The AXiS CLVII (157)

Gold Back Freefall Tests Currency Model Cash Crisis Explained Large-Scale Gold Miners Hit 14-Month Low Zimra Pushes for Paye Integrity Tanganda Battles Economic Headwinds .............................................................................. .............................................................................. .............................................................................. .............................................................................. .............................................................................. fifffflffifl #Issue : CLVII

In Focus 4 5 6 Markets World News 24 25 26 Markets Watch ZSE & VFEX Weekly Financial Markets At a Glance 8 9 10 11 12 14 Strengthening PAYE Compliance : Balancing Revenue Collection and Public Trust Monetary-Fiscal Disconnect in Zim : Implications of Exchange Rate Mismanagement Rethinking Zim's Gold Reserves : A Move Beyond Gold-Backed Currency Small-Scale Miners Prevail : Large-Scale Gold Miners Hit 14-Month Low Trump’s FCPA Freeze: USA Emulates Chinese Model Global Gold at Glance : 2024 Record Analysis, 2025 Projections Appears Even More Bullish Economic News and Analysis Gold’s Broken Promise : Reserves Fail to Anchor Currency Liquidity Crunch : How Zimbabwe’s Policies Are Squeezing the Formal Economy A Cautious Global Economic Outlook : Zimbabwe’s Policy Imperatives Business around the world Politics around the world Regional Economic watch 22 23 27 The equityaxis.net @equity axis @equity axis zimbabwe @equity axis @equity axis @equity axis 08677 197 791 @ aaronc[at]equityaxis.net EQUITY AXIS Financial Insights at your Fingertips Capital Markets 16 17 18 19 20 Nampak Faces Operational Challenges Sweet & Sour Performance : Hippo Valley’s Q3 Outturn Tanganda Faces Economic Strains : Strategic Moves Aim for Recovery Seed Co Exports Surge : Surviving Amid Drought-Induced Demand WestProp Under Scrutiny : Allegations, Financial Red Flags, and Market Impact The AXiS CLVII 14 Feb 2025 Cover Page Page 5 Page 16 Page 18 ZSE ASI VFEZ ASI ZWG INTERBANK 06/02 07/02 10/02 11/02 12/02 13/02 06/02 07/02 10/02 11/02 12/02 13/02 06/02 07/02 10/02 11/02 12/02 13/02 193.45 100.45 26.40 191.90 101.72 26.41 191.73 100.49 26.41 191.55 102.29 26.42 189.98 103.50 26.42 190.00 102.73 26.43 -1.78% 2.27% -0.11% ZSE TOP 10 MEDIUM CAP INDEX SMALL CAP INDEX 100.11 100.11 100.11 100.11 100.11 100.11 0.00% 190.06 226.86 188.35 224.61 188.71 222.65 188.36 222.99 186.11 224.26 186.07 224.53 06/02 07/02 10/02 11/02 12/02 13/02 -2.10% 06/02 07/02 10/02 11/02 12/02 13/02 -1.03% 06/02 07/02 10/02 11/02 12/02 13/02

Gold’s Broken Promise 4 The AXiS CLVII Friday 14 Feb 2025 old anchors Zimbabwe’s economy from a foreign receipts perspective. In 2024, the country recorded a 36-tonne production, raking in US$2.5 billion, a record high. The out- turn in gold helped stimulate total exports for the year to an all-time high. From an overall picture, the growth in gold receipts averted a negative balance of payments position while improving forex availability. The country’s Central Bank (RBZ) reported that it accumulated gold reserves of about 2.7 tonnes by the end of the year, up from 1.5 tonnes in April 2024. When the country introduced a new currency in April 2024, it said the ZiG currency would be anchored on gold reserves. Authorities said they had 1.5 tonnes of gold in the vaults at the Bank while it kept another 1 tonne offshore. The move to anchor the currency against gold is a new phe- nomenon in Zimbabwe. Hence, it generated a lot of interest. The country has struggled with cur- rency stability since it went under US and West- ern sanctions in the early 2000s. The real interest was on whether the said backing existed, in fact, and whether the money supply levels were com- mensurate with the value of gold backing it. This measure would, at a basic level, show if RBZ would be equipped enough to withstand any cur- rency pressure that would arise. Our view was that the said reserves of 1.5 tonnes kept at the Bank were grossly inflated. We were of the view that the Bank had accumulated a total of only 0.7 tonnes since the country restart- ed the accumulation of reserves in October 2022. The assumption was that reserves are kept only from royalties, which are estimated at 5% of pro- duce and further reduced to 2.5%, given the 50% split between cash royalty and physical mineral asset payments. We added a further 0.3 tonnes to arrive at a 1-tonne total, the latter being royalties paid in physical form for other qualifying miner- als. In subsequent months, when the currency model was put to the test, it failed to hold. The value of the local unit faced significant pressure on the parallel market, leading to price distortion and other market disruptions which affected the formal exchange market. The Bank failed to tap into the reserves to restore currency stability. The Bank had earlier said the levels of gold cover were at least 2 times the local liquidity levels and at an even higher 3 times cover after consid- ering the forex cash reserves. We expected that the reserves would come in handy, as is typical when currencies are under attack elsewhere in the world. But this did not happen. In September, the currency was devalued against the dollar, and the forex market was reformed to a willing buyer willing seller (WBWS). This was an attempt to partially float the currency and move away from the fixed exchange rate. Four months down the line, the exchange rate remains largely stable on the formal market, as would be expected from a con- trolled exchange rate. This market has experi- enced very marginal movement over the period. What was not to be expected was the stabilisa- tion of the parallel market for 4 months while the formal market was stable. The typical relationship between a controlled formal exchange rate and an unhinged parallel market is that the latter realise sharp losses when the former is tightly controlled. The premium becomes huge. Could it be that the government was now intervening using gold reserves? We do not believe so. We think the government’s tight- ened monetary policy resulted in the outcome. Government spending was significantly reduced compared to prior periods, thus resulting in reduced pressure. In the latest instance, BDO has published an audit for the gold reserves, and it said the Bank has 2.7 tonnes within its vaults as of the end of December 2024. This means it earned over 1.2 tonnes in just under 9 months. This is staggering, considering that production for the 9 months to December 2024 was 30 tonnes. The royalty payments in real gold totalled 0.75 tonnes, and with an underwhelming PGMs pro- duction for the year, the other minerals contribu- tion would take the total royalty payments in kind to 1 tonne, which is below the reported 1.2-tonne mark. These discrepancies between our estimates then and now, against RBZ’s reported numbers, could be explained in 2 ways. The RBZ could be rebuilding its reserves from out- side royalties. For gold, the Bank is the sole buyer before value addition and onward selling to international markets. During the year, the coun- try exported gold worth US$2.5 billion; it is pos- sible that it could have instead not sold the full produce. However, its ability to do this is limited to fiscal allocation to buy gold for keeps, which was not provided for in the 2024 national budget and its balance sheet. As with currency, printing to buy gold would create excess local currency and possible inflation. The accumulation of gold reserves, as reported by the RBZ, is evidently outside of royalties, as the discrepancies are grossly higher. This means the Bank could have pursued other means, as highlighted above. What is important is how reli- able those mechanisms of reserve accumulation become. For example, funding the purchases through the issuance of new currency or short-term money market instruments creates a poten- tial currency volatility crisis over the short to mid-term. Outside of this, reserves can be accumulated through balance sheet leverage. Being a balance sheet item, the Bank can ramp up gold reserves as at the reporting date and unwind in post peri- ods depending on the form of accumulation. This accu- mulation can be supported by the prepayment of royalties by some bigger producers of gold. At the end of the day, it mat- ters most if the accumulated reserves are playing their monetary policy role. Reserves are meant to help monetary authorities achieve their objective, primarily by aiding short and long-term currency stability. Over the long term, reserve accumulation helps achieve an import cover, which allows for currency stabilisation if forex inflows are outpaced by outflows, creating a forex squeeze. If caught without cover, the country suffers massive currency devaluation and experiences volatility. So, when evaluating the effectiveness of the current reserves accumulation strategy by the RBZ, the two factors above are worth noting. A quick assessment of the short run shows that RBZ has failed to utilise the said reserves to defend the currency when it was under attack. In September 2024, the ZiG was massively devalued against the US dollar, shed- ding about half of its value. In this instance, the Bank should have utilised its reserves to re-equil- ibrate the market. There are other angles which one may look at, but the short-term payoffs were significant and potentially hurt the long-term per- formance of the currency. It, therefore, matters less what level of gold reserves have been accumulated if those reserves are not committed in the short term to defend the currency’s value. This is particularly more important in the case of Zimbabwe because gold reserves were the basis against which the local currency was valued. Gold forward, while this figure will be important to watch, its impact on currency valuation is no longer that significant. The Bank has not opted to use it as a short-term tool to stabilise the currency and, therefore, cease to be a factor. However, over the longer term, a consistent gradual accumulation of reserves is a key anchor for currency stability. Zimbabwe has long struggled with currency stability, and the strain is even pronounced without any import cover. A higher import cover will allow the Bank to smoothen demand and supply of forex over the long term and thus diminish chances of cur- rency volatility. The sincerity of reserves accumu- lated remains a key question, but the government would need to stay the course while also being flexible in its approach by intervening in the markets over the short term. Reserves Fail to Anchor Currency G

The AXiS CLVII Friday 14 Feb 2025 5 How Zimbabwe’s Policies Are Squeezing the Formal Economy Liquidity Crunch f Zimbabwe’s economy had remained predom- inantly formalised, the country would currently be experiencing an acute liquidity crisis, marked by severe cash shortages similar to those witnessed between 2015 and 2018. Banks would be overwhelmed with long queues of depositors desperately trying to access their funds. In a dol- larised economy like Zimbabwe, liquidity is best measured by the availability of liquid cash, which comprises nostro balances and the actual foreign currency cash held in bank vaults. This metric accurately reflects the system’s ability to meet depositors’ demands in the event of a sudden bank run. Historical trends suggest that Zimba- bwe typically faces liquidity and cash crises when total liquid cash falls below US$400 mil- lion. From the inception of dollarisation in 2009 until 2012, Zimbabwe enjoyed a relatively stable liquidity environment. During this period, banks had the freedom to maintain substantial liquidity in their correspondent banking nostro accounts. The importation of foreign currency to meet the cash demands of the local economy was a thriv- ing business. Banks with the capacity to import cash actively did so, supplying the market and selling surplus currency to other financial institu- tions. The banking sector also had a well-func- tioning interbank market, where cash was traded alongside financial instruments such as banker’s acceptances and term deposits, ensuring efficient circulation of liquidity. The onset of Zimbabwe’s cash and liquidity crisis can be traced back to 2013 when the Reserve Bank of Zimbabwe (RBZ) introduced a policy restricting the amount of foreign currency that banks could hold in their nostro accounts. This directive aimed to redirect foreign deposits into the domestic economy for lending to the private sector. However, the policy had unintended con- sequences. Banks found it increasingly costly to continue importing cash to sustain Zimbabwe’s dollarised system. By 2014, cash shortages had intensified, with depositors struggling to access their funds. At the same time, foreign payments became a challenge as nostro balances dwindled. This marked the beginning of an accelerated shift toward the informal economy. Faced with growing uncertainty, individuals who managed to withdraw cash chose to avoid re-de- positing it into the formal banking system, where access had become increasingly difficult. As a result, the financial constraints of the formal sector fueled the rapid expansion of Zimbabwe’s informal economy. The informal market emerged as a more reliable source of liquidity, allowing Zimbabweans to conduct transactions with ease, bypassing the limitations imposed by the banking sector. This transformation underscores the adapt- ability of economic agents in response to restric- tive financial conditions, ultimately reshaping Zimbabwe’s financial landscape. The graph above provides a clear illustration of Zimbabwe’s liquidity dynamics. The dark blue bars represent nostro balances, while the light blue bars depict cash reserves held by banks. The purple line, cover- ing the period from 2024 to 2025, rep- resents total liquid cash, which is the sum of foreign currency notes and coins alongside nostro deposits. A criti- cal observation from the graph is that during periods of acute liquidi- ty crises—such as between 2014 and 2018—total liquid cash remained above US$200 million. However, it is important to contextualise the anomalies observed during the 2017–2019 period when Zimbabwe’s economy was characterised by a highly overvalued exchange rate. During this time, local deposits were no longer in real US dollars but instead consisted of RTGS balances, which effectively became fictitious representations of US dollars. The concern today is that despite total deposits in the banking sector being approx- imately US$4 billion—of which 80% (about US$3.2 billion) is denominated in foreign curren- cy—the actual liquid cash available within the formal sector is only around US$180 million as revealed in the recently published monetary policy statement. This presents a significant struc- tural challenge, reinforcing vulnerabilities within the financial system. Some may question why the period between 2019 and 2024 is not included in the discussion. The answer lies in the availability of data. It is the responsibility of the Reserve Bank of Zimbabwe (RBZ) to ensure transparency by making key financial metrics publicly accessible. Without consistent and reliable data, policymakers, busi- nesses, and the general public are left in the dark, making it difficult to assess the true state of liquidity and implement effective monetary policies. Given the current circumstances, is there a liquid- ity crisis in Zimbabwe’s formal banking sector? The answer is unequivocally yes. Banks have significantly scaled back lending activities, shift- ing their focus toward transactional income rather than interest income, which should ideally be the primary driver of banking revenues. This strategic retreat from lending is a direct consequence of the constrained liquidity environment. Further- more, RBZ policies have inadvertently reinforced the expansion of the informal sector by stifling formal economic activities. The banking system, once a pillar of financial intermediation, now struggles to fulfil its core function, further entrenching the dominance of informal financial networks in Zimbabwe’s economic landscape. Superimposing the economic growth chart onto the liquid cash chart reveals a fundamental issue: authorities continue to address structural growth challenges through monetary interventions rather than sustainable economic policies. This approach distorts financial markets and undermines long-term stability. At present, the RBZ is com- pelled to provide funding to the productive sector, effectively assuming a role that should fall under fiscal authorities. However, monetary authorities are not responsible for driving economic growth through direct financial interventions; that respon- sibility lies with fiscal policymakers. The persistence of quasi-fiscal activities by the RBZ has contributed to economic dysfunction. Instead of focusing on its core mandate of main- taining economic stability, price stability, and financial system integrity, the central bank has become entangled in direct economic interven- tions. This has led to market distortions, exces- sive money supply growth, and inflationary pres- sures. A prime example is the RBZ’s past issu- ance of quasi-currency instruments, such as bond notes, and the introduction of dysfunctional cur- rencies and other instruments, which have eroded confidence in the financial system. Another instance was the RBZ's command agriculture financing program, which, despite being well-in- tended, resulted in large fiscal outlays without the necessary transparency and efficiency, worsening inflationary pressures. When a central bank operates as an extension of fiscal authorities, the result is fiscal dominance over monetary policy. This occurs when govern- ment borrowing and spending priorities dictate central bank decisions, leaving little room for independent monetary policy implementation. The lack of checks and balances erodes investor con- fidence, weakens the financial system, and fuels inflationary pressures. For example, in countries like Venezuela and Argentina, excessive central bank financing of government deficits has led to chronic hyperinflation and currency collapse. Zimbabwe, having faced similar challenges, risks repeating these mistakes if fiscal discipline is not restored. For the RBZ to regain its credibility, it must return to its primary role as an independent mon- etary authority, ensuring macroeconomic stability and serving as a counterbalance to fiscal excess- es. A strong and independent central bank pro- vides policy certainty, stabilises inflation, and fosters an environment conducive to investment and economic growth. Failure to uphold this prin- ciple will see continued economic volatility, with monetary policy being reduced to a tool for short-term political agendas rather than a mecha- nism for long-term financial stability. The recently released research paper by Rest of Africa Research Services (ROARS), the South African-based research arm of Equity Axis, has issued a stark warning to businesses, highlighting that Zimbabwe is experiencing an acute liquidity crisis. According to ROARS, the current mea- sures being implemented by both the *To Page 6 I

