The AXiS XLVIII

The EQUITY AXIS

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CONTENTS The AXiS XLVIII 07 October 2022

The Cover Economic News & Analysis

Delta Beverages has reached a milestone in 4 Delta Corporation: A behemoth in beverages
its financial performance, with volumes 5 Everyday is a Saturday :The curse of joblessness in Zimbabwe
spiking to levels not seen in history helping 6 State of the economy : Beware of the false sense of market stability
Delta is the largest company listed on the 9 World Bank: Rising inflation weighs on economic activity in Sub-Saharan Africa
ZSE by market capitalisation despite trading 10 Deregulation of GMO crops: fact or myth?: Food security forces rethink
at steep discounts to historical averages. 12 World hunger gets worse: Regardless of UN efforts

The curse of joblessness in Zimba- Guest Column
bwe
14 Floating a Diaspora Bond: Should Zimbabwe continue its fondness for borrowing?
As the saying goes, “An idle mind (or person) 15 Ahead of the 2023 elections: A reflection of the disintegration of public value in Zimbabwe
is the devil’s workshop”, the devil is estimat- 16 Tapping into the art of aluminum extrusion: The road to a US$12 billion economy
ed to be running the most workshops in
Zimbabwe than anywhere else in the world Business News and Insights
as idleness has become the new norm
around. 17 RIOZIM: Confluence of calamities plunges profit, gold production
19 General Beltings Holdings: Volumes grow despite liquidity constraints
State of the economy 20 Unifreight: Succumbs to unprecedented losses
20 Hwange Colliery: Continues on descending loss position
Since late July this year, as policymakers have
sought to return the economy to normal, Markets
“stability” has usually been their byword.
Unfortunately, their actions have only 21 Markets Watch
created a false calm — a “stable instability”, 22 Weekly Commodities Pulse
to coin a paradoxical phrase. Stable instabili- 26 ZSE Weekly
ty creates the illusion of normality, obscuring 27 Financial Markets At a Glance
dangers hidden behind the apparently
stationary and familiar World News

RioZim Limited : Confluence of 25 Business around the world
calamities plunges profit, gold 23 Politics around the world
production

Zimbabwe Stock Exchange (ZSE)- listed
mining outfit mainly specialising in gold and
diamond production, RIOZIM Limited
succumbed to a loss after tax during the
half-year ended 30 June 2022 with gold,
diamond production also declining by a
significant by 30% and 56% respectively.

ZSE ASI 14,937.06 ZSE TOP 10 9,244.10 MEDIUM CAP INDEX 29,374.00 ZSE TOP 15 10,168.74 SMALL CAP INDEX 485,956.68 ZWL INTERBANK 621.8788
14,771.65 9,140.55 29,051.67 10,051.47 483,615.64 621.8922
14,734.12 9,111.15 28,999.58 10,022.68 498,506.54 621.9627
14,424.01 8,821.54 29,193.61 9,712.86 488,434.05 623.2271
14,079.81 8,561.42 28,861.48 9,424.93 494,604.57 626.8524
13,632.14 8,108.26 29,405.77 8,981.23 495,776.26 626.9411
-8.74% -12.29% 0.11% -11.68% 2.02% 0.81%



& Analysis

Delta Corporation
A behemoth in beverages
Delta Beverages has reached a milestone in
its financial performance, with volumes Delta together with its supply partners faced
spiking to levels not seen in history help- challenges in sourcing imported raw materials
as RBZ struggled to manage the forex
ing the company achieve a record profit. Delta is rationing system.
the largest company listed on the ZSE by market
capitalisation despite trading at steep discounts to Through all the turbulence, Delta underwent
historical averages. some massive restructuring. More fundamental-
ly was the consolidation of Sab Miller into AB
Delta Volumes Trend in HLs/ millions in Bev, post the latter’s acquisition. The
disposal of some non-core and competing
assets also impacted Delta, particularly with
regard to bottling rights for The Coca-Cola
Company (TCCC). When the AB In Bev and
SAB Miller merger consummated Delta, the
Coca-Cola Company, which had been a direct
competitor of Pepsi, which in turn is owned
by the former, sought to revoke its licencing
deals made with SAB Miller. SAB Miller’s
former operations were predominantly on the grown over the years. In 2014, a US$12 million
Sub-Saharan Africa front, mainly South Africa, investment into the Chitungwiza plant, ramped up
Kenya and also included Zimbabwe. total capacity to 1.8 million hector litres. In
2015, a US$17 million investment at the Fair-
However, the material effect of the intended bridge plant in Bulawayo resulted in a capacity
withdrawal did not kick in as an extension of expansion to 3.5 million hectare litres.
rights was negotiated.
A further US$26 million was laid out in 2016,
This in essence meant that the Delta operation for the setting up of 2 sorghum beer plants in
as it had been under SAB Miller combining Kwekwe and Masvingo. An additional plant was
both sparkling beverages and lager beer, was set up in Rusape adding to local capacity, while
to remain. This is particularly important in that the bottling rights extension allowed for the
As the biggest company on the Zimbabwe Stock it meant that the business continued to receive acquisition of Mutare Bottling Company.
Exchange, Delta Corporation has shone the light massive CAPEX support and enjoy scale, help-
through resilience in turbulent times and innova- ing it retain market leadership in the core
tion for growth, in times of relative stability. Del- market of Zimbabwe. More materially, at the
ta’s value accretive is an offshoot of its asset order of the South African Competition Com-
base expansion which has been stimulated by a mission, SAB Miller was ordered to dispose of
combination of investment in expanded capacity its stake in Distell before the merger with AB
and a new production line as well as the acquisi- In Bev.
tion of local and regional assets to complement
its capacity, in the process diversify markets and In the process, the structuring at Stellen-
unlock further shareholder value. bosch-based Distell, its wines and spirits maker
in turn resulted in the disposal of its stake in
From its lowest ebb in the full year to March Zimbabwe spirits and winemaker, African Dis-
2020, over which the company recorded 4.6 mil- tiller. The stake was sold to Delta which
lion hector litres in sales volumes, the company increased its shareholding in Afdis from 10%
has rebounded strongly to report an all-time high to about 49%, consequently making it a sub-
sales volume of 9.3 million hector litres over the sidiary, from associate status.
12 months to March 2022. In 2021, the company
recorded 6.6 million hector litres in sales which The processes of restructuring as a conse-
was in line with historical averages. However, in quence of the merger also resulted in the
2022, sales volumes increased by 41% to 9.3 offloading of National Breweries by AB In
million hectare litres. Bev, which Delta also snapped in 2018. The
The significance of this movement is that it has company produces sorghum beer for the Moderation of the financial performance where
resulted in a more than doubling of income from respective Zambian market but has largely volumes are concerned shows that after factoring
2010 levels of about US$161 million to about been struggling over the last 5 years. Delta out Zambia, South Africa and the investment in
US$612 million in 2022. Over the 12-year period also snapped up United Breweries South Africa Afdis, volumes will still top 7 million hectolitres
turnover levels have increased by a Constant a sorghum beer manufacturer from Diageo, for the 12 months period to March, still a record
Average Growth Rate (CAGR) of 12% per which is the world’s largest spirits marker high for the company which has in past hit a top
annum. However, a study of the volume trend positioning it as the most consequential of 6.8 million hector litres, that is early into dol-
sorghum beer manufacturer in Southern Africa. larization. It is not only the sorghum beer seg-
shows that it has not always been a smooth ment which has made a difference in Delta’s per-
steady sail up the curve. In the full year to March 2022, UBS reported formance. It is also the rebound in sparkling bev-
total sales volumes of 1.3 million hectare erages, which has struggled since de-dollarisation,
Late in dollarization volumes struggled to grow, litres, which was a growth of 63% over the both supply and demand side factors have
easing off in 2017, as currency disparities kicked prior year. The unit contributed 14% to total weighed on the performance of the unit’s perfor-
in amid forex shortages and tighter supply-side sales volumes for the group in the period mance in the past. Forex shortages impacted
economics. In 2018 ahead of elections, massive under review which helped the company report supply chains and resulted in low product avail-
election spending redeemed volumes but a 2019 its best volumes performance on record. Also ability at a time when competition intensified in
austerity program which ushered in a de-dollari- underpinning the record performance is a 43% offering value packs. Improved product availabili-
sation resulted in massive volume loss as infla- growth in volumes in the Zimbabwe unit, ty and the rebounding demand post-recession have
tion kicked in massively derailing volumes. which accounted for 40% of total sales and driven the unit to one of its best growth perfor-
It was not only aggregate demand which plum- remains the largest contributor of the 3 mar- mances. Sparkling beverages volumes jumped
meted with purchasing power erosion but also kets.While growth appears to all be inorganic 65% in the 2022 financial year to near-record
supply-side bottlenecks, particularly on imported given the various acquisitions, the reality is levels.
that of a 2 pronged approach where local
raw materials. capacity with the Chibuku line has extensively
*To Page 7

5 The AXiS XLVIII Friday 07 Oct 2022

Everyday is a Saturday

The curse of joblessness in Zimbabwe
As the saying goes, “An idle mind (or
person) is the devil’s workshop”, the devil rate is the percentage of people in the labour The possibility of unemployment
is estimated to be running the most work- force who are unemployed. Consequently, mea causing an economic downturn in a
shops in Zimbabwe than anywhere else in the suring the unemployment rate requires identifying country is very huge as this comes
world as idleness has become the new norm who is in the labour force. The labour forcein- as a ripple effect of the impact on
around. According to a recent labour survey by cludes people who are either employed or unem- livelihoods highlighted above. Any
the Zimbabwe National Statistics Agency (ZIM- ployed. Due to unemployment’s far-ranging con- country’s economy depends on con-
STAT), the majority of Zimbabweans are either sequences, it’s important to understand jobless- sumer spending, and when potential
wholly impoverished or partially impoverished. ness and the different types of unemployment. employees are unemployed, they
The data collected indicated that 88% of Zimba- Types of unemployment include cyclical unem- often have less discretionary income,
bweans in the labour force are informally ployment, frictional unemployment, structural which results in a fall in consump-
employed. A majority of these are traders. The unemployment, natural unemployment, long-term tion. Less purchasing power means
results also indicate that half of the population in unemployment, seasonal unemployment, classical less money available to buy things
the age group range of 15 to 34 are not unemployment and underemployment. Long-term made by others, thus risking those
employed anyhow and neither are they in any unemployment and underemployment are the workers' jobs as well.
form of training or education. More findings main types of unemployment found in Zimbabwe. When unemployment rates are high,
from the survey showed that 62% earned People who’ve been unemployed for 27 weeks or the government is unable to collect
incomes of less than ZWL20,000 in April when more and who’ve actively sought employment in the same amount of income tax, and
the poverty datum line was hovering around the past four weeks are classified as long-term they often have to spend more on unemployment
ZWL23,000. unemployed. Underemployment differs from packages which are sometimes labelled “govern-
It is, however, an irony that the authorities have, unemployment in that it describes people who are ment’s support”.The chain, therefore, goes from
for a long-time, struggled with improving the working but are not employed at their full capa- high unemployment to low demand for available
economy as their approach remains “command bility. There are a number of reasons for unem- goods, that is, reduced consumer spending, to
economy”. The approach has dismally failed and ployment. These include recessions, depressions, more unemployment as existing employees will
the failure continues to torment the generality as technological improvements, job outsourcing, and be retrenched owing to low demand and subse-
it can only work if pillars of the economy were voluntarily leaving one job to find another. quently a recession. Due to this trend, the wors-
in the hands of the said authorities. A highly Zimbabwe has deteriorated over the past 3-de- ening situation in Zimbabwe has led to the
informal economy, with 88% of the labour force cades from being a bread-basket to being a beg- majority of the labour force fleeing to other
being in the aforementioned category, can only ging basket. This is attributable to various factors countries, offering special skills that would have
excel as a free economy where market forces which are, however, largely skewed towards been used in building the local economy, if per-
drive the overall economy as opposed to infinite political factors. This has seen unemployment missive by policies. According to recent migra-
and inconsistent policies by the government. rate skyrocketing over the years. Unemployment tion data published by ZIMSTAT, 85% of the
The informal sector refers to those workers who or the loss of income which will always affect Zimbabweans living abroad are based in the
are self-employed, or who work for those who some in any society is certainly less degrading if neighbouring country, South Africa. The data
are self-employed. People who earn a living it is the result of misfortune and not deliberately indicated that 84% of the migrants were leaving
through self-employment in most cases are not imposed by the actions of the authorities. Conse- Zimbabwe in search of employment as the unem-
on payrolls and thus are not taxed. Some people quently, the nation has been hit by several pro- ployment rate escalated in the highly informal-
are self-employed in the informal sector because tests from different pressure groups all demand- ized nation. In relation, South African officials,
they want to avoid registration and taxation. But ing the same thing: for the government to priori- including the president, were quoted complaining
many people work in the informal sector through tize human welfare in Zimbabwe. With the of how the weakening economic conditions of
necessity, not choice. Informal workers are more increase in poverty and informal economic activi- Zimbabwe, particularly high unemployment, are
likely to earn lower wages compared to their ties, the majority of Zimbabweans now live on a heavily burdening the neighbouring countries.
peers in the formal sector, as they lack social kill-and-eat model where the survival for the day According to Carlos Saavedra Lamas, “Unem-
protection and access to credit. On the other is dependent on the respective day’s work. ployment is a great tragedy. The man who goes
hand, informal firms tend to remain small, with Therefore, the working population in informal about hopelessly seeking work in order to earn
low productivity and limited access to finance. markets, which holds the largest portion of the bread for his children is a living reproach to civi-
Globally, Uganda has the highest rate of informal population, cannot afford to take a day off from lization”.
employment at 94%, followed by Zimbabwe their respective fields, lest they will sleep on an The 2022 census done by ZIMSTAT showed that
which clocked at 88%. empty stomach. The government has thus benefit- Zimbabwe has a total population of 15.2 million
With a majority of the informal economic players ed from this dilemma as the majority cannot people, with medium-aged adults (25-54years)
being traders, that is, hawkers, marketers, ven- afford to spend a day protesting, away from their dominating 33% of the aggregate. This equates
dors, artisans, small veranda businesses and fields of work. On the other hand, half of the to a total of 5 million people. According to the
cross-border traders among others, the approach young people aged between 15 to 34 are jobless latest labour statistics, almost half of these are
of policing economic activities at a stringent and not in any form of training or education. unemployed and not involved in any sort of
level can-not yield the intended results. Neverthe- training presently. This translates to an aggregate
less, the high rate of informal economic activities of 2.5 million idle minds in Zimbabwe. The data
is indicative of high levels of poverty as this is also indicated that an aggregate of 3.3 million
both a cause and a consequence of informality. people is employed in Zimbabwe, with 1.9 mil-
According to Orson Scott Card, “Unemployment lion being male while 1.4 million are female.
is capitalism’s way of getting you to plant a The census data published in the second quarter
garden”. This is to say that people resort to of this year showed that a total of 8.7 million
backyard economic activities in a fight for people are within the age range of possibly being
survival if the labour market is not permissive. employed, that is, 15 to 64 years. Of this range,
only 38% are employed according to ZIMSTAT
The data published by ZIMSTAT showed that the The main reason for the existence of the latter data. However, a significant portion of the total
population in the age group range of 15 to 34 can be traced back to the unemployment of the is also still in school or some form of training
are not employed anyhow and neither are they in guardians while the former is caused by the or education. This, however, still leaves a huge
any form of training or education. Unemployment latter. High levels of unemployment are also a portion of the labour force in idleness. Wide-
occurs when someone is willing and able to work result of a lack of education or relevant skills. spread “idleness” can increase crime, often driv-
but does not have a paid job. The unemployment This trend means poverty will remain in the ing people to engage in illicit activities to make
lineage until, usually, an external force is applied. ends meet or fill in idle time. Concerns about
This external force is largely a factor of good unemployment can also spark anti-government
governance, which clearly is a stranger to Zimba- agitation, which fuels political unrest. This speaks
bwe from the thesis. Thus, the levels of poverty of 2.5 million potential criminals or social out-
in such a country will only worsen. Motivational casts as a result of idleness fueled by local eco-
speakers usually ought to cry out loud about how nomic conditions. Additionally, unfavourable
employment chains one to their boss’ dream, but working circumstances may result from an excess
reality will remind you how unemployment can of potential workers vying for few accessible
chain you to poverty. employment opportunities. For close to 3-years,
the neighbouring country, South Africa, has been
fighting Zimbabweans living in the foreign land
to return to their home country. One of the raised
main concerns was the acceptance by Zimbabwe-
ans of poor working conditions and poor wages.
“Zimbabweans are burdening our local labour
force by accepting below minimum accepted
wages, which weighs on prospects of bargaining
for better welfare”, said a South African activist.
This is a result of being reduced to survivors by
the government as statistics are showing.

