The AXiS LXXV

Zimbabwe Launches Gold-Backed CBDC Zimbabwe's Power Predicament: Fleeting Relief Pick n Pay Accounting Challenges in Hyperinflation Delta Delivering Sparkling FY’23 Results ................................................................................... ................................................................................... ................................................................................... ................................................................................... .................................................................................. fifffflffifl #Issue: LXXV Turning a New Page CBZH comes clean on bad debts LOANS BAD DEBTS

equityaxis.net @equity axis @equity axis zimbabwe @equity axis @equity axis @equity axis 08677 197 791 @ aaronc[at]equityaxis.net EQUITY AXIS Financial Insighs at your finger�ps CONTENTS The AXiS LXXV 12 MAY 23 In Focus 4 5 6 12 CBZH: The beginning of a new chapter? Zimbabwe Launches CBDC Gold-Backed Digital Tokens: Amid Currency Crisis and Infla�on Zimbabwe's Power Predicament Gets a Respite : Hwange Unit 8 to Sync Next Week Markets Guest Column World News 21 24 22 27 Capital Markets 13 14 15 16 17 18 19 Business around the world Poli�cs around the world Regional Economic watch Markets Watch Weekly Commodi�es Pulse ZSE Weekly Financial Markets At a Glance 25 26 28 The Cover Page 6 . Page 11 Page 15 7 9 10 11 Economic News and Analysis Asset Management and Infla�on : Maneuvering the Fragile Lithium Rush : Zimbabwe's Bid for Global Leadership in 'Green' Metals Zimbabwe's Wheat Produc�on : A Promising Industry Set to Contribute to Economic Growth Zimbabwe's Tobacco Industry Booms : A Resilient Sector Amidst Adversity - Day 41 The policy that never was Pick n Pay : The Burden of Accoun�ng in Hyperinfla�on Delta Corpora�on : Posts Impressive 60% Increase in Revenue, Delivering Sparkling FY’23 Results Despite Economic Headwinds Hwange Colliery : From Profit to Loss Unpacking the Colliery’s ZW$8.6 Billion Loss Misery Edgars' Ba�le for Dominance : Compe�ng Against Local and Interna�onal Retail Giants in Zimbabwe Padenga : Returns to Profitability on Gold Produc�ons Zimplow Holdings Limited : From Losses to Lessons: 2022 Journey Towards Growth and Resilience NMB Proper�es Promises Densifica�on : Green Densifica�on Explained CBZ Holdings Limited : Sound Risk Management and Diversified Revenue Streams Posi�on the firm for Sustained Growth FinTech Viability: Old Mutual Taps into Technology New Economic Stability Measures : Old Wine in New Bo�les? ZSE ASI 44,952.21 VFEZ ASI 85.74 ZWL INTERBANK 1,088.9411 49,689.11 85.84 1,096.9741 54,058.72 82.20 1,112.7253 59,355.89 82.46 1,125.6671 58,885.96 83.81 1,212.5448 59,538.57 89.18 1,222.2740 32.45% 4.02% -10.91% ZSE TOP 10 26,357.02 MEDIUM CAP INDEX 93,580.10 SMALL CAP INDEX 745,612.03 29,541.33 99,331.49 745,613.66 32,561.63 103,771.89 745,652.79 36,506.16 106,191.27 751,443.12 35,576.01 111,996.55 770,500.59 35,813.01 114,893.40 770,499.89 35.88% 22.78% 3.34%

4 The AXiS LXXV Friday 12 May 2023 There are far more liabilities than there are assets falling due within a period of 6 months. The mis- match could have been as a result of bad debts write-offs or restructuring, which only helps but defer the inevitable. Further an analysis of the bank’s loans against cover shows that the entire book is covered to the tune of 31% only, that is through collateral security. If after adjusting for non-collateralised loans for reputable institutions in key sectors such as mining and service, the exposure is way too much. There has been no bank failure in Zimbabwe in recent periods, but as with all matters financial, prudential management builds a fortress, which cushions institutions from unforeseen risks. What has been at play at CBZ is a matter of public record. The bank had failed to divorce itself from the influence of government, which is a share- holder in the bank (minority). While the bank has benefitted through government deposits, it has suffered exploitation from politically exposed persons. There seems to have been a payoff between the 2, but reputation and sustainable management were irrecoverable. The market had long discounted the bank’s valu- ation sometimes by a magnitude as high as 40% due to the obscurity in loan book. For these mis- givings, the regulator is largely responsible and of course past management and auditors. The coterie failed to adhere to good practices and effective management of the bank. This is why it is important to recognise the steps taken by the Holtzman man led board and Muda- vanhu led executive committee, fairly new to their positions. Taking responsibility of past failures and the resolve to change trajectory are attributes of good management. Perhaps it also reflects on a changing attitude from government. What is far much important from this point onwards, is the redressing of the asset base and the balance sheet in general. A volatile environ- ment diminishes the allure of traditional banking such as lending, but excessive off-balance sheet leverage, which is very tempting under the circumstances, reduces balance sheet strength. These activities and the prevalent environment also increase the rate of erosion and quality of the capital base. stretch of imagination. For perspective, the aver- age sector NPL ration for 2022, was 1.58%. NPLs of such magnitude were last recorded in pre ZAMCO years, that is between 2011 and 2014. Like any other bank, CBZ is a beneficiary of the ZAMCO exercise which mopped a cumu- lative US$1.2 billion worth of bad loans from the sector between 2014 and 2020. The expectation and even so the picture painted by the majority of the sector, has been that of cleaner loan books post the ZAMCO initiative as demonstrated by very low NPL ratios. After the bold move by CBZ to properly account for its bad loans, it now beggars the mind, if most of the sector’s players can still be trusted in terms of their financial numbers. This case would typi- cally rest with the RBZ and the external auditors. That at least for over a decade, the auditors and the regulator, gave a nod on the messy financial results is reflective poor governance both internal- ly within bank(s) and externally from those entrusted by the shareholders and citizens to insti- tute checks and balances on these institutions. It is even so worrying, that as a prime banker for government and for a long time the largest bank by asset size in Zimbabwe, CBZ would have such porous standards. A strong and resilient banking system is the foundation for sustainable economic growth, as banks are at the centre of the credit intermediation process between savers and investors. In the event of a bank failure, the implication will be that of heightened systemic risk, which would ground the entire financial sector. The catastrophic occurrence of the 2008 global finan- cial sector crisis, was underpinned by bad loans and poor credit underwriting by most banks. In recent periods, bank failures in the US were due to asset mismatches triggered by shocks in the operating environment. Banks with poor credit quality are more likely prone to shocks espoused through market sensitivity risk. A highly volatile environment such as Zimbabwe pose higher risks and if banks balance sheets are weak, the possi- bility of failure increases. A look at CBZ’s contractual gap analysis high- lights the dangers of a grossly poor loan book. anticipated, especially given the time lag against which most banks had released their financials. The overall results were largely depressed against prior performance as growth margins eased across multiple variables. The financials services group’s assets grew but likewise much of the growth emanated from revaluation of a legacy debts assumed by the Central Bank as well as balances with the RBZ (non interest earning). A slowdown in the group’s performance largely emanated from reduced income from earning assets. CBZH’s interest income grew by only 16%, which compared to an industry wide growth of above 35% for the same period. The decline in interest income follows a diminishing contribu- tion in earning assets to total assets from 49% in 2021 to 26% in 2022. Even after moderating for other non-monetary movement in assets, the decline in the ratio is quite pronounced. This means much of the 2022 performance for CBZH, is best read through the lense of interest earning assets and interest income together with elements of the company’s performance related to that. From an overall perspective, interest income con- tribution to total income came in at 29% down from 49% in the prior year. There seems to be a deliberate strategy focussing on building a healthy asset base, an aspect which has been sticky in CBZ’s affairs for the longest time. Slowing down, reflecting and recalibrating, is a generally positive indicator as most players would not have the courage to open the closet for the investment community and stakeholders to gaze. An earnest exercise would demand a reflec- tion, which we deduce to have been effected through a pause in asset growth (interest earning), particularly loans and then secondly a recalibra- tion, which required a proper evaluation and clas- sification of loan performance. This is perhaps the most important element of the process. From CBZ’s results the bank deduced that Non Performing Loans (NPLs), captured in note 37.3 under credit quality per class of financial assets, came in at $84 billion (stage 3), against a total loan book of $248 billion, deducing to NPLs ratio of 34%. This is a buffling statistic by any CBZ finally released its full year results for the year ended December 2022 and as a market leader the earnings were highly The beginning of a new chapter? CBZH *From Page 4 EQUITY AXIS fifffflffiflffi  Financial insights at your fightertips. flfl fl flffi fl fl  flfl flfi
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Zimbabwe Launches CBDC Gold-Backed Digital Tokens currencies, known as Central Bank Digital Currencies (CBDCs), which can be used by citizens to make digital payments and store value. In the context of Zimbabwe, the use of digital money by private companies has led to the central bank having to crack down on non-compliant entities. Introducing a CBDC would provide the government with a digital currency under its control, and the profits realized can be used for public welfare. The Role of Gold Tokens in Zimbabwe's Monetary Policy The IMF has recommended that Zimbabwe introduce interest-bearing assets to mop up excess liquidity and wind down the use of gold coins to "sustainably anchor economic growth". Central Bank governor John Mangudya stated that the use of gold coins as an open market instrument for managing liquidity would continue as part of the central bank's steriliza- tion interventions to achieve a stable exchange rate. However, the IMF spokesperson maintained the Fund's stance on gold coins, emphasizing the need for appropriate interest-bearing instruments and wind- ing down the use of gold coins in monetary policy. The Importance of Careful Assessment The IMF's cautionary stance on Zimbabwe's gold-backed CBDC highlights the importance of con- ducting a thorough assessment of the potential risks and advantages associated with such a financial instrument. As more countries explore the concept of CBDCs, it is crucial to ensure that the benefits of these digital currencies outweigh the potential risks to macroeconomic stability, financial systems, and legal frameworks. Lessons from Other Countries Zimbabwe can learn from the experiences of other countries that have faced warnings from the IMF regarding unconventional currency management approaches. The Central African Republic's adoption of Bitcoin as legal tender and El Salvador's similar move both prompted cautionary statements from the IMF. By carefully analysing the potential risks and advan- tages associated with a gold-backed CBDC, Zimba- bwe can make informed decisions about the most appropriate monetary policy tools to address its eco- nomic challenges and stabilize its currency. The IMF has expressed its intention to engage with Zimbabwean authorities on the topic of the gold-backed digital currency. As Zimbabwe continues to explore the potential of this financial instrument, ongoing dialogue with the IMF can help ensure that the country's monetary policy aligns with internation- al standards and best practices. Potential Support for Economic Reforms The IMF is also expected to support Zimbabwe on economic reforms to accompany the country's arrears clearance and debt resolution framework. However, the IMF spokesperson noted that there have not been any discussions yet on a supervised economic reform plan, such as the Staff Monitored Programme (SMP). Authorities have indicated that an SMP might be considered later in the year. As Zimbabwe navigates the complex landscape of digital currencies and CBDCs, the country must carefully evaluate