taken to accelerate smart- phone adoption, ultimately enhancing connectivity and fostering digital inclusivity throughout Rwanda. During the first nine months of 2023, MTN Rwanda reported a decline in net profit by 25.2 percent to RWF 11.1 billion compared to the same period in 2022. This decline can be attributed to various factors, including high finance costs related to inflationary adjustments on tower leases and the depreciation of the local currency. However, despite this setback, the com- pany experienced positive growth in service reve- nue, which increased by 13.6 percent year-on-year to RWF 186.2 billion. Additionally, MTN Rwanda's EBITDA grew by 4.7 percent to RWF 84.7 billion, indicating underlying opera- tional strength. Recognizing the importance of robust infrastruc- ture to meet the growing demand for telecommu- nications services, MTN Rwanda has been active- ly investing in its network. The company's capi- tal expenditure (excluding leases) rose by 11.5 percent to RWF 42.9 billion during the first nine months of 2023. This investment has been focused on upgrading its Radio Access Network (RAN) and expanding its 4G coverage. Despite the investment, there was a marginal decrease of 0.5 percentage points in the capital expenditure intensity, which stood at 22.7 percent. MTN Rwanda has witnessed a steady increase in its subscriber base across var- ious services, indicating its ability to attract and retain customers in a competi- tive market. The number of mobile sub- scribers grew by 5.6 percent to 7.2 mil- lion, highlighting the company's contin- ued appeal. Active data subscribers also saw significant growth, rising by 8.4 per- cent to 2.6 million. Moreover, mobile money subscribers increased by 11.5 per- cent to 4.6 million, reflecting the popu- larity of MTN Rwanda's mobile financial services. A significant barrier to smartphone adop- tion in Rwanda has been affordability. To tackle this challenge, MTN Rwanda launched a smartphone financing program in part- nership with the data platform Bboxx. This pro- gram provides Rwandan consumers with flexible financing options, enabling them to own smart- phones without significant upfront costs. The initiative aligns with the Rwandan government's "ConnectRwanda 2.0" program, which aims to provide smartphones to over one million Rwan- dans by the end of 2024. In a similar vein, Airtel Rwanda, in collaboration with the Rwandan government and Reed Hast- ings, the co-founder and CEO of Netflix, launched a new range of 4G-compatible smart- phones. These devices are priced at an affordable unit price of 20,000 Rwandan francs ($16.42). The partnership aims to accelerate the adoption of digital services in the country and bridge the digital divide. This initiative is part of the Rwan- dan government's "ConnectRwanda 2.0" program, which seeks to empower more Rwandans with access to smartphones and digital connectivity. MTN Rwanda's financial performance, though impacted by certain factors, demonstrates the company's resilience and adaptability in a dynamic market. Positive growth in service reve- nue and subscriber base reflects the company's ability to attract and retain customers. Further- more, MTN Rwanda's investments in infrastruc- ture signify its commitment to enhancing connec- tivity and meeting the growing demand for tele- communications services. The company's initiatives to address smartphone affordability, such as the smartphone financing program in partnership with Bboxx, are aligned with the Rwandan government's "ConnectRwanda 2.0" program. The collaboration between Airtel Rwanda, the Rwandan government, and Reed Hastings in launching affordable smartphones also contributes to the broader goal of promoting digi- tal inclusivity in the country. Despite the challenges, MTN Rwanda remains optimistic about its full-year performance, with a focus on meeting targets, maintaining a strong market position, and continuing to invest in infra- structure. These efforts, combined with indus- try-wide initiatives, are instrumental in driving connectivity, promoting smartphone adoption, and advancing Rwanda's digital transformation. Through these endeavours, MTN Rwanda is actively contributing to the realization of a more connected and digitally inclusive society in Rwanda. Mitigated Erosion MTN Rwanda's 25% Loss Alleviated *To Page 23 M Unveiling the Ripple Effect Assessing the Implications of Implats Job Cuts on Zimplats I

The world economy is not experiencing rapid growth at the moment. Therefore, the demand for platinum and palladium seems lacklustre. Both metals (especially palladium) are commonly used in car manufacturing. A logical conclusion offers itself: reduced car sales translate into decreased demand for these commodities. By June 2023, the local subsidiary Zimplats, had an average number of employees amounting to 3 732, a marginal jump from June 2022. In June 2022, Zimplats had a headcount of 3 712 and that figure accounted for 42% of the mine's total labour. The balance of the labour is comprised of opex (26%) and capex (32%) contractors. This brought Zimplats' total labour to 8 937 for the end of the full year, making the group a very significant employer in the country. Should the same workforce-trimming exercise be imple- mented in Zimbabwe, it will have a huge impact on the economy at large considering how highly informalized the market is. In 2021, Zimplats announced that it would spend US$1.8 billion in expanding operations in Zimbabwe, the single largest investment into the country over the past five years. The project would see Zimplats developing new mines, expanding processing facilities – including a sulphur abatement plant – and a 185MW solar farm. However, due to the drop in platinum prices, the group has been forced to cut spend- ing. The planned expansion was going to signifi- cantly boost headcounts at both the operation itself and contractors but currently, we fear the opposite due to the obtaining fundamentals. Implats CEO Nico Muller's comments in August 2023 were encouraging as he suggested that PGM market fundamentals, in the long run, are stronger than what current pricing is suggesting. He sees the current pricing disturbances to pass and that normalcy and stability will return to the PGM industry. On the other hand, the Chamber of Mines' Mining Business Confidence Index, which measures what miners think about the coming year is showing a pessimistic picture for 2024. The index is on a scale of -100 to +100, with the lowest score being the least level of confi- dence and the biggest score the highest level of confidence. A year ago, the index was 9.4%, meaning that miners were only slightly positive about 2023. In the latest report, the index has turned negative, falling to -0.3%. This means that miners are now pessimistic about what lies ahead. Miners see profitability falling by 15% in 2023. Half of the miners surveyed say they are struggling to break even. Most expect profits to fall, with only gold miners expecting to remain profitable in 2024. Mining in general has switched to a crisis mode in the country and Zimplats is not spared. What differs from South African operations is that amongst the different negative reasons for job cuts, the company is looking to close or rather decommission shafts which are no longer eco- nomical. The possibility of job cuts coming to Zimplats is based on falling metal prices. However, the company can still decide to keep its labour for that sunny day when prices return to normalcy. From what the company previously hinted, it looks like Zimplats will only work on reducing capital expenditure downwards, a move that will keep labour-force intact. The conditions Zimplats is operating under are not yet as bad for cutting labour – the company can always find its way to navigate. The market will await a management update on the issue in February 2024, according to their previous reporting. The AXiS CI Friday 10 Nov 2023 23 *From Page 4 EQUITY AXIS fifffflffiflffi  Financial insights at your fingertips. fifffflffiflffflffi fiffff fffl  fiff  fiff  ff fiffflfffl www.equityaxis.net Equity Axis Head Office 32 Lawson Avenue, Milton Park, Harare, Zimbabwe t: +263 (08677) 197791 c:+263 773 782 392 | 773 037 422 [email protected] Follow us *From Page 22 Source :2022 Zimplats Annual Report