6 The AXiS XLVIII Friday 07 Oct 2022

State of the economy
Beware of the false sense of market stability

S ince late July this year, as policymakers In the period under review, food and non-alcoholic bank, willing buyer-willing seller exchange
have sought to return the economy to beverages inflation rate stood at 1.7% in September rate. We also know that gold is an internation-
normal, “stability” has usually been their 2022, shedding 12.5 percentage points on the August ally traded commodity and the fact that interna-
by word. Unfortunately, their actions have only 2022 rate of 14.2%. Whereas, the month-on-month tional buyers will only buy the coins in foreign
created a false calm — a “stable instability”, non-food inflation rate stood at 5.2%, shedding 5.4 currencies which include the U.S. dollar, South
to coin a paradoxical phrase. Stable instability percentage points. African Rand, and British Pound among others
creates the illusion of normality, obscuring and the RBZ is expressing the weight of the
dangers hidden behind the apparently station- We are witnessing are a combination of three key coin in troy ounces rather than metric grammes
ary and familiar. It’s analogous to a person macroeconomic issues. Firstly, the introduction of used in the country clearly reveals that the
who shows no obvious symptoms of an gold coins as an alternative investment instrument RBZ went the extra mile to follow international
as-yet-undetected terminal disease. For a gov- has been crucial in inducing confidence in the local standards and induce confidence.
ernment that is used to being on the backfoot unit and mopping up excess liquidity. Secondly, the But to understand why there is already a huge
and constantly fighting the remnants of one demand for the coins, we have to appreciate
policy disaster after the other, stability is an combination of the the investment landscape in the country. Most
anomaly. As expected, monetary authorities world’s highest interest international corporations/ investors are paid in
continue to latch on the recent economic gains, rates and the temporary the local currency but have no avenues to
touting them as a function of recent sound suspension of payments to expatriate the funds back home. The only
monetary and fiscal policy, despite globally government contractors option they have really is to look for and buy
synchronised high inflation, slow economic has worked in unison to the greenback before expatriating the funds out
growth, weak labour markets and unstable also suck liquidity out the of the country. The challenge they then face is
asset prices. Our government is quick to of the market. First, lets that there is nowhere to access foreign curren-
ignore low labour-force participation rates, consider the gold coins cy. Certainly not in the banking system, so they
flexible definitions of employment, the poor and their role in this are forced to turn to the black market/ parallel
quality of new jobs created, low wage growth, stability. market which is illegal, further exacerbating the
limited productivity growth, weak capital Gold Coins liquidity crisis.
investment, and continued imbalances in exter- The Reserve Bank of Gold coins have so far offered, a stable and
nal trade. Zimbabwe said a total of trusted alternative for expatriation, consequently
They’re sanguine about continued fiscal defi- 9 516 gold coins valued mopping up excess liquidity, starving the paral-
cits and perpetually increasing debt, while at ZW$9 billion had been lel market of both the Z$ and US$. If this
seeing the normalisation of record high interest sold as at 23 September policy tool is able to drive the exchange rates
rates. They’re unconcerned about widening 2022, with 35% having to a point of convergence or at least close to,
inequality, expanding poor demographic and been sold to individuals the coins will be a success. But the question
rising geopolitical tensions within the Southern and 65% to corporates, including asset management remains, will the gold coins alone be enough
African region. and insurance entities. to solve the liquidity challenge?
In hindsight, the government’s sweeping mea- We know that the coins are ideal for high-value
sures have had recent positives. Policy has transactions and with a purity of 22 carats, individu- To adequately mop up the
pushed month on month and headline inflation al serial numbers and backed by a certificate, they Z$400 in excess liquidity the
down, reduced the exchange rate disparity, and are a custom fit as a store of value since they can RBZ needs to produce 19,904
has resulted in the shortage of the local unit. be bought using the local currency and at the inter- coins every week. To produce
The latter, from an economic perspective, bank, 19,094 gold coins every week,
would be a necessity in a bid for currency for 6 months, the RBZ needs
stability, however, the manner in which the about 15.6 metric tonnes of pure
fiscal tool was deployed is expected cause gold which is half the whole
another macroeconomic implosion over the exported tonnage of gold for last
next couple of months. year, 2021.
Currently, a walk down the streets of Harare Clearly, this is not governments’
points to a relatively stable economy, with intentions and they knew that
black market money changers starved of the before beginning the project.
Zim dollar and the greenback in short supply. Further, only just under 10,000
The parallel market exchange rate has been coins have been sold since the start of the sale,
stagnating at $1: ZWL700, while the official reflecting the decline in demand for the coins.
exchange rate has almost converged with the However, that may be remedied by the intro-
street rate as it is currently pegged at $1: duction of smaller units by next month in
ZWL620, cutting the premium to just under November.
20%, from 100%. So, in hindsight, the gold coins have worked
to address some issues, but not all of them.
Month-on-month inflation pared from 12.4% in Even as the exchange rate has stabilised, the
August 2022 to 3.47% in September 2022, a US dollar and gold coins will remain preferred
significant win in the inflation fight, and one over the ZWL, meaning at the point of sale,
that is expected to inform the MPC’s monetary economic agents will want the former and not
stance in the following months. The decline in the latter. Will the RBZ be able to meet this
month-on-month inflation has in turn resulted demand? In order to do that the RBZ will have
in the decline in annual inflation to 280.4% in to raid the Foreign Currency Auction System
September 2022, down from 285.1% in August of US$26.5 million each week.
2022. The auction market already has a huge backlog
and since the “auction” disperses about US$25
million weekly for all national competing
needs, there is no possible way to meet this
demand. Yet, this is an unprecedented monetary
policy move and it remains to be seen how it
will play out and what the inflationary environ-
ment will look like in 2023.
Essentially, the RBZ is trying to remedy the
economic crisis by deploying gold coins to
mop up the excess liquidity, stabilise inflation
and close the disparity between the two
exchange rates and depose the black market as
the centre of economic power in Zimbabwe.
Gold coins in hindsight are a pretty competent
monetary policy tool.

*To Page 7

The AXiS XLVIII Friday 07 Oct 2022 7

*From Page 4 Outside of the volumes game, Delta has experi- of low-margin sales and this has a consequence
enced management changes over the review on profitability assuming costs are held steady. It
period. Matts Valela has just been 1 year into the is equally challenging to manage costs in a vola-
top seat, as CEO and he delivered the perfor- tile environment, which has been characteristic of
mance of a lifetime. While he is to be credited, its primary market in Zimbabwe.
it is the deliberate strategy and vision of Delta, Overall the dominance of Delta in the local
supported by its deep-pocketed majority share- market cannot be avoided and its strong showing
holder, which has allowed for sustained growth in in terms of revenue performance posits it in a
value and performance over a longer duration. it league only a few can be counted.
is however not all rosy at Delta as the company It is an easy guess that the company’s next mile-
continues to struggle to turn around the Zambia stone over the next 4 years is a record US$1
business which has been reporting losses since its billion in sales, which will be achieved with little
acquisition. additional acumen.
Likewise, the business has been tilting in favour

*From Page 6 earnings for public "The only serious solution to this problem is to
firms, potentially liberalise the market for the local currency. This
Interest Rates impacting their will, in fact, provide a long-term solution to the
When the cost of money in the form of interest growth rate and their problems we are confronting. Anything else, we
rates rises rapidly, growth may slow sharply or stock values. If the are just dealing with the symptoms and not
even give way to a recession. When the RBZ cost of borrowing thefundamentals."
raises the policy rate, the goal is to increase the money from a bank Final Thoughts
cost of credit throughout the economy. Higher increases, the oppor- Essentially, it is not sustainable for the govern-
interest rates make loans more expensive for both tunity to expand ment not to pay its suppliers because it affects
businesses and consumers, and everyone ends up investment in capital public service delivery and also affects the gov-
spending more on interest payments. Those who goods by a corpora- ernment's ability to mobilise domestic resources
can’t or don’t want to afford the higher payments tion stalls. The inter- in terms of revenues. By back-strapping compa-
postpone projects that involve financing. It simul- est rate nies, the government has created a false sense of
taneously encourages people to save money to stability that will implode as soon as the pay-
earn higher interest payments. This reduces the Payments to con- ments are resumed.
supply of money in circulation, which tends to tractors We have established that the gold coins alone
lower inflation and moderate economic activity, cannot create the recent stability and neither can
inevitably cooling off the economy. Recently, the govern- the ridiculously high interest rates, rather, govern-
However, in the case of Zimbabwe, a policy rate ment deployed a ment as the biggest spender in the economy,
of 200% in the face of stable exchange rate and quite dangerous through the same contractors will re-inject liquidi-
a scarce local unit will kill many businesses. The fiscal measure to ty back in the economy over the next few
RBZ last week vowed to maintain a “tight mone- contain liquidity. The government of Zimbabwe months.
tary policy stance” that it is hoping will be “but- stopped paying its contractors. This may have Although President Emerson Mnangagwa’s gov-
tressed by continuous fiscal prudence” to fight come as a shock to many potential international ernment is touting the tight money supply situa-
inflation. This overbearing policy has had an investors, but it was just another day in the Zim- tion as evidence of stability, businesses and con-
immeasurable consequence on the liquidity being babwe. This came after the suppliers were accused sumers are feeling the pinch.
injected into the economy, but at what cost and of “forward-pricing” and using inflated local According to Sithulisiwe Ncube, secretary for
how long can the RBZ keep this up without exchange rates. Bridgefort Capital , “The policy interventions,
creating irreparable damage. apparently to protect the Zimbabwe Dollar, have
Effects on the stock market This, inevitably has shrunk the amount of Zim resulted in such tight liquidity that the use of
Higher market interest rates can have a negative dollar notes in the economy and staved off specu- ZWL has decreased while more transactions are
impact on the stock market. When the RBZ rate lative borrowing for currency trade purposes. taking place in USD making the ZWL less rele-
hikes make borrowing money more expensive, the However, as we have maintained since the suspen- vant for many businesses, which is leading to
cost of doing business rises for public (and sion, when the government begins paying its sup- further dollarisation of the economy,”, said on
private) companies. Over time, higher costs and pliers and contractors, the parallel market rate will Friday.
less business could mean lower revenues and escalate. Going into the last quarter of 2022, there is a
sense of false stability in the economy. Although
According to Economist Eddie Cross, "The current the Monetary Policy Committee continues to
shortfall of domestic supplies of local currency has express satisfaction with the “positive impact” of
been due to the measures adopted by the govern- the recent policy measures, we remain cautious in
ment where the government has halted payment to my analysis of the general trajectory of the econ-
suppliers of services and goods. The government omy over the next couple of months, based on
has also tightened up money supply through the the evidence. Primarily, the gold coins were not
reserve bank."This has resulted in the shortage of a solitary monetary policy measure rather, they
local currency and the electronic currency. This has were also anchored by the treasury’s suspension
had an immediate effect on slowing down specula- of payments to contractors by the government,
tion in the Zimbabwe dollar against the US dollar which accounts for the largest chunk of spending
(US$) and as a result the local currency has in the economy. Upon resumption, liquidity will
strengthened on the parallel market," Cross said. be injected back into the economy, pushing the
parallel market rate up as the operating environ-
Cross added: "However this is not going to be ment remains primarily informal.
long lived, the government has to return to meet-
ing its obligation of paying contractors and suppli-
ers, and it is in the process of doing that. Once
these payments resume, we are going to see a
resumption of activity on the parallel market for
the local currency.