the potential risks and advantages associated with the introduction of a gold-backed CBDC. By engaging in ongoing dialogue with the IMF and adhering to inter- national standards and best practices, Zimbabwe can develop and implement effective monetary policies that address its economic challenges and promote sustainable growth. skyrocketing inflation. The Reserve Bank of Zim- babwe (RBZ) this week started the issuance of gold-backed digital tokens, aiming to provide a stable store of value and an alternative to the rapidly depreciating Zimbabwe dollar. The high demand for the dollar, compared to its limited supply in the official market, has led to the depreciation of the local currency on the parallel market. This depreciation has prompted the RBZ to respond by raising key interest rates and intro- ducing physical gold coins as an alternative store of value. The proposed introduction of gold tokens in Zim- babwe comes after the central bank introduced gold coins last year to mop up excess local currency balances, which were blamed for fuelling the depreciation of the local currency. As of March 10, 2023, a cumulative total of 31,866 gold coins had been sold in different denominations, mopping up more than ZW$ 25.8 billion, according to the bank's Monetary Policy Committee. Gold-Backed Digital Tokens: A New Value-Pre- serving Instrument The RBZ has launched its CBDC gold-backed digital tokens to "expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public." The tokens will be available for purchase through com- mercial banks, building societies, and the People's Own Savings Bank, with a minimum spend of $10 for individuals and $5,000 for financial institutions, corporates, and other entities. Making Gold More Accessible and Tradable with Digital Tokens One of the key features of these digital tokens is the low-price access point, made possible by the process of fractionalization. This allows individuals to acquire fractions of the digital gold tokens for as little as $10, making gold more accessible and affordable for the general public. The pricing model of the tokens is based on the international gold price determined by the London Bullion Market Association, with users able to buy or redeem the token at a 20% premium on the mid-bid-offer rate. Dual Function: Store of Value and Means of Pay- ment While the primary use case for the CBDC gold-backed digital tokens is to serve as a store of value, the RBZ has confirmed that the tokens will also be capable of facilitating person-to-person (P2P) and person-to-business (P2B) transactions and settlements. This dual functionality may help the central bank maintain the tokens' fixed con- vertibility and potentially aid in defending the country's exchange rate. Will Zimbabweans Embrace Gold Tokens for Payments? There is some doubt as to how widely the gold-backed digital tokens will be utilized for pay- ments. Many local companies and traders already use the US dollar for key transactions, and formal retailers are looking forward to accepting these gold tokens as they are considered 'local' and should be less volatile than Zimbabwean dollars. However, the primary function of the gold tokens remains as a store of value, and their adoption for day-to-day transactions may not be as widespread as initially anticipated. The Role of Banks and the 180-Day Vesting Period Zimbabwe's digital tokens can be held in either e-gold wallets or e-gold cards, which will be man- aged by banks. However, it appears that many banks were not prepared for the launch of the gold tokens, with some lacking the necessary informa- tion and infrastructure to support the new currency. Banks are expected to play a crucial role in open- ing and running these wallets and cards, but their current state of readiness raises questions about the future success of the gold token initiative. Customers who purchase gold tokens will receive a certificate, and after a vesting period of 180 days, the tokens can be traded. During this time, token holders are free to trade their tokens on the secondary market, with the RBZ's blessing. Challenges and Uncertainty Surrounding the Gold-Backed CBDC The introduction of the gold-backed digital tokens has been met with skepticism from some quarters, with critics arguing that the central bank's efforts are misguided and that the focus should be on addressing the core issues affecting the country's currency. Furthermore, the lack of preparedness among banks raises concerns about the viability of the gold token initiative, especially regarding the e-gold wallets and cards. As Zimbabwe ventures into the world of CBDCs with its gold-backed digital tokens, it remains to be seen how successful the implementation will be and whether it can provide the much-needed stabil- ity in the country's struggling economy. The International Monetary Fund (IMF) has urged Zimbabwe's financial authorities to carefully evalu- ate the potential risks and advantages of issuing a gold-backed Central Bank Digital Currency (CBDC) in addressing the country's macroeconom- ic challenges. The global financial institution recommended that instead of hastily introducing the gold-backed digital currency, the authorities should consider liberalizing the foreign exchange market to stabilize the economy. IMF's Concerns and Recommendations An unnamed spokesperson for the IMF suggested that authorities should conduct a careful assessment to ensure that the benefits of this measure outweigh the costs and potential risks. These risks include macroeconomic and financial stability risks, legal and operational risks, governance risks, and the cost of foreign reserves. The IMF spokesperson also advised Zimbabwe's monetary authorities to stick to conventional solu- tions, such as maintaining a tight monetary policy and accelerating the liberalization of the foreign currency market by removing restrictions on exchange rates. This warning marks the second time that the Bret- ton Woods institution has reprimanded an African country for adopting an unconventional approach to currency management. In 2022, the IMF warned of risks to financial stability after the Central African Republic introduced Bitcoin as a legal tender. Simi- lar warnings were issued to El Salvador when it became the first country to declare Bitcoin as legal tender. The Rationale Behind Gold-Backed CBDC Central banks worldwide are increasingly showing interest in digital currencies to avoid the systemic risks posed by unregulated cryptocurrencies like Bitcoin. They favour issuing their own digital Zimbabwe recently introduced a gold-backed central bank digital currency (CBDC) in an effort to combat currency volatility and 5 The AXiS LXXV Friday 12 May 2023 Amid Currency Crisis and Inflation: Everything You Need to Know

6 The AXiS LXXV Friday 12 May 2023 Zim's Power Predicament Gets a Respite period under review at 479.08m (25.13% usable storage) on 8th May 2023, compared to 479.71m(29.71% usable storage) recorded on the same hdate last year. The lake levels are anticipated to continue rising until June or July. Last year, the ZRA directed ZPC to shut down the station until early this year after it exceeded its water ration with just 63cm of water above the intake level at the lake remaining after itutilized 23, 89 billion cubic metres of water, which was 1,39 billion cubic metres more than its allocated 22,50 billion cubic metres for the year 2022. The Government, nonetheless, said the station would not completely shut down but instead would continue generating the minimal power that it was capable of producing. Earlier this year, President Mnangagwa said power challenges would be dramatically mitigated as his Government was working on the ‘optimal and reliable’ power supply. He said upgrading and expanding the Hwange Thermal Power Station was one of the unambiguous testimonies that the future of the country's power situation was bright. In the last quarter of 2022, the country witnessed inordinate power outages that adversely impacted business operations and resulted in heavy depen- dence on generators and other alternative power sources, thereby compromising the ease of doing business and escalating operational costs. A number of Zimbabwe Stock Exchange (ZSE) listed compa- nies are also sanguine about growth and profitabili- ty due to improvement in energy supply and decent rainfall received that will boost the agricultural sector. Although firms are optimistic about the improve- ment of power supply, the increase in mining com- panies requesting to join the grid can outpace the progress made by ZPC, and the fact that the outside world now only wants to invest in clean energy makes it challenging for the country since we also heavily rely on coal. The Zimbabwe Power Company has also announced that 120MW of electricity will be ring- fenced to guarantee uninterrupted power supply to wheat farmers this coming winter. ZPC said it was cognizant of the importance of power supply towards wheat production; hence, the need to ensure farmers have adequate power to enable them to irrigate the crop and boost production in line with the aspirations of the National Development Strategy and Vision 2030. Wheat production increased from 300,000 tonnes in 2021 to 375,000 tonnes in 2022, representing a 25 percent increase against a national annual require- ment of 360,000 tonnes leaving a surplus of over 15,000t. The production figures for last year were the highest since 1962 when wheat was first grown in Zimbabwe. In conclusion, businesses should expect power outages to ease, not in the current financial year but in 2024; however, with many firms applying to be added to the grid, electricity production will again be less than half of the peak production unless the government works on initiatives to increase electricity generation through clean energy by 2025. At this juncture, it is only efficacious for any- enterprise in the country to explore solar as an alternative to power operations as the probabilities for a slowdown in power cuts are non-existent. Miningcorporations and companies listed on the Zimbabwe Stock Exchange have either com- menced or are in the process of initiating solar projects and this is what firms in the country need to contemplate in order to arm businesses against power cuts in the future. At the end of April when Hwange transiently surged to levels in excess of 500 megawatts, the Minister of Energy, Soda Zhemu, announced that the synchronisation of Unit 8 to the grid will commence on the 16th of May and Hwange Unit 7 will be commercially available in June. The engineers undertaking the project anticipate that annexing Hwange Unit 8 will require less time as they will take into account the lessons gleaned from Unit 7. “I am delighted to proclaim that on 16 May, we will witness the synchronisation of Unit 8 and its connection to the grid,” “In June, we will have Unit 7 operating commer- cially,” Minister Soda Zhemu stated. Subsequent to the commissioning of the two units, ZPC will embark upon another project of refurbishing the existing six units that were com- missioned in the 1980s to reinstate their capacity to 980 megawatts. Presently, they function at half capacity. Smaller thermal stations remain the feeble link due to obsolete equipment with Bulawayo at naught while Munyati and Harare are inconsis- tently generating below 20 megawatts. The Zim- babwe Power Company is soliciting private sector investors with vast power demands to take over, modernise and operate its three small thermal power stations in exchange for guaranteed power supplies. ZPC acting MD Engineer Nobert Matarutse averred: “What we are focusing on as ZPC, consistent with Zesa policy, is to repurpose the small ther- mal power plants so that we can allure other investors to come in and assume control of the stations through some form of agreements.” He said they were already engaging several enter- prises but could not pledge a timeline when the negotiations would be finalised nor the figures entailed. Output from the Kariba Power Station, which averaged above 700 megawatts and anchored domestic supplies for the better part of 2022, was abruptly diminished to below 300 megawatts in November when water levels dwindled to unsus- tainable levels – plunging the country into a dire supply deficit. However, the latest update from the Zambezi River Authority (ZRA), which administers water at Kariba on behalf of Zimbabwe and Zambia, indicates that the lake level has been steadily rising due to higher inflows on the mainstream Zambezi River compared to outflows, closing theh and 8 to 600 megawatts, the Kariba Hydro-Power Station has exponentially increased its daily elec- tricity generation output by 260 percent from 250 megawatts earlier this year to 900 megawatts in response to the burgeoning water inflows into the vast Lake Kariba. Downpours continue to deluge the expansive Zambezi River basin, and expecta- tions are positive that the amelioration in