*From Page 5 Government and the Reserve Bank of Zimba- bwe (RBZ) are unlikely to resolve the crisis. Instead, these policies risk exacerbating the dete- rioration of the formal economy, further entrench- ing the dominance of informal financial activities. The research note, available through Equity Axis, provides an in-depth analysis of Zimbabwe’s liquidity constraints, shedding light on the struc- tural weaknesses in the monetary system. ROARS highlights how the persistent shortage of liquid cash within the formal banking sector—coupled with declining confidence in the financial system—has forced businesses and individuals to seek alternative means of accessing liquidity out- side traditional banking channels. The report further argues that excessive fiscal intervention in monetary policy, combined with the RBZ's qua- si-fiscal activities, has distorted market dynamics and weakened the ability of banks to perform their core function of financial intermediation. Additionally, the paper draws parallels with other economies that have experienced similar liquidity crises, warning that unless Zimbabwe implements structural reforms—including restoring central bank independence, improving monetary transpar- ency, and encouraging formal sector growth—the economy will remain vulnerable to external shocks. The findings emphasise the need for policy realignment, urging authorities to prioritise financial sector stability over short-term interven- tionist strategies. For businesses, investors, and policymakers, the ROARS research note serves as a critical resource, offering evidence-based insights into the evolving liquidity situation and its broader impli- cations for Zimbabwe’s economic trajectory. 6 The AXiS CLVII Friday 14 Feb 2025 he International Monetary Fund’s (IMF) flagship report, the World Economic Out- look (WEO) Update, released in January 2025, adopts a cautious stance on the global economy, highlighting divergent growth trajecto- ries. According to the report, “The global econo- my is holding steady, although the degree of grip varies widely across countries. Global GDP growth in the third quarter of 2024 was 0.1 per- centage point below that predicted in the October 2024 WEO, after disappointing data releases in some Asian and European economies. Growth in China, at 4.7 percent year-over-year, was below expectations. Growth in India also slowed more than expected, led by a sharper-than-expected deceleration in industrial activity. Growth continued to be sub- dued in the euro area (with Germany’s perfor- mance lagging that of other euro area countries), largely reflecting continued weakness in manufac- turing and goods exports even as consumption picked up in line with the recovery in real incomes. In Japan, output contracted mildly owing to temporary supply disruptions. By con- trast, momentum in the United States remained robust, with the economy expanding at a rate of 2.7 percent in year-over-year terms in the third quarter, powered by strong consumption.” One of the key challenges underscored by the WEO is the persistent over-reliance on monetary tightening as the primary tool for curbing infla- tion, despite the substantial reduction in inflation rates. This policy approach, which has been widely adopted in developing economies under IMF programs, has often resulted in stagnated growth due to high borrowing costs. In Zimbabwe, where inflation has been a long-standing challenge, the Staff Monitored Pro- gram (SMP) emphasizes fiscal consolidation and monetary discipline to stabilize prices and restore macroeconomic stability. However, the continued high interest rates and liquidity constraints have placed downward pressure on economic activity, exacerbating structural bottlenecks in key sectors such as manufacturing, agriculture, and mining. Zimbabwe’s economic trajectory requires a more balanced approach, one that does not solely rely on monetary tightening but also embraces proac- tive fiscal and structural policies. While inflation remains a concern, with official figures fluctuat- ing due to exchange rate volatility and sup- ply-side disruptions, a rigid focus on contraction- ary monetary policies risks suppressing much-needed economic recovery. The January 2025 WEO update projects that Zim- babwe’s GDP growth will remain subdued in the long term though a modest growth in 2025 is expected due to lower base, reflecting weak investment, external financing constraints, and slow-paced reforms. As a result, a shift toward a more growth-oriented policy mix is necessary. Unlike some developing economies that have pur- sued aggressive fiscal austerity, China and India have adopted stimulus measures to counter economic slowdowns. China, for instance, has rolled out a stimulus package exceeding a trillion dol- lars, while India has implemented tax cuts to boost consumption and investment. A Bloomberg article published on February 3, 2025, titled “In- dia’s Record Tax Cuts to Spur Rebound, Top Official Says,” highlights this approach: “India’s economic growth slowdown is temporary, and record tax cuts announced in the budget will help spur consumption and improve private invest- ments in the world’s fifth-biggest economy, a top government official said.” For Zimbabwe, the lessons are clear: an excessive reliance on restrictive monetary policies, without complementary fiscal reforms, could undermine economic resilience. The government must lever- age fiscal policy to unlock supply-side con- straints, enhance infrastructure development, and foster private sector growth. The risk of overusing monetary austerity is evident in the increasing debt burden from high interest costs, which restricts fiscal space for development spending. Given Zimbabwe’s fragile economic recovery, a more pragmatic approach—focused on incentivizing production, stabilizing the exchange rate, and fostering invest- ment-friendly policies—is essential for sustainable growth. Moreover, as the IMF’s WEO suggests, a shift away from a purely neoliberal framework that prioritizes inflation targeting at the expense of growth is imperative, particularly in developing economies like Zimbabwe. The country’s partici- pation in the Staff Monitored Program should align with a long-term strategy that balances macroeconomic stability with inclusive growth. Targeted fiscal interventions, such as tax incen- tives for key industries, increased infrastructure investment, and policies to enhance agricultural and manufacturing output, could provide the nec- essary impetus for economic expansion while mitigating inflationary pressures. In conclusion, Zimbabwe must take a cue from global policy trends and recalibrate its economic strategy. The overemphasis on monetary tighten- ing should be replaced with a more holistic approach that integrates fiscal innovation, struc- tural reforms, and pro-growth policies. Without such adjustments, the economy risks pro- longed stagnation, with limited job creation and declining real incomes. By adopting a more balanced economic policy framework, Zimbabwe can navigate the current global uncertainties while fostering sustainable and inclusive growth. Zimbabwe’s Policy Imperatives A Cautious Global Economic Outlook T

he Zimbabwe Revenue Authority (ZIMRA) has recently intensified its enforcement of Pay-As-You-Earn (PAYE) tax compliance in response to declining government revenues amid a shrinking formal econ- omy. A significant component of this effort is the introduc- tion of an Employee Manage- ment Module within ZIMRA’s Tax and Revenue Management System (TARMS). This system assigns a unique Taxpayer Identification Number (TIN) to every employee, allowing for more precise tracking of PAYE contributions and reducing tax evasion. As Zimbabwe’s tax base continues to contract due to the growing informal sector, the government faces mounting pressure to maximise revenue collection from salaried employees who are already bearing a dispropor- tionate tax burden. TARMS is a digital tax administration platform designed to enhance efficiency, transparency, and compliance within Zimbabwe’s taxation system. Through the automation of payroll reconciliation, the system ensures that employers submit accu- rate payroll data, which is cross-checked against PAYE remittances in real-time. Any discrepancies trigger alerts, prompting further investigations or audits. By integrating with banking institutions, TARMS enables seamless tax payments, minimis- ing errors and ensuring that tax receipts are accu- rately recorded. Additionally, the system supports e-filing and online payments, reducing bureaucrat- ic inefficiencies and aligning Zimbabwe with global trends in tax digitalisation, as seen in South Africa’s SARS eFiling system and Kenya’s iTax platform. While the adoption of TARMS represents a modernisation of tax collection, Zimbabwe still faces a trust deficit between taxpayers and the govern- ment. In countries like Sweden and Germany, tax compliance is reinforced by transparent govern- ment spending and efficient service delivery, making taxation a widely accepted civic duty. In contrast, Zimbabwean taxpayers remain sceptical about whether increased enforcement will trans- late into improved public services. Many salaried employees already feel overburdened by a tax system that demands more from them while fail- ing to deliver reliable infrastructure, quality healthcare, and a functional education system. The frustration is exacerbated by the perception that the wealthy and politically connected find ways to circumvent tax obligations, leaving the middle class to shoulder the majority of the tax burden. Zimbabwe’s tax collection framework still retains remnants of colonial-era administration, where taxation was historically perceived as an extractive tool rather than a means of nation-building. Despite the advancements brought by TARMS, ZIMRA’s enforcement approach remains largely punitive, with tax offi- cials often viewed as aggres- sive revenue collectors rather than facilitators of economic growth. This contrasts with more progressive tax systems in Singapore and Canada, where tax authorities empha- sise education, digitalisation, and incentivisation to encour- age voluntary compliance. In Estonia, for example, tax returns are pre-filled based on employer-submitted payroll data, reducing administrative burdens and fostering a culture of compliance. For TARMS to achieve its full potential, Zimbabwe must prioritise restoring public trust in taxation. Strengthening accountability, improving service delivery, and broadening the tax base—particular- ly by formalising the informal sector—are critical steps toward a more equitable tax system. Trans- parency in government spending is equally vital; regular publication of detailed reports on tax rev- enue allocation would go a long way in building confidence among taxpayers. Additionally, offer- ing tax incentives for early or voluntary pay- ments, as seen in other jurisdictions, could help shift the tax system from being seen as purely extractive to participatory. Without these reforms, the perception that taxation is a burden rather than a civic responsibility will persist, further alienating taxpayers from the state. While TARMS offers a foundation for a more structured tax regime, its success ultimately depends on ensuring that taxation serves the broader public good rather than being a mechanism for mere revenue collection. Strengthening PAYE Compliance Balancing Revenue Collection and Public Trust & Analysis 8 The AXiS CLVII Friday 14 Feb 2025 T *From Page 4 EQUITY AXIS fifffflffiflffi  Financial insights at your fingertips. flfl fl flffi fl fl  flfl flfi
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The AXiS CLVII Friday 14 Feb 2025 9 Implications of Exchange Rate Mismanagement Monetary-Fiscal Disconnect in Zim he Reserve Bank of Zimbabwe (RBZ) and the Ministry of Finance seem to be embroiled in a high-stakes policy clash over the valuation of the Zimbabwe Gold (ZiG) cur- rency, a conflict that exposes profound institution- al misalignment and threatens to derail the nation’s fragile economic recovery. RBZ Governor John Mushayavanhu’s projection of a ZiG appreciation to circa ZWG22 per US dollar in 2025, anchored in gold reserves and import cover metrics, stands in stark contrast to Finance Minister Mthuli Ncube’s implicit depreci- ation forecast of ZWG36 per US dollar, derived from the 2025 budget arithmetic. Since the begin- ning of this decade, this perpetual divergence, rooted in conflicting methodologies, ideological priorities, and institutional mandates, has created a vacuum of policy credibility, destabilising busi- nesses, amplifying inflationary risks, and inviting speculative behaviour. The RBZ Governor’s optimism about ZiG appre- ciation rests on two quantitative pillars, which are gold reserves and import cover. The RBZ claims that Zimbabwe’s gold reserves, which reportedly cover three times the ZiG in circulation, provide a tangible backing for the currency, theoretically limiting depreciation. Additionally, the central bank asserts that foreign currency reserves now provide at least three months of import cover, a benchmark considered minimally adequate for currency stability. Using these metrics, the RBZ calculates a “fair value” exchange rate of ZWG22 per US dollar this year, implying an 18% appre- ciation from the current interbank rate of ZWG26 per US dollar. However, this framework is riddled with analyti- cal shortcomings. First, the gold coverage ratio is a static metric that ignores dynamic market forces. Zimbabwe’s total gold and foreign curren- cy reserves have increased by about 90%, from US$285 million in April 2024 to around US$550 million (ZiG14.3 billion) as of the end of January 2025 (which is more than 3 times cover for reserve money of ZiG3.5 billion), this represents less than 20% of the ZiG’s monetary base (ZWG79.259 billion, or approximately US$3.05 billion at the same rate of ZWG26 per US dollar). This narrow coverage leaves the ZiG vul- nerable to speculative attacks, as traders can easily overwhelm reserves by offloading local currency. Second, the import cover metric is misleading. Zimbabwe’s monthly import bill in 2024 aver- aged US$800 million, meaning three months of cover requires $2.4 billion in reserves. However, the RBZ’s foreign reserves accumulation strategy in 2024 resulted in a total monetary value of gold and other foreign currencies of circa US$550 million, leaving a shortfall of nearly US$2 billion. This gap undermines the RBZ’s claims of import-driven stability. Crucially, the RBZ’s model disregards currency demand dynamics. In a dollarised economy where over 80% of transactions are US dollar-denomi- nated, the ZiG’s utility is limited to tax payments and small-scale trade. This structural dollarisation creates an inelastic demand for US dollars, which the parallel market rate (ZWG35 per US dollar) reflects. The RBZ’s insistence on an artificially strong ZiG (a supposed ZWG22 per US dollar) widens the exchange rate premium (parallel rate divided by interbank rate) to 59%, incentivising arbitrage and capital flight. Meanwhile, the Ministry of Finance’s 2025 budget reveals a pragmatic, if tacit, acceptance of ZiG depreciation. The fiscal framework set the overall expenditures for 2025 at ZWG276.4 billion, which was translated to US$7.7 billion by the framework. Dividing the ZWG expenditure figure by the US dollar expenditure target yields an implicit exchange rate of ZWG36 per US dollar. This rate aligns with the parallel market’s trajectory and acknowledges three systemic pres- sures: forex scarcity, fiscal deficits, and inflation- ary feedback. Exporters, required to surrender 30% of foreign earnings (up from 25%), will retain just US$5.6 billion of our projected US$8 billion export receipts. This 30% surrender (approximately US$2.4 billion) is insufficient to meet the RBZ’s reserve targets, given Zimbabwe’s US$720 mil- lion annual interbank obligations by the RBZ, as well as a circa US$1.5 billion in government’s annual foreign obligations. The 2025 budget proj- ects a deficit of ZWG6.1 billion (2% of expenditures). To finance this, the gov- ernment will rely on domestic debt i s s u a n c e , n o t a b l y i n c r e a s i n g ZiG liquidity. This monetary overhang will f u r t h e r depress the c u r r e n c y ’ s value. With b u s i n e s s e s pricing goods at parallel rates, wage demands and production costs will rise. For example, a retailer importing US$100,000 worth of goods at ZWG35 per US dollar faces a cost base of ZWG3.5 million. If compelled to convert US dollar sales at ZWG26 per US dollar, they incur an exchange loss of ZWG900,000, forcing price hikes to break even. The Fiscus’ ZWG36 per US dollar assumption thus reflects a grim reality that without address- ing forex shortages and dollarisation, the ZiG’s depreciation is inevitable. Furthermore, the RBZ’s ZiG reporting mandate, effective immediately for 2024 financial state- ments, imposes severe quantitative distortions on Zimbabwe Stock Exchange (ZSE)-listed compa- nies. Consider a firm with US$10 million in US dollar revenue (80% of total income) and ZWG52.52 million in local currency earnings (20% at ZWG26 per US dollar). Under the RBZ’s mandate, the firm must consoli- date all revenue in ZiG using the interbank rate. Converting US dollar revenue at ZWG26 per US dollar yields ZWG260 million, while the local currency earnings add ZWG52.52 million, result- ing in total revenue of ZWG312.52 million. However, if the parallel rate (ZWG35 per US dollar) reflects true economic value, the firm’s US dollar revenue should equate to ZWG350 million. The RBZ’s mandate, thus, understates the company’s ZiG revenue by ZWG90 million. The understatement comes from the fact that traders in Zimbabwe creatively apply the parallel market rate to avoid arbitrage and exchange losses. Auditors, bound by International Accounting Standard (IAS) 21 to use the interbank rate, must approve these distorted statements, which erodes investor confidence. Due to understated incomes compared to the real market value of the sales, this move by the RBZ further stifles the fiscus position as companies declare understated profits. The widening gap between the RBZ’s theoretical rate (ZWG22 per US dollar) and the parallel mar- ket’s trajectory (ZWG35 per US dollar in the first quarter of 2025, rising to ZWG45 per US dollar by mid-year) will thus have catastrophic macroeconomic repercussions on both economic players and the government, as I alluded. By mid-2025, the exchange rate premium could reach 105% as the parallel market is expected to reach 45 in the second quarter while the governor will likely do everything in his power to strike an interbank rate that he has convinced himself is ideal, thus doubling the cost of forex for formal businesses. Retailers, compelled to use the interbank rate for conversions, will hike USD prices by 80–100% to hedge against losses as they are forced to abide by the interbank rate, mimicking 2023’s inflation spiral (the annual Consumer Price Index was 667%). Companies with US$ liabilities will see their ZiG-denominated debt soar. As busi- nesses shift to informal US dollar transactions to avoid the lag that comes from formal market sourcing of foreign currency, formal sector GDP, already 80% dollarised, could contract by circa 15%, slashing Value Added Tax (VAT) and cor- porate tax receipts significantly annually. Ultimately, Zimbabwe’s monetary-fiscal rift is not merely ideological; rather, it is a quantitative crisis. The RBZ’s gold-centric model, while theo- retically elegant, fails to account for the ZiG’s structural vulnerabilities, that is, forex scarcity (worsened by the 30% surrender ratio), dollarisa- tion (80% transaction share), and inflationary feedbacks (to potentially be worsened by an expected 105% exchange premium). The Fiscus’ implicit devaluation (ZWG36 per US dollar), though realistic, lacks the political courage to reform surrender policies or unify exchange rates. To avert collapse, policymakers at RBZ and the Ministry of Finance ought to unify exchange rates by possibly auctioning forex reserves at market-driven rates, reducing and maintaining the premium at less than 10% by Q3 of 2025. Adjusting surrender thresholds to 15% for exporters would free a substantial amount of forex for companies and reduce pressure on the interbank, which the government. Ironically, the government’s decision to reduce retention ratio is justified (by the government) by the need to fund the forex market, yet in reality, reducing retention ratio proportionally increases pressure for the foreign currency from the same companies on the formal market and in-turn drive parallel exchange market activities. Additionally, permitting ZSE firms to continue publishing statements in both ZiG and US dollars during a three-year transition would restore inves- tor trust. Without these reforms, the ZiG will join the Zimbabwean dollar (2009) and bond notes (2019) as relics of monetary hubris, and Zimba- bweans will continue voting with their wallets, one US dollar at a time. T