uring the third quarter of 2023, BYD (Build Your Dreams), a prominent Chinese electric car company, came closer to matching Tesla in terms of electric vehicle sales volume. , BYD experienced a substantial increase in electric car sales, reaching 431,603 battery electric vehicle (BEV) sales, just 3,456 units shy of Tesla's figures. This marks the historical prox- imity between the two companies, with BYD achieving 99.2% of Tesla's sales (excluding com- mercial BEVs and plug-in hybrids). Tesla wit- nessed a 27% increase in sales compared to the first quarter, with a total of 552,477 EV cars sold. This followed an impressive performance in 2022 where BYD sold over 1.8 million units compared to Tesla's 1.3 million units, BYD is now seen as a significant competitor to Tesla's position as the leading champion of electric vehi- cles. This is indicative that Tesla's dominance in the BEV segment may be waning and stakes are high that Tesla might be at risk of losing its top position to BYD in the full year 2023 as well. BYD is a multinational Chinese corporation spe- cializing in the production of automobiles, rechargeable batteries, and new energy solutions. It was founded in February 1995 by Wang Chuanfu the sitting CEO in Shenzhen, Guang- dong Province. Originally focusing on lithium-ion battery technology, the company quickly gained renown for its advancements in battery manufac- turing, particularly for electric vehicles and porta- ble electronics. Building upon its expertise in battery manufactur- ing, BYD expanded its operations to the automo- tive industry. In 2003, the company acquired Tsinchuan Automobile Company, a Chinese state-owned car manufacturer. Initially producing gasoline-powered vehicles, BYD soon shifted its focus to electric and hybrid vehicles. In 2008, they made headlines with the release of the BYD F3DM, the world's first mass-produced plug-in hybrid sedan. In 2008, Berkshire Hathaway, led by Warren Buffett, made a substantial investment in BYD, acquiring a significant stake in the com- pany. Subsequently, in 2010, they introduced the BYD e6, an all-electric crossover, which they began selling to fleet customers both domestically and internationally. By 2022, the company had secured its position as the second-largest battery manufacturer, paving the way for even greater achievements and claimed the top spot in total car sales surpassing Tesla. While Tesla had previously maintained a strong market share and stayed ahead of its competitors, Wang Chuanfu has emerged as a formidable figure within the electric vehicle industry, possi- bly outshining Tesla's CEO due to certain aspects. Wang Chuanfu's strong technical background in engineering as to Musk has to a certain degree played a significant role in BYD's success in developing innovative electric vehicle technolo- gies and solutions. One notable example is BYD's advancements in battery technology. BYD was one of the early pioneers in the development and production of lithium iron phosphate (LiFe- PO4) batteries, which are known for their safety, longevity, and cost-effectiveness. Tesla primarily relies on lithium-ion battery technology, specifi- cally using nickel-cobalt-aluminum (NCA) and nickel-manganese-cobalt (NMC) chemistries. LiFePO4 batteries have a lower energy density compared to the NCA and NMC chemistries used by Tesla. However, they are considered more stable and have a longer lifespan. Unlike BYD's emphasis on vertical integration which cut costs, Tesla has adopted an outsourc- ing approach for certain components and manu- facturing processes. Tesla collaborates with Pana- sonic for the supply of battery cells and has worked with other suppliers for various compo- nents. However, by having in-house production of batteries and other key components, BYD can exercise better control over costs than Tesla. BYD set up its "BYD Iron-Phosphate Battery Manufacturing Plant" in 2011, which has a pro- duction capacity of over 30 GWh per year. This vertical integration eliminates the reliance on external suppliers and reduces the potential impact of supply chain disruptions or price fluc- tuations. It allows BYD to optimize production processes and potentially offer competitive pric- ing for its electric vehicles. BYD's diversification beyond passenger cars unlike Tesla is another area where its CEO is ahead of Elon Musk. BYD has s uccessfully expanded its product portfolio to include electric buses, commercial vehicles, and other electric mobility solutions. BYD's electric buses have gained significant traction globally, with deploy- ments in cities like London, Los Angeles, and Singapore. This diversification has provided BYD with additional revenue streams and the ability to cater to different market segments. The rise of BYD's manufacturing and sales of electric vehicles aligns with the booming electric car industry, as the world strives to transition away from fossil fuels towards environmentally friendly transportation. Notably, China stands as one of the leading producers and consumers of lithium, while Zimbabwe boasts the largest lithi- um reserves in Africa. Lithium is crucial in elec- tric vehicle production, and BYD as the latest biggest EVs producer and second largest lithium batteries producer can benefit from Zimbabwe at large. Zimbabwe, with huge untapped lithium reserves, also benefit from a partnership with BYD, moves that ambassadors should take as a top priority. It will also give BYD a competitive advantage on the supply side over Tesla as China already has warm relations with Zimbabwe. Zim- babwe is the largest lithium producer of lithium in Africa and boasts the sixth spot globally. Lithium exports from Zimbabwe have experiThe AXiS CI Friday 10 Nov 2023 24 BYD's EVs Victory Zimbabwe's Disguised Blessing D *To Page 25

experienced a significant surge, increasing from US$1.8 million in 2018 to US$70 million in 2022. BYD has already an advantage over Zim- babwe’s lithium industry given that the sector is dominated by Chinese companies. Chinese com- panies, such as Zhejiang Huayou Cobalt, Sinomi- ne Resource Group, Chengxin Lithium Group, and Yahua Group, have made substantial invest- ments, totalling approximately US$1 billion. These investments have resulted in a rapid expansion of the lithium industry over the past two years. It is expected that by 2027, the capac- ity for petalite and spodumene production will increase from 13,000 tons per year of lithium carbonate equivalent (LCE) in 2022 to a stagger- ing 192,000 tons per year of LCE. This signifi- cant growth in capacity highlights the increasing importance and demand for lithium in the global market, particularly for use in the production of electric vehicles. BYD has the potential to benefit significantly by tapping into Zimbabwe's lithium resources. As a company backed by the Chinese government and with a strong financial position, BYD has an advantage over its competitors, including Tesla and Volkswagen. Unlike BYD, Tesla and Volk- swagen face challenges in establishing closer relations with Zimbabwe's lithium industry due to political issues between Zimbabwe and the United States as well as Europe. Given China's already close ties with Zimbabwe, BYD is in a favourable position to maintain its dominance in the production and sales charts of electric vehi- cles. The established relationship between China and Zimbabwe facilitates smooth- er access to lithium resources, enabling BYD to secure a stable supply and potentially gain a competitive edge over its rivals. Zimbabwean officials should leverage the strong relations they share with China to actively seek investments from BYD. Given the existing close ties, it presents a valuable opportunity for Zimba- bwe to attract further investments from BYD, a prominent Chinese company in the electric vehicle industry. By fostering a conducive investment environment and actively engaging with BYD, Zimbabwe can tap into the exper- tise, resources, and market influ- ence of BYD to further develop its lithium industry and bolster its position as a major player in the global electric vehicle market. Zimbabwe is poised to become the fifth-largest primary producer of lithium by 2025, surpassing the contributions of both Canada and Brazil. Although Zimbabwe possesses substantial lithium deposits, the mining of this valuable metal has been limited to Bikita Minerals, which has primarily produced petalite—a form of lithium used in ceramics, aluminium smelting, and glass since the 1950s. The Chinese manufacturers' capability to blend petalite and spodumene concentrates