water levels will facilitate the gargantuan hydro-power station to generate more power commensurate with its installed capacity of 1050 megawatts. The exponential upsurge in output at Kariba is immensely positive for the country, however, it arises at a juncture when the Hwange Thermal Power Station has curtailed output this week. The diminished output is attributable to Hwange Unit 7 still undergoing commissioning tests, and pres- ently, the engineers have disengaged the unit from the grid for the evaluation of all systems in preparation for the final phase of commissioning. The quotidian output from Hwange has plummet- ed from as high as 709 megawatts recorded at the beginning of April to circa 220 megawatts this week. It appears that the engineers capitalized on the upswing in electricity in Kariba to then disengage Hwange Unit 7 from the grid as the aggregate output has consistently hovered above 1000 megawatts even though Unit 7 has been detached from the grid. This denotes that electricity genera- tion is still functioning at just below half the national peak demand which approximates 2200 megawatts. Had Hwange Unit 7 remained on the grid, ZPC would have been generating 71% of peak demand, and this would signify that annex- ing the additional 300 megawatts from Hwange Unit 8 later this year would propel electricity generation to 84% against peak demand. The country is importing between 300- 450 megawatts from the Southern Africa Power Pool encompassing Zesco, Excom, Hydro Cabora Bassa and EDM of Mozambique. Simultaneously, due to contractual stipulations, 80 megawatts are exported to Namibia. When aggregated, available supplies range between 1 550 to 1 650 megawatts presently. However, this implies that if the two units in Hwange add 600 megawatts to the grid, that will offset the peak demand of 2200 mega- watts as electricity production will be anticipated to range from 2050 megawatts to 2250 mega- watts. According to ZESA, the power company is inun- dated with new applications amounting to 2,300 megawatts, which would engender a power short- fall in the short to medium-term plans. “We have applications totalling 2,300 by 2025 in terms of power requirements sitting before us.” This then suggests that efforts by the power utili- ty to neutralize national power demand will be absorbed as soon as Hwange Unit 8 is on the grid, and electricity challenges will continue to haunt the economy as countless businesses will continue to be afflicted by operating expenses that will further enervate firms’ income state- ments. As we eagerly anticipate the synchronisation of Hwange Unit 8 next week, which will augment the combined output from Unit 7 Hwange Unit 8 to Sync Next Week but the Relief is Fleeting!

7 The AXiS LXXV Friday 12 May 2023 & Analysis track. The impact of monetary policy on invest- ments is thus direct as well as indirect. The direct impact is through the level and direction of inter- est rates, while the indirect effect is through expectations about where inflation is headed. Technology also plays an important role in asset management business in countries with fragile currencies. With advances in technology, it is now possible for asset managers to access real-time data on market conditions and make informed decisions based on this information. This helps them stay ahead of market trends and make better investment decisions. Finally, it is important for asset managers operat- ing in countries with fragile currencies to work closely with their clients. Clients may have con- cerns about investing in such an environment, so asset managers need to be transparent about the risks and opportunities involved. By building strong relationships with clients and providing them with regular updates on their investments, asset managers can help to build trust and confi- dence in their services. In conclusion, an asset management business in a country with a fragile currency can be challeng- ing as it requires a careful balancing of risks and opportunities, but it is not impossible. By diversi- fying portfolios, focusing on long-term invest- ments, staying up-to-date with economic and political developments, leveraging technology, and building strong client relationships, asset managers can successfully navigate this environment and help their clients achieve their investment goals. Asset managers must adopt strategies that can help their clients preserve their wealth and gener- ate returns that outpace inflation. By investing in assets with a high correlation with inflation, equi- ties with strong pricing power, and bonds with floating interest rates or issued by entities that adjust interest rates upward during times of high inflation, asset managers can help their clients navigate the challenges of a highly inflationary environment accessibility of such assets using the ZWL. These are therefore narrowed down to stocks on the ZSE, treasury bills, and gold coins. Since compa- nies have resorted to passing on price increases to consumers through higher prices for their prod- ucts, this has also reflected on the ZSE with rapid growth in stock prices. Typically, fixed-income investments such as bonds may not be ideal during periods of high inflation since rising prices erode the value of fixed pay- ments over time. However, the government of Zimbabwe has a history of adjusting interest rates upward during times of high inflation and this renders the bond viable, and also asset managers can consider investing in bonds with floating interest rates. Asset managers must also be mindful of currency risk during periods of high inflation. To mitigate this risk, asset managers need to diversify their portfolios across different currencies and asset classes. This helps to spread the risk and reduce exposure to any one particular currency. The ZWL has been depreciating against the US$ on a daily basis since last year, reducing the purchas- ing power of investors' assets denominated in the respective currency. Asset managers may consider investing in hard currencies that are expected to appreciate or hedging against currency risk using derivatives such as futures contracts. Another important strategy for managing assets in Zimbabwe is to focus on long-term investments. Short-term investments are more susceptible to fluctuations in the value of the local currency, whereas long-term investments are more likely to ride out any short-term volatility. By investing in assets that have a longer time horizon, asset managers can reduce their exposure to short-term fluctuations in the value of the local currency. This is quite relatable as banks in Zim- babwe have over the past few years increased their exposure in real estate despite the recom- mendation for banks to invest in highly liquid assets to cushion against possible bank runs. In addition to diversification and long-term invest- ment strategies, asset managers also need to stay up-to-date with economic and political develop- ments in the country. Changes in government policy or economic conditions tend to have a significant impact on the value of the local currency and investment opportunities. Asset managers need to be aware of these devel- opments so that they can adjust their investment strategies accordingly. When inflation is moving significantly higher, the central bank may take steps to cool the economy by raising short-term interest rates, which constitutes restrictive or tight monetarypolicy. Conversely, when the economy is sluggish, the central bank will adopt an accom- modative policy by lowering short-term interest rates to stimulate growth and get the economy back on behalf of clients. In a highly inflationary environ- ment, asset management becomes even more criti- cal as investors seek to protect their wealth from the eroding effects of inflation. On the other hand, a very fragile currency can be a challeng- ing task as the value of the currency can fluctuate rapidly, making it difficult to manage investments and assets effectively. However, with the right strategies and tools, asset managers can still thrive in such an environment. Inflation is a persistent increase in the general price level of goods and services in an economy over time. It reduces the purchasing power of money, making it harder for investors to maintain their standard of living. In such an environment, asset managers must adopt strategies that can help their clients preserve their wealth and generate returns that outpace inflation. Likewise, one of the key challenges faced by asset managers in Zimbabwe is currency risk as ZWL-denominated investments are highly volatile in relation to the currency. The fragility of the ZWL has seen most compa- nies migrate from the ZWL-denominated bourse, Zimbabwe Stock Exchange (ZSE) to a US$-de- nominated market, VFEX, in a bid to preserve investor value. While the ZSE currently boasts as the best-performing bourse in Africa on a year-to-date return basis, in US$ terms, the trad- ing currency armed with inconsistent policies poses a threat to the going concern of invest- ments as was witnessed in 2022. Asset managers have had a tough time redesign- ing portfolios due to the uncertainty. Recently, fund managers of the Old Mutual Top Ten Exchange Traded Fund requested temporary changes to the operations of the fund, an unchanged composition of the fund during the three months to May, no primary creation and redemption of units on the fund, and the existing units shall continue to trade on the secondary market of the ZSE. This follows the delisting of some counters once included in the ETF before, as they migrated to VFEX. The ZSE boasts of a 70% year-to-date return in US$ terms, while VFEX has succumbed to a loss of -10% since the beginning of the year. Regardless, more companies seem to opt for the marginal bear run on VFEX which has affected relatively all counters, than the volatility and uncertainty on ZSE which is attributed to the fragile ZWL. Asset managers now have a task to decide a better devil between uncertainty and fundamental value preservation in deciding invest- ment techniques, and this now lies on the goal of the investor. One strategy that asset managers can use in Zim- babwe is to invest in assets that have a high correlation with inflation, also considering the Asset management business is a crucial aspect of the financial industry, which involves managing and investing assets on How Asset Managers Can Navigate the Tight Environment

9 The AXiS LXXV Friday 12 May 2023 *To Page 9 lithium industry could also help to promote sustainable development in the country. The production of EV batteries is a key component of the global transition to renewable energy, and the development of Zimbabwe's lithium resources could contribute to this transition. By producing 'green' metals, Zimbabwe could position itself as a leader in sustainable mining practices and help to reduce the environmental impact of the global mining industry. However, some challenges need to be addressed to ensure the sustainable development of Zimba- bwe's lithium industry. For example, there is a need to ensure that the environmental impact of mining activities is minimized and that local com- munities are involved in the decision-making process and benefit from the development of these projects. It is also important to ensure that the benefits of these projects are shared equitably and that the revenues generated from the export of lithium are used for the overall development of the country. The recent Chinese investments in Zimbabwe's lithium industry could have a significant impact on the country's economy, especially at a time when the country is facing increased pressure from Western sanctions. Zimbabwe has been subject to various sanctions by Western countries, including the United States and European Union, since the early 2000s. These sanctions have had a significant impact on Zimbabwe's economy, limiting the country's access to international markets and financial insti- tutions. However, the recent Chinese investments in Zimbabwe's lithium industry could provide a much-needed boost to the country's economy. The investments are expected to create employment opportunities and stimulate economic growth in the regions where these projects are located. In addition, the export of lithium to other countries could generate significant revenue for Zimba- bwe's government, which could be used to finance the country's development projects. Zimbabwe's lithium deposits are primarily located in the Bikita and Kamativi regions in the south- ern part of the country. These deposits are esti- mated to contain over 11 million tonnes of lithi- um, making Zimbabwe one of the top lithi- um-producing countries in the world. The recent investments in Zimbabwe's lithium industry are part of a broader trend of Chinese companies investing in African mining projects. China is the world's largest producer of lithium, and the country is looking to secure access to lithium