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12 The AXiS XLVIII Friday 07 Oct 2022

World hunger gets worse

Regardless of UN efforts

F or decades now, the eradication of world and food commodity markets and their deriva-
hunger has been the key for the United tives.
Nations as well as its member countries.
For decades now, the eradication of world When the world narrowly missed its target in tions together with agriculture, education, economic
hunger has been the key for the United Nations 2015 to halve the proportion of people suffer- empowerment, gender issues, water and sanitation –
as well as its member countries. This goal has ing from hunger, it was thought that the all the SDGs. In essence, hunger and food security
been emphasized so much to the extent that world was on a steady trajectory toward eradi- cannot be solved without the holistic development
from the sustainable goals that were adopted by cation. Achieving “zero hunger” by 2030 of communities, and vice versa. The UN’s State of
the UN to be achieved by 2030, ending world would now seem ambitious, but with enough Food Security and Nutrition in the World Report
hunger was goal number 2. These sustainable investment, it seems feasible. Unfortunately, published in 2021 found that as many as 828 mil-
goals are 17, and the targets are 169 countries however, last year would mark the third year lion people were hungry last year, an increase from
spanning over 3516 events,1326 publications in a row that global hunger has actually been 811 million in 2020.
and 6584 courses of actions at the time of writ- on the rise. The number of people going hungry is on the rise.
ing for this article. Children and their families are facing the worst
The 2030 Agenda for Sustainable Development, The United Nations’ Sustainable Development global hunger crisis in decades. Fail to act now,
adopted by all United Nations Member States Goal (SDG) 2 aims to “end hunger, achieve will result in lives being lost and years of develop-
in 2015, provides a shared blueprint for peace food security and improved nutrition and pro- ment gains will go down the drain due to a deadly
and prosperity for people and the planet, now mote sustainable agriculture” by 2030. But as combination of conflict, the climate crisis and the
and into the future. At its heart are the 17 Sus- hunger refuses to fall amid conflict, climate economic crisis fuelled by the Covid-19 pandemic
tainable Development Goals (SDGs), which are challenges, and inequality, the global develop- and the war in Ukraine.
an urgent call for action by all countries - ment community is increasingly recognizing Around the world, more than enough food is pro-
developed and developing - in a global partner- that hunger is not just a technical problem – duced to feed the global population—but as many
ship. They recognize that ending poverty and it is a human one. Ending hunger will require as 828 million people still go hungry. After steadily
other deprivations must go hand-in-hand with integrated action across a range of initiatives declining for a decade, world hunger is on the rise,
strategies that improve health and education, and through strong global partnerships. After affecting nearly 10% percent of people globally.
reduce inequality, and spur economic growth – all, according to John Coonrod at The Hunger From 2019 to 2022, the number of undernourished
all while tackling climate change and working Project, hunger is tied to every SDG. people grew by as many as 150 million, a crisis
to preserve our oceans and forests. The SDGs driven largely by conflict, climate change, and the
build on decades of work by countries and the It should be alarming, then, that in 2018, COVID-19 pandemic.
UN, including the UN Department of Economic nearly 11 percent of the world population – or Before this increase in recent years, the world had
and Social Affairs about 822 million people – did not have been making significant progress in reducing
This article however will be focused on SDG enough to eat, according to this year’s State hunger. In fact, in 2000, world leaders joined the
2 which is to: "End hunger, achieve food secu- of Food Security and Nutrition in the World United Nations and civil society in committing to
rity and improved nutrition, and promote sus- report by the UN Food and Agriculture Orga- meet eight Millennium Development Goals by
tainable agriculture". Globally, 1 in 9 people are nization (FAO). That’s up from about 811 mil- 2015: the first of which was “to eradicate extreme
undernourished, the vast majority of whom live lion the previous year, marking the third year poverty and hunger.”
in developing countries. Under nutrition causes of increase in a row.
wasting or severe wasting of 52 million chil- WHAT CAUSES HUNGER?
dren worldwide. It contributes to nearly half In addition, more than 2 billion people, or 26
(45%) of deaths in children under five – 3.1 percent of the world, are food insecure, mean- Hunger is strongly interconnected with poverty, and
million children per year. This section is an ing they do not have regular access to enough it involves interactions among an array of social,
excerpt from Sustainable Development Goal 2. safe and nutritious food. Although most of political, demographic, and societal factors. People
these people are in low- and middle-income living in poverty frequently face household food
Graph above just shows that world hunger is countries, food insecurity is also affecting insecurity, use inappropriate care practices, and live
actually getting worse as opposed to improving about 8 percent of in unsafe environments that have low access to
at the backdrop of investment coming in from people in North quality water, sanitation, and hygiene, and inade-
many countries to reduce world hunger. SDG 2 America and quate access or availability to health services and
has eight targets and 14 indicators to measure Europe. education—all of which contribute to hunger.
progress. The five "outcome targets" are: ending Conflict is also a key driver of severe food crises,
hunger and improving access to food; ending Progress has also including famine—a fact officially recognized by
all forms of malnutrition; agricultural productiv- slowed when it the UN Security Council in May 2018. Hunger and
ity; sustainable food production systems and comes to reducing undernutrition are much worse when conflicts are
resilient agricultural practices; and genetic the number of prolonged and institutions are weak. The number of
diversity of seeds, cultivated plants and farmed babies born under- conflicts is on the rise, some worsened by
and domesticated animals; investments, research weight and halving climate-related shocks. People and organizations
and technology. The three "means of achiev- the number of chil- working to combat hunger must take conflict-sensi-
ing"targets include: addressing trade restrictions dren who are stunt- tive approaches, much more so than in the past.
and distortions in world agricultural markets ed, the FAO report Weather-related events, in part associated with
says. climate change, have also impacted food availability
in many countries and thus contributed to the rise
If the global rate of of food insecurity. Economic downturns in countries
extreme poverty dependent on oil and other primary-commodity
continues to decline export revenues has also affected food availability
– albeit slower now and decreased people’s ability to access food. Small
than before – why farmers, herders, and fishermen produce about 70
is hunger on the percent of the global food supply, yet they are
rise? According to especially vulnerable to food insecurity – poverty
the UN, the main and hunger are most acute among rural populations.
drivers of global Conflict is a cause and consequence of hunger. In
hunger right now 2020, conflict was the primary driver of hunger for
are a combination of deadly protracted con- 99.1 million people in 23 countries. An estimated
flicts, climate variability and shocks, as well 14 million children under the age of five worldwide
as economic slowdowns and downturns, cou- suffer from severe acute malnutrition, also known
pled with inequality. These crises compound as severe wasting, yet only 25 percent of acutely
the effects of one other, destroying agricultur- malnourished children have access to lifesaving
al lands, productivity and infrastructure, kill- treatment.
ing livestock, forcing people from their
homes, depleting communities’ abilities to
cope and in some cases, restricting the access
of humanitarians to deliver food and aid.

To address these new challenges, the UN
agency heads say it requires bolder action,
“not only in scale but also in terms of multi-
sectoral collaboration,” bringing food solu



Floating a Diaspora Bond

Should Zimbabwe continue its fondness for borrowing?

By Zvikomborero Sibanda extreme poverty in 2021 amid massive ZWL pendent.
depreciation, chronic inflation, and high unem-
T he Ministry of Finance and Economic ployment. • Economic Assessment: Zimbabwe has a low
Development (MoFED) revealed last week Now, instead of focusing on intensifying domestic income per capita and increased informality which
that the Government of Zimbabwe is in resource mobilization to arrest debt distress, the generally means a shallow tax base to guarantee
loan repayment. The overall economy is too con-
the process of setting up a Diaspora Bond (DB) government is forging ahead to pile more debt centrated thus being vulnerable to higher volatility
to attract increased investment. A Diaspora bond which disproportionately benefits the few elites in growth which in turn may adversely affect the
(Db) is a bond issued by a country to its expatri- who have unlimited access to the corridors of government’s balance sheet.
ates particularly those in wealthy countries to tap power. In my view, Zimbabwe’s overreliance on
into their accumulated savings. It is considered an borrowing is perpetrating intergenerational inequi- • Fiscal Assessment: Typically, the government
alternative to borrowing from international finan- ties and constraining the countercyclical effects of should be fiscally flexible with a declining gov-
cial institutions (IFIs), bilateral partners, or capital fiscal policies. More importantly, unsustainable ernment debt to GDP ratio and a lower interest
markets. debt has heightened prevailing interest, tax, and expense to total expenditure ratio to show strong
inflation rates thereby affecting the competitive- creditworthiness. However, the opposite is true for
The proposed Db will carry an interest rate of 9% ness of domestic manufacturing firms. Statistics Zimbabwe.
and will be structured such that rather than letting provided in the 2023 Budget Strategy Paper show
diasporas send money monthly to their relatives manufactured exports on a downward trend from • Monetary Assessment: The Reserve Bank of
back home, it is the Db interest yield that will be about 40% enjoyed in 1993 to less than 10% in Zimbabwe (RBZ) is not operationally independent
used for that purpose. The cash-strapped Zimba- 2021. The continued exportation of raw primary as the government influences its monetary policy.
bwean government seeks to tap into its expats commodities has exposed the nation to frequent As such, the monetary policy is not highly credi-
who have fled the country in droves searching for and severe global fluctuations. As a result, the ble as shown by a track record of high and unsta-
greener pastures due to severe tightening of the decline in value addition and beneficiation has ble inflation since the attainment of independence
domestic economy and deepening abject poverty. reduced Zimbabwe into a perennial importer in 1980.
According to the latest Zimbabwe National Statis- struggling with high unemployment and income
tics Agency’s (ZimStat) 2022 census results, about disparities. More so, unsustainable debt is deplet- From the foregoing, it is my view that the gov-
85% of 908 913 Zimbabwean emigrants are living ing national reserves thus inhibiting the national ernment should abolish reliance on borrowing by
in South Africa, 47 928 are in Botswana, 23 166 ability to respond to unforeseen contingencies like resorting to increased domestic resource mobiliza-
are in the United Kingdom and the balance scat- El-Nino-induced droughts as well as climate tion as the nation is endowed with many mineral
tered across the rest of the world. Independent change and climate variability. Last but not least, resources on global demand. As for already
estimates, however, show that over three (3) mil- resorting to collateralized borrowing due to limit- unsustainable debt, it is high time now for author-
lion Zimbabweans are living abroad. For instance, ed access to concessionary loans from IFIs is ities to uphold constitutionalism to reduce unend-
the latest statistics released by the United King- fuelling unsustainable resource extraction leading ing fiscal condonations. There is also a need to
dom (UK) indicate a 424% year-on-year jump in to environmental degradation, and pollution of air undertake an independent debt audit to ascertain
Zimbabweans granted UK skilled work visas. This & water sources, as well as causing forced the exact legitimate debt stock and cultivate a
gives a clear picture of the extent of the brain displacements of locals without compensation. culture of regular debt audits. A clear debt man-
drain being suffered by Zimbabwe due to a per- agement strategy is needed so that public financ-
sistently faltering economy and its consequences Apart from the negative impacts of public debt on ing needs and payment obligations are met at the
on human capital base, development, and innova- the economy and citizens, I opine that there is lowest possible cost and consistent with a prudent
tion. limited data for Treasury to have a complete map- degree of risk. In addition, authorities should
ping of the diasporas given that most of them strengthen oversight mechanisms informing debt
Although a DB gives diasporas a fair chance to have fled political polarization and are still being and public finance management processes on loan
contribute to the economic growth and develop- denied their constitutional right to vote. There is contraction, uses, and repayments. To sustain
ment of their country, a review of the status quo also a huge public confidence deficit being depict- exchange rate and price stability, there is a need
clearly shows that Zimbabwean authorities are out ed through the prevailing toxic political climate, to boost market confidence through responsible
of touch with lived realities of poor citizens who weak institutional capacity, elevated public corrup- fiscal spending, credible & transparent monetary
are being choked by burgeoning public debt. tion & impunity, and lack of effective oversight. policymaking, and swift implementation of struc-
Available official statistics already show public tural reforms. Structural reforms are measures that
and publicly guaranteed (PPG) debt at US$16.78 Furthermore, if one is to undertake an objective change the fabric of the economy -the institutional
billion as of June 2022 comprised of US$3.58 evaluation of Zimbabwe’s sovereign credit and & regulatory framework- to make labour markets
billion in domestic debt and US$13.2 billion in assign a debt rating, they would find it to be too adaptive, boost competition, encourage innovation,
external debt. This PPG debt is unsustainable as risky (junk bond) as I briefly highlighted some of and improve the quality of public taxation sys-
evidenced by rising external arrears now standing the red flags below: tems, among others.
at US$6.41 billion (48.6% of external debt stock).
• Institutional Assessment: Without compre- Zvikomborero Sibanda is an Economic Analyst for
To show the gravity of debt unsustainability, a hensive reforms, existing institutions are not able Zimbabwe Coalition on Debt and Development
granular analysis of the 2021 budget shows that to deliver sound public finances as well as effec- (ZIM- CODD). He writes in his own capacity; his
Treasury had spent more funds on debt servicing tive and predictable policies. Also, these institu- views do not represent those of the organization he
than it had earmarked for social welfare. Ironical- tions are not transparent and accountable as they works for. Email: [email protected]. Twit-
ly, 7.9 million citizens -about half of the total have a high perceived level of corruption. Statisti- ter: @bravon96
population- were estimated to be wallowing in cal offices like the Debt Office are not fully inde