*To Page 11 A Move Beyond Gold-Backed Currency Rethinking Zim's Gold Reserves 10 The AXiS CLVII Friday 14 Feb 2025 The recent Monetary Policy Statement (MPS) released by Governor John Musha- yavanhu represents a pivotal moment in Zimbabwe's economic narrative. For the first time, the RBZ has begun systematically tracking the nation’s gold reserves, marking a significant shift in both policy and perspective. As of January 2025, the nation’s gold reserves peaked at 2,680 kilograms, a substantial increase from 1,500 kilograms observed in April 2024, coinciding with the introduction of the controver- sial gold-backed currency, the ZiG. This article analyses the implications of maintaining a gold-backed currency in Zimbabwe while positing alternative, innovative uses for the country's bur- geoning gold reserves. The Case Against a Gold-Backed Currency While the concept of a gold-backed currency ostensibly promotes stability and trust, the practi- cal execution in Zimbabwe has been fraught with challenges. The inflationary pressures are evident, with the Consumer Price Index (CPI) reflecting a staggering month-on-month inflation rate of 11.6% in January 2025, a drastic increase from just 1.1% in December 2024. This inflationary spike mirrors the broader macroeconomic instabil- ity that continues to plague the nation, raising questions about the efficacy of the gold-backed currency model. Finance Minister Mthuli Ncube asserts that the ZiG currency is indeed backed by gold; however, the exchange rate of the currency is not tied directly to gold values. This disconnection raises concerns about the tangible benefits of a gold-backed currency. The official exchange rate has plummeted from 13.44 ZWG/USD in April 2024 to an average of 26.3 ZWG/USD in 2025, indicating a significant depreciation that compli- cates the economic outlook. Meanwhile, the black market rate has surged to 35 ZWG/USD from 17 ZWG/USD, illustrating a stark divergence between official and parallel market values. This disparity highlights a broader issue: Zimbabwe has struggled to establish a widely accepted and functional currency, leading economic agents to adopt a pessimistic outlook, assuming the worst-case scenarios in an uncertain environment. The premium on the exchange rate is now 8.7 ZWG, with the parallel market rate exceeding the official rate by approximately 30% Exchange Rates (Official and Parallel) *Source: RBZ & Equity Axis Research Furthermore, the RBZ's recent redesign of banknotes to improve durability and security reflects an acknowledgement of the currency's inherent weaknesses rather than presenting a comprehensive solution. While these redesigned notes aim to combat counterfeiting and enhance usability, they fail to tackle the fundamental eco- nomic challenges at play. As commendable as this initiative may be, it raises concerns about the monetary authorities' motivations, particularly regarding seigniorage, the profit derived from printing money. This practice not only generates revenue for the government but also subtly admits that the cur- rent denominations in circulation are insufficient. It presents a significant opportunity to introduce larger denominations that align with inflationary pressures, thereby addressing both usability and economic realities more effectively. The financial metrics surrounding Zimbabwe’s gold reserves offer a clearer picture of the coun- try’s potential. As of January 2025, gold holdings reached $241 million, a commendable increase from $113 million in April 2024. This represents a growth rate of approximately 113% within nine months. Additionally, mineral royalties surged to $541 million from $276 mil- lion, indicating a growth rate of 96% over the same period. Gold Holdings (USD) *Source: RBZ & Equity Axis Research Historically, gold prices have reached unprece- dented heights, peaking at $2,942.52 per ounce in February 2025. Pro- jections indicate that gold might surpass the $3,000 mark later this year, driven by central banks' increasing demand for gold as a hedge against geopoliti- cal volatility and infla- tion. This context underscores the strate- gic importance of gold reserves beyond merely backing the currency. Alternative Utilization of Gold Reserves: Establishing a Gold Fund for Social Proj- ects Given the substantial gold reserves and their rising value, a more strategic approach would involve establishing a "Gold Fund for Social Projects." This fund would utilise a portion of gold revenues to support critical sectors such as health, education, and infrastructure, fostering sustainable community development. Gold Holdings (Kgs) *Source: RBZ & Equity Axis Research The Gold Fund could be structured similarly to sovereign wealth funds in other nations, such as Norway’s Government Pension Fund Global, which utilises surplus revenues from natural resources to benefit future generations. A trans- parent governance framework is essential to ensure accountability and effectiveness. Collabo- ration between government entities and private sector stakeholders can enhance the fund's effec- tiveness. Engaging local businesses in project implementation can drive job creation and stimu- late economic growth. Active com- munity engagement in decision-making processes is crucial. Establishing advisory boards comprised of local stakeholders can ensure that the proj- ects funded are aligned with commu- nity needs and priori- ties. While the primary focus would be on social projects, diver- sifying investments into sectors such as renewable energy, agriculture, and tech- nology can yield eco- nomic returns that further benefit the fund and its objectives. Several countries have successfully implemented similar strategies. For instance, Botswana’s Pula Fund, which invests in diamond revenues, has funded numerous educational and health initia- tives, significantly improving living standards. Similarly, the Alaska Permanent Fund has distrib- uted dividends to residents from oil revenues, demonstrating the potential for resource wealth to directly benefit citizens. The implications of maintaining a gold-backed currency in Zimbabwe are increasingly question- able, particularly in light of the economic chal- lenges that continue to afflict the nation. As gold prices are projected to rise, the potential of these reserves can be harnessed more effectively through a dedicated Gold Fund for Social Proj- ects. This approach not only aligns with global best practices but also positions Zimbabwe on a path toward sustainable development and eco- nomic resilience. As international funding for African nations, par- ticularly from the United States, diminishes, Zim- babwean leaders must recognise the urgency of leveraging domestic resources for community improvement. Establishing a Gold Fund can pro- vide a crucial lifeline, fostering a renewed sense of hope and progress in a nation striving for stability and growth. The time for action is now; the future of Zimbabwe hinges on the innovative and strategic utilisation of its gold reserves. T

11 The AXiS CLVII Friday 14 Feb 2025 Large-Scale Gold Miners Hit 14-Month Low Small-Scale Miners Prevail he gold mining sector in Zimbabwe has witnessed a notable shift in production dynamics, with large-scale miners recording their lowest gold output in January 2025 since December 2023, according to the latest data from Fidelity Printers and Refiners. This decline stands in stark contrast to the remarkable performance of small-scale miners, who have continued to outpace their larger counterparts. The large-scale mining sector, dominated by key players such as Kuvimba Mining House (housing Freda Rebecca), Caledonia Mining Corporation (operating Blanket Mine and Bilboes Mine), Padenga Holdings (with Eureka Mine as its flag- ship asset), and the underperforming RioZim (managing Renco Mine and Cam and Motor), has faced significant operational challenges. Gold Production(tonnes) *Source: Fidelity Printers and Refiners, Equity Axis Research In January 2025, large-scale producers recorded a 14-month low output of 868.7 kg, a sharp decline from 1,108 kg in January 2024. Meanwhile, small-scale miners achieved a 70.2% year-on-year growth, producing 2,265 kg compared to 1,333 kg in the same period last year. The ascendancy of small-scale miners in Zimbabwe’s gold sector has been evident since 2017, the last year in which large-scale producers outperformed small-scale miners. By 2024, small-scale miners contributed approxi- mately 70% of the total gold output, driven by several government-led initiatives. These include improved payment modalities by Fidelity Gold Printers and Refineries, formalization of artisanal miners, and the establishment of additional gold-selling stations. The introduction of a traceability system on Sep- tember 30, 2024, which tracks gold production from mines to market, further bolstered small-scale miners’ productivity. These reforms have created an enabling environment for small-scale miners, allowing them to capitalize on favourable market conditions and significantly increase their output. The dominance of small-scale and artisanal miners in Zimbabwe’s gold sector presents a dou- ble-edged sword, with both positive and negative implications for the economy and the mining industry. On the positive side, small-scale and artisanal mining operations are highly agile and labou r -intensive, providing employ- ment opportunities for thousands of Zimbabweans, par- ticularly in rural areas where formal job opportunities are scarce. and contribute over 70% of Zimba- bwe’s total gold output last year. Small-scale miners operate with lower overhead costs compared to large-scale miners, as they rely less on s o p h i s t i c a t e d machinery and foreign currency, making them less vulnerable to policy changes like export surrender requirements. This has allowed them to thrive even in challenging economic conditions, as seen in 2024 when they outperformed large-scale miners despite electricity shortages. However, the reliance on small-scale and artisanal mining also poses significant challenges. Unlike large-scale miners, who invest in long-term capi- tal projects, advanced technology, and sustainable mining practices, small-scale operations often lack the resources and expertise to optimize resource extraction and minimise environmental degrada- tion. Gold Deliveries to Fidelity ( Jan-23 vs Jan-24) *Source: Fidelity Printers and Refiners, Equity Axis Research Artisanal mining is frequently associated with illegal activities, environmental damage, and unsafe working conditions, which can undermine the sector’s long-term sustainability. The domi- nance of small-scale miners limits the country’s ability to fully capitalise on its gold reserves, as their operations are typically less efficient and yield lower recovery rates compared to large-scale mining. In contrast, countries like South Africa and Ghana, where large-scale mining dominates, have been able to leverage advanced technologies and economies of scale to maximize production and attract foreign invest- ment. Ghana’s large-scale mining sector, support- ed by favourable policies and significant foreign investment, contributed over 4 million ounces of gold in 2023, making it Africa’s largest gold pro- ducer. Similarly, China’s gold sector, dominated by state-owned enterprises and large-scale miners, has consistently achieved high production levels due to substantial investments in technology and infrastructure. Zimbabwe’s over-reliance on small-scale mining, therefore, risks perpetuating inefficiencies and limiting the sector’s potential to drive broader economic growth. To achieve a balanced and sustainable gold sector, Zimbabwe must address the structural challenges faced by large-scale miners while continuing to support the formalisation and regulation of small-scale opera- tions. Large-scale miners have faced mounting opera- tional and financial pressures. The government has imposed stringent fiscal policies on these entities, including an increase in the export surrender requirement from 30% to 40% in T The proposed Gold Fund for Social Projects should be distinctly differentiated from Zimba- bwe’s existing Mutapa Sovereign Wealth Fund in several key aspects, particularly in focus, gover- nance, and operational strategy. First, the Gold Fund would have a specific man- date centred on utilising gold revenues to directly address social issues, such as healthcare, educa- tion, and infrastructure development. This target- ed approach contrasts with the broader investment strategy of the Mutapa Fund, which encompasses a wide range of sectors without a primary focus on immediate social impact. By concentrating on social projects, the Gold Fund aims to deliver measurable benefits to communities, thereby fostering a sense of ownership and engagement among citizens. Second, governance structures must differ mark- edly between the two funds. The Gold Fund should prioritise transparency and community involvement by establishing advisory boards com- prised of local stakeholders. These boards would play a crucial role in determining project priori- ties, ensuring that the fund’s activities align with the specific needs and aspirations of communities. In contrast, the Mutapa Fund has historically operated under more centralised decision-making processes, which may not always reflect local conditions or preferences. By integrating commu- nity feedback into its governance model, the Gold Fund can enhance accountability and responsiveness. Lastly, the operational strategy of the Gold Fund should incorporate flexibility and adaptability. Given the volatile nature of gold prices, the fund can adjust its investments based on real-time market conditions and community needs. This dynamic approach would enable the Gold Fund to allocate resources effectively, ensuring that funds are directed where they are most needed at any given time. In comparison, the Mutapa Fund may have a more rigid investment framework, limiting its ability to respond promptly to chang- ing economic landscapes. In summary, the Gold Fund for Social Projects should distinctly focus on social impact, prioritise community-driven governance, and adopt a flexi- ble operational strategy, differentiating it signifi- cantly from the Mutapa Sovereign Wealth Fund. *From Page 10 *To Page 12