into battery-grade material has increased the appeal of Zimbabwean lithium deposits. Zimbabwe boasts the largest lithium reserves in Africa and ranks sixth globally in terms of lithium reserves. The country is estimated to have the highest number of lithium projects under exploration in the entire continent, with the majority of these projects being undertaken by Chinese investments. Despite the current low prices of lithium, it can be an opportune time for investment and stockpil- ing, particularly for BYD in the electric vehicle manufacturing industry. Low prices present favourable conditions for companies to acquire these key components at reduced costs, which can ultimately lead to higher profits in the future. By investing and stockpiling lithium and platinum while prices are low, BYD can secure a strategic advantage. It can build up an inventory of these crucial materials, ensuring a stable supply chain while potentially benefiting from anticipated price increases as demand for EVs continues to rise. The lithium market has experienced a turbulent journey in 2023. However, the rapid global tran- sition towards renewable energy and electric vehicles has generated a significant need for lithi- um, a vital component in rechargeable batteries. However, a paradox has emerged this year, char- acterized by an oversupply of lithium alongside the expectation of a substantial surge in demand. Unfortunately, the oversupply has resulted in a sharp decline in lithium prices, leading to a potential decrease in profits. This decline can be directly attributed to the surplus in the market. Despite the strong global push for electric vehi- cles and renewable energy sources, the immediate demand has not kept pace with the available supply, intensifying the downward pressure on prices. Additionally, consumer demand is exhibit- ing signs of fatigue, and inventory levels contin- ue to reach new highs, further complicating the situation. One of the most significant hurdles in transition- ing away from fossil fuels and meeting the rising lithium demand is geopolitical conflict. These conflicts make it difficult to divest from fossil fuels as nations strive to reduce costs and secure their energy sources. However, it's important to note that wars are not permanent, and the urgen- cy to combat climate change and its effects will eventually lead to the phasing out of fossil fuels. The impending extinction of fossil fuels is driven by the imperative to protect the planet from the adverse effects of climate change. As the world increasingly recognizes the need for sustainable energy alternatives, the demand for lithium and other renewable energy resources will continue to grow. While the current situation indi- cates an oversupply of lithium, the future presents a contrasting narrative. Projections suggest that by 2030, there will be a stagger- ing demand for lithium, with global sales of over 350 million electric vehicles. This begs the question: are we adequately pre- pared to meet this exponential surge in lithium demand? The existing methods of lithium extraction, despite being abun- dant, are slow and environmental- ly unfriendly. This adds another layer of complexity to the chal- lenge at hand. By 2030, the demand for lithium is expected to nearly double the available supply. The AXiS CI Friday 10 Nov 2023 25 *From Page 24

' ' Term of The Week Cost-Benefit Analysis to determine whether the benefits outweigh the costs, helping decision-mak- ers make informed choices and allocate resources efficiently. Understanding the term In cost-benefit analysis, various factors are taken into account, including mon- etary values, timeframes, and qualitative considerations. Benefits and costs are typically expressed in monetary terms to facilitate comparison. The analy- sis considers both tangible and intangible factors, such as financial gains, envi- ronmental impacts, social welfare, and public health. By conducting a cost-benefit analysis, companies can evaluate the expected returns and potential drawbacks of different options, aiding in decision-mak- ing. It allows them to assess the economic viability of investments, projects, or policies and determine the optimal allocation of resources. Cost-benefit analy- sis plays a crucial role in strategic planning, risk assessment, and policy formu- lation for organizations across various sectors. Cost-benefit analysis is a systematic approach used to assess the potential benefits and costs of a project, decision, or policy. It involves quantifying and comparing the positive impacts (benefits) and negative impacts (costs) associ- ated with a particular course of action. The purpose of cost-benefit analysis is The AXiS CI Friday 10 Nov 2023 26 tar Africa Corporation faced a significant setback in FY2023, reporting a substantial inflation-adjusted loss of ZWL1.73 billion. This marked a sharp downturn from the ZWL2.33 billion profit achieved in FY2022. The company's financial woes can be primarily attributed to the soaring prices of raw sugar and increased operating costs. During the financial year under review, Star Afri- ca's sugar refining plant, Goldstar Sugars, faced even more adversity as operations were temporar- ily halted. The catalysts behind this disruption were the surging prices of raw sugar and unfa- vourable trade terms. Interestingly, Star Africa sources its raw sugar from its biggest rival, Hippo Valley Estates. Unlike Hippo Valley Estates which is involved in the full sugar pro- duction value chain and is also a business unit of Tongaat Hulett(currently undergoing voluntary business rescue), Star Africa only refines raw sugar into final products. Adding to the company's woes, a foreign exchange loss of ZWL1.88 billion and a monetary adjustment loss of ZWL2.43 billion overshadowed operating profit, which experienced a 54% decline, reaching ZWL413 million. This ultimately culminated in an overall net loss of ZWL1.73 billion for the year. On the other hand, total turnover grew 30% to ZWL50.1 billion driven by a 30% increase in revenue from contracts with cus- tomers and rental income which nearly dou- bled for the year ended 31 March 2023. However Gross profit margin declined to 16% from 22% last year as the cost of sales grew 41% against the 30% revenue uptick. This indicates potential input cost pressures weighing on profitability. Selling & distribu- tion expenses more than tripled to ZWL1.6 billion while administrative expenses jumped 34% to ZWL5.9 billion, reflecting heightened opera- tional expenditures. Ultimately, Basic EPS plunged from 44.33 cents to negative 39.55 cents. Likewise, headline EPS fell steeply from 24.51 cents to negative 53.14 cents. Return on equity dropped from 19% to negative 12%, indicating capital erosion. The liquidity position remains healthy with a current ratio of 1.5x. However, the long-term debt-to-eq- uity ratio rose from 10% to 25% showing increased borrowing and financial risk. In terms of business operations for Star Africa Corporation, Goldstar Sugars (GSS) also faced pressure from cheap imports after the implemen- tation of Statutory Instrument 98 of 2022, GSS however managed to maintain sales volumes of granulated sugar at a stagnant level. The troubles at the refinery were exacerbated when production took a hit due to raw sugar stockouts and power outages, resulting in a 6% decrease in production volumes. On the other hand, Country Choice Foods (CCF) experienced growth in sales volumes, driven by competitive pricing and affordability of its prod- ucts. Sales volumes increased by 9%, supported by improved production of sugar specialities. The procurement and commissioning of automated syrup-filling and icing-packing machines played a crucial role in boosting production. CCF also expanded its product portfolio by launching new items such as drinking chocolate, powdered mahewu, baking powder, cocoa powder, and baking raisins. To add to that the revenue performance of Star Africa's Properties Business significantly improved, with a notable increase in rental income compared to the previous year. The busi- ness rebounded from the negative impact of the COVID-19 pandemic, which affected tenants' ability to generate income and meet rental obliga- tions. With the easing of pandemic-related restric- tions, occupancy rates, and rental collections have shown an upward trend across the property port- folio. Star Africa's associate, Tongaat Hulett Botswana, recorded a profit for the year, contributing to Star Africa's overall financial performance. The company's share of the profit, after converting earnings into Zimba- bwean Dollars, amounted to ZWL319.4 mil- lion. This positive outcome suggests a suc- cessful partnership and business operation in the Botswana market. In conclusion, while Star Africa's operations have showcased both challenges and suc- cesses, it is important to address the poten- tial risks associated with their reliance on Hippo Valley Estates as a supplier. On the other hand, the baking powder, cocoa powder, and baking raisins segments have expanded their product offerings and wit- nessed growth in sales volumes, the Proper- ties Business has made a remarkable recov- ery, generating increased rental income as occupancy rates improve. Additionally, the successful partnership with Tongaat Hulett Botswana has further contribut- ed to Star Africa's financial performance, rein- forcing its presence in the Botswana market. With these achievements, Star Africa is poised to overcome obstacles, capitalize on opportunities, and continue on its path toward sustained success in the years to come. Dulled Star Africa Profits Plunge and Costs Surge in a Turbulent Year S