resources in other parts of the world to meet the growing demand for EV batteries. In addition to the Chinese investments, there are also other companies showing interest in Zimbabwe's lithium industry. For example, Prospect Resources, an Australian mining company, has been explor- ing lithium deposits in the country's Arcadia region and is planning to build a lithium carbon- ate plant in Zimbabwe. The growth of Zimbabwe's lithium industry has the potential to bring significant economic bene- fits to the country. The development of lithium mines and processing plants will create employ- ment opportunities and stimulate economic growth in the regions where these projects are located. In addition, the export of lithium to other countries could generate significant revenue for Zimba- bwe's government. Furthermore, the development of Zimbabwe's Zimbabwe is poised to become a leader in the production of lithium, a metal that is in high demand due to its use in the manufacturing of electric vehicle (EV) batteries. The country's vast reserves of lithium have recently become the focus of significant investment by Chinese energy firms, making it a key player in the global race for 'green' metals. The global EV market is expected to reach a value of $7 trillion by 2030 and $46 trillion by 2050, according to Smart Energy International. The increasing demand for EV batteries has resulted in a surge in the price of lithium carbon- ate, which reached $41,925 per tonne in Decem- ber 2022. Zimbabwe is home to Africa's largest lithium reserves and is ranked fifth globally, according to Mining Zimbabwe. However, until recently, the country's lithium resources have remained largely untapped due to a lack of investment. This has changed in recent months, with three massive Chinese investments totaling close to $800 million in lithium projects, all inked since December 2022. The first of these investments is a $250 million deal signed between China's Great Wall Motor Company and the Zimbabwean government. The agreement will see the construction of a lithium mine and processing plant in the country's Mata- beleland North province. The plant is expected to produce up to 25,000 tonnes of lithium carbonate per year, which will be used to manufacture batteries for Great Wall's EVs. The second investment is a $310 million deal between China's Tsingshan Holding Group and Zimbabwe's government-owned mining firm, Zimbabwe Mining Development Corporation (ZMDC). The agreement involves the develop- ment of a lithium mine in the country's Masho- naland West province and a lithium processing plant in the capital, Harare. The plant is expected to produce up to 50,000 tonnes of lithium carbon- ate per year. The third and largest investment is a $239 million deal between China's Jiangxi Copper Corporation and ZMDC. The agreement involves the develop- ment of a lithium mine and processing plant in Zimbabwe's eastern province of Manicaland. The plant is expected to produce up to 25,000 tonnes of lithium carbonate per year. These investments are expected to significantly boost Zimbabwe's lithium production and position the country as a major player in the global EV market. The devel- opment of these lithium projects is also expected to create employment opportunities and stimulate economic growth in the country. However, there are concerns about the potential environmental impact of these projects. Lithium extraction can be a water-intensive process, and there are concerns about the impact of mining activities on Zimbabwe's fragile ecosystems. It is therefore essential that these projects are imple- mented sustainably and responsibly, with due con- sideration given to environmental concerns. In addition to these concerns, there are also con- cerns about the impact of these projects on the local communities. It is essential that the benefits of these projects are shared with the local com- munities, and that the rights of these communities are respected throughout the development process. Sure, I can provide you with some additional information on Zimbabwe's lithium industry and Zimbabwe is poised to become a leader in the production of lithium, a metal that is in high demand due to its use in the manufacLithium Rush Zimbabwe's Bid for Global Leadership in 'Green' Metals *From Page 8

10 The AXiS LXXV Friday 12 May 2023 *From Page 8 Moreover, Chinese investment in Zimbabwe's lithium industry could also help to strengthen the economic ties between the two countries. China has become Zimbabwe's largest trading partner and has been investing in various sectors of the country's economy, including infrastructure and mining. The growth of these economic ties could help to insulate Zimbabwe from the impact of Western sanctions and provide the country with greater economic independence. However, there are also concerns about the poten- tial negative impact of Chinese investment on Zimbabwe's economy. There are concerns that the Chinese companies may not prioritize the interests of local communities and that the benefits of these projects may not be shared equitably. It is therefore essential that the Zimbabwean govern- ment ensures that these investments are imple- mented sustainably and responsibly, with due con- sideration given to the interests of local commu- nities and the overall development of the country. The recent Chinese investments in Zimbabwe's lithium industry are expected to have a significant impact on the country's economy, especially at a time when the country is facing increased pres- sure from Western sanctions. The investments are expected to create employ- ment opportunities and stimulate economic growth, while also helping to strengthen the eco- nomic ties between China and Zimbabwe. How- ever, these investments must be implemented sustainably and responsibly, with due consider- ation given to the interests of local communities and the overall development of the country. In conclusion Zimbabwe's lithium industry has the potential to bring significant economic and environmental benefits to the country. The recent investments in the industry by Chinese companies and the interest shown by other companiesindicate a growing international recognition of Zimba- bwe's potential as a leader in the production of However, it is important that the development of these projects is done sustainably and that the benefits are shared equitably. If done right, the growth of Zimbabwe's lithium industry could contribute to the country's overall development and help to promote global sustainability. Zimbabwe's vast reserves of lithium make it a key player in the global race for 'green' metals. The recent investments by Chinese energy firms are expected to significantly boost the country's lithium production and position it as a leader in the production of EV batteries. However, these projects must be implemented sustainably and responsibly, with due consider- ation given to environmental and social concerns. If done right, the development of Zimbabwe's lithium resources could bring significant benefits to the country, its people, and the global environ- ment. Wheat Production on the rise Sector to boost economic growth long-awaited breakthrough in wheat production self-sustenance for the country is around the corner as the industry stakeholders are around to assist from their various ends. This comes at a time the economy has targeted a 5.7% increase in the yield produced. The govern- ment recently announced its plans to increase the hectarage of winter wheat production by 5% for 2023 compared to last year's 80,388 hectares. The article analyses how different sectors have played a part in delivering the high likelihood of the projected output. This includes how further the government can assist in the attainment of the planned objectives. The projected production from the area that will be planted under wheat is 408,000 tonnes, based on the actual yield volume of 4.8 tonnes per hectare, achieved in 2022. Zimbabwe's Commitment to Self-Sufficiency in Wheat Production Zimbabwe's success in achieving self-sufficiency in wheat production is noteworthy given the significant challenges that many African countries face in this regard. The government has demon- strated a commitment to supporting farmers through a range of initiatives designed to facilitate increased yields and improve access to resources. The CBZ Agro-Yield Programme, for example, is a joint venture between the government and com- mercial bank, CBZ Bank Limited, which provides low-interest loans to farmers to invest in their crops. Similarly, the AFC Land Bank is a govern- ment-run program that aims to improve agricultur- al productivity by facilitating access to land and supporting infrastructure development in rural areas. The Presidential Input Scheme, meanwhile, provides free inputs such as seeds, fertilizers, and herbicides to smallholder farmers to encourage increased production. Through these and other initiatives, the Zimbabwe- an government has been able to guarantee 65% support for farmers, while the remaining 35% is made up of private sector contributions. The Food Crop Contractors Association is one such private sector player that provides funding to complement the government's efforts, allowing farmers to ben- efit from a combination of public and private resources. Moreover, the emphasis on self-financing farmers ensures that those who can do so can invest in their own operations, further strengthen- ing the country's agricultural sector. Additionally, the government has encouraged farmers to use high-yield crops and plant early to maximize productivity. The government has also assured Zimbabweans of adequate seed and basal fertilizer for the 2023 winter cereal production season. Although top-dressing fertilizers are in short supply, the government has put in place enabling legislation to facilitate the importation of duty-free top-dressing fertilizers by local compa- nies. Overall, Zimbabwe's approach to supporting wheat production is a model that other African countries could consider emulating. By taking a comprehensive approach and leveraging both public and private resources, the country has been able to achieve notable success in this area. Through continued commitment to these initiatives and a focus on innovation and productivity, Zim- babwe can ensure the sustained success of its agricultural sector for years to come. Infrastructure to Ensure Smooth Production Zimbabwe's electricity supplier, ZESA, has com- mitted to ringfencing 120MW of electricity to support the country's winter wheat farmers. This move is expected to facilitate uninterrupted power supply and mitigate power outages during the winter season, which will enable wheat farmers to irrigate their crops and achieve higher yields. This initiative aligns with the Zimbabwean govern- ment's National Development Strategy and Vision 2030, which seeks to promote sustainable eco- nomic growth and development across the coun- try. To ensure effective communication and fault reso- lution, the government has established support groups for winter wheat farmers, including the Agriculture-Energy Task Force, which willwork to address any issues that may arise during the crop- ping season. These measures are expected to ensure the availability of critical resources and enable efficient fault resolution, minimizing any disruptions to electricity supply.In addition to sup- porting wheat production, the Zimbabwean gov- ernment has also announced plans to promote barley production, to produce 50,050 tonnes of barley from a total of 7,700 hectares. The govern- ment's focus on promoting agricultural productivi- ty and supporting farmers aligns with broader tefforts to strengthen the counry's economy and ensure long-term sustainable growth. Finally, it is worth noting that Zimbabwe's power generation capacity has improved steadily in recent years, with the successful synchronization of the Hwange Thermal Power Station unit 7 expansion and recovery of the Kariba Hydro-Pow- er Station contributing to a combined output of 1,205 MW as of yesterday. This increased electric- ity capacity will enable the government to support critical sectors such as agriculture and industry, driving economic growth and development across the country. Conclusion Zimbabwe's commitment to self-sufficiency in agriculture is an important step towards reducing the country's dependence on imported goods and creating a more resilient and diverse economy. By prioritising the agriculture sector and investing in critical infrastructure such as power generation and irrigation, the Zimbabwean government can create a robust and sustainable agricultural industry that supports the local production of basic commodi- ties. The recent establishment of communication sup- port groups for winter wheat farmers and the ring- fencing of electricity for agriculture are promising developments that demonstrate the government's commitment to supporting farmers and promoting agricultural productivity. These initiatives should be bolstered with additional funding and incen- tives to enable farmers to invest in their opera- tions and improve their yields. Looking ahead, the Zimbabwean government must continue to implement policies that support local agriculture production, promote technological inno- vation and training, and attract private sector investment. If executed effectively, these measures could lead to a more productive and profitable agricultural industry that contributes to the growth and development of the broader economy. Overall, Zimbabwe's progress towards achieving wheat self-sufficiency is a positive sign of the country's potential to drive sustainable economic growth and development through local production and investment. With sufficient support and focus, the country's agricultural sector could become a key pillar of its economy and a source of prosper- ity and opportunity for its citizens. imbabwe's wheat production industry is set for a significant boost, thanks to the sup- Zport of various industry players. The *From Page 8