12 The AXiS CLVII Friday 14 Feb 2025 2021, which was later reduced to 35% in 2022 under former Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya. While the reduction provided some relief, large-scale miners continue to grapple with high production costs, exacerbat- ed by the need to settle obligations in US dollars. The overvaluation of the local currency at the formal market rate further compounds their chal- lenges, as exporters lose approximately half of their income when surrendering foreign currency to the RBZ. This financial strain has hindered their ability to extend mine life, ramp up production, and invest in capital projects, ultimately impacting their competitiveness. The decline in large-scale pro- duction is attributed to several factors. Firstly, the underperformance of RioZim, once a mining giant, has significantly reduced the sector’s output. RioZim’s quarterly production has plum- meted from approximately 500 kg per quarter to an annual output of around 800 kg, with its mines either under maintenance, depleted, or underutilized. Caledonia Mining Corporation’s projected flagship asset once completed, Bilboes Mine, is undergo- ing a $309 million rehabilitation, resulting in reduced production. Kuvimba Mining House is also focused on mine rehabilitation and life extension projects, further constraining output. Padenga Holdings’ Eureka Mine remains a rare exception, operating at full capacity and targeting over 100,000 ounces in 2025, up from 85,000 ounces in 2024. The challenges faced by large-scale miners are further compounded by recent policy changes. On February 6, 2025, the government increased the export surrender requirement from 25% to 30%, effectively reducing miners’ retained foreign cur- rency earnings. Given that large-scale mining operations rely heavily on foreign currency for machinery, labour, and supplier payments, this policy shift is expected to escalate production costs. Additionally, electricity costs, which account for nearly 20% of miners’ revenues and are billed in US dollars, add to the financial burden. These factors collectively undermine the sector’s ability to capitalize on rising global gold prices, which averaged $1,700 per ounce in January 2025, up from the previous year. Global Gold Perfomance *Source: World Gold Council , Equity Axis Research In comparison to Zimbabwe, other African nations and global players like China have imple- mented more favourable policies to incentivize gold production and exports. Ghana, Africa’s largest gold producer, offers tax exemptions and reduced royalty rates for mining companies, fostering a conducive environment for investment. Similarly, China has streamlined regulatory pro- cesses and provided subsidies to mining compa- nies, enabling them to scale production efficiently. These measures contrast sharply with Zimbabwe’s approach, which places a disproportionate burden on large-scale miners. Looking ahead, the global gold market remains robust, supported by geopolitical tensions, eco- nomic uncertainty, and strong demand from inves- tors and central banks. However, Zimbabwe’s large-scale miners face an uphill battle to regain their footing. Rejuvenating aging mines, improv- ing operational efficiency, and addressing poli- cy-induced financial strains will be critical to reversing the current trend. In the interim, small-scale miners are expected to remain the primary drivers of gold production, particularly if prices remain elevated. The govern- ment’s target of 40 tonnes of gold in 2025 will likely hinge on the continued success of small-scale miners reflecting the need for balanced policies that support both segments of the sector. *From Page 11 *To Page 13 n a controversial move that has ignited heated debates within the realms of business ethics and international governance, President Trump has enacted an executive order that effectively freezes the enforcement of the Foreign Corrupt Practices Act (FCPA). This legislation, which has been a cornerstone of anti-bribery regulation since its inception in the 1970s, prohibits U.S. compa- nies and individuals from making payments to foreign government officials to secure improper advantages in business dealings. This article delves into the implications of this executive order, particularly in the context of the United States' evolving economic strategies and its potential alignment with the pragmatic, often morally ambiguous, approaches adopted by coun- tries like China. The FCPA was established in response to wide- spread allegations of American companies engag- ing in corrupt practices abroad. Investigations by the U.S. Securities and Exchange Commission (SEC) uncovered numerous instances of U.S. firms making questionable payments to foreign officials to secure contracts and business advan- tages. Notably, the Act does not require that a bribe be completed; merely offering a bribe is sufficient for prosecution. Over the years, substantial settlements have underscored the law’s enforcement, with companies like RTX (formerly Raytheon) and Walmart facing hefty fines for their transgressions. The FCPA is jointly enforced by the SEC, which oversees civil enforcement, and the Department of Justice (DOJ), responsible for both civil and criminal enforcement. This dual structure has enabled a robust mechanism for addressing corruption and upholding ethical stan- dards in international business practices. President Trump's executive order introduces a 180-day "pause" on all investigations under the FCPA. This moratorium is intended to afford the administration time to devise new enforcement guidelines that aim to level the playing field for U.S. companies competing in global markets. The order not only halts ongoing investigations but also prevents the initiation of new cases during this period. Trump's rationale for this suspension is rooted in a desire to foster a more favourable business environment for American firms, posit- ing that the FCPA, while noble in intention, has become a hindrance to U.S. competitiveness on the international stage. Critics of this executive order argue that it under- mines the integrity of American business practices and signals a retreat from the country’s long- standing commitment to ethical standards. How- ever, supporters contend that the current applica- tion of the FCPA is excessively punitive and disproportionately affects U.S. companies, espe- cially when compared to the less stringent enforcement of anti-bribery laws in other coun- tries. Aligning with China's Economic Model The implications of this shift are profound, par- ticularly when viewed through the lens of the United States' desire to emulate certain aspects of China's economic model. China has often been characterised by its willingness to overlook ethi- cal considerations to achieve substantial economic growth and global market share. This approach, while criticised for its moral ambiguities, has allowed China to ascend as a dominant player in international trade, often at the expense of West- ern competitors. China's economic strategy is underpinned by a pragmatic approach that prioritises economic growth over strict adherence to ethical norms. The Chinese government has been known to engage in and tolerate practices that would USA Emulates Chinese Model Trump’s FCPA Freeze I

13 The AXiS CLVII Friday 14 Feb 2025 be deemed corrupt or unethical in other juris- dictions. For instance, Chinese companies frequently operate in environments where bribery and corruption are commonplace, leveraging these practices to gain competitive advantages. This model has enabled Chinese firms to expand rap- idly into emerging markets, particularly in Africa and Southeast Asia, where regulatory frameworks may be less stringent. A significant aspect of China's approach is its state-led capitalism, which allows the government to play a pivotal role in guiding national compa- nies toward international expansion. This inter- ventionist strategy has manifested in various initiatives, such as the Belt and Road Initiative (BRI), which aims to enhance global trade routes and foster economic partnerships through infra- structure investments. By financing large-scale projects in developing nations, China not only secures access to vital resources but also strengthens its geopolitical influence. The United States faces the pressing challenge of competing with this Chinese model. The FCPA's stringent enforcement has often placed American firms at a disadvantage in markets where corruption is rampant and where local competitors, often backed by their govern- ments, are willing to engage in unethical practices. By freezing the FCPA's enforce- ment, the Trump administra- tion appears to be attempting to level this playing field, allowing U.S. companies to operate in a manner more akin to their Chinese counter- parts. The potential impact of this shift is substantial. The World Bank estimates that corrup- tion costs developing coun- tries around $1 trillion each year, stifling economic growth and worsening inequality. In Africa specifically, illicit financial flows are projected to exceed $1 trillion annually, further impeding economic progress and deepening dispar- ities. This staggering figure high- lights the immense challenge posed by illicit financial activities, with estimates indicating that these flows could surpass $50 billion per year. If U.S. companies can engage more freely in these markets, the argument is that they may con- tribute positively to local economies by investing in infrastructure and creating jobs. For instance, a report from McKinsey & Company suggests that infrastructure investments in Africa could generate $175 billion in additional annual eco- nomic output by 2030. However, this optimistic view must be tempered by the possible erosion of ethical standards and governance. The African Market: Opportunities and Risks Africa presents a unique case study in this con- text. The continent is rich in natural resources and has become an attractive destination for foreign investment. However, it is also marred by significant corruption challenges, often complicat- ing business operations for foreign entities. The easing of restrictions under the FCPA could enable U.S. companies to navigate these complex- ities more adeptly, potentially giving them an edge over competitors constrained by stricter ethi- cal guidelines. The African Union estimates that corruption costs the continent $148 billion annually, a figure that represents a significant opportunity for U.S. firms willing to engage in practices that may be deemed unethical in other contexts. As U.S. com- panies potentially adopt a more flexible approach to business practices, they may find themselves well-positioned to capitalise on lucrative contracts in sectors such as construction, energy, and tele- communications. The Risk of Eroding Standards However, the potential for increased U.S. engage- ment in Africa raises serious ethical concerns. Critics argue that a more lenient stance on brib- ery could exacerbate existing corruption issues, leading to a cycle of unethical behaviour that undermines governance and accountability. The long-term implications for African economies could be dire, with increased corruption contribut- ing to political instability and economic disparity. Moreover, if U.S. companies begin to mimic the practices of their Chinese counterparts, the very foundation of ethical business conduct could be undermined. The risk is not merely theoretical; it is evident in regions where the Chinese model has taken root. In countries like Angola and Zambia, Chinese investments have been linked to increased corruption and governance challenges, raising questions about the sustainability of such economic strategies. To grasp the stakes involved, it's crucial to com- pare the U.S. and Chinese approaches quantita- tively. The Chinese economy has experienced rapid growth, with GDP soaring from $1.2 trillion in 2000 to over $14 trillion in 2020, largely driven by an aggressive international investment strategy. In contrast, U.S. GDP growth has been more moderate, reflecting a more cautious approach to global business. While U.S. compa- nies have historically prioritised ethical practices, the ongoing policy shift could prompt a more assertive stance in global markets, especially in regions like Africa, where competition with Chi- nese firms is intense. According to the Brookings Institution, U.S. foreign direct investment in Africa was about $54 billion in 2019, compared to China's $100 billion. The potential for U.S. companies to expand their presence in Africa will depend on their ability to adapt to this evolving landscape, which may necessitate a reevaluation of their ethical boundaries. The U.S. executive order and its potential ramifi- cations must be viewed within a broader global economic landscape increasingly characterised by competitive pragmatism. As countries vie for dominance in international markets, the traditional moral high ground often espoused by Western nations is being challenged by a more transac- tional approach to foreign relations and trade. As the geopolitical landscape shifts, the potential for a more flexible interpretation of the FCPA could lead to increased tensions between nations advocating for ethical business practices and those favouring economic expediency. The impli- cations of the U.S. adopting a more lenient stance on bribery could ripple through international trade agreements and partnerships, complicating diplo- matic relations. The Potential for a New Global Standard Interestingly, the U.S. move could inadvertently catalyse a reevalua- tion of global anti-corruption stan- dards. As American firms begin operating under a more lenient framework, other nations may feel pressured to reconsider their anti-bribery laws. This could lead to a race to the bottom, where ethical considerations are increas- ingly sidelined in favour of eco- nomic growth. Conversely, this shift could also galvanise efforts to strengthen anti-corruption initiatives globally. If U.S. companies begin to face backlash for unethical practices, it may prompt a renewed emphasis on transparency and accountabili- ty, both domestically and interna- tionally. The challenge will be to strike a balance between fostering economic growth and maintaining ethical standards. In summary, President Trump's executive order to pause the enforcement of the Foreign Corrupt Practices Act marks a significant turning point in U.S. economic policy, one that aligns more close- ly with the pragmatic approaches seen in coun- tries like China. While this shift may offer imme- diate advantages to American firms operating in competitive international markets, it raises funda- mental questions about the long-term implications for ethical business practices, governance, and economic development, particularly in regions like Africa, where corruption remains a critical challenge. As the global economic landscape continues to evolve, the balance between ethical considerations and economic imperatives will be a key battle- ground in shaping the future of international busi- ness. The United States must navigate these com- plexities with caution, ensuring that its pursuit of economic growth does not come at the expense of its ethical commitments. The stakes are high, and the choices made today will undoubtedly shape the future of global commerce for years to come. *From Page 12

lobal gold demand reached unprecedented levels in 2024, with total demand (includ- ing over-the-counter investment) rising by 1% year-on-year in the fourth quarter to achieve a new quarterly high. This surge contributed to a record annual total of 4,974 tonnes(t) , reflect- ing gold’s enduring appeal as a safe-haven asset and a hedge against economic uncertainty. Gold Supply & Demand(tonnes) *Source: World Gold Council, Equity Axis Research Central banks were at the forefront of this demand surge, continuing their aggressive accu- mulation of gold for the third consecutive year. Purchases exceeded 1,000t annually, with a sharp acceleration in the fourth quarter, during which central banks bought 333tonnes. This sustained buying spree reflects growing con- cerns about geopolitical risks, currency volatility, and the need to diversify reserves away from traditional fiat currencies. The ongoing geopoliti- cal tensions, particularly the Russia-Ukraine war (beginning in February 2022) and the war between Israel and Hamas (escalated in October 2023), have significantly influenced central banks' decisions to accumulate gold. These events have heightened uncertainty in global mar- kets, fostering an environment where traditional fiat currencies are perceived as increasingly vola- tile. Gold Demand by Sector(tonnes) *Source: World Gold Council & Equity Axis Research Central banks, tasked with maintaining economic stability and safeguarding reserves, view gold as a safe haven asset. The psychological impact of geopolitical instability drives demand for gold, which is often seen as a protective measure against potential economic fallout, inflation, or currency devaluation. Currency volatility further exacerbates this trend. In times of crisis, currencies can experience significant fluctuations, leading to diminished confidence among investors and institutions. Sanctions and economic disruptions stemming from the Russia-Ukraine war have impacted the value of the Russian Ruble, which plummeted by over 40% in early 2022 before stabilizing due to strict capital controls. Similarly, the Turkish lira has faced severe deval- uation since 2018, losing over 80% of its value by 2023, prompting Turkey's central bank to increase its gold reserves. Another notable instance was the collapse of the Venezuelan bolivar, which entered hyperinflation in 2016, with annual inflation rates exceeding 1,000,000% by 2018. In response, the Venezuelan government and cen- tral bank turned to gold reserves to stabilize the economy and restore some level of financial credibility. Additionally, the need for diversification is paramount as central banks aim to mitigate risks associated with over-reliance on any single currency or asset class. Gold's performance during previous finan- cial crises has proven resilient, reinforcing its appeal. As central banks continue to accumulate gold, this demand can create upward pressure on prices, further incen- tivizing purchases. During the Eurozone debt crisis (2010-2012), central banks in countries like Germany and France increased their gold reserves to reduce dependence on the euro and protect against potential currency devaluation. This move highlighted gold's role as a strategic asset in times of regional economic instability. Similarly, in 2022, central banks globally added a record 1,136 tons of gold to their reserves, the highest annual demand since 1967, according to the World Gold Council. Meanwhile, annual gold investment reached a four-year high of 1,180tonnes, marking a 25% increase compared to 2023 while a notable shift occurred in gold exchange-traded funds (ETFs), which saw holdings remain essentially unchanged in 2024 a contrast to the heavy outflows of the previous three years. This stabilisation signals renewed investor confidence in gold as a strategic asset. Bar and coin demand remained steady at 1,186tonnes, mirroring 2023 levels. However, the composition shifted, with bar investment growing while coin buying declined. This trend suggests that investors are prioritising larger, more cost-effective forms of gold owner- ship. Gold’s role in technology also contributed to the overall demand increase, with annual technology demand growing by 21t (+7%) in 2024. This growth was largely driven by the continued expansion of artificial intelligence (AI) adoption, which relies on gold for its superior conductivity and reliability in advanced electronics. Gold jewellery was the outlier in an otherwise robust market, with annual consumption dropping by 11% to 1,877t. High gold prices forced consumers to purchase smaller quantities, though spending on gold jew- ellery still rose by 9% to US$144 billion, reflect- ing the metal’s enduring cultural and economic significance. Meanwhile, the London Bullion Market Associa- tion (LBMA) gold price reached 40 new record highs during 2024, with the average fourth-quar- ter price hitting US$2,663 per ounce another record. The AXiS CLVII Friday 14 Feb 2025 14 2024 Record Analysis, 2025 Projections Appears Even More Bullish Global Gold at Glance G *To Page 11

15 The AXiS CLVII Friday 14 Feb 2025 Gold Production(tonnes) *Source: World Gold Council, Equity Axis Research The annual average price of US$2,386/oz repre- sented a 23% increase from 2023. In value terms, gold demand reached unprecedented levels. The combination of record prices and volumes resulted in a fourth-quarter value of US$111 billion, pushing the annual total to a historic high of US$382 billion. Total gold supply increased by 1% year-on-year to 4,974t, matching the record demand. This growth was driven by a combination of higher mine production and increased recycling activity, ensuring that the market remained balanced despite the surge in demand. Average Gold Prices(US$/Oz) *Source: World Gold Council, Equity Axis Research Looking ahead, the continued geopolitical and economic tensions, including the Russia-Ukraine war, the Israel-Hamas conflict, and the lingering effects of President Donald Trump’s trade wars with tariffs on China, the EU, and other allies are expected to significantly shape the gold market in 2025. These conflicts and trade disputes will create a climate of heightened uncertainty, driving central banks and investors to seek safe-haven assets like gold. The Russia-Ukraine war has already disrupted global energy and commodity markets, while the Israel-Hamas conflict has added further instability to the Middle East, a region critical to global oil supplies. The trade wars initiated by the U.S. under the Trump administration, and the retaliatory tariffs will further fragment global trade networks and increase economic uncertainty. These factors collectively contribute to a volatile environment where gold is likely to remain a preferred asset for risk mitigation. 2025 Gold Outlook In 2025, gold's outlook is projected to remain strong due to continued central bank accumula- tion, robust demand from gold ETF investors, and increasing geopolitical uncertainties. Central banks are expected to sustain their aggressive buying, potentially exceeding 1,000 tonnes for the fourth consecutive year, as they seek to diversify reserves away from fiat currencies amid height- ened geopolitical risks, particularly from the ongoing Russia-Ukraine war and the Israel-Hamas conflict. This strength is further supported by a gradual decline in interest rates, influenced by the Trump administration’s pro-growth agenda, which may stoke temporary inflationary pressures. The U.S. dollar is anticipated to weaken, enhancing gold's appeal as an alternative asset. Additionally, the European Central Bank (ECB) is projected to implement a 1% rate cut, potentially re-engaging European ETF investors despite positive real rates. Gold ETF investment in the U.S. is expected to see substantial inflows, with China's ETF demand remaining robust but slightly subdued from 2024 levels due to RMB weakness and high bench- marks. In the bar and coin segment, while demand in the West may be weighed down by economic malaise and elevated prices, interest could revive in the latter half of the year as interest rates decrease. Demand in China and India is expected to remain solid but slightly weaker as both economies face slowing growth. Jewellery demand is projected to face challenges due to high gold prices, particularly in key mar- kets like India and China, where price volatility will be a significant factor. However, auspicious wedding dates in India may provide some support for jewellery purchases. Meanwhile, continued capital investment in AI and related technologies is expected to sustain stable technology demand, although broader electronic demand may be hin- dered by economic uncertainties in China and Europe. High margins are anticipated to incentivize mine production to achieve new highs, although cau- tious outlooks remain due to the potential for reduced mine supply from de-hedging practices. Recycled gold supply is projected to increase, exceeding 350 tonnes in Q4 for the fourth time in a decade, driven by slowing global economic growth and high gold prices, though constraints may arise from limited near-market supplies. *From Page 10