The AXiS CI Friday 10 Nov 2023 28 West End businesses renew plea for VAT-free shopping in London Businesses have renewed their plea to the gov- ernment to bring back VAT-free shopping in London this Christmas. The New West End Com- pany (NWEC), which represents hundreds of retailers in the West End, said reinstating the scheme could add £2.3bn to the UK economy. However, the government said the scheme "could cost British taxpayers around £2bn a year", adding "VAT-free shopping does not directly ben- efit Brits". It comes after London businesses made a similar request in September. HM Treasury said one in 10 non-EU visitors used the previous scheme, which was estimated to have cost British taxpayers £0.5bn for 1.2m non-EU visitors in 2019. -BBC Japan’s prime minister announces $113 billion in stimulus spending Japanese Prime Minister Fumio Kishida announced Thursday a stimulus package of more than 17 trillion yen ($113 billion) that includes tax breaks and benefits for low-income house- holds, a plan criticized by some observers as populist spending that would worsen Japan’s national debt. Kishida said his priorities are to overcome defla- tion and to put the economy on a growth track. Tax revenues will increase only when the econo- my grows and lead to fiscal health, he told a news conference, explaining the package endorsed by his Cabinet earlier in the day. The government will fund the spending by com- piling a supplementary budget of 13.1 trillion yen ($87 billion) for the current fiscal year. - AP SADC and Germany sign Framework Agree- ment on Development Cooperation to pro- mote economic development in the region The Southern African Development Community (SADC) and the Federal Republic of Germany signed the SADC-German Framework Agreement on Development Cooperation in Gaborone, Botswana, on the 8th November 2023. The Framework Agreement was signed by His Excellency Mr. Elias Mpedi Magosi, the Execu- tive Secretary of SADC and Her Excellency, Margit Hellwig-Bötte, Ambassador of the Federal Republic of Germany to Botswana and Special Representative to SADC. The Development Cooperation under the Agree- ment aims to achieve sustainable development reflected equally in economic efficiency, social justice, environmental viability and political stability, within the framework of the respective laws and regulations of the two parties and for the benefit of the people in the SADC region. - SADC News SWITZERLAND ENDS ELECTRIC CAR TAX EXEMPTION Switzerland on Wednesday scrapped a tax exemp- tion for imports of electric cars, whose growing presence on Swiss roads has cut into tax reve- nues. The federal government said in a statement that electric cars would from January 1 be subject to the same four-percent import duty imposed on traditional fuel vehicles. E-vehicles had been exempt from the tax since its introduction in 1997. The government had then wanted to create incentives for the use of electric cars. But it said "the situation has now changed significantly". "The Federal Council takes the view that the exemption from duty as an incentive is no longer necessary, given the sharp rise in the share of e-vehicles in total car imports and the conver- gence of prices," it said. - eNCA Global fashion brands commit to raise pur- chase prices for Bangladesh-made clothes Global fashion retailers including H&M HMb.ST and Gap GPS.N are committed to raising pur- chase prices for Bangladesh-made clothing to help factories there offset higher workers' wages, a US-based association representing more than 1,000 brands said. Bangladesh is the world's biggest garments exporter after China. This week, after clashes between police and factory workers, the govern- ment mandated an almost 60 percent raise to the minimum monthly wage to Tk 12,500 ($113) from December, the first increase in five years. Factory owners had said the wage hike, which comes ahead of a January general election, would eat into their profit margins by increasing costs 5-6 percent. Labour accounts for 10-13 percent of total manufacturing costs, industry estimates show. -DailyStar Mozambique: Government revokes Bei- ra-Zimbabwe oil pipeline operator conces- sion – decree published The Mozambican government has formalised the revocation of the concession to operate the oil pipeline between Beira and Zimbabwe awarded in 1984 to the Companhia do Pipeline Moçambique Zimbabwe (CPMZ) , according to a decree to which Lusa had access on Thursday. According to the content of the decree, approved by the Cabinet and published on 1 November, the ministers who oversee the areas of finance, min- eral resources and transport must now approve “the mechanisms to ensure the continuity of the exploration activity of the Beira – Zimbabwe Pipeline”. “Without prejudice to the powers of other bodies, the rights acquired under the concession contract and other contractual instruments, the current cor- porate structure of CPMZ, as well as the invest- ments made, shall be safeguarded,” reads the decree. -COM African countries to seek extension of duty-free access to US markets The extension of the U.S. program allowing sub-Saharan African countries duty-free access to U.S. markets is expected to be high on the agenda of the U.S. Africa Growth and Opportuni- ty Act (AGOA) trade forum that will begin in South Africa on Thursday. Officials including U.S. trade representative Ambassador Katherine Tai and Deputy Assistant Secretary of State for African Affairs Joy Basu will meet African lead- ers and officials in Johannesburg over the next three days to discuss, among other issues, the possible extension of AGOA and ways to improve its benefits for African nations. The forum kicks off days after U.S. President Joe Biden announced his intention to boot Niger, Uganda, Central African Republic and Gabon off the list of beneficiaries as they have failed to comply with the eligibility criteria. AGOA is U.S. legislation that allows sub-Saharan African coun- tries duty-free access to the U.S. market provided they meet certain conditions, including adherence to the rule of law and the protection of human rights. It was last extended in 2015 for a 10-year period and will expire in September 2025, with a deci- sion of its possible extension reliant on U.S. Con- gress.-Africanews Hong Kong’s first green loan for logistics sector, worth US$1.13 billion, will finance cold storage facility in Kwai Chung ESR Group, a real estate services and investment company, and property firm Chinachem Group have secured Hong Kong’s first green loan for a logistics facility, worth HK$8.8 billion (US$1.13 billion). The five-year loan will finance the con- struction of the Kwai Chung Cold Storage Logis- tics Centre. The seven-storey facility, to be con- structed on a 55,245 square-metre site, will be the biggest cold storage unit to be built in the city in two decades. “Our cold storage logistics centre in Kwai Chung will provide a range of green features for compa- nies looking for sustainable solutions in all aspects of their supply chain,” ESR Group co-founders and co-CEOs Stuart Gibson and Jeffrey Shen said in a joint statement on Friday. The project is aligned with the Hong Kong gov- ernment’s focus on the development of sustain- able, modern logistics infrastructure as part of efforts to enhance the city’s status as an interna- tional trade centre, they added.