15 The AXiS XLVIII Friday 07 Oct 2022

Ahead of the 2023 elections

A reflection of the disintegration of public value in Zimbabwe

By Takudzwa Gwaze

T he Zimbabwean economy is comatose, and origin of a Zimbabwean state can typically be of Zimbabwe. Transitional justice remains one of
the political environment is highly toxic traced back to its traditions, culture, ideology, the critical pillars to healing the traumatized nation.
with a disintegrating social fabric. The history, environmental conditions, and so forth. The militarist forms of nationalist struggles and the
2023 general elections are approaching on the Public officials and political representatives can state's monopolization by the ruling party bred a
backdrop of a divided nation and a weak, dys- only meaningfully fulfil their obligations if they new round of human rights abuses that have con-
functional opposition. There is no strategic direc- appreciate the role those public institutions and tinued into the present period and threatened eco-
tion displayed by the Citizens Coalition for the public, in general, should play in society. This nomic development. The continual holding of elec-
Change (CCC) and other opposition parties to piece seeks to answer the most conceding ques- tions led to extreme government debts on the eco-
adapt and navigate this fraught political landscape. tions on how public values have influenced state nomic side in Zimbabwe. Elections in Zimbabwe
The traits of violence have already escalated. On direction or misdirection. are marked by financial disaster policies but have
February 27th, Mboneni Ncube was killed after a Zimbabwe’s democratic politics is a nuisance for political benefits, particularly to political elites and
violent crash. The continual persecution of Zenge- public value management. The evidence is that their cronies. In the long run, the rollout of unsus-
za, Member of Parliament, and executive mem- public officials are responsible for identifying and tainable welfare schemes is a common ploy used
bers of CCC, Job Sikhala and others is a cause choosing public values, even lobbying and cam- by ZANU PF to woo voters, especially in rural
of concern. paigning for them. The public value system in the areas. Such manipulation would not work if the
non-western world, particularly in the African voters were rational and were likely to elect a gov-
Teachers continue to demand a living wage, and context, has disintegrated due to multifaceted fac- ernment based on its long-term performance.
all civil servants and the general population live tors ranging from colonialism to globalization. However, unfortunately, that is not the case. Voters
below the poverty datum line. After fee hikes, Global South politics is not an appropriate forum often focus on the short-term benefits they are
students have expressed dissatisfaction with the for aggregating and accommodating the plurality likely to receive, which causes governments to
Harare government, reflecting a fragmented Zim- of values. Public officials seem better positioned spend much money trying to look good just before
babwean society. The President has failed to to identify, prioritize, weigh, and even legitimize the elections, which is why Zimbabwe is in an
deliver his 2018 election promises. The different values and claims. Politics in the Global economic mess. The other factor is that industrial-
79-year-old ZANU-PF leader will seek a second South malignantly continues to make their task ists and investors avoid making critical decisions
full term after failing to provide and turn the difficult even with time and skill. One may still during an election year or the election period in
country into an investor-friendly environment. have to hope against hope that the political envi- general. This is because a change in the govern-
The government is highly polarized, and the ronment is willing to be disciplined and focused ment may also mean a difference in the govern-
regime in Harare is working tirelessly to guaran- in its deliberations. ment’s priorities. Many times, a government's poli-
tee its victory through co-optation, intimidation, Any breaches of the social contract in society cies entirely change a project's viability. Investors
and vote-rigging. could lead to conflict and even civil war. There- want to avoid the risk of their projects becoming
fore, sustaining the social contract depends mainly redundant due to inconsistent government policies
The history of Zimbabwe shows that the nation is on ordering the constitution and laws to avoid and political character changes. Hence, they prefer
traumatized; there has never been room for peace unbalanced or excessive concentrations of power, to play the wait and watch the game. This nega-
and stability; healing and reconciliation are still a whether in the public or the private sector. The tively impacts the economy since the economic
dream to be achieved. Besides holding regular social contract has been breached in the Zimba- output and the jobs that could have been created
elections to promote the democratic development bwean context, and democratic values are no are being postponed. Increased spending by each
of Zimbabwe, the country´s public values have longer respected within politics. Public values political party marks the election period. Every
deteriorated due to the violent nature of the liber- provide a normative consensus about the rights, political party spends millions of dollars. This
ation struggle, ingrained in the Zimbabwean polit- benefits, and prerogatives to which citizens should money is suddenly taken out from bank accounts
ical culture, and have shaped post-independence and should not be entitled; the obligations of citi- and unleashed. This is why suddenly there is a lot
politics. State violence as a method of repression zens to society, the state, and one another; and of money chasing limited amounts of goods. This
had been a prominent feature of the white minori- the principles on which governments and policies results in price inflation and in some cases exacer-
ty government pre-independence period. Post-in- should be based. Public values are the core bates exchange rate disparity.
dependence state violence and repression were creator of trust in the government and its institu- From all the above points, it is clear that neither
adopted and modified by the Mugabe regime from tions of governance. the government nor the citizens are looking at
1980-to 2017 and the Mnangagwa regime from Several media houses and platforms indicate that long-term results during an election year. They are
2018. the Zimbabwean state is divided. And there are only concerned about the immediate impact that
very slim chances that the coming 2023 elections their policies can create. As a result, the economy
While the public value discourse is a new concept will be competitive and yield better results that completely stops focusing on long-term imports.
and practice in the global south, it is a cause of can change the public value systems. People out- Instead, the focus is on immediate consumption.
concern as the country goes for the 2023 elec- side the presume of political parties are tired of Thus, long-term spending like infrastructure proj-
tions. The modern conceptions of the ideal state the system. Continued violence intimidates CCC ects takes a hit. This has led to slower economic
began with the reflections of Greek philosophers supporters and could discourage them from freely growth in every election year that the Zimbabwean
such as Plato and Aristotle. In the long history of attending rallies, fuelling voter apathy. This is the economy has seen after independence. The bottom
statehood and political thought, the meanings tactic of ZANU PF's incumbency advantage, line is that elections drain the national economy
ascribed to such ideals have been modified and which the party regularly exploits to maintain and are never a means to change economic
should be understood within the context of a par- hegemony. However, underlying resentment aspects. Of course, they are essential, and they
ticular state. The dominant culture and ideology towards the government will continue to grow define what a democracy is. However, every elec-
prevalent in a state ultimately influence how gov- locally and internationally. On the market analysis, tion costs the economy a lot of money. Hence, a
ernment structures itself to reflect the conceptions this resentment reduces foreign direct investment country would be better off avoiding frequent elec-
and conventions that the public attaches to the and the growth of the tourism industry, leading to tions from an economic standpoint. Therefore, it is
ideal or best way government should govern. slow growth in the country's GDP. If no reforms in the voters’ interest to elect a strong government
are implemented, the central scenario remains that that will last the entire tenure so that elections do
Public values underpin and shape the govern- ZANU PF will win the 2023 general elections, not have to be undertaken before they are planned.
ment's behaviour, culture, and conviction to given its tight grip on security services and judi- It also helps to ensure peace and stability in the
change certain aspects. Culture is a complex cial institutions. country.
whole that encompasses beliefs, customs, knowl- The history of Zimbabwe shows that the nation is Takudzwa Mudzingwa Gwaze is a Development
edge norms, values, and other capabilities and traumatized; there has never been room for peace Consultant and Public Policy Analyst. For more
habits acquired by man as a member of society. and stability; healing and reconciliation are still information on his work, kindly visit www.takudz-
It distinguishes people, communities, and nations wagwazem.com
from others and stems from micro components
ofculture and macro societal institutions. The

“Nothing is impossible, the word itself says ‘I’m possible’!” -Audrey Hepburn

16 The AXiS XLVIII Friday 07 Oct 2022

Tapping into the art of
aluminum extrusion

The road to a US$12 billion
economy

By Tadiwanashe Mweta KnDiod Ywou
Unifreight was incorporated
Aluminum is a light weight, durable and malleable metal that in 1970
is highly used in the production of consumer goods, elec- and got listed on the
tronics and vehicle producand vehicle production. In 2020, Zimbabwe Stock Exchange in 2003.
2020, rought ly 23 percent of total aluminum globally was used
by the transport sector for manufacturing and production. It was acquired by Pioneer
The African continent led by Guinea, Cameroon and Mozambique Corporation
has a huge amount of bauxite deposits however the continent
remains deprived in the production of aluminium due to irregular through a reverse listing in 2013.
power supply, obstruction in financial investments, modernisation
and an unstable political environment. Statistics reveal that the The reverse listing was a
global aluminum market size reached 150 billion American dollars second
in 2020 and is estimated to grow to 210 billion United States dol-
lars by 2027.The main drivers being manufacturing, packaging and after one
construction industries. Zimbabwe should increase her exports and such that saw the
enjoy a bite of the 210 billion cake size by 2027.
Zimbabwe is one of the only two countries in the SADC region incorporation
with extruded Aluminium production capability known as alumini- into PCA of Clan
um extrusion. The world class extrusion facility is pivotal in the Transport in 2003.
manufacturing of architectural, irrigation and general engineering
products of international standards for the domestic and export
markets.
Zimbabwe is leveraging from increased exports of beneficiated
aluminium products to markets in theSADC and international mar-
kets. According toUnited Nations COMTRADE database on interna
tional trade, the value of exports of aluminium products from Zim-
babwe to South Africa in 2020 was US$1.92 Million. Aluminium
factored into Zimbabwe’s minerals accounts contributes about 12
% to gross domestic product (GDP). Aluminium extrusion in Zim-
babwe is expected to play a major role in contributing to the Gov-
ernment’s target of generating US$12 billion economy from miner-
al exports annually by 2023, viewed also as the major stepping
stone towards attainment of upper middle-income status by 2030.
the The trade war between America and China is opening up
opportunities for Zimbabwe to boost its exports by supplying mar-
kets traditionally supplied by China on the international stage.
China and America are the two of the major consumers of alumin-
ium and steel on the international markets. Aluminium saw a price
surge buoyed by supply cuts in China, the world‘s biggest user
and producer of the metal while demand for metals rose due to
the depressed US dollar that made metals an attractive option for
investors.
Zimbabwe is not a primary producer of aluminium but makes Alu-
minium products sold locally and for the export market. Almin
metal Industries Limited is the country’s leading manufacturer and
marketer of Aluminium profiles. The local market for aluminium
products has been growing in Zimbabwe. Aluminium products are
becoming people’s favourite in the construction industry. It iscom-
mon to see aluminium products in houses, offices, buildings and
many other structures. Aluminium is readily available, durable, and
most preferably it is light. The increase in local demand in Zimba-
bwe has opened up business opportunities in support of a mid-
dle-income economy by 2030. The economy of the country benefit
positively from the extrusion of Aluminium through the creation
of direct and indirect jobs in this sector. Overtime it is believed
that aluminium extrusion be given a national status for develop-
ment. It contributes to wide ranging economic growth prospects in
its wake.
Why Aluminium?
Aluminium when used in the industrial and construction industry
is corrosion resistance and is one third less weight as a replace-
ment for steel components.it can go places and create shapes often
forming deeper or intricate spinning for projects with deep and
straight walls. Aluminium can work for anything through proper
engineering and manufacturing to give a perfect finish to any prod-
uct and
Did You Know?
Aluminium is the widely used metal after steel. It is the third most
common element on earth after oxygen and silicon.
Tadiwanashe Mweta is a Digital Marketing Executive at OWNken, a
leader in the house-finishes industry. You can contact her via email
on [email protected] or [email protected]