markets Nampak Faces Operational Challenges 16 The AXiS CLVII Friday 14 Feb 2025 amPak Zimbabwe Limited, a prominent packaging firm listed on the Zimbabwe Stock Exchange (ZSE), has encountered significant challenges during the first quarter of its fiscal year 2025, which spans from October to December 2024. The company reported a substantial decline in overall performance, marked by a 23% decrease in group revenue year-over-year in USD terms, alongside a staggering 56% drop in trading profit. This downturn was attributed to a confluence of factors that have severely impacted the compa- ny's operations, including reduced demand, inade- quate power supply, and considerable supply chain disruptions. Electricity Supply Challenges One of the most pressing issues faced by NamPak during this period has been the inade- quate electricity supply from the Zimbabwe Elec- tricity Supply Authority (ZESA). Chronic power shortages and blackouts have plagued the country, with many areas experiencing outages lasting up to 18 hours daily. These disruptions have resulted in several nega- tive consequences for NamPak's operations, nota- bly increasing operational costs and decreasing manufacturing efficiency. The reliance on backup generators has become a necessity. However, this solution is not without its drawbacks. The addi- tional costs incurred from running generators and the inefficiencies associated with stop-start pro- duction processes have severely hampered the company's ability to meet market demand. The Mega Pack segment, despite being a bright spot for NamPak in FY2024, experienced a 13% decline in volumes compared to the previous year. The intermittent power disruptions not only increased costs but also led to frequent break- downs in plant machinery, which ultimately resulted in lost production time for the festive season. Van Gend, the Group Managing Director, acknowledged these challenges, stating that the company has had to install additional generator capacity to ensure more efficient operations going forward. The need for such measures reflects the severity of the situation and highlights the critical role that energy supply plays in the operational viability of manufacturing firms in Zimbabwe. Supply Chain Disruptions In addition to electricity supply issues, NamPak has also faced disruptions within its supply chain. Political unrest in neighbouring Mozambique has led to shipping delays, particularly affecting the CarnaudMetalBox segment, which reported a 7% drop in sales volumes. This decline can be traced back to significant reductions in metals volumes, which lagged behind last year's figures due to these raw material shortages. The reliance on a stable supply chain is paramount for any manu- facturing operation, and disruptions can have a cascading effect on production schedules and cus- tomer fulfilment. The liquidity challenges faced by some of NamPak's customers stemming from currency volatility and inflationary pres- sures have further complicated the com- pany's supply chain dynamics. These challenges have temporarily affected cus- tomer purchasing behaviour, leading to reduced offtake in the plastics segment, which saw volumes slightly below the prior year. Market Competition and Demand Dynamics The competitive landscape within the packaging market has also intensified, presenting additional challenges for NamPak. Increased activity from rival firms has led to a more crowded marketplace, making it difficult for NamPak to maintain its market share. The Hunyani Paper and Packaging Division, for instance, saw a staggering 35% contraction in sales volumes. This decline was attributed not only to heightened competition but also to the reduced carry-over of late-season orders from tobacco merchants, a direct result of the drought's impact on tobacco crops. While Zimbabwe's tobacco export earnings reached an all-time high of US$ 1.3 billion in 2024, the success of the tobacco sector did not translate into increased demand for packaging materials. This disconnect illustrates the complex- ities of market dynamics, even when one sector thrives, it does not guarantee a corresponding benefit for related industries. The tightening of margins and increased competition have forced NamPak to rethink its strategic approach to pric- ing and customer engagement as it navigates a landscape where competitors are vying for the same customer base. Positive Developments Amidst Challenges Despite these numerous challenges, there were some positive developments within NamPak's operations. The Cartons and Labels Division, which focuses on carton manufacturing and designs, experienced a 4% increase in sales volumes, driven by a recovery in commercial sales. This uptick was largely attributed to the divi- sion's success in capitalising on tobacco wrap volumes, which outperformed the previous year’s figures. The company is in the process of navigating a significant strategic shift with the pending dispos- al of Nampak Southern Africa Holdings Limited’s shareholding in the group to TSL Limited. This proposed transaction, contingent upon fulfilling necessary conditions, involves TSL acquiring a 51.43% stake in NamPak Zimbabwe for $25 mil- lion. Such a transaction is expected to create synergies that could benefit both companies.TSL would gain in-house manufacturing capabilities for pack- aging materials, while NamPak could accelerate growth and improve its competitive stance in the market. Given the ongoing challenges with electricity supply, NamPak should consider investing in alternative energy solutions, such as solar power. This diversification could reduce reliance on ZESA and mitigate the impact of future power disruptions. By adopting renewable energy sourc- es, NamPak could not only enhance operational resilience but also align with global sustainability trends. Nampack should consider strengthening relation- ships with suppliers, and diversifying sourcing strategies can help alleviate risks associated with political instability and shipping delays. NamPak should explore partnerships with alternative sup- pliers in more regions to ensure a steady flow of raw materials, and implementing advanced inven- tory management systems could improve forecast- ing accuracy and reduce the impact of supply chain disruptions. The group must also modernise production facili- ties through technology and automation to enhance efficiency and minimise downtime. By investing in state-of-the-art machinery and process automation, NamPak can improve its production capabilities, allowing for greater flexibility and responsiveness to market demands. This moderni- sation effort is critical for enhancing production capabilities and meeting evolving market needs. Collaborating with local and international firms can improve resource allocation and market posi- tioning. Strategic alliances could provide access to new markets, technologies, and expertise, bol- stering NamPak’s competitive edge. The upcom- ing acquisition by TSL Limited is a step in this direction, but NamPak should also seek additional partnerships that can drive growth and innovation. Looking ahead, the company must navigate a challenging environment while leveraging oppor- tunities for growth, particularly through the strate- gic acquisition by TSL Limited. By implementing the recommended strategies and focusing on oper- ational resilience, NamPak has the potential to rejuvenate its business and drive future growth. N

n a trading update for the third quarter ended 31 December 2024, Hippo Valley Estates Lim- ited reported a mixed performance that reflects both strategic successes and persistent challenges. The company reported a 16% year-on-year reve- nue increase, driven primarily by a deliberate shift towards prioritizing the local market over low-margin exports. This growth, however, was countered by rising operational costs and margin pressures, which we predict in the next quarter to be compounded by the newly implemented monetary policy requiring immediate adoption of Zimbabwe Gold (ZWG) reporting for financial statements. Sugar Sales(tonnes) *Source : Hippo Valley Q3 earnings, Equity Axis Research The repeal of Statutory Instrument 180 in January 2024 proved transformative for Hippo Valley, unlocking latent demand for its fortified Hullets ‘Sunsweet’ brand in the domestic market. This legislative change, which previously suspended duty on sugar imports to ensure supply, allowed the company to reclaim market share from foreign competitors, driving local sales volumes up. By prioritizing higher-margin domestic sales, Hippo Valley offset a steep 53% decline in export volumes for the industry, a strategic trade-off that reflects management’s focus on profitability over volume growth. However, this success is not without caveats. The local market remains infiltrated by illegally imported unforti- fied sugar, which continues to undercut pricing power and erode consumer trust. Despite repeated alerts to regulatory authorities, enforcement remains lax, exposing Hippo Valley’s revenue growth to the vagaries of infor- mal trade. This development underscores the unpredictability of the company’s current strate- gy, which relies heavily on regu- latory vigilance and sustained consumer preference for premi- um, fortified products. Operational headwinds further complicated the Company’s financial performance in the period under review. Rising costs, particularly in cane pro- curement and labor, exerted significant pressure on profit margins. Cane purchases, which constitute a substantial portion of production expenses, were inflated by inflationary trends in agricultural inputs, while man- power costs reflect broader wage pressures in Zimbabwe’s econo- my. In response, Hippo Valley initiated a review of its cost structures, with plans to implement sustainable containment measures such as renegotiating supplier contracts and optimizing labor productivity. While these steps are prudent, their effectiveness hinges on execution, particular- ly in an environment where input costs remain volatile. On the production front, the 2024/25 crushing season concluded on a high note, with sugar output bolstered by improved mill reliability and an 18% surge in cane deliveries from the compa- ny’s own plantations. A 7% yield improvement, achieved through enhanced agronomic practices and consistent delivery schedules, underscored operational efficiency gains. However, the perfor- mance of private farmers, a critical component of Hippo Valley’s supply chain, painted a contrast- ing picture. Despite a 4% yield increase, private growers reported a marginal drop in cane deliver- ies, attributed to a 124-hectare reduction in culti- vated land. This divergence highlights possibly systemic challenges within Zimbabwe’s agricul- tural sector, including limited access to financing for smallholders, competing land-use priorities, and the lingering effects of climate variability on farming decisions. Zimbabwe’s recent monetary policy shift on the 6th of February 2025, mandating immediate ZWG reporting for financial statements, introduc- es additional complexity. Hippo Valley had only transitioned to USD-denominated reporting at the start of its FY2025 to mitigate distortions from hyperinflation, a move aimed at providing stake- holders with clearer, more stable financial met- rics. The abrupt pivot to ZWG reporting, a highly volatile currency, creates ambiguity for investors, as the company explicitly cautions against relying on translated hyperinflation-adjusted USD equivalents for comparative analysis. This dual reporting framework, ZWG for regulatory compliance and USD for operational clarity, risks obfuscating financial transparency, complicating cross-period performance assessments, and increasing adminis- trative overhead. For instance, reconciling ZWG-based tax obligations with USD-denominat- ed revenue streams could strain financial teams, while investors may struggle to parse the true impact of currency fluctuations on profitability. Navigating this duality will require meticulous communication with stakeholders and potential investments in advanced accounting systems capable of handling multi-currency reporting. Looking ahead, Hippo Valley’s short-term pros- pects rest on consolidating its dominance in the local market. Assuming regulatory authorities intensify efforts to curb illegal imports, demand for fortified brands like Sunsweet is expected to remain robust, supporting revenue growth of 10–12% in 2025 from the brand. The company’s strategic stockpiling of sugar to meet domestic demand and fulfill obligations to critical export markets provides a buffer against supply chain disruptions. Cost management will also be pivotal to margin recovery, particularly as cane and labor expenses remain susceptible to inflationary pres- sures. Investments in automation, such as preci- sion agriculture technologies to optimize cane yields, and partnerships with private farmers to secure reliable supply chains, could alleviate cost pressures over time. In the medium term (FY2026), Hippo Valley’s focus on yield optimization will be critical to offsetting land-use constraints among private growers. Initiatives such as expanded irrigation projects, pest control innovations, and farmer training programs could drive sustainable yield improvements, ensuring a steady cane supply even as arable land becomes scarcer. Advocacy for policy reforms, including stricter import con- trols and tax incentives for local sugar producers, may also strengthen the company’s competitive position. However, adapting to ZWG reporting will remain a formidable challenge. The company may need to invest in dual-currency accounting systems and lobby for standardized guidelines to harmonize ZWG and USD disclosures, ensuring consistency for investors. Furthermore, collabora- tion with industry peers to establish best practices for multi-currency reporting could mitigate com- pliance risks and enhance sector-wide transparen- cy. Long-term risks loom on multiple fronts, demanding proactive mitigation strategies. Curren- cy volatility remains a perennial concern. While ZWG adoption aims to standardize Zimbabwe’s economy and promote local currency use, a resurgence of hyperinflation could destabilize USD-based profit calculations, eroding investor confidence. Climate change poses another existential threat, with unpredict- able rainfall patterns and pest outbreaks jeopardizing cane yields. Hippo Valley’s commit- ment to climate-resilient agricul- ture, such as drought-resistant cane varieties and water-efficient irrigation systems, will be vital to safeguarding production. Overreliance on the domestic market also leaves the company exposed to local demand shocks, necessitating a balanced export strategy. Should global sugar prices rebound, Hippo Valley could selectively re-engage with export markets at full-scale, leveraging its stockpile capacity to capitalize on price spikes without compromising local supply. 17 Sweet & Sour Performance Hippo Valley’s Q3 Outturn The AXiS CLVII Friday 14 Feb 2025 I

anganda Tea Company continues to operate in a challenging environment characterised by macroeconomic instability, policy adjust- ments, and adverse weather conditions. After a strong financial performance for the year ended September 30, 2024, the company has released its trading update for the first quarter ended Decem- ber 31, 2024, showing notable declines in key performance indicators. Tightening liquidity con- ditions, electricity supply disruptions, and policy changes have significantly affected both produc- tion and sales volumes, creating new obstacles to the company’s growth. The monetary policy stance adopted by the RBZ, aimed at curbing inflation through liquidity tightening, has inadvertently dampened overall market activity and reduced credit availability. This has slowed economic growth and affected consumer spend- ing patterns, leading to weaker demand in both local and export markets. Additionally, the RBZ’s decision to lower exporters’ currency retention threshold from 75% to 70% on Febru- ary 6, 2025, has placed further financial strain on companies like Tanganda, which rely heavily on foreign exchange earn- ings. Beyond monetary policy constraints, the company has encountered chal- lenges due to an unreli- able electricity supply, which has negatively impacted production effi- ciency, particularly in tea and macadamia nut opera- tions. The delayed onset of rains in the last quarter significantly affected bulk tea production, resulting in a 26% decline in volumes to 1,463 tonnes compared to 1,986 tonnes in the prior year. Conse- quently, export volumes fell by 11% to 1,134 tonnes, further affect- ing revenue generation. Packed tea sales, a crucial revenue stream, also declined by 31% to 330 tonnes due to persistent difficulties in the formal wholesale and retail market, which remains central to Tan- ganda’s customer base. To address these challenges, Tanganda has expanded its sales channels by exploring alterna- tive distribution methods while maintaining rela- tionships with traditional wholesale, retail, and catering customers. This strategy seeks to balance market expansion with customer retention, ensur- ing long-term growth and sustainability. However, declining domestic demand and a growing infor- mal economy, as highlighted by the government’s press statement on January 31, 2025, continue to pose difficulties for formal market participants. On a positive note, Tanganda successfully export- ed 286 tonnes of macadamia nuts that had been delayed in the previous financial year due to logistical issues. This contributed to the compa- ny’s revenue inflow for the quarter, though it was insufficient to offset declines in tea sales. Over- all, revenue for the quarter fell by 12% to US$4.4 million from US$5 million in the prior year, and the company reported a loss before tax of US$853,917, reflecting the severity of the operational constraints experienced during the period. Despite current challenges, there is cautious opti- mism for a sectoral recovery in 2025, driven by the anticipated La Niña weather phenomenon. La Niña is typically associated with normal to above-normal rainfall, which could positively impact Tanganda’s agricultural output, particularly in the latter half of the financial year. Favourable weather conditions may help offset some of the production losses recorded in the first quarter, potentially restoring bulk tea and macadamia nut yields to more stable levels. Another significant development is the govern- ment’s launch of the Land Tenure Implementa- tion Programme in December 2024, which aims to facilitate the conversion of 99-year leases and offer letters into legally recognised title deeds. This initiative is expected to strengthen collateral security, improving access to funding from finan- cial institutions. If effectively implemented, it could provide Tanganda with better financing options, supporting further investment in produc- tion capacity and infrastructure. The company has also reaffirmed its commitment to strategic capital market initiatives, as reflected in its cautionary statement issued on February 10, 2025. Tanganda is advancing its proposal to establish a new class of shares on the VFEX, aligning with its broader goal of enhancing capi- tal-raising efforts and improving liquidity. If suc- cessfully executed, this initiative could unlock additional funding to support operational improvements, sustainability initiatives, and expansion projects. Comparing the latest trading update with Tangan- da’s strong performance for the full year ended September 30, 2024, it is evident that the compa- ny has experienced a significant financial setback. The previous financial year saw a 9% revenue growth to US$25.7 million and a remarkable 223% increase in operating profit to US$1.9 mil- lion, with a profit after tax of US$1.4 million—a substantial turnaround from the prior year’s loss of US$3.1 million. These results were largely driven by robust export sales of high-value crops such as avocados and macadamia nuts, as well as strategic cost management initiatives, including investments in solar energy to address electric- ity supply challenges. However, the first quarter of the new financial year has introduced fresh obstacles, including subdued global tea prices, persistent power short- ages, and weaker domestic demand. While Tanganda previ- ously benefited from a favour- able international avocado market, the latest trading update does not provide insight into the current state of avocado and mac- adamia exports beyond the shipment of delayed macadamia consignments. Given the company’s heavy reliance on agri- cultural exports, fluctua- tions in global commodi- ty prices and demand trends will continue to play a significant role in its financial performance. Tanganda’s ongoing invest- ments in sustainability and operational efficiency remain key strategic priorities. The company’s adoption of solar energy across three of its five estates has helped reduce electric- ity costs, and further grid-tied solutions and net metering plans signal a commitment to long-term cost reduction. Additionally, its continued adherence to stringent environmental, health, and safety standards strengthens its position in international markets, where buyers increasingly prioritise sustainable sourcing practic- es. Looking ahead, Tanganda’s immediate priorities should include reinforcing market diversification strategies, securing alternative energy solutions to mitigate power supply disruptions, and capitalis- ing on policy developments such as the Land Tenure Implementation Programme. The company must also remain agile in adapting to shifting consumer demand patterns, particularly in the packed tea segment, where challenges in the formal retail sector have suppressed sales vol- umes. While short-term financial pressures are evident, Tanganda’s long-term outlook depends on its ability to respond to economic uncertainties, enhance agricultural yields, and leverage capi- tal-raising efforts through the proposed VFEX listing. With a combination of strategic resilience and operational efficiency, Tanganda is well-posi- tioned to recover from its first-quarter downturn and sustain its growth trajectory in the medium to long term. T Tanganda Faces Economic Strains 18 The AXiS CLVII Friday 14 Feb 2025 Strategic Moves Aim for Recovery