11 The AXiS LXXV Friday 12 May 2023 tors channel their inflated loot to the parallel market, as has been the order over the recent past years. The main objective of public procurement is to reduce costs, benefit from specialist expertise, promote transparency, protect public funds, and chal- lenge corrupt tendencies. It thus improves efficiency in public resource allocation and provision of service delivery through the use of competition. According to the United Nations Development Pro- gramme public procurement plays a pivotal role in government performance and is measured through service delivery. Public procurement is used as a stra- tegic tool to enhance government performance and the quality of services and is thus central to the delivery of public services. According to the World Bank, public procurement programmes have a direct bearing on public service delivery, results, perfor- mance, consolidation and completion. Legislation that discourages disclosure thus increases pilferage of public funds, reduces efficiency in goods, inflates the cost of public service and reduces services delivery while heightening corruption. With- out closure, it increasingly becomes difficult to mea- sure government performance in service delivery. The mechanics of the envisaged economic instability to emerge from the legislative rollback can be best described as demonstrated below. The tendering process on designated sectors, in this case Health, becomes obscured in secrecy. The public has no record on the bidding process and the ultimate winner of specific tenders. While some tenders may be publicised, the purported legislation would have given the state power to withhold tender details. In essence, if, under suchcircumstance, a tender is gazzeted, it is only done so, for proce- dure’s sakes. Given that all other processes are outside of public scrutiny, government officials reserve a right to unquestionably grant tenders to preferred handpicked candidates. The only incen- tive for this is kickbacks on the deal. To justify kickback, the winner’s bids have to be grossly inflated against normal cost. The difference between the inflated amount and the competitive bid (if it was considered) represents additional liquidity, typically in local currency, set to chase the elusive USD. These schemes have been ongoing, but with relaxed legislation on the health sector, the gravity of depreciation increases. Contractors have been at the forefront of driving the parallel exchange rate despite efforts to tame their activities. The outcome of their action shows that government has been recklessly issuing new money, which would consequently a relatively slowly growing forex. These occurrence of such a piece of legislation would not have been without precedence. Barely 2 years ago a scandal involving COVID-19 medi- cines procurement was pronounced. The then Minister of Health Obadiah Moyo awarded a US$60 million tender to a UAE firm at grossly inflated prices. The company had no record in health business and its product prices were 3 times above the average. The Minister was later sacked. The fact that this scandal involved the health sector, shows how vulnerable it is to such dealings. dence raised interest on the subject of public resource management. We focussed on projecting through analysis what could have been the impact of such lax policy. Had it been enacted the legis- lation would have set the stage for a fiscal and monetary showdown whose outcome was likely to have far reaching economic implications. Dubbed as general notice 634 of 2023, pertain- ing to the public procurement and disposal of public assets act, the “President” declared a number of activities, goods and services supplied by government to the health sector to be of national interest and therefore immediately exempt from public disclosure. These include construction equipment and materials, biomedical and medical equipment, medicines and drugs, vehicles includ- ing ambulances, laboratory equipment, chemicals and accessories, hospital protective equipment and repairs and maintenance services of hospital equipment and machinery. The health sector typically account for between 10% to 15% of the country’s national budget, which over the last 3 years has averaged US$4.5 billion per annum. The gross allocation to the health sector deduces to half a billion US dollars per year based on historical data. The setting aside of public disclosure rules on dealings in the health sector would suscept about US$500 million a year to corrupt activities which would have led to wider budget deficits and poorer healthcare delivery. In the short term, it may have resulted in sharp exchange rate depreciations as contrac This week government raised a scare after a piece of legislation was gazzeted only to be rescinded and disowned. However the inciThe policy that never was Zim's Tobacco Industry Booms year-to-date sales up by 43.79% compared to the same period last year. The year-to-date sales value has also increased by 44.07%, reaching US$516.50m. These impressive figures have been driven by increased volumes of tobacco sold, with cumulative sales reaching 172.46m kgs. The high sales figures are a testament to the resilience of Zimbabwe's tobacco industry, which has been able to weather the challenges posed by the COVID-19 pandemic and other factors. However, there are still challenges that need to be addressed to ensure that the industry con- tinues to grow and thrive. One of the challenges facing the industry is the issue of rejected bales, which are currently 7.83% behind the prior year. This suggests that there is a need for farmers to improve the quality of their tobacco and for buyers to be more discerning in their purchases. The govern- ment and industry stakeholders should work closely to provide farmers with the necessary support and training to improve the quality of their tobacco. Another challenge facing Zimbabwe's tobacco industry is the issue of debt imbabwe's tobacco sales have shown remarkable growth in the current season, with cumulative A Resilient Sector Amidst Adversity Day 41 Z financing for smallholder farmers. Many rural farmers lack the neces- sary collateral to secure funding from formal institutions, which limits their ability to invest in their farming operations. The government and industry stake- holders should explore alternative financing models that can provide smallholder farmers with access to credit, such as microfinance schemes.

12 The AXiS LXXV Friday 12 May 2023 Zimbabweans are being trapped in a devas- tating cost-of-living crisis as the Zimba- bwe dollar (ZWL) continues to massively deteriorate against the US dollar. The free-falling local currency is exerting mounting pressure on ZWL prices to skyrocket beyond the reach of many. In response, Treasury recently announced a mixed bag of policy measures to clamp the pric- ing madness and restore stability in the economy. This week’s column, therefore, analyses these new measures as well as other key developments that occurred during the week under review. 1. New Proposed Measures: Promotion of Use of ZWL The government will ensure that levies and fees charged by its affiliated agencies and service providers are paid in ZWLs. This is a good policy direction that was long overdue as it helps propel demand for the ZWL. As ZWL demand increases, its value will appreciate thus subduing the exchange rate pass-through to infla- tion. It however remains to be seen if the gov- ernment will surely promote its currency this time around because this is not the first time it has promised to increase tax collection in ZWLs. For instance, measures to restore stability announced in May 2022 included the “promotion of the use of ZWL’ which is yet to materialize. As such, the renewal of this policy stance is highly commendable and must be buttressed by introducing higher denomination banknotes to increase transaction convenience. 100% Retention of Domestic Forex Sales The RBZ will exempt all proceeds from domes- tic sales in foreign currency from the 15% surrender requirement. This is another positive move by authorities that will help reduce excess ZWL liquidity in the economy as well as mini- mize massive exchange rate losses faced by businesses as the gap between official and alter- native rates continue to widen. However, forex surrender requirements must also be scrapped for exporting businesses in order to help reduce their operating costs and encourage more exports. There is also a need to cushion workers particularly civil servants as well as pensioners by increasing the USD component of their earn- ings. This will provide them with a stable store of value thereby reducing widening income inequalities. Removal of Import Restrictions All basic goods will no longer be subject to import licenses and imported duty-free. This measure seeks to increase the supply of basics in the economy which will exert downward pres- sure on prices. However, this measure will not fully cushion consumers especially those earning in fragile ZWLs as these duty-free imports will be largely sold in foreign currency. As such, this policy stance poses a grave threat to the survival of the ZWL, local manufacturing, and employ- ment. It will also reduce government revenue collection from import duties and taxes at a time Treasury is facing mounting spending pressures emanating from the upcoming 2023 harmonized elections. Treasury Adoption of All External Loans Old Wine in New Bottles? Zimbabwe can no longer access external sionary credit lines to finance long-term income-generating and jobs-creating national projects. The nation is now resorting to increased taxation which is overburdening consumers and plunging them into extreme poverty. It is reported that authorities sometimes resort to collateralized borrowing which is fuelling illicit finan- cial flows and unsustainable mineral resource extraction. This is damaging the environment, pollut- ing water sources, and displacing families from com- munal land to pave the way for miners. As such, the ongoing structured debt dialogues show that the government is now committed to permanently resolving the debt conundrum, cutting poverty & inequality, and propelling stable, sustainable, and inclusive economic recovery and growth. The debt dialogues, however, must be buttressed by the increased political will to fully implement needed reforms – land tenure, governance, and economic reforms. These reforms will ensure a thriving democ- racy, transparent & accountable public sector, ease of doing business, social fairness & inclusion, fair market competition, and increased innovation. 