17 The AXiS XLVIII Friday 07 Oct 2022

& Insights

RioZim Limited

Confluence of calamities plunges profit, gold production

The graph below shows the Group’s total cial market rate, which is also a fixed one. The graph below shows the Group’s After
assets growth over four years in ZWL bn Mining is a competitive field that requires a lot Tax Profit over four years in ZWL bn
of foreign currency to import inputs, add value
Zimbabwe Stock Exchange (ZSE)- listed mining and beneficiation. The Group has been on record “Despite the positive strides in the free flow of
outfit mainly specialising in gold and diamond multiple times challenging the government to economic activities, the operating environment
production, RIOZIM Limited succumbed to a loss review retention thresholds upwards. However, the remained bedevilled with structural challenges
after tax during the half-year ended 30 June 2022 government remains defiant as it also seeks to fill throughout the period, most notably amongst
with gold, diamond production also declining by its foreign currency coffers through milking, them were acute power shortages, spiralling
a significant by 30% and 56% respectively. The mainly mining firms. exchange rates, unreasonable pricing distortions
Group’s dismal performance was mainly powered and huge foreign currency inadequacies,” Jaun
by the Zimbabwe Electricity Supply Authority’s “With a mandatory liquidation of 40% the amount said.
(ZESA) deficiency to supply sufficient electricity, of foreign exchange remaining with the Group “Consequently, the Group recorded a net loss
shortages of foreign currency and exchange rate has consistently proved insufficient to sustain for the six-month period.”
distortions during the period. costs and production is erratic owing to the lack Revenue during the period soared by 85% to
During the half-year to June 2022, the operating of foreign currency to buy consumables or carry ZWL4.8 billion from ZWL2.6 billion recorded
environment remained hard-hitting both at mac- out repair and maintenance and production plant,” in the prior year. In spite of the reduction in
ro-and micro level. The local currency depreciat- the Group’s chairperson Beebee Jaun said in a gold production, revenue increased due to the
ed by 69% from January to June 30 while record- statement accompanying the half year financials. steep depreciation of the local currency against
ing a record fall of 33% within a single day. Mar- the United States dollar as the average
ket’s lack of confidence in the authorities and “The Company has resorted to borrowing from exchange rate moved from US$1: ZWL88 in
their policies during the period took the Zimba- the major shareholder again in foreign currency the six-month period in the prior year to US$1:
bwe dollar to deathbed. The Reserve Bank of and contingent plans are being prepared for ZWL176 in the current period.
Zimbabwe consistently resorted to the cranking further borrowings in the short term as and when The graph shows the Group’s revenue per-
machine to service government projects as was required.” formance over 4-years in ZWL bn
manifested by the high liquidity of the
RTGS-float in the streets chasing a few US The Group’s dismal performance was exacerbated “However, this had a counter-balancing effect
dollars. by electricity supply constraints encountered with costs rising disproportionately higher than
This fuelled black market activities causing a during the period. Gold production at Renco mine revenue and the low gold production volumes
major disparity between the black market, which declined by a significant 37% as scarcity of elec- coupled with the adverse effect of exchange
mirrors the economy of the state and the formal tricity took a toll. The power utility Zimbabwe rates distortions on costs, plunged the Group
market, which is however overvalued. The aver- Electricity Supply Authority (ZESA) remained
age exchange rate moved from US$1: ZWL88 in insufficient in conducting its duties taking back into a net loss of ZWL5.5 billion for the
the six-month period in the prior year to US$1: the state to the stone age period when the power period under review,” Jaun said.
ZWL176 in the current period, reflecting a 50% supply was an alien. Cost of sales soared by 78% to
fall. This had a counter-balancing effect with ZWL4.6 billion from ZWL2.6
costs rising disproportionately higher than reve- Due to incompetency, ZESA remains in a pool of billion while finance costs rock-
nue. debts, a situation which is impeding it to import eted by 854% to ZWL221 mil-
Despite exporting gold and diamond, more energy. The power regulator is also hit by lion from ZWL23 million. In
the Group continues to incur acute foreign currency shortages to import more power. the same vein, income tax
foreign currency shortages. The Also, recurrent technical faults at the Kariba expenses soared by 301%
export retention thresholds put on Power Station continued unabated while the to ZWL3 billion from
mining companies continues to ageing coal power plant at Hwange remains ZWL758 440 recorded in
suffocate the volatile operat- unsolved. This is despite the nation expecting to
ing environment. As it be electricity self-sufficient in 2023. As a result, 2021. *To Page 16
battles to fill-in the foreign the Group’s loss after tax for the period more
currency vacuum, govern- than quadrupled, widening deficits by 270% from The group continues to
ment force companies to a loss of ZWL1 billion in the six-months to June bemoan unrealistic
retain only 60% of their 2021 to ZWL5 billion during the forex retention
foreign currency from period under thresholds and
export proceeds and review. erratic power
obtain the remaining supply
40% in Zimbabwe
dollars using the offi-

18 The AXiS XLVIII Friday 07 Oct 2022

*To Page 13 an extensive dewatering exercise to bring them ing capacity of 190tph.
The graph below shows the Group’s income to mineable conditions. Jaun added that, “After “The Crown Jewel Project which will increase
tax expenses over four years in ZWL bn careful consideration, the mine was put on full the processing capacity on the current plant by
care and maintenance subsequent to period end circa three fold progressed well during the
Growth in finance costs gives a testimony of a and some small scale mining projects are being period and was brought to completion stage by
dire economy coupled with a decaying currency undertaken to sustain the care and maintenance period end. “
and counter-productive measures put by the costs. “ Due to the low carats production, the share of
government during the half-year. During the The Group said its primary focus at Cam & profit from the associate declined to ZWL83.8
reviewed period, the Central Bank spiked bank Motor during the period was the completion of million from ZW$252.9 million recorded in the
policy rates by 20 basis points from 60% in the BIOX Plant Project and resumption of comparative prior period.
January to 80% in April, which was a global mining activities at the high grade Cam & ENERGY BUSINESS
record high. Barely 6 months, Mangudya’s Motor mine pits. Mining activities at One Step Concerning the 178 MW Solar Project the
administration rocketed the rates by 120 bases mine were therefore, suspended from the begin- Group revealed that it concluded all the regula-
points to another global record high of 200% ning of year to pave way for a smooth transi- tory requirements which are the prerequisites to
making borrowing too expensive. tion back to mining and production from the the implementation of the solar projects across
Gold Business Cam & Motor mine pits. Testing of the BIOX the Group’s mines while negotiations on fund-
Renco mine’s production for the period fell by Plant and its separate components commenced ing arrangements with potential funders of the
37% to 174kg from 278kg achieved in the in haste from the beginning of the year which project which had stalled in the prior year due
same period in prior year. The low gold pro- brought the plant to completion at the end of to COVID-19 uncertainties were recommenced
duction was a result of low milled tonnage aris- the first quarter. Due to a mix of the discontin- during the period.
ing from severe power challenges during the uance of One Step operations a testing of the “Regarding the 2 800 MW Sengwa Power Sta-
first quarter and lost production due to a month BIOX Plant, production for the period was tion, we are in discussions with various stake-
long labour dispute in the second quarter. depressed at 211kg even though this was a holders including various arms of government
“The labour dispute was amicably resolved and slight improvement from 181kg achieved in the on a potential mutually beneficial arrangement
industrial relations at the mine are now stable comparative period. on the implementation of this multimillion
after the engagements and interventions by Resultantly, overall gold production for the dollar project,” Juan said.
management.” period declined by 30% to 393kg compared to Group optimistic about outlook
Meanwhile, Dalny mine suffered from unsus- 564kg achieved in the same period in the prior Despite acknowledging that the operating envi-
tainable low grades from its pits which resulted year. ronment will remain unsustainable and tense
in the mine suspending operations for the “The subdued production was mainly attribut- due to shortages of foreign currency, inflation-
six-month period under review. A marginal 8kg able to the negligible production output at ary pressures and erratic power supplies, the
of gold was produced for the period against Dalny during the period coupled with under Group is confident that it will go back to profit
105kg produced in the comparative period when capacity utilisation at Cam & Motor after making.
the mine was fully operational. The Group reit- discontinuance of the One Step operation to “The Group is set to ramp up production on
erated that the mine’s underground shafts suc- pave way for the resumption of mining activi- the BIOX plant in the second half of the year
cumbed to flooding a situation that will require ties at Cam & Motor,” Juan said. which will take the Group to stable production
Diamond business and return to profitability.”
The Group’s associate produced 115 000 carats The Group has spent over USD 110 million on
for the period which was 52% below the 240 the BIOX plant and the 500 tph diamond pro-
000 carats produced in the comparative period. cessing plant much of which was borrowed in
During the period the mine stopped mining USD and has to be repaid in the same currency.
operations and migrated to processing its vast
low grade stock piled dumps. This initiative
resulted in low carats production for the period
as the current plant has a limited plant process

Term of The Week

Cr' edit crunch

fiDneafinncitiaiol nin: sAticturetidoint scrburnocuhgrhetfeorns to a decline in lending activity by overly lenient in offering credit. Loans are advanced to borrowers
by a sudden shortage of funds. ers with questionable ability to repay, and, as a result, the default
Often an extension of a recession, a credit crunch makes it nearly rInateexatrnedmperecsaesnecse, tohfebraadtedeobf tbbaedgdinebtot briesceo. mes so high that many
impossible for companies to borrow because lenders are scared of banks become insolvent and must shut their doors or rely on a gov-
bankruptcies or defaults, resulting in higher rates. ernment bailout to continue.

Udintidoenrsitnanwdhinicghaicnrveedsittmcerunnt ccha:pAitcarleidsithcarrudnctho is an economic con- The fallout from such a crisis can cause the pendulum to swing in
secure. Banks and the opposite direction. Fearful of getting burned again by defaults,
other traditional financial institutions become wary of lending banks curtail lending activity and seek out only borrowers with pris-
funds to individuals and corporations as they are afraid that the tine credit who present the lowest possible risk. Such behaviour by
borrowers will default. This causes interest rates to rise as a way to lenders is known as a flight to quality.
compensate the lender for taking on the additional risk.

Sometimes called a credit squeeze or credit crisis, a credit crunch lCoonngseedqrueecnecsesiso:nT,hoer usual consequence of a credit crunch is a pro-
tends to occur independently of a sudden change in interest rates. slower recovery, which occurs as a result of the
Individuals and businesses that could formerly obtain loans to shrinking credit supply.
finance major purchases or expand operations suddenly find them-
selves unable to acquire such funds. The ensuing ripple effect can In addition to tightening credit standards, lenders may increase
be felt throughout the entire economy, as home-ownership rates interest rates during a credit crunch to earn greater revenues from
drop and businesses are forced to cut back due to a dearth of capi- the reduced number of customers who are able to borrow.
tal. Increased borrowing costs hinder an individual's ability to spend
money in the economy, and it eats into business capital that could
Causes: A credit crunch often follows a period in which lenders are otherwise be used to grow operations and hire workers.

19 The AXiS XLVIII Friday 07 Oct 2022

General Beltings Holdings’

Volumes grow despite liquidity constraints
D espite the liquidity constraints in the
economy, General Beltings Holdings ZW$669 million was 12% up compared to last “The Government of Zimbabwe is predicting the
Limited posted a 21% increase in total year's turnover of ZW4597 million driven by the economy to grow by 4.6 % in 2022 due to
volumes to 500 metric tonnes for the half year volume growth at Cernol Chemicals. increased hospitality activity improved, agricul-
ended 30 June 2022 compared to 412 metric Total gross profit increased by 5% to ZW$278 tural output and viable mineral prices,” the
tonnes recorded last year. million compared to ZW$265 million recorded in Group said.
Zimbabwe is currently experiencing liquidity the prior year due to improved throughput and GB Holdings however further noted that the
challenges as authorities have been working on cost containment measures. Russia -Ukraine conflict is still far and logistical
measures to mop up liquidity which has result- The Group however highlighted that due to the supply chains will be congested as the year
ed in less local currency compared to the US$ imported inflation in the rapidly dollarized closes.
amount of foreign currency in circulation, environment, operating costs surged by 58% to Going forward, the Group is poised to meet the
affecting most business operations. ZW$260 million compared to ZW$164 million increased demand in the fourth quarter driven
However, as much as this has been affecting recorded in the same period last year. by an improved order book as local firms con-
business operations, experts have been of the Resultantly, an operating profit of ZW$24 million tinue to appreciate the Company’s commensu-
view that a liquidity crunch is necessary to was recorded against ZW$104 achieved in the rate value proposition.
save the Zimbabwe dollar. prior year. “In addition, activity in the tourism industry is
In a statement accompanying the financial Concerning dividend payment for the period under expected to improve given the positive senti-
results, the Group said the growth in volumes review, the Board resolved not to pay an interim ment around containment of potential pandemics
was buoyed by a 42% volume increase at dividend as it considered the need for additional like COVID-19 and Monkeypox,” the Group
Cernol Chemicals Division. working capital to fund a firming order book and said.
“Cernol Chemicals shored up the volumes as the need to adequately stock raw materials.Mean-
the economy opened up post COVID-19 restric- while, the Group highlighted that the monetary-
tive measures and benefited from its consolida- policy initiatives put in place by the government
tion in the niche markets,” the Group said.The are anticipated that will stabilise the economic
Group’s total turnover for the period at environment in the long run and stimulate a posi-
tive growth trajectory.