' ' Term of The Week For instance, while U.S.-based corporations face the same tax rates at the federal level, they face different tax rates at the state level. Also known as pretax income or earnings before tax (EBT). Understanding the term A company’s pretax earnings provide insight into its financial performance before the impact of tax is employed. Some consider this metric a better measure of perfor- mance than net income because certain factors such as tax credits, carryforwards, and carrybacks, can have a bearing on a company’s tax expenses in a given year. Pretax earnings are calculated by subtracting a firm’s operating expenses from its gross margin or revenue. Operating expenses include items such as depreciation, insurance, interest, and regulatory fines. For example, a manufacturer with revenues of $100 million in a fiscal year may have $90 million in total operating expenses (including depreciation and interest expenses), excluding taxes. In this case, pretax earnings amount to $10 million. The after-tax earnings figure, or net income, is com- puted by deducting corporate income taxes from pretax earnings of $10 million. Businesses may prefer tracking pre-tax earnings over net income as items such as tax deductions and employee benefits paid in one period may differ from another period. In effect, the pre-tax earnings are viewed as a more consistent measure of business performance and fiscal health over time, because it erases the volatile differences brought on by tax considerations. Pretax earnings are a company's income after all operating expenses, including inter- est and depreciation, have been deducted from total sales or revenues, but before income taxes have been subtracted. Because pretax earnings exclude taxes, this mea- sure enables the intrinsic profitability of companies to be compared across industries or geographic regions where corporate taxes differ. Pretax Earnings Seed Co Exports Surge 19 The AXiS CLVII Friday 14 Feb 2025 eed Co, Zimbabwe’s largest seed producer, has delivered a stellar performance in the third quarter of the year, with revenue surg- ing by 48% driven by higher sales volumes and record exports. Volume sold (MT) *Source, Seed Co Q3 Update, Equity Axis This growth comes amid drought-induced stock- outs across the region, which have significantly increased demand for drought-resistant seed vari- eties. The company’s strong stock carry-over position from the previous season has also played a pivotal role in meeting this heightened demand. As the flagship entity of the Seed Co Group, Seed Co Zimbabwe Limited has maintained its dominance in the local market, supplying a wide range of seeds, including maize, soybeans, wheat, and sorghum. The company’s success in Zimba- bwe is largely attributed to its deep understanding of the local agricultural landscape and its ability to develop seeds that address specific challenges such as drought, pests, and diseases. Its drought-tolerant maize varieties, such as the old horse, SC513, modified SC 555, SC637, new medium maize seed varieties SC661 and SC657 and a high yielding wheat variety SC W1904 have become lead- ing favourites for farmers grappling with erratic rainfall patterns. Beyond Zimbabwe, Seed Co has expanded its foot- print across South- ern Africa, includ- ing key markets such as Zambia, Malawi, Mozam- bique, and Botswa- na. In these coun- tries, the company has capitalised on recurring droughts and the resulting demand for resil- ient seed varieties. Its strong stock carry-over position from the previous season has enabled it to meet this heightened demand. The severe droughts experi- enced across Southern Africa have created a unique opportunity for Seed Co. As farmers grapple with water scarcity and poor yields, the demand for resilient seed varieties has skyrocketed. Seed Co’s innovative prod- uct portfolio, including drought-tolerant ones have positioned the company as a key player. These varieties have been specifically engineered to thrive in low-rainfall conditions. This optimism has translated into a 45% increase in sales volumes, rising from 18,520 metric tons in the previous quarter. The company’s operating profit also grew by 25%, reaching $25.8 million, fuelled by both sales expansion and cost optimi- zation measures. Looking ahead, Seed Co is well-positioned to maintain its growth trajectory by continuing to innovate and adapt to changing climatic condi- tions. The company has already invested heavily in research and development, introducing new seed varieties that are not only drought-resistant but also pest-tolerant and high-yielding. To further mitigate the impact of droughts, Seed Co could explore partnerships with governments and international organizations to promote sus- tainable farming practices. Initiatives such as water harvesting, conservation agriculture, and the use of precision farming technologies could complement the adoption of drought-resistant seeds, ensuring long-term elas- ticity for farmers. Surviving Amid Drought-Induced Demand S

WestProp Under Scrutiny 20 The AXiS CLVII Friday 14 Feb 2025 estProp Holdings, a publicly listed real estate development company, has recent- ly come under scrutiny following allega- tions that it paid to suppress a damaging news article. This raises serious corporate governance concerns, particularly for a firm entrusted with investor funds. The unfolding controversy war- rants a closer examination of WestProp’s financial health, governance practices, and broader implica- tions for shareholder confidence. The reported extortion case involving US$40,000 and media figures attempting to coerce payments from WestProp reflects poorly on all parties involved. While extortion is a criminal offence, the fact that WestProp allegedly agreed to pay a portion of the demanded sum rather than expos- ing the perpetrators immediately raises red flags about transparency. A well-governed company with nothing to hide would typically report such incidents promptly. The delay in involving law enforcement raises questions about whether the company feared exposure of genuine corporate malpractice. Corporate governance is paramount for any listed entity. Investors and regulatory bodies rely on listed firms to operate with integrity. If a compa- ny succumbs to extortion, it signals potential underlying vulnerabilities that might not yet be publicly known. This case demands scrutiny beyond the extortion itself—was WestProp attempting to prevent exposure of deeper finan- cial or operational issues? If the company had no skeletons in its closet, payment should not have been made at all. WestProp’s full-year financial results for 2023, while seemingly impressive on the surface, raise several concerns. The company reported a signifi- cant increase in revenue denominated in US dol- lars, which, in isolation, suggests growth. Howev- er, a deeper analysis reveals discrepancies that warrant closer examination. The most glaring inconsistency lies in the revenue figures for FY2022. According to WestProp’s prospectus, revenue for FY2022 was initially reported as US$23.31 mil- lion. However, the company’s last full-year financials for FY2023 stated that revenue for the same period was only US$11.67 million. A downward revision of nearly 50% is significant and requires a thor- ough explanation. Such a drastic variance in reported revenue raises questions about financial reporting accuracy and transparency. Another concern is the company’s profit composition. In FY2023, WestProp reported revenue of US$16.09 million. However, its profit was over three times this figure due to a non-cash item—fair value adjustments on investment property amounting to US$49.5 mil- lion. If this adjustment is excluded, the company’s actual profit would be closer to US$770,000, a fraction of the declared profit. This raises concerns about whether the company is using accounting adjustments to present an inflated financial perfor- mance. The issue becomes even more concerning when considering dividend payments. Despite reporting only US$770,000 in profit (exclud- ing fair value adjustments), West- Prop declared a dividend of US$3.23 million for the year. This raises critical questions: where is the dividend money coming from, and is the company making prudent capital allocation decisions? Paying out more in dividends than the compa- ny’s actual cash-based earnings suggests either a reliance on external funding or an unsustainable financial model. WestProp’s auditors, Grant Thornton, issued a qualified opinion on those financials, specifically citing concerns about revenue recognition. The auditors stated that there is a presumed risk of fraud in this area, highlighting the possibility that revenue might be overstated. Such a statement from an independent auditing firm is a major red flag. For a company aiming to establish credibili- ty in the capital markets, having its financial reporting questioned by auditors is highly damag- ing. It places additional scrutiny on WestProp’s revenue streams and overall financial manage- ment. A qualified audit opinion can significantly impact investor confidence and share price per- formance. Market participants generally view such opinions as warning signs, prompting con- cerns about whether financial statements truly reflect the company’s actual performance. If reve- nue is overstated, this could mislead investors into overvaluing the company’s stock. WestProp’s stock is relatively illiquid, meaning its share price may not react as sharply to negative news compared to more actively traded compa- nies. However, the combination of governance concerns, financial inconsistencies, and an audi- tor’s qualified opinion could eventually erode investor confidence. Internationally, listed entities that have been embroiled in governance scandals or financial reporting discrepancies have often seen sharp declines in their stock prices. For instance, companies such as Steinhoff Internation- al in South Africa and Wirecard in Germany suffered massive share price collapses following revelations of accounting irregularities. Even in cases where companies attempted to manage investor perceptions, once credibility was lost, market value plummeted. While WestProp’s situa- tion is not yet at the same scale, these examples serve as cautionary tales of what could happen if transparency issues persist. Kenneth Sharpe, WestProp’s CEO, is a well-con- nected businessman with potential political lever- age. Some may argue that this influence could be used to suppress further scrutiny or limit the damage from these developments. However, polit- ical connections do not always shield companies from financial and reputational risks in the long run. Investors and regulatory bodies will continue to demand accountability, and failure to address these concerns transparently could have lasting consequences. If Sharpe had significant political influence, he could have leveraged it to expose the extortionists earlier rather than making any payment. The fact that WestProp eventually reported the extortionists suggests the company may have either reached a breaking point or real- ised that the issue was not going to disappear quietly. WestProp Holdings is at a critical juncture. While its real estate developments may be of high qual- ity, the concerns surrounding governance, finan- cial transparency, and corporate decision-making are too significant to ignore. The combination of financial reporting discrepancies, an auditor’s qualified opinion, and a willingness to engage in financial negotiations with alleged extortionists raises legitimate concerns for investors. For West- Prop to rebuild trust, it must take several key steps. The company must provide a detailed explanation for the revenue discrepancy in FY2022, clarify the sustainability of its profit model and the rationale behind its dividend policy, address the auditor’s concerns and, imple- ment stronger financial controls, strengthen gover- nance practices to ensure that corporate integrity is upheld, and demonstrate transparency in han- dling legal and reputational risks. Investors and market watchers will be closely monitoring how the company handles these challenges. Failure to address these concerns adequately could further erode confidence and impact WestProp’s long-term sustainability. Allegations, Financial Red Flags, and Market Impact W