3. Invictus Confirm Light Oil, Gas Presence The Australia Securities Exchange (ASX) listed Invictus Energy which has been exploring oil and gas in Muzarabani has announced that samples from its rig site confirmed the presence of light oil, gas condensate, and helium. “Results from the mudgas compositional analysis definitively prove the presence of hydrocarbons in multiple reservoir pay zones at Mukuyu-1 consistent with the wireline log interpreta- tion, fluorescence, and elevated mudgas readings,” reads part of the company’s update to shareholders. Invictus Energy found the presence of light oil and rich natural gas-condensate, with condensate gas ratios estimated at between 30 to 135 barrels per million cubic feet. Light crude oil has low density, low specific gravity, and low wax content. Since it produces a higher percentage of gasoline and diesel fuel when converted into products by an oil refinery, it receives a higher price than heavy crude oil on global commodity markets. Also, the potential for helium gas in commercial concentrations is another big win that will provide an additional high-value by-product. Helium is used as an inert-gas atmo- sphere for welding metals, rocket propulsion, meteo- rology, cryogenics, and in high-pressure breathing operations. Zimbabwe has reportedly over 40 minerals witnessing global demand but is struggling to make effective use of these. It must, therefore, adopt or devise its local version of the Extractive Industries Transparency Initiative (EITI) standards. The bedrock of EITI is the belief that public resources belong to the citizens hence the need to promote accountability, good gover- nance, and participation of all stakeholders in the mining value chain. The EITI standards will bridge the existing transparency gap by making mandatory disclosure of information such as contract awards and licenses, beneficial owners, revenues received by the government, revenue appropriated by the government, and the actual benefits to the citizenry. More so, authorities must expedite the passage of the Mines and Minerals Amendment Bill to pluck existing loop- holes undermining development in mining communi- ties. Zvikomborero B. Sibanda is an Economic Analyst for Zimbabwe Coalition on Debt and Development (ZIMCODD). He writes in his own capacity; his views do not represent those of the organization he works for. Email: [email protected] All external loans to the government will be transferred from the Reserve Bank of Zimbabwe (RBZ) to the Treasury. The official statistics show RBZ's external debt at US$3.4 billion as of the end of September 2022. History shows that the RBZ has been at the center stage of opaque borrowing in Zimbabwe, with most of its debts ending up being assumed by the taxpayers through the Treasury. Even though the decision to clean the RBZ balance sheet is welcome as it will help the Bank achieve its price and financial stability objectives, the procedure has become a recurring event that is exerting devastating impacts on the economy and citizens by plunging debt levels into unsustainable territory. To arrest this trend, authorities must therefore ensure that going forward all public debt is only contracted by Treasury in a transparent and accountable manner, that is, fully involving the Parliament. Enhanced Auction System The Reserve Bank of Zimbabwe (RBZ) foreign exchange auction system will be fine-tuned by auctioning a pre-announced envelope on a pure Dutch auction basis. However, authorities have been fine-tuning the auction system since its introduction in June 2020 but no meaningful stability has been noted to date. With companies now meeting most of their forex demands from domestic forex sales, it is high time authorities disband the auction system where they are sell- ing US dollars at a discount. The funds earmarked for the auction market must then be reallocated to other developmental needs such as the provision of public services. Gold coins and digital Tokens The government will continue to assure the public confidence in gold coins and digital gold tokens by ensuring that at all times, these instru- ments are fully backed by physical gold reserves. While the adoption of gold is a noble idea that will increase investment instruments and provide an alternative asset for storing value, I question the wisdom of selling precious yellow metal at a discount (overvalued interbank rate) amid rising economic instability. The widening disparity between parallel and official rates is promoting excessive arbitrage activities that only benefit the rich and a connected few. As such, selling gold in ZWLs must be stopped until a true market price of the ZWL is discovered. 2. Fourth Round of Structured Debt Dialogue Zimbabwe held the fourth high-level debt forum this week, a follow-up to a third meeting held in February 2023. The nation is engaging its credi- tors to clear debt arrears which have grown unsustainably. Statistics from the Public Debt Management Office (PDMO) show that of Zim- babwe’s US$14.04 billion external debt recorded as of September 2022, arrears & penalties alone account for almost 50% (US$6.6 billion) of this total. The total debt stock is officially recorded at US$17.6 billion as of the end of September 2022. This debt stock is roughly four (4) times the size of Zimbabwe’s average national budget of US$4.3 billion in the last decade. Zimbabwe’s high indebtedness is now crowding out public service delivery, private investment, concesand other developmental programs as more funds are being earmarked for debt repayments. More so, because of high arrears on its external debt, By Zvikomborero Sibanda New Economic Stability Measures

The AXiS LXXV Friday 12 May 2023 13 Pick n Pay rom Pick n Pay results a few things are worth noting. Zimbabwe is a hyperinflationary envi- ronment from an accounting perspective, therefore listed entities are compelled to report earn- ings according to IAS 29, financial reporting in hyperinflationary economies. This has been true for all listed entities on the ZSE reporting in local currency. the preparation of financials through this method suscepts financials to distortions which may deter objective analysis of the results. It also increas- es the scope of work from an accounting and audit- ing perspective, likewise given the restatement of prior year performances as well as assets and liabili- ties revaluations. Companies moving to the VFEX have pointed out to the complexities of preparations of financials in ZWL as a key challenge and equally the interpretation and reliability of ZWL-stated finan- cials by users, particularly investors. Results Extract The 72 stores of our 49% associate-accounted invest- ment delivered another resilient performance in a difficult economic environment. The Group’s share of TM’s earnings, before any hyperinflation net mone- tary adjustments, increased 1.8% year-on-year to R98.4 million. Sharp local currency devaluation during the year meant that hyperinflation and local currency translation into Rands negatively impacted the result. The Group year-end has resulted in the Group carrying an received a R16.0 million dividend from TM in this period (R20.1 million in FY22. Reported profit before tax and reported headline earn- ings include the impact of hyperinflation accounting attributable to the Group’s investment in associate. In management’s view, this impact of hyperinflation accounting does not provide stakeholders with an accurate assessment of the Group’s comparable year-on-year earnings performance. As a result, the Group has presented its earnings for the current and prior period on a pro forma basis, by excluding the Group’s share of associate’s hyperinflation net mone- tary loss of R23.4 million (2022: R25.1 million), with no impact on tax. Refer to note 7 of the sum- marised Group annual financial statements for more information. Another pertinent observation is the application of exchange rates in the translation of local investment. For Pick n Pay, the company observed that it was not able to clear funds at the exiting auction market rate which fared relatively better than the parallel rate. The market has been unable to clear funds owed to external parties either as settlement to credi- tors or dividends to shareholders timeously. Pick n Pay considered that it could not translate its earnings at the auction rate, but rather discount it further to a milder rate, truly reflective of market forces. This predicament was once highlighted by Old Mutual in 2019 when considering the rate to account for its Zim earnings. What this means for the broader market is that earnings and even balance sheet items translated to forex, should not be accounted for at par with the official market rate, for a better appreci current period, as part of foreign currency translations. The share of associate’s income and net asset value of TM Supermarkets have been translated into the Group’s presentation currency at the closing rate in accordance with the hyperinflationary provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates. Zimba- bwe operates a formal market-based foreign exchange trading system to establish formalised trading in ZWL$ with other currencies (referred to as the auction rate). The intention of this auction rate system is expected to bring transparency and efficiency in the trading of foreign currency in the economy. In line with prior period assessments, management assessed that the closing auction rate to the South Afri- can rand is not available for immediate settlement, as shortages of foreign currency results in the official exchange rate not being liquid, and is therefore not an appropriate rate to use when accounting for the Group's investment in associate. An estimated exchange rate of 0.019 ZWL$ (2022: 0.082 ZWL$) to the South African rand was used when translating the result of TM Super- markets as at 26 February 2023. Inputs considered in this estimate include the official inflation rate, the in-country fuel price and the exchange rate applicable to dividends received from the Group’s investment in associate during the period. The table below summarises the exchange rates at which the results of TM Supermarkets have been translated into South African rand, for the relevant peri- ods under review. The closing ZWL$ to ZAR exchange rate was calculated using the official USD to ZAR exchange rate divided by the management estimat- ed USD to ZWL$ exchange rate. For comparative informational purposes, exchange rates based on the USD to ZWL$ auction rate have also been presented. 7.2 Exchange rates applied in translating the results of investment in associate During the period under review, significant judgement was applied by management in determining that the following impairment indicators of the Group's invest- ment in associate exist: • The devaluation and illiquidity of currency in Zimbabwe and the resultant impact on the Zimbabwean economy; • Currency shortages and currency devaluation led to high levels of food and other inflation; • The economy was subjected to increases in Zimbabwe inflation rates as published by the Reserve Bank of Zimbabwe; and • The upward valuation of the assets of TM Supermarkets attributable to the application of hyperinflation accounting in terms of IAS 29. Impairment reviews were performed and the Group concluded that the carrying value of its investment in associate exceeded its recoverable amount, resulting in an impairment loss of R5.7 million (2022: R14.4 million) recognised by the Group. The Burden of Accounting in Hyperinflation markets F z ation of earnings performance. Extract from Results Accounting for investment in associateThe Group has a 49% investment in TM Supermarkets (Pvt) Limited (TM Supermarkets), a private company incorporated in Zimbabwe, and which operates supermarkets through- out Zimbabwe. The Group accounts for its investment in associate under the equity method of accounting in accordance with IAS 28. Investment in Associates and Joint Ventures In accordance with the provisions of IAS 29 Financial Reporting in Hyperinflationary Economies (IAS 29), entities operating in Zimbabwe have been assessed to be operating in a hyperinflationary economy. The equi- ty-accounted results of TM Supermarkets included in this Group result have therefore been prepared in accordance with IAS 29, with the following key accounting principles applied within the results of TM Supermarkets: All previously published financial information was restated to reflect the current buying power of the Zimbabwe dollar (ZWL$), and • All assets and liabilities were revalued to reflect current values, which resulted in a non-cash net monetary adjustment recognised in the statement of com- prehensive income of TM Supermarkets. Prudentially accounting for its investment in Zimba- bwe, Pick n Pay said that it impaired its investment in Zimbabwe to the extent that the carrying value of its investment in associate exceeded its recoverable amount. What this meant was that an upward revalua- tion in assets arising from hyperinflation accounting was effected which grossly inflated the group’s value of investment in Zimbabwe. The outcome of the adjustment was a net impairment loss of R5.7 million. this assertion shows that there is a general distortion in recoverable amounts from local investment, which demand a discount on equity value from foreign inves- tors. This distortion makes it difficult for foreigners to value local businesses even as it makes it difficult for the local entity to effectively manage its balance sheet. Companies may mistakenly end up shoring debt or overexposing their balance sheet, on the assumption that they are well covered, given a higher equity figure. This may result in near-term insolvency, suffice it to say earning assets on balance sheets are properly accounted for. Foreign currency translations As the Group's presentation currency is not that of a hyperinflationary economy, the comparative information of the Group's financial results related to TM Supermarkets is not restated. Any difference between the Group's share of the TM Supermarkets adjusted equity balance after applying IAS 29 and the balance previously recorded by the Group is recognised in other comprehensive income in the