- SouthChina MorningPost US to fund $553m deep-sea terminal in Sri Lanka The United States will lend more than $550m for a deep-sea container terminal in Sri Lanka, offi- cials say, with the project seen as countering Chi- na’s rising influence in the Indian Ocean. Sri Lanka sits astride the world’s busiest shipping route, which links the Middle East and East Asia, giving its maritime assets strategic importance. The new Colombo West International Terminal will be 1.4km long, 20 metres deep (0.16 miles long, 66 feet deep) and have an annual capacity of 3.2 million containers. It is being built by a consortium led by India’s Adani Group – which earlier this year denied accusations of “brazen” corporate fraud by a US-based short seller..- Aljazeera Thailand Pushes Ahead With $14 Billion Handout to Prop Economy Thailand will whittle down a plan to hand out cash to its citizens to jumpstart its economy after some economists and former central bankers warned that the move may stoke inflation and widen fiscal deficit. The so-called digital wallet program will cover 50 million people with each receiving 10,000 baht ($280) that needs to be used within six months, according to Prime Minister Srettha Thavisin. That’s down from an original proposal to extend the handout to 56 million people who are 16 years or older.- Bloomberg Ford’s South Africa unit to invest $281 mil- lion in hybrid vehicles The South African unit of U.S. auto giant Ford said on Wednesday it would invest 5.2 billion rand ($281 million) to produce a hybrid vehicle in the country, as it urged the government to move fast on an electric vehicle policy. Three-quarters of cars produced by South Africa’s auto industry, which accounts for 5% of gross domestic product and over 100,000 jobs, are exported, mostly to European countries. But with the UK and Europe banning the sale of new petrol cars from 2035, South Africa’s gov- ernment has warned of an existential threat to the sector, and automakers have sought a government plan to transition to electric vehicles. “The gov- ernment really needs to finalise its policy and get it out there because other countries are moving fast, very fast,” Andrea` Cavallaro, Ford’s opera- tions director of international market group, told Reuters.- CNBCA Oil giant sues Greenpeace Greenpeace is facing one of the biggest legal threats in its history after the environmental group’s campaigners occupied energy giant Shell’s floating oil platform earlier this year, Reu- ters reports. According to the news agency, citing relevant documents, Shell has filed a claim in London's High Court, seeking $2.1 million in damages. The lawsuit also calls for an indefinite block on all protests at the company’s infrastructure at sea or in port anywhere in the world, otherwise Shell is threatening to make claims that could reach $8.6 million. Shell confirmed to Reuters that legal proceedings were underway, claiming that boarding a moving vessel at sea was “unlawful and extremely dan- gerous.”“The right to protest is fundamental and we respect it absolutely. But it must be done safely and lawfully,” the company’s spokesperson was quoted as saying. Meanwhile, Greenpeace said in a statement that it would accept Shell’s offer to reduce the level of damages it is seeking if the company complied with a 2021 Dutch court order requiring it to cut its emissions by 45% by 2030. Shell has appealed this ruling.- RT Business Around The World

The AXiS CI Friday 10 Nov 2023 29 Fighting in northern Myanmar displaces almost 50,000 civilians, UN says Fighting has raged for two weeks across northern Shan state near the Chinese border, in what ana- lysts say poses the biggest military challenge to the junta since it seized power in 2021. The Myanmar National Democratic Alliance Army (MNDAA), Ta'ang National Liberation Army (TNLA) and Arakan Army (AA) say they have seized dozens of military outposts and blocked vital trade routes to China. "As of 9 November, almost 50,000 people in northern Shan were forced into displacement," the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) said in an update. Outside Shan state's Lashio township – home to the military's northeastern command – internet and phone services were disrupted, hindering humanitarian responses to the fighting, UNOCHA said. Restrictions on transport and availability of cash were hindering efforts by local humanitarian groups to give out aid, it said. -France24 Iran warns expansion of Gaza war 'inevita- ble'; officials say air strikes hit hospitals Iran warned the scale of civilian suffering caused by Israel's war on Hamas would inevita- bly lead to an expansion of the conflict, as offi- cials in Gaza reported Israeli air strikes on or near several hospitals in the Palestinian enclave. The comments from Iranian Foreign Minister Hossein Amir-Abdollahian could ramp up con- cerns over whether Washington's diplomatic efforts and deployment of U.S. naval forces to the eastern Mediterranean will be able to keep the conflict from further destabilising the Middle East. -Reuters Mossad helps foil ‘Hezbollah attack’ in Brazil – Israel The Israeli government has claimed that the country's Mossad intelligence agency helped Bra- zilian security services foil a planned terrorist attack on Jewish targets in the South American country, leading to the bust of a local Hezbol- lah-linked cell. “Mossad thanks the security forces in Brazil for the arrest of a terrorist cell that acted on behalf of the terrorist organization Hezbollah to carry out an attack against Israeli and Jewish targets in the country,” Israeli Prime Minister Benjamin Netanyahu’s office said in a statement on Wednesday. Brazilian authorities have arrested two unidenti- fied people on terrorism charges in Sao Paulo, according to a statement by Brazil’s Federal Police, which made no mention of Hezbollah, Mossad or Israel. They also executed 11 search and seizure warrants in Sao Paulo, Brasilia and Minas Gerais states. Police said the crackdown aimed to prevent a terrorist attack and investigate the possible recruitment of Brazilians to carry out such plots in the country.-RT Burkina conscripts dissidents in anti-jihadist fight: HRW Burkina Faso’s junta has conscripted at least a dozen journalists, civil society activists and oppo- sition members for its anti-jihadist fight in a crackdown on dissent, Human Rights Watch has said. Captain Ibrahim Traore, Burkina’s transi- tional president who came to power in a Septem- ber 2022 coup, declared in April a year-long “general mobilisation” to give authorities power to requisition people from the age of 18 if needed in the fight against jihadists. HRW said in a statement on Wednesday that the junta was using the sweeping emergency law against perceived dissidents. Between November 4 and 5, security forces notified the group of at least 12 in writing or by telephone that they would be called up to participate in government security operations, it said.- The Guardian Russia is turning increasingly hostile toward Israel as it picks sides in the Middle East When the Israel-Hamas war started a month ago, Russia was conspicuously measured in its imme- diate response to the conflict, issuing cautious statements calling for cool heads and a cease-fire. As Israel’s assault on the Hamas-governed Gaza Strip has intensified, with over 10,000 Palestin- ians believed to have now died in the heavi- ly-bombarded enclave, Russia has increasingly abandoned its more neutral stance and is becom- ing openly critical and hostile toward Israel. Russia’s initially sober response to the eruption of violence was seen to be a result of the Krem- lin carefully weighing up its competing and con- flicting interests in the Middle East. Russia has always enjoyed constructive relations with Israel, with Russian President Vladimir Putin and Isra- el’s Premier Benjamin Netanyahu enjoying a close relationship and vowing to deepen Israe- li-Russian ties. -CNBC Portugal to Hold Snap Election in March After Probe Toppled Prime Minister Portugal will face an early election on March 10 after Prime Minister Antonio Costa unexpectedly resigned on Tuesday amid a probe into possible government corruption. Lawmakers will be able to give final approval to the outgoing government’s 2024 budget before Costa is