The AXiS CLVII Friday 14 Feb 2025 22 Multi-billion dollar Honda-Nissan merger talks collapse Honda and Nissan have announced that they are ending talks of a merger, adding that they will continue their partnership on electric vehicles. The Japanese car makers, along with junior part- ner Mitsubishi, aimed to combine their businesses to fight back against competition from rival firms, especially in China. "Going forward, the three companies will collab- orate within the framework of a strategic partner- ship aimed at the era of intelligence and electri- fied vehicles," the companies said in a statement on Thursday. Joining forces would have created a new motor industry giant alongside Toyota, Volkswagen, General Motors and Ford. - bbc Yeezy.com disappears from the internet after Shopify says Kanye West violated its terms The website that was selling Kanye West’s T-shirts embossed with swastikas has been deacti- vated by Shopify Tuesday. A Shopify spokesperson said in a comment to CNN that the “merchant did not engage in authentic commerce practices and violated our terms so we removed them.” Shopify is the back-end platform that powered the T-shirt store on the Yeezy website. The site no longer loads as of Tuesday morning. “All merchants are responsible for following the rules of our platform,” the Shopify spokesperson added. - cnn Canada’s 13 Premiers descend on Washing- ton to play the China card on trade The leaders of all Canadian provinces and territo- ries are set to meet up in the US capital Wednes- day to take their arguments against tariffs to American lawmakers, business groups and labor leaders. For the first time ever, they’re all in Washington together, trying to bend the ears of the most influential American policymakers they can find. Their message: Do business with us and we’ll help you compete against China. Ontario Premier Doug Ford said Tuesday he believes there’s opposition in the US to Trump’s tariff plans, which include 25% charges on almost everything the country buys from Canada and Mexico. But few will say it openly. - minin- gweekly Base Titanium makes final shipment after shutting Kenya operation Kwale-based Base Titanium made its last bulk shipment from Mombasa to the United States on Wednesday, marking the end of 11 years of tita- nium ore export from the site. Mv Devbulk Sinem became the 171st vessel to make a call at the Base Titanium import facility in Likoni since February 2014 when the first consignment was exported and the last to pick the final titanium ore from the company. Base Titanium operations manager Devham Vick- ers said the company concluded its mining pro- cesses in December 2024 after minerals were depleted in Kwale mining sites. - businessdailyafrica Ghana missing $156 million in state budget after USAID freeze Countries around the world are still reeling after the US administration's brutal crackdown on its largest development and humanitarian aid agency, USAID. The loss of US development aid has also been felt in Ghana. The country now lacks $156 million in its state budget. Ghana's President John Mahama has asked Finance Minister Cassiel Ato Forson to find ways to close the gap in funding left behind by the freeze of USAID programs, according to a state- ment from the president's office. American development aid has been crucial for Ghana's health and agriculture sectors. USAID notably supported the creation of an advanced national surveillance system for HIV and sexually transmissible diseases and programs to make Ghanaian agricultural firms more com- petitive in regional and international markets. - africanews Trump’s Ukraine Plans Mean a $3 Trillion Bill for European Allies Donald Trump is starting to tell European Union leaders what they need to do if they want to secure peace in Ukraine. His demands are set to push the bloc to its limits. Trump spoke with Vladimir Putin on Wednesday, setting the wheels in motion for peace talks, just as his defense secretary was explaining to his European allies that they are going to have to shoulder most of the burden for any settlement. Bloomberg Economics calculates that protecting Ukraine and expanding their own militaries could cost the continent’s major powers an additional $3.1 trillion over the next 10 years. - bloomberg Kenya’s Stock Exchange Targets 9 Million Retail Investors in New 5-Year Strategy The Nairobi Securities Exchange (NSE) has unveiled an ambitious five-year strategy aimed at attracting 9 million active retail investors, both domestically and in the diaspora. The plan, which kicked off in February 2024, is part of a broader effort to revitalize the stock market and boost participation. Frank Mwiti, the CEO of the NSE, announced the strategy during an appearance on the Trading Bell Show. He emphasized the exchange’s com- mitment to mobilizing retail investors back into the market. This goal is particularly ambitious given the current state of the market where approximately 97.5% of the 1.5 million accounts used for trading securities, including shares, are inactive. - kenyanwallstreet. China’s smartphone brands embrace Deep- Seek’s AI models as Apple partners with Alibaba Apple and its rivals in the Chinese smartphone market are in a heated race to adopt the coun- try’s fast-improving artificial intelligence (AI) models, including those from DeepSeek and Alib- aba Group Holding. The iPhone maker struck a deal to use Alibaba’s Qwen models for Apple Intelligence in mainland China, the South China Morning Post reported on Tuesday, citing sources. Apple Intelligence is sup- ported by OpenAI’s ChatGPT in most interna- tional markets, but in China, only AI models approved by the government can be used. It was an “extreme honour” for Alibaba to collaborate with Apple, co-founder and chairman Joe Tsai said on Thursday at the World Govern- ment Summit in Dubai, confirming the partner- ship. Alibaba owns the South China Morning Post. - scmp Mozambique: 2025 GDP should grow 3% after 1.6% fall in Q4 2024 – Standard Bank Standard Bank Mozambique’s chief economist has said that the country’s GDP fell by 1.6% by the end of 2024, and that the economy should grow by 3% this year, or 1% excluding the extractive sector. “Our GDP growth estimates for 2024 at 2.5% y/y, after 5.4% y/y in 2023, reflect a 1.6% y/y contraction in GDP growth for Q4:24 ” writes Fáusio Mussá in the comment accompanying the release of the Purchasing Managers’ Index (PMI) for January 2025 [issued on Thursday, January 6 2025]. These figures, he adds, “imply GDP growth excluding the extractive sector (mining and LNG) below 1% y/y in 2024, down from 2.2% y/y in 2023,” which represents growth of less than half that recorded in 2023, when the Mozambican economy expanded by 2.2% compared to the pre- vious year. - clubofmozambique In change in crypto enforcement, SEC and Binance seek pause in lawsuit Binance and the United States Securities and Exchange Commission (SEC) have asked a feder- al judge to stay the regulator’s lawsuit against the crypto exchange, according to a court filing, citing the potential impact of a newly launched task force. The motion to request a stay for 60 days marks the first clear effort to retreat from the SEC’s previous crypto enforcement under Democratic leadership. In a joint motion filed late on Monday, the par- ties said the SEC’s task force, formed last month to work on crypto regulations, may “impact and facilitate the potential resolution of this case”. The stay was seen by some as an early sign of the SEC’s pivot to a more crypto-friendly stance, reflecting President Donald Trump’s pledge to make the US a global hub for the industry.- alja- zeera UK economy ekes out modest growth in final quarter of 2024 after strong December The British economy managed to eke out a quar- terly growth of 0.1% in the final quarter of 2024 following a stronger than anticipated performance in December. The Office for National Statistics said Thursday that the 0.4% expansion in December was a result of a broad-based expansion, with pubs doing particularly well in the run-up to Christ- mas. The fourth quarter figures means the economy grew by 0.9% overall in 2024. The quarterly increase followed no growth in the previous three months and may ease some of the pressure on Treasury chief Rachel Reeves, who critics say has been partly responsible for the economic slowdown since Labour returned to power in July. - apnews Chocolate lovers feel the price pinch this Val- entine's Day Bonbons and truffles are even more of a luxury this Valentine's Day. For the third year, cocoa harvests are coming up short due to abnormal weather, which has led to cocoa beans being so expensive that chocolate makers have little choice but to raise their own prices. "It's been a pretty dramatic change to our busi- ness model," says Alex Whitmore, who runs Taza Chocolate, a Boston-area manufacturer. - npr Anthropic poaches Google DeepMind talent to lead new European office Anthropic announced to Euronews Next on Thursday in a Europe exclusive that Neil Houls- by would be leading the new Zürich office. One of the most influential US artificial intelli- gence (AI) companies Anthropic has poached a Google DeepMind research scientist to lead its newest European office in Zurich. Despite having smaller resources, the Claude AI assistant maker is seen as a competitor to larger rivals such as OpenAI and Google’s AI chatbot. Anthropic is valued at around $60 billion (€58 billion), which is almost $100 billion less than OpenAI. Anthropic calls itself an AI safety research com- pany and was co-founded by former OpenAI executives, researchers, and brother and sister Dario and Daniela Amodei. - euronews Business Around The World

The AXiS CLVII Friday 14 Feb 2025 23 Ukraine’s negotiating conundrum: Ceasefire, concessions and more sacrifice As Russia’s full-scale invasion of Ukraine nears a three-year mark, there is a sign of a possible end to the war. The new US administration is pushing forward with its peace plan, but Wash- ington, Kyiv and Moscow have different interpre- tations of what this "peace" might represent. This week's Munich Security Conference will mark the first meeting between Ukraine's presi- dent and the new US administration. Volodymyr Zelenskyy is expected to meet with US Vice President JD Vance and Secretary of State Marco Rubio for what could be the beginning of negoti- ations to put an end to Russia's war in Ukraine. The question is, on what terms and conditions. Almost three years into Russia’s full-scale inva- sion, expectations in Kyiv are cautious. While Ukrainians keep repeating that no one wants peace more than they do, after so much loss and sacrifice, they want justice. - euronews Official DOGE website updated, promising 'savings' updates by Valentine's Day Elon Musk's official government website for the Department of Government Efficiency (DOGE) was updated on Wednesday and no longer features only a logo. The site now prominently features a feed of X posts made by DOGE, along with sections break- ing down what appears to be publicly available data on the government workforce -- along with a message promising an update on "savings" by Valentine’s Day, which is Friday. The update comes three weeks after the website's initial launch and less than 24 hours after Musk told ABC News' Rachel Scott. on Tuesday that DOGE posts "our actions to the DOGE Handle on X and to the DOGE website," while the web- site was still blank. - abcnews African leaders to push for slavery repara- tions despite resistance African leaders meeting in Ethiopia this weekend are to launch a new push for slavery and colonial reparations, but can expect to be stonewalled by former colonial powers, most of which have ruled out making amends for historical wrongs. While the issue of reparations has gained mo- mentum worldwide, so has the backlash. U.S. President Donald Trump has said he "doesn't see it (reparations) happening" and many of Europe's leaders have opposed even talking about it. - reuters ‘Each of us is afraid’: Guinea’s junta leader tightens grip as opposition lies low Across Guinea’s capital, Conakry, billboards and posters proclaim the people’s loyalty to the vision of Mamady Doumbouya, the general who has led the west African country since a coup in Septem- ber 2021. The iconography is omnipresent. Along the Fidel Castro highway, the posters hang on poles that rise out of piles of rubbish. Near the grand mosque, one poster is accompanied by the gnomic inscription “Your silence is precious, your eyes reassuring”. Another, bearing an image of him shaking Xi Jinping’s hand at a meeting in Beijing in September, has the caption: “Welcome back Mamady Doumbouya, our pride.” - theguardian Trump offers Putin a way back in from the cold A single phone call will not magically end the war in Ukraine. Talks may now get under way. Exactly when and how they will conclude isn't clear. But President Vladimir Putin has already scored something of a diplomatic victory simply by holding this telephone conversation. After all, three years ago he was out in the polit- ical wilderness. Putin's decision to launch a full-scale invasion of Ukraine had turned him into a pariah. The United Nations General Assembly over- whelmingly adopted a resolution condemning Russia for its "unlawful use of force against Ukraine." Russia was hit by thousands of interna- tional sanctions. The following year the Interna- tional Criminal Court issued an arrest warrant for the Kremlin leader. As for the President of the United States – then Joe Biden – he left no doubt of what he thought of his Russian counterpart, condemning Putin as a "murderous dictator" and a "pure thug". After Russia launched its large-scale invasion of Ukraine in February 2022, there were no more telephone calls between Putin and Biden. Fast forward to 2025. A change of president has brought a change of style, a change of language – and a totally different US approach to Russia. Trump says he wants to "work together, very closely" with Putin to end the war in Ukraine. He hopes they will be "visiting each other's nations". Clearly, so does Vladimir Putin, who invited Trump to Moscow. - Bbc Fighting in Africa’s mineral-rich DRC killed over 3,000 in less than 2 weeks. Here’s how your phone plays a part A rampaging rebel group has claimed the capture of another mining town in the eastern part of the Democratic Republic of Congo (DRC), a little over a week after it took control of the region’s largest city Goma. Clashes between the rebel coalition Alliance Fleuve Congo (AFC) and Congolese forces have left more than 3,000 people dead in less than two weeks, according to DRC’s government. The AFC, of which the M23 armed group – which claims to defend the interest of minority Rwandophone communities – is a key member, took over resource-rich Nyabibwe last week after Goma, the provincial capital of North Kivu, fell on January 27. It comes less than a year after the rebels seized Rubaya, a mining hub also in the country’s east, which harbors one of the world’s largest deposits of coltan, a valuable mineral used in the produc- tion of smartphones. - cnn Japan’s NHK AI gaffe reignites Diaoyu Islands dispute amid Chinese coastguard intrusion Japan’s national broadcaster NHK has been left red-faced again after AI-generated subtitles on a news programme identified disputed territories in the East China Sea as the Diaoyu Islands. Japan controls the uninhabited islets and refers to them as the Senkaku Islands, China claims them as the Diaoyu Islands. This disagreement has sparked a prolonged and contentious sovereignty dispute between the two nations. The slip-up occurred during an English-language news broadcast on Monday. NHK officials attributed the error to the Google AI-based simul- taneous translation system used for the past five years.- scmp Mozambique: Chapo challenges deputy gen- eral commander to strengthen police integri- ty – AIM Mozambican President Daniel Chapo on Wednes- day challenged the new Deputy General Com- mander of the Police, Aquilasse Manda, to use his professional skills in order to strengthen the integrity of the police force. According to Chapo, who was speaking at a ceremony in which he swore Manda into office, the Police must be monitored properly so that police officers are held accountable for their acts. “We want a Police force that acts with integrity and officers who misbehave cannot be part of the Police”, he said. Chapo added that Manda is taking office “at a time of great difficulty, especially when it comes to governance, peace and security. We need to defeat terrorism in the northern province of Cabo Delgado and the kidnapping of minors. We also have to act against attacks by groups called Naparama [the peasant militia] in the centre of the country”, the President said. - com ‘I saw him kill people:’ Libya and Italy’s shadowy migrant deals Libya’s Chief of Judicial Police, Osama “Al Masri” Njeem, returned to Libya on an Italian government plane after his arrest in Italy on Jan- uary 19 on an International Criminal Court (ICC) warrant. His release two days later was for what the Ital- ian government said on Wednesday were “inaccu- racies” in the warrant. Njeem is accused by the ICC of crimes commit- ted in his role overseeing the Tripoli branch of the Reform and Rehabilitation Institution, a network of detention centres run by the govern- ment-backed Special Defence Force (SDF). Amnesty International identifies Njeem as a “long-term member of Tripoli-based militia the Deterrence Apparatus for Combatting Terrorism and Organised Crime (DACTO)”, one of several militias the internationally recognised Tripoli gov- ernment relies on, and absorbs, to project power across the western parts of Libya, which it nomi- nally controls. - aljazeera Congo Catholic delegation meets rebel leader as forces advance Representatives of Congo's powerful Catholic church met on Wednesday with a rebel leader whose Rwandan-backed M23 forces last month seized Goma, the biggest city in the country's east, and have continued advancing south. The meeting in Goma comes as the rebel leader, Corneille Nangaa, tries to assert himself as the public face of politicians and rebel groups oppos- ing Democratic Republic of Congo's president, Felix Tshisekedi. Nangaa's Alliance Fleuve Congo (AFC), which sees M23 as its military wing, has controlled Goma, the capital of North Kivu province, since late January and on Tuesday threatened to renew its advance on Bukavu, the capital of South Kivu province. Two United Nations sources and South Kivu's provincial governor said on Wednesday that M23 now controlled the town of Ihusi, west of Lake Kivu between Goma and Bukavu. - reuters Hundreds of foreigners freed from Myan- mar's scam centres More than 250 people from 20 nationalities who had been working in telecom fraud centres in Myanmar's Karen State have been released by an ethnic armed group and brought to Thailand. The workers, more than half of whom were from African or Asian nations, were received by the Thai army, and are being assessed to find out if they were victims of human trafficking. Last week Thai Prime Minister Paetongtarn Shi- nawatra met Chinese leader Xi Jinping and prom- ised to shut down the scam centres which have proliferated along the Thai-Myanmar border. Her government has stopped access to power and fuel from the Thai side of the border, and tough- ened up banking and visa rules to try to prevent scam operators from using Thailand as a transit country for moving workers and cash.- Bbc South Africa does have a history of racist land inequality. Just not in the way Trump and Musk are portraying The so-called land question has been a decades-long dilemma for South Africa. Apartheid, dismantled in the 1990s, left a deep-seeded legacy of land inequality after centu- ries of policies pushed non-White South Africans off the land to the benefit of White people. An act in 1913 limited Black ownership to just 7% of the land, later revised to 13%. - cnn Politics Around The World

Markets watch ZiG Sustains Week-on-Week Finger-tip Declines The AXiS CLVII Friday 14 Feb 2025 24 he Zimbabwe Gold (ZiG) sustained a downward trend for three consecutive weeks falling to 26.4565 maintaining marginal declines week-on-week from 26.4072 on the 7th of February 2025 Zimbabwe's central bank kept the benchmark interest rate steady at 35% on February 6th, 2025, leaving borrowing costs unchanged for the second consecutive time, maintaining a tight monetary policy to support the ZiG. Zimbabwe's monthly consumer inflation climbed to 10.5% in January 2025, a sharp increase from a four-month low of 3.7% in the prior month. Inflation also accelerated in US dollar currency terms. \Zimbabwe's economic woes persist, with high inflation, tight liquidity, and foreign currency shortages continuing despite the launch of the gold-backed ZIG currency in April last year. Regional Markets Rand remains static The South African rand appreciated to 18.36 on the second week of February, on the 14th, flirt- ing with marginal gains on the Valentines Day. Meanwhile, gold production in South Africa dropped by 8.4% year-on-year in December 2024, easing from an 11.5% decline in the pre- vious month. This marked the 14th consecutive period of decreasing gold output albeit at a softer pace. The drop negatively impacted the year-on-year volume change in overall mining production by 1.1 percentage points. On a seasonally adjusted basis, gold production rose by 0.7% in Decem- ber. Naira extend losses The Naira depreciated to 1506 on the 14th of February 2025 from 1503.42 on the 7th of February 2025 against the greenback. Nigeria has called for a review of the current funding structure of the United Nations (UN), citing the need for a more balanced and truly multilateral system. The call for reform came on the heels of an argument by the Deputy Speaker of the Nige- ria’s House of Representatives, Benjamin Kalu, who is leading the country’s delegation at an ongoing meeting of the Inter-Parliamentary Union (IPU) in New York, United States (U.S.) that an all-inclusive funding mechanism for UN was needed. Shilling firms amid interest rate cuts The Kenyan shilling marginally slipped to 129.35 on the 14th of February 2025 from 129.15 on the 7th of February 2025 against the greenback. The Kenya Bankers Association (KBA) is pro- jecting that all banks will reduce interest rates on loans by the end of this month, after the latest benchmark rate cut by the Central Bank of Kenya (CBK). On Wednesday KBA leadership committed that the interest rates are coming down and that it is immediate. On February 5, CBK cut the base lending to 10.75%, the fourth cut in a row, saying it wanted to do more to support lending and boost economic growth. Only two lenders-KCB Group and Co-operative Bank-have cut rates since the last CBK review, despite the regulator saying it would begin con- ducting on-site inspections of interest rates. Kwacha appreciates amid interest rate hike The Zambian Kwacha appreciated to 27.82 on the 14th of February 2025 from 27.98 on the 7th of February 2025 against the greenback. The Central Bank of Zambia lifted its bench- mark interest rate by another 50 basis points to 14.5% during its regular meeting on February 12th, 2025, marking the second consecutive rate hike. The decision was aimed at counteracting per- sistent inflationary pressures and bringing inflation back to its target band. Zambia's annual inflation rate stood at an over three-year high of 16.7% in January 2025, unchanged from the prior month, well above the central bank's 6-8% target range. Pula firms with cents, despite inflation surge The Botswana Pula firmed to 13.78 on the 14th of February 2025 from 13.87 against the greenback last week. The annual inflation rate in Botswana quickened to 2.5% in January 2025, the steepest since last August, accelerat- ing from 1.7% in each of the previous two months. Upward pressure came mostly from prices of miscellaneous goods & services (7.6% vs 7.5% in December); alcoholic beverages & tobacco (7.1% vs 6.7%) and food & non-alcoholic bev- erages (5.1% vs 4.7%). On a monthly basis, consumer prices rose by 0.5% in January, following a 0.1% increase in the prior month. Mozambican metical closes firm The metical depreciated to 63.9 on the 14th of February 2025 week on week from 63.29 last week. The Standard Bank Mozambique PMI rose to 47.5 in January 2025 from 46.4 in December, indicating a continued contraction in business conditions for the third consecutive month. Output and new orders declined for the third month in a row, though the rate of contraction eased compared to December. Ongoing political protests continued to disrupt economic activity, but some firms reported a slight easing of disruptions, boosting client numbers. On a positive note, employment and purchas- ing activity saw modest increases in January, ending a two-month decline. Logistics issues were partially resolved, providing vendors with greater delivery flexibility, although overall lead times still worsened. T