The AXiS LXXV Friday 12 May 2023 Delta Corporation constraints to post a 12% increase in beverage volume. Zimbabwe's lager beer volume reached a histor- ic 2.2 million hectolitres due to several factors, including competitive and stable US$ pricing, increased consumer engagement through brand activations, new glass bottles and better circula- tion, and improved brand and pack availability from optimized factory performance. Additional packaging capacity is expected in Qtr2 F24 to allow for full portfolio availability. Overall, stra- tegic pricing, consumer engagement, and opti- mized production processes are driving volume growth and increasing accessibility for consum- ers. Cash crop marketing and improved supply of Scud have significantly contributed to volume growth. The recent launch of Chibuku Super Banana flavor has promised a positive volume trajectory, and the utilization of regional capacity has covered the supply. However, challenges remain, such as compromised Chibuku Super capacity from water and electricity outages, operational challenges in formal retail/wholesale channels, and poor market access during the rainy season due to bad road conditions, hinder- ing growth. Delta's sparkling drinks have continued to see a recovery in both volume and market share, with an even higher value share. However, the limited PET capacity has been a challenge for the com- pany, which is why a new plant is being com- missioned in May 2023 to address this issue. 60% in revenue, reaching ZW$536.92 billion, while operating income rose by 29% to ZW$99.79 billion. Basic earnings per share also increased by 29% to ZW$4,842.23 cents, while the declared total divi- dend remained unchanged at US$0.03 cents per share. Delta's revenue growth was driven by an increase in sales volume, while its regional operations moved closer to breaking even. However, the com- pany's cost structure was distorted by the existence of multiple exchange rates, and global inflation affected packaging and fuel costs. Delta also bene- fited from high stockholding gains, with replace- ment cost-based pricing in ZW$. The Earnings Before Interest and Taxes (EBIT) increased by 13% to US$140.6 million, indicating that the company's revenue contributed to its profit- ability. In light of this profitability increased by 30% to ZW$63.14 billion. Delta's estimated consumer price index (CPI) rose by 204%, mainly due to the absence of ZIMSTATS CPI data for February and March 2023. The estima- tion was guided by experts, currency movement factors, and proxy data, which is permitted under IAS 29. The South African Rand to US Dollar exchange rate increased by 25%, while the Zambian Kwacha to US Dollar exchange rate increased by 12%. These exchange rate fluctuations may have impacted Delta's import expenses. Capital Expenditure for the year was ZW$70 mil- lion. Delta invested in significantly during the year, including a new RGB packaging line in Southerton, a PET new line in Graniteside, and a Chibuku Super plant in Harare. The company also invested in distribution vehicles, forklifts, brewing tanks, coolers, and PET lines. Despite its strong financial performance, Delta faced some challenges during the year. The company experienced a high monetary loss and effective tax rate, and it also dealt with a contractual dispute with a foreign supplier. Additionally, the company had ongoing appeal processes regarding ZIMRA foreign currency tax assessments. Delta demonstrated strong financial performance, indicating that it is well-positioned to continue its growth trajectory in the African beverage market. Nonetheless, the company must continue to manage its costs effectively and navigate the challenges posed by exchange rate movements and inflation. In Zimbabwe's tempestuous economy, Delta benefit- ted from to increased government spending, housing demand and strong mining and agricultural activity. However, volatility persisted as the Zimbabwe dollar seesawed before stabilizing in the third quar- ter, only to slide again in the final quarter, ham- stringing formal businesses. Tight liquidity and stratospheric interest rates compounded economic distortions. Adding to the tempest, erratic power and water sup- plies disrupted operations while congested cities hampered product deliveries. Pressure on consumer wallets from mounting inflation and fuel hikes threatened to dampen Delta's sparkle. To circumvent economic floods in its main market, Delta invested heavily in equipment for informal vendors offering competitive hard currency pricing. New production coming online and penetrating New production coming online and penetrating value segments supported volume gains, with spar- kling beverages fizzing 10% higher to claim an outsize market share despite limited PET capacity. Sorghum beer volumes in Zimbabwe ascended 9%, propelled by alternative packs, innovative flavors and exploiting regional capacity. In neighboring Zambia, Delta's volumes spiked 28% as new sorghum beers seduced customers. An uptick in Zambia's economy promised prosperity but currency depreciation drove costs up as dispos- able incomes remained tight, with high maize prices adding to hardship. In South Africa, 12% volume growth for sorghum beer signified captur- ing share from illicit homebrews via distribution gains and imminent local production to choke costs. An economic rebound following COVID-19 buoyed sales, though higher fuel and electricity levies pressured spending. Despite experiencing an increase in volumes in Zambia and South Africa, the firm has yet to achieve profitability as it focus- es on penetrating the market and solidifying its brands in neighboring countries. African Distillers, Delta's spirits subsidiary, grew 18%, lifted by a 14% upswing in spirits, 16% uplift in wines and 23% upsurge in ciders. Expand- ed distribution and in-country supply enabled com- petitive pricing, cementing market dominance despite health regulations and trade constraints roil- ing key clients. Schweppes Holdings Africa, an associate of Delta, faced several challenges during the year. In the first half of the year, the company was constrained by a shortage of fruit juices, which adversely affected its production and sales. Additionally, trading chal- lenges in formal sectors further impacted the com- pany's operations. Furthermore, a prolonged plant breakdown had a significant impact on the supply of water and Minute Maid juice drinks. On the other hand, Nampak Zimbabwe, a packaging com- pany, sustained volume growth and benefited from a recovery in key customer segments. Despite facing economic challenges, the company was able to maintain its growth trajectory, which is a posi- tive sign for its future prospects.Moving forward Delta has arranged to get in bed with Heineken to further the firm’s business foothold in the region. Delta's sparkling performance, especially in Zimba- bwe, affirmed its adaptive business models can overcome macro-economic and operational chal- lenges, though heavy local currency debts and imports render the group exposed to exchange rate shocks and restrictive policy changes. Productivity hiccups from power outages and scarce water impact operations, but with new capacity coming online, Delta is poised to overcome present chal- lenges and continue outpacing peers. Overall, rising above economic difficulties and supply vulnerabili- ties, Delta's adept management produced stellar results in a year of adversity, suggesting even more effervescent outlooks ahead. elta Corporation announced sparkling results, overcoming macroeconomic head- winds in Zimbabwe and supply chain Posts Impressive 60% Increase in Revenue, Delivering Sparkling FY’23 Results Despite Economic Headwinds D 14

Hwange Colliery political to challenges beyond our borders, Hwange Colliery is not being spared. Since 2019, Hwange had been recording profits, though at a decreasing rate. However, in 2022, the Group posted a record ZWL8.6 billion loss-after tax despite a ramped-up production. This was from a profit of ZWL98 million. How- ever, loss-making alone is not a reason to avoid investment or that can define Hwange Colliery’s going forward concerned, but it needs to be tamed to increase shareholder returns and expan- sion. Amazon has been recording unstable prof- its, Tesla spent five years without a profit while Uber’s average revenue per user is going down. However, the difference, that Hwange should be abreast of are the differences in operating envi- ronments in recognition of the fitness of the economic environment, currency performance, taxation policies and economic policies at large. Amazon, Tesla and Uber enjoy a euphoric oper- ating environment where corporates are incentiv- ised, with a stable currency and favourable taxa- tion policies. Hwange’s loss-making year was not more of a management deficit but of a dire macroeconomic environment coupled with divestment economic policies and intermittent internal environment’s effective policing. For instance, the loss was mostly attributed to the exchange rate impact on legacy debts. Legacy debts contributed ZWL30.70 billion of unrealised losses in infla- tion-adjusted terms. The operating economic environment is crowded with a busload of headwinds, making it tough for companies. A track down of the company’s financial records shows that deprived profits tilted more toward Zimbabwe’s decaying local currency, disparity of exchange rates as wells unfavourable taxation policies which are eating up a handsome amount of the company’s profits. A closer look at the company’s financials indi- cates that production costs (marketing)decreased by a margin of 14% in 2019. However, down through the lane to 2022, costs were shooting through the roof. From ZWL14 million in 2019, costs shoot to ZWL17 million in 2021, while 2021 and 2022’s costs spiralled to ZWL49 mil- lion and ZWL373 million respectively. This means marketing costs have been increas- ing at an increasing rate, and in 4 years, market- ing costs alone soared by a whopping 2564%, the highest cost outturn in four years. On the other hand, administrative costs alone ballooned to ZWL14 billion from ZWL131 million in 2019, increasing an unmatched rate of 10587% in four years.The company did not include finance costs from 2019 up to 2022 FY results. However, though the costs are more of an inter- nal management issue, they are further largely indicative of an inflationary environment where the company had to review its wages to employ- ees regularly to cushion them against a deterio- rating Zimbabwe dollar. This also shows that marketers reviewed also their taxes to fit infla- tion-adjusted terms, thus, skyrocketing the costs. Inflation is a macroeconomic threat that largely rests on the incompetence of treasury and central banks in restoring confidence in the market. Since the reintroduction of the Zimbabwe dollar in 2019, the dollar has gained by over 100% against the Zimbabwe dollar. From being pegged s the operating environment toughens due to a busload of calamities, from challeng- es within the country, both economic and From Profit to Loss Unpacking the Colliery’s ZW$8.6 Billion Loss Misery A at 1:1, the Zimbabwe dollar has depreciated to ZWL1070 on the formal market against the single dollar while to ZWL2700 against the single dollar on the parallel market rate. This means the purchasing power of the local curren- cy is weaning making ZWL purchases worthless in the long run. To cut down these losses, com- panies have to buy the US Dollar at inflated prices in the black market, making it a loss-loss for them. The auction market has been lagging in cushioning the companies with the desired US dollar, for value preservation and to import key raw materials. The rapid decline of the local currency stun cor- porates further through the 25% surrender threshold and 20% for local sales. This means companies have to give up their 25% and 20% of forex proceeds to the RBZ in exchange for the Zimbabwe dollar, quoting the formal market. Producers quote prices using the parallel market and the parallel market is twice the formal market rate. Therefore, it means companies are losing half of their hard-earned profits to the deteriorating Zimbabwe dollar. Instead of getting 25% and 20% back, companies are obtaining 12.5% and 10% respectively. Further exacerbat- ing this is the aggressive taxation regime in the country. Zimbabwe has a 15% VAT, circa 25% corporate tax, a 3% Aids levy and an aggressive-custom duties policy. Corporates further pay custom duties and withholding tax while pay-as-you-earn (PAYE) tax remains substantial. Zimbabwe pres- ently operates on a source-based tax system. This means that income from a source within, or deemed to be within, Zimbabwe will be sub- ject to tax in Zimbabwe unless a specific exemption is available. The maximum rate of corporate tax was 30.9 % and the minimum was 24%. This affects operating