formally exonerated in early December, President Marcelo Rebelo de Sousa said on Thursday night in a televised address in Lisbon. -Bloomberg Madagascar: Head of parliament lower house calls for suspension of Nov. 16 presi- dential election The head of Madagascar's lower house of parlia- ment on Thursday (Nov. 09) called for the sus- pension of the November 16 presidential elec- tions. The mediation group headed by the official concluded the current situation in the country did not allow for a free and credible vote. The group including the organization that bring together Madagascar's four biggest Christian churches spoke to the press in Antananarivo. "The electoral process must comply with interna- tional standards," Lower House speaker Christine Razanamahasoa said. "This is not the case at the moment with the election that we are trying to organise on November 16. We are strongly calling for the electoral process to be suspended." She said this was to ensure "peace" and "harmony" in the country, where political tensions have been run- ning high in the run-up to the vote, which was already postponed by a week. -Africanews Mozambique: Inhabitants denounce insur- gents in Macomia with local backing Inhabitants from the administrative post of Mucojo, Macomia district, in the Mozambican province of Cabo Delgado, on Wednesday denounced the alleged circulation of terrorists in local communities, in some cases with the protec- tion of community members. “The terrorists are still here among us. Every week at least, they visit one of the communities,” a source told Lusa from Mucojo. According to the source, the terrorists go into the communities to buy basic necessities and use local fishermen’s boats as a means of transport. “When they arrive in our communities, they buy everything and use our boats to transport their products,” he added. Another local source told Lusa that when they arrive in the community, the terrorists appeal to the people not to leave their homes, assuring them that they mean no harm: “They always say they won’t harm us, but we’re afraid because someone who has killed and taken everything can’t be trusted.” -COM U.S. launches airstrike in Syria in response to attacks by Iranian-backed militias The U.S. carried out an airstrike on a weapons warehouse in eastern Syria used by Iranian-backed militias, in retaliation for what has been a growing number of attacks on bases hous- ing U.S. troops in the region for the past several weeks, the Pentagon said. In Wednesday's strike, two U.S. F-15 fighter jets dropped multiple bombs on a weapons storage facility near Maysu- lun in Deir el-Zour that was known to be used by Iran's Revolutionary Guard, U.S. officials said. "The President has no higher priority than the safety of U.S. personnel, and he directed today's action to make clear that the United States will defend itself, its personnel, and its interests," Defense Secretary Lloyd Austin said in a state- ment. A military official told reporters in a call that people were seen at the warehouse during the day as the U.S. military watched the site for hours, but the number decreased to about "a couple" overnight when the strike occurred. The official said the strike triggered secondary explosions, indicating the presences of weapons, but the U.S. believes that no civilians were killed and any people at the warehouse were tied to the Revolutionary Guard or militia groups.-NPR United Nations suspends pullout of African Union troops from Somalia as battles with militants rage The United Nations Security Council on Thurs- day suspended for a period of three months the pullout of African Union troop from Somalia, where fighting rages with al-Qaida’s affiliate in East Africa. The decision follows a request by the Horn of Africa nation for the forces to remain in the country to help in the fight against the al-Shabab extremists. Somalia’s request was supported by the African Union, all countries that contribute soldiers to the force and the council, which agreed to delay the pullout of the 19,000-strong AU force for 90 days. Last year in April, the council unanimously approved a new African Union Transition Mis- sion in Somalia, known as ATMIS, to support the Somalis until their forces take full responsi- bility for the country’s security at the end of 2024.-AP Bodies in military uniforms reported in Sudan streets Intense fighting reportedly continues in Sudan's capital, Khartoum, and in the western region of Darfur, where hundreds are said to have been killed in the ongoing clashes. Witnesses told the AFP news agency that bodies littered the streets of Omdurman city on Thursday in the latest escalation of violence between the Sudanese army and the paramilitary Rapid Support Forces (RSF). “The bodies of people in military uniforms are lying in the streets of the city centre after the fighting yesterday,” a witness was quoted as saying. In the west of the country, about 700 people have reportedly been killed in West Darfur clashes, the International Organization for Migration (IOM) said in a statement quoted by the Reuters news agency. Over 300 others are reported missing following the fighting in El Geneina, the West Darfur capi- tal, the statement added.-BBC China warns Estonia to scrap plans for Tai- wanese office Taiwanese Foreign Minister Joseph Wu began his visit to the three Baltic countries on Wednesday. Last week, Tallinn also announced it would allow Taiwan to open a non-diplomatic Taipei represen- tative office in the country to boost economic and cultural ties with the island. This has provoked outrage from Beijing, which considers the autonomous island to be part of China. “China urges the Estonian side to abide by its solemn commitment to the one-China principle, refrain from allowing Taiwan to set up any offi- cial organisations, and effectively safeguard the political basis of bilateral relations,” Chinese For- eign Ministry spokesperson Wang Wenbin told a press conference on Wednesday.- LRT Politics Around The World

Markets watch ZimDollar Premium Widens to 48% The AXiS CI Friday 10 Nov 2023 30 he Zimbabwe dollar has experi- enced a 0.4% depreciation on the formal market, declining from ZWL5718.4090 to ZWL5738.7217, as reported by the latest data from the Central Bank. This slight decline has widened the premium from 40% to 48% compared to last week, as the Zimbabwe dollar continues to depreciate on the ungov- erned parallel market, reaching 8500 against the US dollar. The steady decline of the Zimbabwe dollar and the increasing gap between the parallel and formal market rates raise concerns and suggest possible market manipulation by the govern- ment. Regional Markets Rand Appreciates to 18.3 The South African rand strengthened to ZAR18.3 against the dollar, reach- ing its highest level since early August. This appreciation is attributed to a weaker dollar following the Federal Reserve's decision to maintain interest rates and indications that another hike this year is unlikely. However, South Africa's central bank continues its battle against inflation, with risks to the inflation outlook remaining on the upside. Deteriorating public finances could lead to higher interest rates, while the National Trea- sury predicts larger budget deficits and increased debt in the coming year. Kwacha Eases to 22.7 The Zambia Kwacha fell to 22.7, sur- passing its 28-month low reached on July 21, 2021. The Kwacha had previously hit a his- toric low of 21.65 in July, representing the weakest performance of the cur- rency. On a positive note, the Stanbic Bank Zambia PMI shows a slight expansion in the country's private sector, with the index rising to 50.6 in October 2023. New orders increased slightly, revers- ing a two-month decline, indicating strengthening customer demand. How- ever, purchase prices continued to rise, despite inflationary pressures. Naira Hits 802.8 The Naira reached its worst perfor- mance in history, trading at 802.8. Concurrently, the Stanbic IBTC Bank Nigeria PMI droped to 49.1 in Octo- ber 2023, signalling the first contrac- tion in the country's private sector since March. New business declined significantly, ending a six-month growth streak, as high inflation damp- ened customer demand. Business activity also decreased, fall- ing for the second time in three months. Consequently, firms reduced their purchasing activity for the first time in seven months. Shilling Shrinks to 151.6 The Shilling depreciated further from 150.7 to 151.6 against the US dollar, continuing its depreciation trend. The Stanbic Bank Kenya PMI reflects a contraction in October 2023, with the index declining to 46.2, the sec- ond-fastest contraction since August 2022. Intense cost pressures led to de- creases in output, new orders, and em- ployment across all surveyed sectors. Purchasing activity also experienced a modest decline, while input inflation reached a record pace due to higher fuel prices and currency weakness. Pula Depreciates Marginally The Botswana Pula experienced a slight drop, with its value against the US dollar decreasing from 13.5 to 13.6. A stronger currency has implications for Botswana, making imports cheaper for residents but potentially making exports relatively more expensive. A stable and positively trending currency can boost investor and business confi- dence, attracting foreign investment and stimulating economic activity. However, currency exchange rates are subject to fluctuations influenced by global economic trends, geopolitical events, and changes in monetary poli- cies of major economies. T