20 The AXiS XLVIII Friday 07 Oct 2022

Unifreight

Succumbs to unprecedented losses

The graph below shows the Company’s During the period under review, finance costs “The Group has been monitoring costs as margins
PAT over four years soared by over 1000% to ZWL114 million from continued to be eroded and this has resulted in
ZWL9 million in 2021 during the same period this healthy increase from the prior year,” the
Unifreight is the only company so far to com- which translates to an 1147% uptick while operat- Company's chairperson Peter Annesley said in a
mend government’s retrogressive policies, ing costs grew by 19% to ZWL4.5 billion from statement accompanying the half-year financials.
despite pairing losses. ZWL3 billion. “Our cumulative net profit as a percentage of rev-
Transport and logistics company, Unifreight During the Company’s operating period, the Zim- enue is sitting at 10.9% which is above industry
Zimbabwe Limited has succumbed to a loss babwe dollar depreciated by 69% on the average, but unfortunately below expectations.”
during the half year ended 30 June 2022 RBZ-governed Auction Market, which was how-
despite its volumes advancing by 19%. The ever and still overvalued. The 69% falter was Outlook
Company’s loss after tax widened by 15%, from ZWL112.8 traded in January to ZWL366.2
from a loss of ZWL540 million in 2021 during traded by the end of June 2022, while the govern- “The Board is happy with progress achieved
the same period to another loss of ZWL619.7 ment hiked interest rates by 120 basis points to during the period under review, particularly the
million during the period under review. 200%, which is a global record high making bor- acquisition of new revenue earning equipment,
Unifreight is the only company so far to com- rowing exorbitant. and the growth in the balance sheet in real terms.”
mend government’s retrogressive policies, The Company expects a robust second half-year
despite pairing losses. courtesy of measures put by the government to
correct economic illness. “We are also optimistic
with regard to the positive changes in the mone-
tary policy, with the view that if implemented cor-
rectly, it is in the favour of formal business flour-
ishing, while the playing field is levelled to
include the informal market in the economy.”

Net cash generated from operating activities also Of all the companies that released half year finan-
declined to ZWL285 million from ZWL1 billion cials this year, Unifreight is the first company to
during the same period last year which was a put thumbs up for the policies initiated by the
31% decrease as interest paid soared by 1147% Fiscal and Monetary officials. This is despite the
to ZWL114 million from ZWL9 million. As a company continuing to succumb to losses due to
result, cash and cash equivalents at the end of the currency decay and hawkish monetary measures
period plummeted to ZWL30 million from by both the Treasury and Reserve Bank of Zim-
ZWL438 during the prior period. babwe gaffers.

However, revenue for the Company increased by “We are rigorously pursuing new revenue streams,
30% to ZWL4.5 billion from ZWL3.4 billion with whilst maintaining and strictly monitoring costs
volumes for the period increasing by 19% from and are confident that we will end 2022 with a
last year and 5% ahead of budget. favourable set of results.

Hwange Colliery
Continues on descending loss position
Z SE suspended firm Hwange Colliery
remains on a downward spiral after gross losses, persistent losses over a long period, ed to 1.29-million tonnes a 56% increase in pro-
posting losses of Z$3.97 billion loss in negative cash flow, obsolete and antiquated plant duction year-on-year.
and equipment, technical insolvency with liabili-
inflation-adjusted terms for the half year ended ties significantly exceeding assets, non-payment of The steady production is mainly attributed to the
30 June 2022. This was a loss surge of 356% creditors as they fell due, and non-payment of successful contract mining model the company
from a loss position of Z$870 715 posted the employees over a long period of time. With that has employed. A total of 676 387 tonnes of coal
same period yesteryear. The net loss is a result in mind the local bourse ZSE went on to suspend was produced for Hwange Power Station and
of an Z$8-billion, exchange loss on foreign the firm for as long as it was going to be under Zimbabwe Zhongxin Electrical Energy for elec-
legacy debts during the period under review. administration. tricity generation during the course of the period
a 124% increase year-on-year.
ZSE suspended firm Hwange Colliery remains On the other hand the coal miner made a 52%
on a downward spiral after posting losses of increase in production and a 74% increase in Deliveries into the power station were, however,
Z$3.97 billion loss in inflation-adjusted terms sales . The company’s gross profit increased by negatively affected by limited stock holding space
for the half year ended 30 June 2022. This was 74% year-on-year to Z$4.54-billion in infla- in the power station. In terms of underground
a loss surge of 356% from a loss position of tion-adjusted terms, largely as a result of a combi- mining production, Hwange produced 19.49% less
Z$870 715 posted the same period yesteryear. nation of an increase in sales volume and regular as compared to prior year, mainly owing to
The net loss is a result of an Z$8-billion, product price adjustments in line with market ageing underground mining equipment.
exchange loss on foreign legacy debts during value.
the period under review. In this regard, the frim’s strategic plan is to have
Revenue in the period totalled Z$16.49-million, two new continuous miners within the next 18
Hwange Colliery was placed under administra- up 87% from the Z$8.83-million of the interim months, resulting in the company’s underground
tion by a reconstruction order made by Zimba- period of the 2021 financial year. Basic earnings mine reaching its nameplate production capacity.
bwe’s Justice, Legal and Parliamentary Affairs a share totalled Z$7.20, while basic headline earn- The first continuous miner is expected to be com-
Minister in terms of the reconstruction of ings a share totalled Z$7.30. missioned before the end of this year.
State-Indebted Companies Act on or about
October 26, 2018. The reasons for this included Total coal mined by opencast operations amount *To Page 17

The AXiS XLVIII Friday 07 Oct 2022 21

Markets
watch

Zim dollar sheds 1%
to US$1:ZWL626.2
T he local currency shed by 1%, making it a softer dollar on expectations of moderating exchange rate pressures and a greater tax
the second consecutive time recording the interest rate hikes by the Federal Reserve. burden. Looking forward, business confidence
best performance against the greenback in Meanwhile, the South African Reserve Bank is remained one of the weakest on record, amid
more than 6 months on the latest RBZ-governed set to continue the tightening policy to stabilize fears that the inflation-driven downturn in the
auction market held on Tuesday. In March this inflation, with markets predicting a rate hike of economy will continue. Manufacturing PMI in
year, the local currency registered a record 33% another 25 basis points in November and either Kenya is expected to be 51.50 points by the end
decline and this week’s performance is the high- January or March before pausing at 6.75% for of this quarter, according to Trading Economics
est in a time. the remainder of next year. global macro models and analysts expectations.
The Zimbabwe dollar dropped by marginal 1% to The central raised the key repo rate by 75 bps In the long-term, the Kenya Stanbic Bank PMI
ZWL 626.1893 from ZWL 621.5321 last week as for a second straight meeting in September, to is projected to trend around 52.00 points in 2023
gold coins fill the gap of hedging the dire curren- firmly re-anchor inflation expectations close to and 54.00 points in 2024.
cy against inflation. the 4.5% midpoint of its target range to achieve However, Kenya’s exports to Tanzania grew the
Meanwhile, fiscal authorities expect inflation to the inflation target in 2024. sharpest among all East Africa Community
continue going down after month-on-month infla- (EAC) markets in the six months to June 2022.
tion receded to 3.47% in September from 12.4% Naira hits new all-time low Exports to Tanzania jumped the highest by 46%
in August. As a result, year on ear inflation also to KES 28.66 billion ($236.7 million) extending
declined to 280.4% in September from 285.1% in Naira on Tuesday fell to a record low of N725 a good trade run between the pair amid ongoing
August. Monetary authorities expect inflation per dollar at the parallel market following elimination of non-tariff barriers. Trade with
(YOY) to continue tapering in October. increased demand for the greenback amid a Tanzania has grown steadily in the past years in
supply shortage. After trading on Tuesday, the the wake of improved relations between the two
The grand total awarded decreased partially to local currency lost N3 or 0.41 percent of its countries after years of feuds that at one point
US$10 million from US$11 million allotted last value to close at N725/$ compared to N722 resulted in retaliatory measures such as trade
week. The highest rate received against the US closed on Monday on the black market. bans.
dollar remained unshaken at ZW$660 which was However, the trend is expected to reverse
bid last week while the lowest rate increased mar- following the tightening policy measures of the KagwaaincshtaUcSo$ntinues on upward trend
ginally to ZWL 590 against the greenback. Central Bank of Nigeria (CBN) Godwin Eme-
On the other hand, the International Monetary fiele, governor of the CBN, after the Monetary the Zambian currency, Zambian Kwacha appreci-
Fund commended the government for keeping the Policy Committee (MPC) meeting in Abuja on ated to 115.6 from 155.8 last week remaining
reserve money tight, especially broad money 3. Tuesday, raised its benchmark interest rate, the strongest and fastest rising currency in
However, the global lender said there is need to known as Monetary Policy Rate (MPR) to Africa. Meanwhile, the Stanbic Bank Zambia
do more on economic reforms to ensure real 15.5% the third consecutive hike this year. PMI came in at 50 in August of 2022 from 50.5
growth supported by economic fundamentals in The CBN also increased the Cash Reserve in the previous month, signalling no change in
order. Ratio (CRR) by 500 basis points to 32.5 per- operating conditions for Zambian companies.
cent from 27.5 percent in January 2020, to Output and new orders decreased slightly, amid
Regional Markets reduce monetary-induced inflation. Emefiele had reports of weaker customer numbers and money
in July 2022 MPC meeting warned bank cus- shortages. Meanwhile, both employment and pur-
Tcyhpeegrrfaoprmh abnecloews asghaoiwnsstrtehgeioUnSaDl curren- tomers against converting the naira to foreign chasing activity continued to rise. On the price
exchange, for electioneering purposes. front, there were signs of waning inflationary
Rand appreciates against the dollar pressures, with rates of increases in both input
Shilling unshaken at 120 against US$ costs and output prices easing.
The rand traded at 17.7 against the greenback on
Thursday, the highest since September 22nd, amid The Kenyan currency remained at 120 for a Finally, business sentiment improved, but was
second week as it continues to respond to infla- still below the series average, due to a more
tionary pressures, power crisis and scarcity of favourable exchange rate and hopes of an
US dollars. Meanwhile, The Stanbic Bank improvement in economic conditions.
Kenya PMI fell further to 44.2 in August of Composite PMI in Zambia is expected to be
2022 from 46.3 in July, pointing to the fifth 49.80 points by the end of this quarter, accord-
consecutive month of contraction in the coun- ing to Trading Economics global macro models
try's private sector and at the fastest pace since and analysts expectations. In the long-term, the
the lockdown-hit period in April 2021. Stanbic Bank Zambia Composite PMI is project-
Output and new orders declined at quicker ed to trend around 52.00 points in 2023 and
rates, amid disruptions caused by the national 51.80 points in 2024.
election. At the same time, there was a
renewed drop in employment. Purchasing activi- Pula unshaken at 11.5
ty also decreased due to weaker sales, while
inventories were cut for the first time since Jan- Pula maintained a stable performance as it
uary amid efforts to avoid dead stocks. remained unshaken at 11.5 against the USD. The
On the price front, inflationary pressures contin- Botswana Pula is expected to trade at 11.6 by
ued to cool off in August, although there were the end of this quarter, according to Trading
still numerous mentions of higher fuel prices, Economics global macro models and analysts'
expectations.

22 The AXiS XLVIII Friday 07 Oct 2022

Weekly
Commodity Pulse

Gold (US$/oz) higher duties. Such masking was possible due 48% since March highs Aluminium has been
to what a tax official said was a loophole cre- severely pressured in recent days due to
In the week under review, gold futures slid to ated by a change in policy in July whereby weakening demand, as top consumer China
$1,731 an ounce as traders assess whether the differential import duties were levied on gold, still struggles to recover from the harsh blows
US central bank may maintain its hawkish silver, and platinum, distinct from the previ- of ongoing COVID-19 restrictions, including
stance after a slew of mixed US data. The ous policy of having the same taxes for all lockdowns.
precious metal fell by 2.8% in the week after the three precious metals. bearish bias, to Although China has recently announced more
fresh data showed the US economy remains notice approaching 828 level, while stochastic stimulus measures to combat this scenario, it
resilient. That may give the Federal Reserve negative momentum by settling within the will still be a few months before the effect
more room to aggressively raise interest rates oversold areas will assist to resume the of these measures can reflect on aluminium
to fight inflation. The dollar and Treasury decline, to expect reaching new negative prices. Furthermore, a rapidly strengthening
yields extended gains after the print. The pre- levels that start at 790.00 and 760.00 levels. US dollar (DXY), which has recently climbed
cious metal has been caught in changing The expected trading range for today is to about 20-year highs in the past few trading
views on central banks’ stance on monetary between 850.00 and 828.00 sessions, has also contributed to aluminium’s
policy recently. Earlier this week, it was subdued prices.
boosted after weak US data eased concerns Copper (US$/t)
that the central bank may be tightening its Nickel (US$/t)
monetary policy too rapidly and tilting the
economy into a recession. The copper price was down in the week In the week under review, nickel prices were
In other news, one of Brazil’s biggest gold despite expectations of weakening demand down 1.1% as demand for the metal further
refiners, which processes gold suspected of reinforced by manufacturing data from around plummeted by the largest consumer, China.
being mined illegally in the Amazon rainfor- the world, a strong dollar, and rising invento- However, experts anticipate that nickel prices
est, has been stripped of an important industry ries in warehouses approved by the London will remain sluggish for the foreseeable
seal of approval that global manufacturers Metal Exchange. The metals price shrunk by future. After the LME’s (London Metal Ex-
from Apple to Tesla rely on to root out 4% closing the trading week at $7,853 per change) nickel squeeze and because of the
abuses in their supply chains. In a related tonne. Moreso, copper for delivery in Decem- war in Ukraine, global supply continues to
story, the Zimbabwe Republic Police (ZRP) ber fell 0.9% from Friday’s settlement price, drop. Adding to these problems are expecta-
arrested How Mine gold robbery suspects. touching $3.40 per pound ($7,480 per tonne). tions that Indonesia’s current nickel surge will
ZRP has confirmed the arrest of three suspect- further affect nickel price direction. Septem-
ed armed robbers who got away with 11, 6 Chinese factory activity contracted at a sharp- ber and October are typically high points for
kgs of gold belonging to How Mine in a heist er pace in September as strict covid-19 lock- annual nickel purchases, but the metal could
that took place early in the week. downs disrupted production and hit demand face a rocky road going into Q4.
for Chinese goods. Manufacturing activity Brent
Platinum (US$/oz) across the eurozone and Asia weakened in
September in the face of continuing cost pres-
sures. Copper stocks in LME warehouses are Brent/Oil (US$/b)
up more than 30% since September at
135,750 tonnes while cancelled warrants
dropped to 6% from 50% on August 26.