The ZSE recorded a mixed performance in the week under review following new monetary policy mea- sures which included further tightening of liquidity along with a decrease in retention ratio which has induced mixed investor sentiment on long-term prospects of ZWG denominated portfolios. The mainstream ZSE All Share Index dwindled by -1.78% week-on-week to Thursday to close at a 7-months low of 190 points, driven by sell-offs in market heavies and medium caps while penny stocks remained constant. In-line with the change in the local currency, the ZSE changed its functional currency to ZWG, and rebased all indices to 100 on the 8th of April 2024 to effectively reflect the effect of the new currency on financial markets. Like- wise, all share prices were also converted to ZWG at a rate of 2,498.65. In 2025, the ZSE All Share Index has to-date suffered a -12.7% dip in nominal terms (-14.8% in US$ terms), setting off the 117.6% nominal growth (14.4% in US$ terms) achieved in 2024, and 982% nominal growth (21% in US$ terms) in 2023. The ZSE All Share Index has plummeted -2.8% in nominal terms (-3.1% in US$ terms) since the beginning of Feb- ruary, extending a nominal -10.1% loss recorded in January (-12% in US$ terms). The US$ denominated bourse, VFEX, recovered from prior week's losses amid a continued oscillatory perfor- mance as new monetary policy measures sent mixed signals on US$ asset classes and investments. The main- stream VFEX All Share Index garnered a 2.27% growth this week to close at 102.73 points, driven by 5 risers which outweighed 4 laggards to counter prior week's losses. The All Share Index was rebased to 100 at the beginning of 2023 to account for the six listings in 2023. Following a -1% loss suffered in January, the VFEX All Share Index is down -0.3% from the beginning of February. Since the beginning of the year, the VFEX All Share Index is down -1.3%, which compares to a growth of 4.1% achieved in 2024 and a -25.7% loss suffered in 2023. An aggregate of US$2,248,278 exchanged hands on VFEX in the week under review, up from US$1,468,926 traded in the prior week. On currency markets, the ZWG, which replaced the ZWL in April 2024, has suffered from immense volatility since inception. In 2024, from introduction, the ZWG depreciated by -47% against the USD on the interbank, against a depreciation of -68% on the parallel market. It is, however, imperative to note that the local unit suf- fered a -43% devaluation against the US$ on interbank on the 27th of September 2024 following an interven- tion from the RBZ in efforts to trim exchange premium against the parallel market and subsequently curtail speculative trading and arbitrage opportunities. As the ex-rate is now determined by demand and supply, the RBZ has in-turn mopped up excess liquidity in the economy to curb speculative trading. In the week under review, the ZWG depreciated by -0.11% against the US$ to close at ZWG26.43 on the Interbank market. T ZSE & VFEX WEEKLY COMMENTARY The AXiS CLVII Friday 14 Feb 2025 25 ZSE ASI VFEZ ASI ZWG INTERBANK 06/02 07/02 10/02 11/02 12/02 13/02 06/02 07/02 10/02 11/02 12/02 13/02 06/02 07/02 10/02 11/02 12/02 13/02 193.45 100.45 26.40 191.90 101.72 26.41 191.73 100.49 26.41 191.55 102.29 26.42 189.98 103.50 26.42 190.00 102.73 26.43 -1.78% 2.27% -0.11% ZSE TOP 10 MEDIUM CAP INDEX SMALL CAP INDEX 100.11 100.11 100.11 100.11 100.11 100.11 0.00% 190.06 226.86 188.35 224.61 188.71 222.65 188.36 222.99 186.11 224.26 186.07 224.53 06/02 07/02 10/02 11/02 12/02 13/02 -2.10% 06/02 07/02 10/02 11/02 12/02 13/02 -1.03% 06/02 07/02 10/02 11/02 12/02 13/02

TOP 5 WEEKLY RISERS TOP 5 WEEKLY FALLERS FINANCIAL MARKETS AT A GLANCE 2025 AFDIS ARISTON BAT CFI DELTA DAIRIBORD HIPPO Bridgefort Capital MEIKLES OK SEEDCO STAR AFRICA TSL Tanganda 660 5.94 7400 480 1299.9577 149.9 644.1147 1.5 350.2 31.9511 253.5 2.8463 199.8 153 700 5.977 8600 480 1292.4882 165.8867 750 1.5 350.2 32.9173 214.8495 2.5001 199.9 178.925 Latest Price ZiG Cents Previous Week ZiG Cents Consumer Staples NTS RTG TRUWORTHS 12.8064 18.009 9000 12.8064 18.009 9000 Latest Price ZWL Cents Consumer Previous Week ZWL Cents CAFCA G/BELTINGS MASIMBA NAMPAK UNIFREIGHT ZECO 1800 7.05 318 70 204 0.0018 1800 7.04 329.85 80 204 0.0018 Latest Price ZiG Cents Industrials Sector Previous Week ZiG Cents ARTZDR LAFARGE PROPLASTICS TURNALL Willdale RioZim 35.7 14375 85 5.5 2.1379 107.8 31.1 14375 84.163 5 4.9904 107.8 Latest Price ZiG Cents Materials Sector Previous Week ZiG Cents Ecocash ECONET ZIMPAPERS 25.5 251.0034 15 27 250.0097 15 Latest Price ZiG Cents ICT Sector Previous Week ZiG Cents MASHHOLD FMP 170.25 102.95 170.25 103.95 Latest Price ZiG Cents Real Estate Sector Previous Week ZiG Cents SEEDCO ARTD STAR AFRICA ZHL PROPLASTICS 253.50 35.70 2.85 26.99 85.00 59 5 0 1 1 30.48% 14.79% 13.85% 2.86% 0.99% COUNTER PRICE CENTS CHANGE % CHANGE WILLDALE BAT TANGANDA HIPPO NAMPAK 2.14 7400.00 153.00 644.11 70.00 (3) (1,600) (26) (106) (10) -57.3% -17.8% -14.5% -14.1% -12.5% COUNTER PRICE CENTS CHANGE % CHANGE Interbank Market Rate 26.43 -0.11% ZSE Top 10 Index 186.07 -2.1% ZSE All Share Index 190 -1.78% NGSE All Share Index 109,172 3.55% 10,063.53 -0.12% BSE All Share Index LuSE All Share Index 15,410.24 -0.19% VFEX All Share Index 102.73 2.27% JSE All Share Index 87,841.44 0.75% CBZ FBCH FIDELITY FML NMBZ ZBFH ZHL 779 748.95 40.05 439.95 370 469.95 26.9946 795 751.2589 40.05 443.85 368.8824 470 25.5021 Latest Price ZiG Cents Financial Sector Previous Week ZiG Cents 190.00 186.07 ZSE Top 10 Index All Share index ZSE Top10 index WOW -2.1% MoM -12.4% YTD -13.6% 190.00 212.75 ZSE Financials Sector All Share index ZSE Financials index WOW -1.9% MoM -9.7% YTD -13.8% 190.00 156.78 ZSE Industrials Index (New) All Share index ZSE Industrials Index (new) WOW -4% MoM -16.2% YTD -15.8% 190.00 561.71 ZSE Real Estate Index All Share index ZSE Real Estate Index WOW -0.2% MoM -16.1% YTD -16.1% 10063.53 190.00 BSE All Share Index BSE All Share index WOW -0.1% MoM 0.1% YTD 0.1% 190.00 100.11 ZSE Small Cap Index All Share index Small Cap index WOW 0% MoM 0% YTD 0% 190.00 334.84 ZSE Consumer Discretionary Index All Share index ZSE Consumer Discretionary index WOW 0.4% MoM 0.4% YTD 0.4% 190.00 125.08 ZSE ICT Index All Share index ZSE ICT Index WOW -1.3% MoM -20.1% YTD -20.5% -2.3% -11.2% Interbank Market Interbank All Share index 15410.24 190.00 LUSE All Share Index LUSE All Share index WOW -0.2% MoM 0.1% YTD -0.2% 109172 190.00 NGSE All Share Index NGSE All Share index WOW 3.5% MoM 5.4% YTD 6.1% 87841.44 190.00 JSE All Share Index JSE All Share index WOW 0.7% MoM 3.7% YTD 4.5% 190.00 157.50 ZSE Materials Index All Share index ZSE Materials Index WOW -4.1% MoM -26.4% YTD -27.7% 190.00 180.04 ZSE Consumer Staples Index All Share index ZSE Consumers Staples index WOW -2.1% MoM -8.5% YTD -9.2% 190.00 224.53 ZSE Medium Cap Index All Share index Medium Cap index WOW -1% MoM -9% YTD -1.3%

Regional Economic Watch Mozambique 1.Standard Bank Mozambique’s chief economist has said that the country’s GDP fell by 1.6% by the end of 2024, and that the economy should grow by 3% this year, or 1% excluding the extractive sector. “Our GDP growth estimates for 2024 at 2.5% y/y, after 5.4% y/y in 2023, reflect a 1.6% y/y contraction in GDP growth for Q4:24 ” writes Fáusio Mussá in the comment accompanying the release of the Purchasing Managers’ Index (PMI) for January 2025 [issued on Thursday, January 6 2025]. These figures, he adds, “imply GDP growth excluding the extractive sector (mining and LNG) below 1% y/y in 2024, down from 2.2% y/y in 2023,” which represents growth of less than half that recorded in 2023, when the Mozambican economy expanded by 2.2% compared to the previous year. For the first three months of this year, Fáusio Mussá expects the economic difficulties to keep the economy in the red, but nevertheless foresees a recovery in the rest of the year. “A contraction in GDP growth is expected to persist through Q1:25, but it should turn the corner later in the year, consistent with our forecast of 3% y/y GDP growth for 2025,” says the economist. 2.The index that measures business confidence in Mozambique improved in January, but remains in negative territory since the post-election protests, which resulted in hundreds of deaths and a downturn in the economy in the fourth quarter of 2024. “The Standard Bank Mozambique PMI signalled a further contraction in the private sector economy in January,” reads the document, which records an improvement in business optimism in January, despite remaining in negative territory. The PMI Purchasing Managers’ Index improved to 47.5 points in January, up from 46.4 in December, the lowest month since August 2020. However, it is still in negative territory as values below 50 indicate pessimism among entrepreneurs and managers regarding the evolution of business activity in the country in which they operate. The index shows that “there were also renewed increases in staffing and purchases, helped by a further drop in input prices”. The commentary on the figures emphasizes that, “at 47.5 in January, the headline index pointed to a solid deterioration in business conditions at the start of 2025”. The first month of 2025 “saw output and new orders decrease for the third month running, albeit to lesser degrees than in December.”, it adds. Some firms indicated that the disruptions to economic activity “had eased”, prompting a return of customers and a reduction in the impact of the post-election violence on companies. January also saw a slight increase in employment, “ending a two-month period of staff cuts”, as did purchases of means of production, which “grew for the first time in three months”. The PMI index published monthly by Standard Bank is based on the responses of purchasing managers from a panel of around 400 private sector companies. Mauritius The COMESA Court of Justice has faulted a 2018 decision by the government of Mauritius that imposed a 10% customs duty on imported edible oils without informing other member states, in a landmark ruling about procedures within the bloc. According to the ruling, Mauritius’ decision should have been communicated to other member states, not just the Secretary General of the trading bloc; a breach in procedure that prompted the court to terminate the order. Mauritius invoked Article 61 of the COMESA Treaty on safeguard measures to stamp the duty as a strategy to control the flow of imports and protect its local edible oils industry. A Mauritian edible oil importer – Agiliss Ltd. – filed a complaint with the regional court, challenging the legality of the order and seeking to prevent the country from imposing any non-tariff barriers. Senegal Senegal hopes for a new International Monetary Fund programme by June, Finance Minister Cheikh Diba said on Thursday, as the government vowed to investigate alleged malfeasance after an audit found that former authorities misreported key data. The IMF had suspended its existing $1.8 billion credit facility to Senegal pending a review of state finances, which confirmed on Wednesday that the debt and budget deficit were much wider than former President Macky Sall’s administration had reported. Speaking at a press conference, Diba said he hoped a new programme with the IMF could be agreed by June with a disbursement soon after. Justice Minister Ousmane Diagne said at the press conference that in a follow-up on results of the audit, the government would investigate alleged cases of embezzlement of public funds, forgery, and money laundering. Diagne said the investigations could implicate former ministers and directors of public institutions during the 2019-2024 period, but he declined to give names. Former President Sall’s Alliance for the Republic party (APR) rejected Wednesday’s review of the country’s finances by the Court of Auditors, saying in a statement on Thursday that the court had itself validated settlement laws for the past budgets in question. The IMF did not immediately respond to a request for comment. On Wednesday it said it would look at the court’s report and initiate consultations with the Senegalese authorities to address issues raised. Nigeria Nigerian lawmakers approved a budget of 54.99 trillion naira ($36.6 billion) for 2025, exceeding the proposal submitted by President Bola Tinubu, the parliamentary speaker said on Thursday. Tinubu last week submitted a revised budget estimate of 54.2 trillion naira to the National Assembly due to additional earnings expected from revenue collection, including from the tax authority, customs and other agencies. But lawmakers raised the amount again before granting their approval. Under Nigerian law, parliament can increase or cut the government’s spending plans. The budget will be sent to Tinubu to be signed into law. Nigeria made a provision of $200 million in the spending plan to fill gaps created by the United States’ suspension of aid to Nigeria’s health sector. Tinubu, now in his second year in office, had vowed during his campaign to revive growth in Africa’s most populous country. But swift reforms – including ending a petrol subsidy and two currency devaluations – implemented shortly after he came to power have driven up prices, triggering a cost-of-living crisis. Inflation is expected to fall sharply to around 15% this year from a three-decade high of 34.80% in January, helped by lower fuel imports, Tinubu said in December. The government said that spending priorities in 2025 would include bolstering security, investing in infrastructure, and implementing measures to ease the impact of the rising living costs. The deficit is estimated to be 1.52% of the gross domestic product, or around 13 trillion naira. Rwanda Rwanda’s central bank kept its key interest rate unchanged at 6.5% for the second monetary policy meeting in a row, saying that despite a recent pickup in inflation it expected it to remain within its target band. Annual inflation rose to 7.4% in January, approaching the top of the National Bank of Rwanda’s 2%-8% target range. The rise in inflation in recent months was caused by unfavourable weather conditions that meant a delay in the harvest, compared to a bumper harvest a year earlier, Governor John Rwangombwa told a press conference. The bank has raised its average inflation forecast for 2025 to around 6.5%, up from 5.8%, and sees it at 4.1% in the following year. The East African country’s economy was likely to have grown last year more than the 8.3% projected in November, the bank’s chief economist Thierry Kalisa told reporters. This year’s growth was projected at 7% in November, but the bank is currently revising that forecast, Kalisa said. 27 The AXiS CLVII Friday 14 Feb 2025