wing to increased demand for value preservation of the fragile ZWL amid policy and political uncertainty, the ZSE continues to widen the margin of gains in each week, with increasing turnover. The mainstream ZSE All Share Index closed at a 19-weeks high of 173,583.74 points on Thursday after rising 9.35% week-on-week. Gains were evenly spun across all the market's main indices as bear-run extends to a 4th consecutive week. The bourse has garnered a nominal growth of 10.5% since the beginning of the month, which translates to a whopping 9.7% in US$ terms as the ZWL has remained relatively stable against the greenback. On a year-to-date basis, the ZSE is up 790.5% and 6.2% in nominal terms and US$ terms respectively. The US$ denominated bourse, VFEX, closed the first week of November in negative territory, extending the bull-run to a 6th consecutive week as policy and political uncertainties continue to subdue demand for regulated US$ investments. The VFEX All Share Index dwindled by -1.58%, a widened margin from prior week's -0.31% decline, to close at 67.7 points. The negative outturn was stimulated by sell-offs in 3 laggards, which outweighed 4 risers. On a year-to-date basis, the VFEX is down -28.6%, with low prospects of recovery in the remaining part of the year. Due to a positive start into the month, the bourse is up 0.04% month-to-date. An aggregate of US$798,770 exchanged hands on VFEX in the week under review, down from US$1,162,484 traded in the prior week. On the currency markets, increased efforts by the Central Bank to curb exchange rate depreciation through the control of money supply, borrowing costs and speculative currency trading has aided in stabilizing the exchange rate on the formal currency market. At the close of the most recent auction trading week, the ZWL shed off -0.35% against the US$ on the Auction market to close at ZWL5,738.72 per US$. On the interbank market, the ZWL depreciated by -0.35% against the US$ to close at ZWL5,739.06. . The AXiS CI Friday 10 Nov 2023 31 ZSE & VFEX WEEKLY COMMENTARY O ZSE ASI 158,748 VFEZ ASI 68.8 ZWL INTERBANK 5,718.98 161,050 67.4 5,719.72 167,717 67.3 5,720.00 170,207 68.1 5,720.31 172,188 67.9 5,738.72 173,584 67.7 5,739.06 9.35% -1.58% -0.35% ZSE TOP 10 MEDIUM CAP INDEX SMALL CAP INDEX 5,342,954 5,342,954 5,336,400 5,336,400 5,340,726 5,343,534 0.01% 70,248 644,502 71,537 648,559 74,947 666,737 76,167 674,602 76,741 688,676 76,998 701,522 9.61% 8.85%

The AXiS CI Friday 10 Nov 2023 32 Weekly Commodity Pulse Gold (US$/oz) Gold prices experienced a tumultuous week, beginning at US$2,002/oz and closing at US$1,962/oz on November 10th, marking a 2.00% decline from the previous week. The year-to-date increase stands at 7.45%. At the top of the push factors, economic uncertainty, due to the ongoing European Union membership vote in Finland and global geopolitical tensions, including the agreement between the US and North Korea to defuse tension in the Korean peninsula, led to increased risk appetite, consequently impacting gold prices. Platinum (US$/oz) The platinum market also witnessed a tumultuous week, with prices beginning at US$939/oz and closing at US$861/oz on November 10th, signify- ing an 8.32% decline from the previous week. The year-to-date decrease stands at 20.51%. This week’s decline primarily emanates from concerns over global economic growth and a significant reduction in spending by major players in the industry due to low metal prices. We have adjust- ed our forecasts for platinum prices in 2024, with the median forecast now at US$1,023/oz, down from US$1,100, reflecting the prevailing bearish sentiment. Copper (US$/t) With prices starting at US$8,186/ton and closing at US$8,129/ton on November 10th, marking a 0.69% decline from the previous week copper prices had a meagre week. The year-to-date decrease stands at 2.90%. This decline can be attributed to concerns over the slowdown in the Chinese economy, which has held back copper prices in 2023. However, the International Copper Study Group (ICSG) forecasts a global copper supply deficit of 114,000 tonnes in 2023, follow- ing a 431,000-tonne deficit in 2022. Aluminium (US$/t) The price of aluminium showed a slight decline of 0.86% this week, with a year-to-date decrease of 5.93%. This decline comes after a period of fluctuation in the aluminium market. The recent fall in aluminium prices can be attributed to sev- eral factors, including the 200% tariff on Russian metal imposed by the US, effectively banning Russian aluminium imports. Additionally, con- cerns about a slowing economy following con- tractionary Chinese manufacturing PMI data in October have impacted the outlook for industrial inputs. Nickel (US$/t) In the nickel market this week, prices started at US$18,235/ton and closed at US$17,813/ton on November 10th, reflecting a 2.31% decline from the previous week and contributing to the year-to-date decrease of 40.72%. This week con- cerns over rising output in Indonesia, lead to worries about an oversupply in the market. The ongoing global economic uncertainty and the threat of a global recession have also curbed the upside for nickel prices due to weak physical demand in China. Brent/Oil (US$/b) In the past week, Brent oil prices commenced at US$86/brl and closed at US$80/brl on November 10th, marking a significant 6.76% decline. The year-to-date decrease stands at 6.43%. Geopoliti- cal tensions in the Middle East played a pivotal role in driving the price movements. On Novem- ber 3rd, oil prices settled over 2% lower as con- cerns over Middle East tensions eased. However, on November 6th, prices surged by more than 5% due to escalating geopolitical tensions in the region. The Israel-Hamas conflict heightened fears about energy production in the area, impact- ing oil prices. 380.7 81.67 380.7 81.67 380.7 81.67 380.7 81.35 380.7 81.35 1,826.00 Daily % Change 3-Nov-23 2,002 6-Nov-23 1,989 7-Nov-23 1,974 8-Nov-23 1,958 9-Nov-23 1,970 10-Nov-23 1,962 WoW -2.00% YTD 7.45% 1,825 1,850 1,875 1,900 1,925 1,950 1,975 2,000 2,025 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23 1,082.90 Daily % Change 3-Nov-23 939 6-Nov-23 918 7-Nov-23 899 8-Nov-23 872 9-Nov-23 864 10-Nov-23 861 WoW -8.32% YTD -20.51% 800 825 850 875 900 925 950 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23 8,372.00 Daily % Change 3-Nov-23 8,186 6-Nov-23 8,238 7-Nov-23 8,187 8-Nov-23 8,142 9-Nov-23 8,147 10-Nov-23 8,129 WoW -0.69% YTD -2.90% 7,800 8,000 8,200 8,400 8,600 8,800 9,000 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23 30,048 Daily % Change 3-Nov-23 18,235 6-Nov-23 18,223 7-Nov-23 18,445 8-Nov-23 17,912 9-Nov-23 18,094 10-Nov-23 17,813 WoW -2.31% YTD -40.72% 17,000 18,000 19,000 20,000 21,000 22,000 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23 85.91 Daily % Change 3-Nov-23 86 6-Nov-23 85 7-Nov-23 82 8-Nov-23 80 9-Nov-23 80 10-Nov-23 80 WoW -6.76% YTD -6.43% 70 75 80 85 90 95 100 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23 2,378 Daily % Change 3-Nov-23 2,257 6-Nov-23 2,288 7-Nov-23 2,265 8-Nov-23 2,264 9-Nov-23 2,243 10-Nov-23 2,237 WoW -0.86% YTD -5.93% 2,100 2,200 2,300 2,400 11-Oct-23 17-Oct-23 23-Oct-23 29-Oct-23 4-Nov-23 10-Nov-23