Aluminium (US$/t)

Platinum futures opened the month on a Aluminium prices are currently trading near Oil prices stabilised near three-week highs
downward trend as demand for the metal was 18-month lows, hovering around $2,300 per after OPEC+ agreed to further tighten global
relatively low. During the week, the metal tonne. This is mostly due to falling demand crude supply with a deal to slash production
plummeted 6.5% due to demand-supply con- as well as weakened commodity prices, espe- by about 2 million barrel per day, the largest
cerns. According to analysts, the expected cially metal prices worldwide, due to inves- reduction since 2020. The organisation has to
trading range for next week is between 840 tors speculating about a potential recession cut oil production by 2 million barrels per
and 870 per tonne. Analysts said India's plati- and central banks warning aa bout a global day to shore up prices, defying U.S. pressure.
num imports in September jumped multi-fold economic slowdown. A stronger US dollar In the week, the organisation agreed to
to a record high as refiners imported a large (DXY), as well as continuously rising interest impose deep output cuts, seeking to spur a
amount of gold containing small amounts of rates by central banks, especially the US Fed- recovery in oil prices despite U.S. pressure to
platinum but registered the purchases with eral Reserve, are all also contributing to alu- pump more. Crude prices have fallen to
customs as a platinum alloy to avoid paying minium woes. Aluminium has dropped about roughly $80 a barrel from more than $120 in
48% since March highs Aluminium has been early June amid growing fears about the pros-
pect of a global economic recession. Oil
prices have fallen to roughly $80 from over
$120 in early June amid growing fears about
the prospect of a global economic recession.

Politics Around The World The AXiS XLVIII Friday 07 Oct 2022 23

Russian rockets slam into Ukrainian city near China's military activities near Taiwan have con- would count as a first strike, Chiu responded
nuclear plant tinued at a much reduced level although Chinese in the affirmative. – The Associated Press
Russia launched two missile attacks that hit apart- military aircraft are still routinely crossing the Russian missiles slam into Ukrainian city near
ment blocks in the southern Ukrainian city of Taiwan Strait's median line, which had previously nuclear plant
Zaporizhzhia on Thursday, killing one person and served as an unofficial barrier between the two. Russia launched missiles that hit apartment
trapping at least five in the city close to Europe’s "In the future, the activities of Chinese Commu- buildings in the southern Ukrainian city of
biggest nuclear power plant, the governor of the nist military aircraft and ships entering our air Zaporizhzhia, a local official said Thursday,
mostly Russian-occupied region said. defence identification zone, crossing the median killing three people and wounding at least 12
The missile strikes, the first before dawn and line and approaching maritime areas close to the in a region that houses Europe’s biggest nucle-
another in the morning, came just hours after island will gradually become more normalised," ar power plant and which Moscow illegally
Ukraine's president announced that the country's the ministry said. – Reuters annexed.
military had retaken three more villages in one of Burkina Faso military leader commits to prede- The two strikes, the first before dawn and
the regions illegally annexed by Russia, the latest cessor's transition timeline another in the morning, damaged more than 40
battlefield reversal for Moscow. Burkina Faso's new military leader Ibrahim buildings, local authorities said. The attacks
Governor Oleksandr Starukh wrote on his Tele- Traore will respect a democratic transition time- came just hours after Ukraine's president
gram channel that many people were rescued from line agreed between his predecessor and West announced that the country's military had
the multi-story buildings, including a 3-year-old Africa regional bloc ECOWAS, he said in a state- retaken three more villages in another of the
girl who was taken to a hospital for treatment. ment late on Tuesday. four regions annexed by Russia, the latest
Photos provided by emergency services showed The comments followed a meeting with an battlefield reversal for Moscow.
rescuers scrambling through rubble in the wreck- ECOWAS delegation sent to meet the junta that The Zaporizhzhia region's governor, Oleksandr
age of a devastated building looking for survivors. took power last week in the second coup to hit Starukh wrote on Telegram that many people
– The Associated Press the West African country this year. were rescued from the multi-story buildings,
Space, the unseen frontier in the war in Ukraine Traore said Burkina Faso would "respect the including a 3-year-old girl who was taken to a
The war in Ukraine has underlined the growing dynamic compromise" agreed with ECOWAS in hospital for treatment.
importance of space to armies on the ground. July to restore constitutional order in 24 months. Photos provided by the Emergency Service of
In an interview with the BBC, the head of the US He also said the country would honour its inter- Ukraine showed rescuers scrambling through
Space Force, General Jay Raymond, describes it national commitments, particularly regarding the rubble in the wreckage of a building looking
as the "first war where commercial space capabili- protection of human rights, and would collaborate for survivors.
ties have really played a significant role". It's also with ECOWAS evaluation mechanisms. Starukh said of Russia: “The terrorist country
the first major conflict in which both sides have The ECOWAS mediator that headed the delega- has shown its beastly face by converting
become so reliant on space. tion, former Niger president Mahamadou Issoufou, defence weapons into offensive weapons and
Gen Raymond - whose service is the newest on Tuesday said he was satisfied with the killing peacefully sleeping people.” – The Asso-
branch of the US armed forces - avoids giving exchanges. – Reuters ciated Press
precise details of how the US and its allies have African Union invites Ethiopia's warring parties Belarus opposition hopeful at Russian setbacks
been helping Ukraine. to peace talks in Ukraine
But he gives a clear indication of what it's been The African Union has invited Ethiopia's govern- Belarus’ opposition leader said Wednesday that
doing. "We use space to help strike with precision, ment and rival Tigray forces to peace talks in she believes Russian military setbacks in
we use space to provide warnings of missiles, of South Africa this weekend aimed at ending a Ukraine could shake the hold on power of
any threat that could come to the United States or two-year conflict, according to a letter seen by Belarusian President Alexander Lukashenko.
to our allies or partners," he says. Reuters. “We have a distracted Russia that is about to
There are already more than 5,000 satellites in Three diplomatic sources speaking on condition of lose this war. It won’t be able to prop
space - most are operated for commercial purpos- anonymity confirmed the authenticity of the Oct. Lukashenko up with money and military sup-
es. 1 letter, written by AU Commission Chair Moussa port as in 2020,” said Sviatlana Tsikhanouska-
But among them are hundreds of dedicated mili- Faki to Debretsion Gebremichael, who leads ya, speaking at a security conference in
tary satellites - the US, Russia and China having Tigray's ruling political party. Warsaw.
the largest number. – BBC News The sources said an identical letter had been sent Tsikhanouskaya fled to Lithuania after Russian
‘UN General Assembly to meet Monday on Russia to the Ethiopian government, while two of them ally Alexander Lukashenko claimed victory in
'annexation' in Ukraine’ said neither side had yet confirmed its participa- disputed August 2020 elections that were
The United Nations General Assembly called an tion. viewed in the West as fraudulent, and which
urgent meeting next Monday to discuss Russia's Ethiopia's government and the leaders of the many thought she won.
declared annexation of four partly-occupied northern Tigray region have both said they are She said that hundreds of Belarusian volunteers
regions of Ukraine, a UN spokesperson said. prepared to participate in AU-mediated talks to have supported Ukrainians in their recent liber-
At the meeting the 193 UN member states will end fighting that has killed thousands of civilians ation of Ukrainian territory.
weigh a resolution now under preparation on the and uprooted millions since November 2020. – “As I speak, a Belarusian battalion is part of
annexation, after Russia vetoed a condemnation in Reuters Ukraine’s counter-offensive chasing the invad-
the Security Council last week, diplomatic sources Taiwan vows to respond to China's military flight ers away. We all understand that the speed of
said Tuesday. incursions changes at the Ukrainian front opens new
General Assembly spokesperson Paulina Kubiak Taiwan’s defence minister on Wednesday said the opportunities for Belarus. And it’s moving so
said the body will meet at the request of Ukraine island will respond to incursions into its airspace fast,” she said at the Warsaw Security Forum.
and Albania on the issue at 3:00 pm (1900 GMT) by Chinese warplanes and drones, but gave no – The Associated Press
Monday. details on specific actions. Ukraine war: Kyiv 'liberates' more villages in
On Friday Russian President Vladimir Putin Responding to questions from legislators, Chiu Kherson as Russia's annexation map shrinks
announced that Moscow had taken over four areas Kuo-cheng said China’s newly aggressive stance Ukraine says its army has recaptured more
of Ukraine which held Kremlin-organized referen- had changed what Taiwan would define as a “first settlements in Kherson, one of the four Rus-
dums on land seized by Russia's military. strike” that would necessitate a response. sian-occupied regions annexed by the Kremlin.
Putin immediately drew near-global condemnation China stepped up its military exercises, fired mis- President Volodymyr Zelenskyy said the villag-
for the land grab, which came after more than siles into waters near Taiwan and sent warplanes es of Novovoskresenske, Novohryhorivka and
seven months of devastating warfare following across the dividing line in the Taiwan Strait in Petropavlivka to the northeast of Kherson city
Moscow's February 24 invasion of Ukraine. – The response to an August visit to the island by U.S. had been "liberated".
New Nation House Speaker Nancy Pelosi, the highest-ranking It came after Russian president Vladimir Putin
Taiwan says China seeking to 'normalise' military American official to visit Taiwan in 25 years. signed constitutional decrees on Wednesday to
activities near island China denies the existence of the median line in formally annex the four Ukrainian regions of
China is seeking to "normalise" its military activi- the Taiwan Strait and challenged established Luhansk, Donetsk, Kherson and Zaporizhzhia.
ties close to Taiwan, including crossing the norms by firing missiles over Taiwan into Japan’s Thousands of Russian troops have retreated
median line of the Taiwan Strait, which poses a exclusive economic zone. from front lines in the south and east since
challenge like none seen before, the Taiwanese “We initially said we do not make the first strike September following Ukraine's military count-
defence ministry said on Tuesday. ... if they haven’t done the first strike, which er-offensive.
China, which views the democratically-governed means firing a projectile or a missile," Chiu said. In his nightly address, Zelenskyy spoke briefly
island as its own territory, carried out war games “But the situation has obviously changed.” in Russian to address pro-Kremlin forces, tell-
including firing missiles over Taipei in early Asked by legislator Lo Chih-cheng of the govern- ing them they had already lost the war.
"Ukrainians know what they are fighting for.
And more and more citizens of Russia are real-
izing that they must die simply because one

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25 The AXiS XLVIII Friday 07 Oct 2022 Business Around The World

Lesotho to hold election after years of instabil- in venture capital investment in the first half move forward with his deal to acquire Twitter
ity of this year, bucking a global decline in deal could see the return to the platform of former
Lesotho will hold a parliamentary election on making linked to worldwide economic turmoil, President Donald Trump, once the world’s
Friday, amid failures by its politicians to pass con- data released by an industry group showed on most influential tweeter.
stitutional reforms meant to end years of political Tuesday.
instability in the southern African mountain king- The funding, raised by 300 different compa- While Trump has previously said he would
dom. nies, represents growth of 133% compared to stay on his own social media platform, Truth
The All Basotho Convention (ABC) has run the the same period last year, according to the Social, rather than return to Twitter, the
country since 2017, but divisions within the party African Private Equity and Venture Capital former president may find the lure of tens of
have given it two prime ministers over five years Association (AVCA), which promotes private millions of Twitter followers difficult to resist.
- one of whom, Thomas Thabane, stepped down investment on the continent.
in 2020 after being charged the murder of his "This impressive growth in start-up funding, “I do think it was not correct to ban Don-
ex-wife. which goes against the grain of global trends ald Trump; I think that was a mistake,” Musk
He denied any wrongdoing, and the charges were this year, demonstrates the depth of opportuni- said at a conference in May, pledging to
later dropped. ty as well as the potential the continent has reverse the ban were he to become the compa-
His successor - Prime Minister Moeketsi Majoro to offer," the AVCA said. ny’s owner.
- declared a state of emergency in August, after The financial sector continued to dominate the
legislators failed to pass two bills meant to end African start-up space in the first half of Despite agreeing to take over the company
political volatility in parliament. Last month, Leso- 2022, accounting for 44% of total deal value. earlier this year, Musk soured on the idea over
tho's highest court ruled the declaration unconsti- Payments platform MFS Africa, Kenyan fin- the summer and spent months battling to get
tutional. tech and solar firm M-Kopa and e-commerce out of it. Twitter sued him to force him to
The ABC has selected another leader, former company Wasoko all secured funding of $75 complete the deal. His U-turn and decision to
health minister Nkaku Kabi, to contest the ticket, million to $125 million during the period. – go ahead with buying the company came to
after he defeated Majoro in a party vote in Febru- Reuters light in a securities filing Tuesday, just two
ary. – Reuters Africa sounds caution on net zero goal ahead weeks before he and Twitter are due to go to
Rivian needs to sharply ramp up EV produc- of COP27 court.
tion to meet 2022 targets — Wall Street is bet- Africa needs time and money to wean itself
ting it can off fossil fuels in order to achieve net zero Twitter said Tuesday it was intent on closing the
Electric vehicle start-up Rivian Automotive told without jeopardising its future, its representa- deal, opening the possibility that Musk could take
investors in March that it will produce 25,000 tives are warning ahead of next month's over the company within weeks, if the deal is
vehicles in 2022. It has three months and a seem- climate talks. completed. The company’s board and shareholders
ingly tall order to get there. At energy conferences this week, Ghana, had previously approved the deal, but uncertainties
Through the end of September, Rivian had built South Africa and the African Union have remain.
just 14,317 electric vehicles — meaning that it insisted the continent stands by net zero -- the
will have to build about 10,700 more between goal of an overall balance in heat-stoking Twitter will have to decide how to play ball with
now and the end of December to deliver on its greenhouse gases. Musk, taking into account his prior waffling on
promise to investors. But they warned that the continent was still the deal a negotiation process that could come
Rivian is confident it can meet its goal. The com- pheoawveilryitsdedpee1vn8edleonptmeonnt. coal, oil and gas to down to how to ensure the world riCchNeNst man will
pany has reiterated that guidance several times actually cuts a check this time. –
since March, most recently on Monday when it
announced its third-quarter production total. Ford hikes starting price of its electric F-150
Lightning pickup for second time in less than
two months

Ford Motor is increasing the starting price of its
electric F-150 Lightning pickup by $5,000 for the
2023 model year, citing rising costs and supply
chain issues.