TOP 5 WEEKLY RISERS TOP 5 WEEKLY FALLERS FINANCIAL MARKETS AT A GLANCE 2023 AFDIS ARISTON BAT CFI DELTA DAIRIBORD HIPPO Bridgefort MEIKLES OK SEEDCO STAR AFRICA TSL Tanganda 200025 3215 1400000 200000 354989.5 54700 200000 1659.09 95600 17002.5 86100 495.34 104145 95100 200015 3040 1350000 200000 308740.9 53995 200000 1659.09 95491.53 16160 88179.49 485.36 59555 95098.51 Latest Price ZWL Cents Previous Week ZWL Cents Consumer Staples EDGARS NTS RTG TRUWORTHS 8400.83 2470 13000 3800 8500 2470 12990 3800 Latest Price ZWL Cents Consumer Previous Week ZWL Cents CAFCA G/BELTINGS MASIMBA NAMPAK UNIFREIGHT ZECO 220000 1725 81024.35 33500 25800 4.00 235000 1725 80500 33522.84 25800 3.31 Latest Price ZWL Cents Industrials Sector Previous Week ZWL Cents ARTZDR LAFARGE PROPLASTICS TURNALL Willdale RioZim 5500 14375 61195 2615 2680 74000 5500 14375 61200 2566.58 2371.57 69000 Latest Price ZWL Cents Materials Sector Previous Week ZWL Cents CBZ FBCH FIDELITY FML NMBZ ZBFH ZHL 210000 75000 18000 68150.51 40500.8 88000 12700 196375 74500 15857.14 58472.97 39955.01 88000 12390 Latest Price ZWL Cents Financial Sector Previous Week ZWL Cents Ecocash ECONET ZIMPAPERS 13000 50043.35 2200.09 13700 49963.71 1665 Latest Price ZWL Cents ICT Sector Previous Week ZWL Cents MASHHOLD FMP 15300 16809.8 14000 14740 Latest Price ZWL Cents Real Estate Sector Previous Week ZWL Cents TSL ZIMPAPERS ZECO DELTA Willdale 104145 2200.09 4 354989.5 2680 44590 535.09 0.69 58027.27 419.6 75% 32% 21% 20% 19% COUNTER PRICE CENTS CHANGE % CHANGE EDGARS CAFCA ECOCASH RTG SEEDCO 8500 220000 13000 12990 86100 -1235 -15000 -700 -505 -1900 -13% -6% -5% -3.7% -2.16% COUNTER PRICE CENTS CHANGE % CHANGE Interbank Market Rate 5,739.06 -0.35% ZSE Top 10 Index 76,998 9.61% ZSE All Share Index 173,584 9.35% NGSE All Share Index 70,773.31 1.04% 8,803.48 0.36% BSE All Share Index LuSE All Share Index 9,917.12 -0.04% VFEX All Share Index 67.7 -1.58% JSE All Share Index 72,465.63 1.52% 70773.31 173583.74 NGSE All Share Index NGSE All Share index WOW 1% MOM 6.6% YTD 38.1% 70773.31 173583.74 NGSE All Share Index NGSE All Share index WOW 1% MOM 6.6% YTD 38.1% 173583.74 96276.86 ZSE Materials Index All Share index ZSE Materials Index WOW 4.1% MOM 23% YTD 607% 173583.74 212784.31 ZSE Consumer Staples Index All Share index ZSE Consumers Staples index WOW 14.9% MOM 40% YTD 771% 173583.74 701521.95 ZSE Medium Cap Index All Share index Medium Cap index WOW 8.9% MOM 41% YTD 1815% 173583.74 5343533.7 ZSE Small Cap Index All Share index Small Cap index WOW 0.01% MOM 81% YTD 1082% 173583.74 496177.4 ZSE Consumer Discretionary Index All Share index ZSE Consumer Discretionary index WOW -4.7% MOM -4% YTD 1298% 173583.74 77383.09 ZSE ICT Index All Share index ZSE ICT Index WOW -0.8% MOM -1% YTD 342% -4.7% 37% Interbank Market Interbank All Share index 9917.12 173583.74 LUSE All Share Index LUSE All Share index WOW -0.04% MOM 6.5% YTD 35.2% 8803.48 173583.74 BSE All Share Index BSE All Share index WOW 0.4% MOM 1.6% YTD 13.9% 173583.74 190082.23 ZSE Real Estate Index All Share index ZSE Real Estate Index WOW 8.7% MOM 18% YTD 972% 173583.74 309532.11 ZSE IndustrialsIndex (New) All Share index ZSE Industrials Index (new) WOW -0.04% MOM 18% YTD 1354% 173583.74 343770.52 ZSE Financials Sector All Share index ZSE Financials index WOW 6.7% MOM 74% YTD 1099% 173583.74 76997.7 ZSE Top 10 Index All Share index ZSE Top10 index WOW 9.6% MOM 36% YTD 525%

34 Regional Economic Watch Cavallaro was talking to Reuters on the sidelines of Ford celebrating 100 years of operations in South Africa and announcing an investment to produce the Ranger hybrid car.The company said the investment would go into producing its Ranger Plug-in Hybrid Electric Vehicle, which will be rolled out from its factory in Pretoria from late 2024. “What we have seen is just this rapid escalation of the adoption of new energy vehicle technologies,” President of Ford Motor Company in Africa Neale Hill told Reuters.Ford plans to export about 70% of the 44,000 of the Ranger cars to Europe, Australia and New Zealand, Cavallaro said. Mozambique The Mozambican parliament on Wednesday approved a budget of just over 2.6 billion meticais ( around US$40.7 million) for its operating and investment expenses in 2024, 14% less than in 2023.The bill was approved only by MPs from the Front for the Liberation of Mozambique (Frelimo), the ruling party with a qualified majority in parliament, since the benches of the Mozambican National Resistance (Renamo), the main opposition party, and the Mozambique Democratic Movement (MDM), the third largest party, were once again absent en bloc from the plenary session of the legislative body. “The proposal for the parliament’s budget for 2024, due to the need to contain expenses, points to a reduction of around 14 % compared to the 2023 budget,” said Hélder Injojo, a Frelimo MP and the president of the parliament’s administrative council, who presented the document.Of the amount approved today, the largest portion goes to operating expenses, which will absorb just over 2.5 billion meticais ( 39 million US dollars).The remainder, equivalent to US$1.7 million, will go towards investment costs, Injojo added. Hélder Injojo said that parliament’s administrative council body’s activities in 2024 will prioritise strengthening parliament’s representative, legislative and supervisory functions and institutional capacity building.“The instruments approved today are aimed at creating premises so that this house can fulfil its role next year, fulfilling its mission of representing the noblest interests of the Mozambican people, ensuring legislative production for the functioning of our state and ensuring supervisory action,” emphasised Hélder Injojo. Renamo and MDM members of parliament were again absent from plenary sessions today, after boycotting the solemn act to restart the body’s work, as part of the opposition parties’ challenge to the results of the local elections on 11 October.The leaders of Renamo, Ossufo Momade, and the MDM, Lutero Simango, had said at a joint press conference that the two parties would return to parliament, but this announcement has not yet materialised. Malawi Malawi’s central bank said in a notice to authorised dealer banks seen by Reuters that it was devaluing the local kwacha currency’s exchange rate to the dollar MWK= by about 30% from Thursday.The notice said the kwacha’s exchange rate would be adjusted to 1,700 kwacha to the dollar from a selling rate of about 1,180 kwacha to the dollar.A central bank spokesperson was not immediately available for comment. It is the second time the southern African country has significantly devalued its currency, after doing so first in May 2022 to prop up dwindling foreign currency reserves pressured by rising commodity prices and declining revenue from tobacco exports.The notice to banks said the exchange rate adjustment was needed because there were still supply-demand imbalances in the currency market and arbitrage opportunities had resurfaced. Spot checks on some players indicated that the market was able to clear import bills at the new exchange rate, the central bank said.“The Reserve Bank of Malawi will closely monitor developments in the market to avoid disorderly behaviour among market players that may cause excessive volatility,” it said.A senior local banker said the move was widely expected.“It works in short term and only addresses demand side for now, but what is required is to sort out supply side,” he said. South Africa The South African unit of U.S. auto giant Ford said on Wednesday it would invest 5.2 billion rand ($281 million) to produce a hybrid vehicle in the country, as it urged the government to move fast on an electric vehicle policy.Three-quarters of cars produced by South Africa’s auto industry, which accounts for 5% of gross domestic product and over 100,000 jobs, are exported, mostly to European countries. But with the UK and Europe banning the sale of new petrol cars from 2035, South Africa’s government has warned of an existential threat to the sector, and automakers have sought a government plan to transition to electric vehicles. “The government really needs to finalise its policy and get it out there because other countries are moving fast, very fast,” Andrea` Cavallaro, Ford’s operations director of international market group, told Reuters. In the meantime the company is focussed on producing hybrid vehicles – cars that can run on petrol like a regular internal combustion engine or ICE-driven vehicles and also run on electric charge. The AXiS CI Friday 10 Nov 2023