Wall Street isn’t too concerned, either. As several "Africa is fully convinced and committed to a The new price of the 2023 Lightning Pro, an
analysts noted this week, Rivian just had its best net zero and supportive of the climate agenda, entry-level model meant for commercial and busi-
quarter for production yet, with 7,363 EVs built however. Where we may differ is on the time- ness customers, will be $51,974 up nearly 11%
between July and September. That’s more than it frame," African Union (AU) energy commis- from previous pricing and a 30% increase from
built in the entire first half of 2022, thanks to a sioner Amani Abou-Zeid told AFP on the the original $39,974 price in May 2021.
second shift of workers added during the quarter sidelines of the Green Energy Africa Summit In an emailed statement, Ford said it is adjusting
and thanks to management’s efforts to mitigate the in Cape Town. the price “due to ongoing supply chain constraints,
syueparp.ly–-chCaNinBwCoes that Rivian faced earlier in the Africa's population of 1.3 billion is set to rising material costs and other market factors. We
OPEC+ to make deep oil output cuts to boost double by 2050, and AU nations aim to make will continue to monitor pricing across the model
sagging prices affordable and reliable energy available to year.”
everyone by 2063, she argued. – AFP Current retail order holders and commercial and
government customers with a scheduled order will
Bangladesh, Oct. 6 -- exporting countries be unaffected by the price increase, the company
decided Wednesday to sharply cut production Kenya lifts ban on genetically modified crops said.
to support sagging oil prices, a move that in response to drought Ford made waves when it announced the starting
could deal the struggling global economy Kenya has lifted a ban on genetically modified price for the Lightning would be about $40,000,
another blow and raise politically sensitive crops in response the worst drought to affect making it more affordable than many EVs on the
pump prices for U.S. drivers just ahead of key the East African region in 40 years, with market. Wall Street praised the vehicle, and it was
national elections. authorities hoping it will improve crop yields a major boost for the company at that time, as
Energy ministers cut production by a larg- and food security. investors were concentrating on EV start-ups. –
er-than-expected 2 million barrels per day CNBC

starting in November after gathering for their For the last four seasons the annual rains have Fitch cuts outlook for UK rating to ‘negative’
first face-to-face meeting at the Vienna head- failed across Kenya, Ethiopia and Somalia, from ‘stable’
quarters of the OPEC oil cartel since the start forcing 1.5 million people to flee their homes Ratings agency Fitch lowered the outlook for its
of the COVID-19 pandemic. in search of food and water elsewhere. credit rating for British government debt to “nega-
The group said the decision was based on the A statement issued by President William tive” from “stable” on Wednesday, days after a
"uncertainty that surrounds the global econom- Ruto's office after he chaired a cabinet meet- similar move from rival Standard & Poor’s
ic and oil market outlooks." Saudi Energy ing described lifting the ban as part of following the government’s Sept. 23 fiscal state-
Minister Abdulaziz bin Salman stressed the responses to the drought. Cultivation and ment.
group's stated role as a guardian of stable importation of genetically modified white “The large and unfunded fiscal package announced
energy markets. maize is now authorised. as part of the new government’s growth plan
"We are here to stay as a moderating force, could lead to a significant increase in fiscal defi-
to bring about stability," he told reporters. "Cabinet vacated its earlier decision of 8th cits over the medium term,” Fitch said.

Oil is trading well below its summer peaks November, 2012 prohibiting the open cultiva- Fitch maintained its “AA-” credit rating for Brit-
because of fears that major global economies tion of genetically modified crops and the ain, which is one notch lower than S&P’s.
such as the U.S. or Europe will sink into importation of food crops and animal feeds Finance minister Kwasi Kwarteng announced 45
recession due to high inflation, rising interest produced through biotechnology innovations; billion pounds ($51 billion) of unfunded tax cuts
rinateUs karnadinee.ne–rgUynuitnecderNtaeinwtsy oofvBeranRgulsasdiae'ssh war effectively lifting the ban on Genetically Mod- in the Sept. 23 statement alongside large energy
ified Crops," the statement read. – Reuters subsidies and other measures aimed at boosting
growth, but financial markets balked at the extra
borrowing. Sterling fell to a record low against
Africa sees record venture capital investment, Musk deal could see Trump back on Twitter the US dollar and some British government bonds
bucking global decline by midterms tumbled by tthoesmtepostinintodesctaabdielsiz, efomrcairnkgettsh.e–BCanNkN
African start-ups attracted a record $3.5 billion Elon Musk’s decision this week to once again of England

The AXiS XLVIII Friday 07 Oct 2022 26

ZSE WEEKLY COMMENTARY

Following a significant rebound in the previous week as investors were buying at
lows, the ZSE fell back into the red in the week under review. The mainstream ZSE
All Share Index dwindled by -8.74% to close the week at 13632.14 points. Market
heavyweight losses of -12.29% outweighed gains of 0.11% and 2.02% in medium
caps and penny stocks, respectively, to stimulate an overall loss position. The mar-
ket's persistent low liquidity, which the Central Bank is imposing in an effort to

reduce inflation, has had a negative impact on stocks performance.

The market is also characterized by uncertainty as the country approaches the 2023
presidential elections. Almost a week into the new month, nominal losses since the
beginning of the month reached a staggering -7.71%. Overall nominal returns for the
year to date were reduced to 25.96% at the close of the week, translating to a loss
position of -78% in US dollar terms. The Central Bank's efforts to reduce liquidity
and control inflation led to a decrease in annual inflation from 285% to 280.4%.
However, the action has also temporarily decreased consumer spend and subsequently
demand for equities.

ZSE ASI 14,937.06 ZSE TOP 10 9,244.10 MEDIUM CAP INDEX 29,374.00
14,771.65 9,140.55 29,051.67

14,734.12 9,111.15 28,999.58

14,424.01 8,821.54 29,193.61

14,079.81 8,561.42 28,861.48

13,632.14 8,108.26 29,405.77

-8.74% -12.29% 0.11%

ZSE TOP 15 10,168.74 SMALL CAP INDEX 485,956.68 ZWL INTERBANK 621.8788
10,051.47 483,615.64 621.8922

10,022.68 498,506.54 621.9627

9,712.86 488,434.05 623.2271

9,424.93 494,604.57 626.8524

8,981.23 495,776.26 626.9411

-11.68% 2.02% 0.81%

On global markets, Asian shares were cautiously higher on Thursday, while the dollar
eased ahead of U.S. non-farm payrolls data and oil prices gained for a fourth day
after deep production cuts pledged by OPEC+ members.

BNC recorded a decline of -1.96% in the week under review on the US dollar denom-
inated stock exchange, VFEX, while the other 3 counters did not record any change
in price. A total of US$44,024 was traded during the week, a decrease from
US$66,296 in the prior week. Due to limited liquidity throughout the week, the
blue-chip stocks BNC and Padenga only recorded trade activity on Thursday, while

the other two stocks did not record any trade.

On currency markets, the ZWL has been stable on both the formal and the informal
markets, owing to tightened liquidity in the economy. On the parallel market, the ZWL
has been sailing at a stable exchange rate for close to a month now, with the premium
dwindling to below 30%. On the Reuters Auction currency market, the US$ appreciat-

ed by 0.75% at the close of the most recent trading week to close at ZWL626.189
per each US$ while on the sole legal exchange market, the Interbank, the US$ appre-
ciated by a mild 0.81% to close at ZWL626.9411 per each US$.

FINANCIAL MARKETS AT A GLANCE 2022

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

13,632.14 8,108.26 495,776.26 626.9411
-8.74% -12.29% 2.02% -0.81%

ZSE Top 10 Index ZSE Small Cap Index ZSE Medium Cap Index

All Share index ZSE Top10 index All Share index Small Cap index All Share index

Medium Cap index

13,632.14 13,632.14 29,405.77
8,108.26 495,776.26 13,632.14

WOW -12.3% MOM -4% YTD 19% WOW 2% MOM -5% YTD 23.1% WOW 0.1% MOM -0.1% YTD 44.1%

ZSE Financials Sector ZSE Financials index ZSE Consumer Discretionary Index ZSE Consumer Staples Index

All Share index All Share index ZSE Consumer Discretionary index All Share index ZSE Consumers Staples index

13,632.14 13,632.14
18884.8 16017.32

23252.9
13,632.14

WOW 2.7% MOM -1% YTD 65.8% WOW 2% MOM -4% YTD 54.2% WOW -11.5% MOM -5% YTD 17.1%

ZSE Industrials Index (New) ZSE ICT Index ZSE Materials Index ZSE Materials Index
12227.26
All Share index ZSE Industrials Index (new) All Share index ZSE ICT Index All Share index 13,632.14
19772.4

13,632.14 13,632.14
18574.22

WOW 5.7% MOM 22% YTD 4.4% WOW -17.7% MOM -4% YTD 13.1% WOW 11.6% MOM 10% YTD 39.9%

ZSE Real Estate Index ZSE Real Estate Index Interbank Market 17.8% JSE All Share Index 13,632.14
-3% 65612.75
All Share index Interbank All Share index JSE All Share index

11900.28
13,632.14

WOW 9.7% MOM 19% YTD 35.7% WOW 3.7% MOM -6.5% YTD -11%

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

BSE All Share index LUSE All Share index NGSE All Share index
48836.7
137,462382..5174 7229.31
13,632.14 13,632.14

WOW 0.4% MOM 0.9% YTD 6% WOW -1.6% MOM 3.1% YTD 19.3% WOW -0.3% MOM -1.7% YTD 14.3%

Latest Price Previous Week Consumer Latest Price Previous Week Materials Latest Price Previous Week TOP 5 WEEKLY RISERS
ZWL Cents ZWL Cents ZWL Cents ZWL Cents Sector ZWL Cents ZWL Cents
AFDIS African Sun COUNTER PRICE CENTS CHANGE % CHANGE
ARISTON 27577.42 30000 AXIA 1855.38 1794.38 ARTZDR 1700 1700
BAT 375 385.24 EDGARS 4921.52 5010.9 LAFARGE 12500 9890 FML 2753.18 1033.18 60%
CFI 300000 314000 NTS 750 680 PROPLASTICS 2507.41 2600 LAFARGE 12500 3900 45%
DELTA 35761.2 35761.2 RTG 1300 1300 TURNALL 350 331.5 CAFCA 20000 3000 18%
DAIRIBORD 20442.33 24873.91 SIMBISA 703.9 689 Willdale 210 198.27 DAIRIBORD 2530 311.2 14%
HIPPO 2530 2218.8 TRUWORTHS 16119.3 15911.64 RioZim 11496.87 10400 MASHHOLD 700 72.67 12%
INNSCOR 23000 20700 254 260
MEDTECH 27008.67 30792.99 ICT Financial Latest Price Previous Week TOP 5 WEEKLY FALLERS
MEIKLES 741 770 Sector Latest Price Previous Week Sector ZWL Cents ZWL Cents
NATFOODS 11000 10000 Ecocash ZWL Cents ZWL Cents COUNTER PRICE CENTS CHANGE % CHANGE
OK 120000 120000 ECONET 5599.22 First Capital Bank 1029.44 918.39
SEEDCO 3128.57 3551.59 ZIMPAPERS 4981.67 11482.96 CBZ 13043.48 14000 ECONET 9001.6 -2771.64 -24%
STAR AFRICA 9000 10800.49 9001.6 300 FBCH 4600 4500 DELTA 20442.33 -5490.57 -21%
TSL 162.25 161.2 Real Estate 300 FIDELITY 2400 2400 SEEDCO 9000 -2000 -18%
Tanganda 4000 4000 Sector Previous Week FML 2753.18 1975 BRIDGEFORT 741 -159 -18%
8038.46 8500 MASHHOLD Latest Price ZWL Cents GBFS 1755 1755 CFI 35761.2 -6238.8 -15%
FMP ZWL Cents 627.33 NMBZ 1900 1835
685.36 ZBFH 6600 6600
700 ZHL 500 500
697.11

JSE All Share Index BSE All Share Index LuSE All Share Index NGSE All Share Index

65612.75 7428.57 7229.31 48836.7
3.71% 0.36% -1.58% -0.26%

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