profit and ultimately, net profit as companies lose more in feeding ZIMRA’s hunger for high taxes. FY Performance Coal production increased by 63% while sales volumes increased by 45% compared to the prior year. “Despite the remarkable increase in production and sales compared to the previous year, the underground mine section was affected by delays in the commissioning of new equip- ment, while the market for NPD (nuts, peas, and duff) and Duff products was depressed,” the Group said in a statement accompanying the full-year results. Raw coking coal and clean coking coal sales increased by 36%, from 594,482 tonnes in 2021 to 808,315 tonnes in 2022. The total coal produced by opencast oper- ations was 3,128,884 tonnes, a 73% increase in production from the previous year. A total of 1,198,539 tonnes of coal were delivered to Hwange Power Station during the year, which was an increase of 63% from the previous year. Deliveries into the power station were, however, neg- atively affected by challenges at the power station and limited stock holding space at the same. Underground mine coal production declined by 24% compared to the previous year. This was mainly due to delays in commissioning the new underground mining equipment due to COVID-19 restrictions that affected the move- ment of the engineers from the Original Equip- ment Manufacturers. As a part of efforts to increase production, the Company entered into an equipment mobilisation and coal offtake agreement through which it will receive new underground mining equipment valued at US$15 million over two years. A con- signment of the equipment worth U6 million has since been received and commissioned into oper- ation. This is expected to increase underground production to 50,000 tonnes by mid-2023.The Company has also engaged new mining contrac- tors to open three new opencast pits to guaran- tee coking coal annual production of 772,000 tonnes per year. On the coal processing front, the Company acquired two new washing plants that will be commissioned during the second half of 2023. The washing plants will be located near the mining areas to reduce hauling and pro- cessing costs. The development of the Option Area started with the boxcut and mining of a portal that will lead to the underground mine. This new mine will augment the production of coking coal from the current 3 Main under- ground mines. Coal production from the Option Area is scheduled for 2024. “The Company has a thrust in 2023 to grow its market share of coking coal sales in neighbour- ing countries. Advanced plans to develop dedi- cated solutions for the delivery of coking coal and coke products in the region are underway,” added the Group. As a result, revenue improved by 139.76% from ZWL32.42 billion in 2021 to ZWL77.73 billion in 2022 on an inflation-adjust- ed basis. This was largely driven by the increase in sales tonnes. Gross profit increased by 226.20% from ZWL7.10 billion a prior year to ZWL23.16 billion in inflation-adjusted terms this year. However, the Company posted a loss of ZWL8.6 billion for the year. The loss was mostly attributed to the exchange rate impact on legacy debts. Legacy debts contributed ZWL30.70 billion of unrealised losses in infla- tion-adjusted terms. The key is to make the auc- tion system fully market responsive by adopting a free market policy, increasing the pace of adjustments, removing controls, tightening mone- tary policy, improving governance and boosting foreign exchange supply. An efficient market-ori- ented system will ensure stability in the exchange rate and remove distortion. 15 The AXiS LXXV Friday 12 May 2023

16 The AXiS LXXV Friday 12 May 2023 consumer behaviour and market trends to determine the optimal price points for its products and services. By pricing products and services correctly, Edgars could attract more customers and increase sales, ultimately boost- ing profitability. Another way for Edgars to compete with international retailers is by leveraging its local knowledge and expertise. By understanding the local market and consumer preferences, Edgars can tailor its products and services to meet the needs of Zimbabwean customers. This could involve offering products that are more culturally relevant or offering services that are tailored to local needs and preferenc- es. Edgars' main competitor in Zimbabwe's retail market is Truworths Truworths offers similar products and services to Edgars and compete for the same customer base. However, Edgars has a significant advantage over its competi- tors due to its large network of retail stores and its well-established brand recognition in Zimbabwe. In addition to local competition, Edgars also faces competition from international retailers and some have entered the Zimbabwean market in recent years. These include compa- nies such as Woolworths and Pick n Pay, which have expanded their operations into Zimbabwe as part of their broader plans to expand across the African continent. These international retailers bring significant resourc- es and expertise to the Zimbabwean market, which can pose a challenge to Edgars. However, Edgars has managed to hold its own against international competition by leveraging its local knowledge and expertise. The compa- ny has a deep understanding of the Zimba- bwean market and has tailored its products and services to meet the needs of local cus- tomers. Edgars has also invested in building strong relationships with its stakeholders, such as suppliers, customers, and employees, which has helped it to create a more stable and sup- portive environment for its operations. Regionally, Edgars faces competition from other retailers in Southern Africa, such as South Africa's Woolworths and Truworths, and Botswana's Choppies Enterprises. These companies bring significant resources and expertise to the regional market, which can pose a challenge to Edgars. However, Edgars has established a strong brand presence in Zimbabwe and has a loyal customer base, which gives it a competitive advantage. In conclusion, Edgars faces significant compe- tition in Zimbabwe's retail market from both local and international competitors. However, the company has managed to hold its own by leveraging its local knowledge and expertise, building strong relationships with stakeholders, and tailoring its products and services to meet the needs of local customers. While competi- tion in the regional market remains fierce, Edgars' well-established brand presence and loyal customer base give it a competitive advantage. E Edgars' Battle for Dominance dgars Store Limited, one of Zimba- bwe's largest retail companies, released its financial report for the 52 weeks that ended 8th January 2023. The report shows a significant increase in revenue and operating profit, but also a decline in profit. The company's total equity and total assets increased as well. In this article, we will ana- lyze the financial report, explore possible ways to improve profitability, discuss how to compete with international competition, and look at strategies to sustain operations in Zim- babwe's volatile economy. The increase in revenue by 52% from ZWL 23.675 billion to ZWL 35.92 billion is a significant achievement for Edgars. The com- pany's operating profit also increased by 93% from ZWL 4.10 billion to ZWL 7.918 billion. However, the decline in profit by 90% from ZWL 1.921 billion to ZWL 194.448 million is a cause for concern. The decrease in profit can be attributed to various factors, including inflation, foreign exchange shortages, and the impact of the COVID-19 pandemic. To improve profitability, Edgars could explore various strategies, including cost-cutting mea- sures, diversification of products and services, and the introduction of innovative marketing campaigns. Cost-cutting measures could include the optimization of supply chain oper- ations, renegotiating rental agreements, and streamlining administrative expenses. Diversi- fication of products and services could involve expanding into new markets or offer- ing new product lines to existing customers. Innovative marketing campaigns could help to attract new customers and increase sales. Competing with international retailers in Zim- babwe's market can be challenging, but Edgars has several advantages, including its brand recognition, loyal customer base, and extensive network of retail stores. To compete effectively, Edgars could focus on offering high-quality products and services, improving customer service, and leveraging its existing relationships with suppliers and partners. The company could also explore partnerships with other retailers or e-commerce platforms to expand its reach and offer customers a more diverse range of products and services. To sustain its operations in Zimbabwe's vola- tile economy, Edgars should focus on several strategies, including diversification of revenue streams, enhancing supply chain resilience, and investing in technology and innovation. Diversification of revenue streams could involve expanding into new markets or offer- ing new product lines to existing customers. Enhancing supply chain resilience could involve building stronger relationships with suppliers, implementing risk management strategies, and investing in logistics infrastruc- ture. Investing in technology and innovation could help to improve operational efficiency, enhance the customer experience, and provide new revenue opportunities.Edgars should explore measures to improve profitability. The company could also focus on optimizing its pricing strategy. This could involve analyzing Competing Against Local and International Retail Giants in Zimbabwe Padenga Holdings Limited, a Victoria Falls-based pro- ducer of crocodilian skins and meat catering to high-end export markets and mining firms, has returned to profit- ability. The company recorded a profit of $9.3 million for the fiscal year 2022, a turnaround from a loss of $8.2 million the previous year. This robust performance was primarily driven by a full year of gold production at the Eureka Mine, which became operational in Octo- ber 2021. The year ending December 31, 2022 saw Padenga navi- gating various macroeconomic headwinds that necessitat- ed agile management. Inflationary pressures eased in the latter part of the year as central banks raised interest rates, while the Zimbabwean dollar continued its down- ward slide against major currencies. As a result, Paden- ga posted improved earnings before interest, taxes, depreciation, and amortization of $32.3 million. The company also recorded a $2.7 million gain from the revaluation of biological assets, attributable to higher forecast crocodilian skin prices in 2023 and greater live- stock volumes. Padenga’s interest expense declined 3% to $9.97 million, largely due to the restructuring of the mining unit’s bor- rowing facilities. On the back of revenue growth, cost management, and the swing from a biological asset revaluation loss to a gain, Padenga achieved a profit before tax from continuing operations of $13.9 million, compared to a $7.3 million loss before tax in 2021. Padenga Holdings, which listed on the Victoria Falls Stock Exchange in July 2021 after switching from the Zimbabwe Stock Exchange, is Africa’s first listed com- pany focused solely on crocodilian skin and meat pro- duction. It traces its origins to one of Zimbabwe’s first commercial crocodile farms established in 1965. Today, Padenga is a leading supplier of premium Nile crocodile skins, accounting for nearly 85% of skins sold to top luxury brands. It also produces crocodilian meat for export to Europe and Asia. Padenga’s mining arm, Dallaglio, became one of the top three gold producers in the country after producing nearly 2,000 kilograms of gold, a 101% increase from the previous year. This growth was largely driven by the Eureka gold mine, which had its first full year of opera- tions. However, Padenga’s crocodile operations struggled due to a necessary shift in the harvest season. The com- pany harvested 34,117 crocodile skins, a 17% decrease from the previous year. Revenue from the crocodile operations also decreased by 7% due to the drop in har- vest volumes, though average prices per skin did increase slightly. The crocodile operations remained prof- itable due to a significant gain from the increased value of its crocodile livestock. Padenga's total revenue increased 68% to $127.9 mil- lion, with the majority (82%) coming from its mining operations. Profit from operations was $15.7 million, up significantly from $10.1 million the previous year. The company's crocodile operations generated $4.9 million in cash flow, down from $5.2 million the previous year due to the timing of cash flows from the extended harvest. Padenga exited its struggling alligator operations in the U.S. after years of accumulating losses. It sold the assets of that operation in July. Padenga has invested significantly in capital projects, including refurbishing an underground mine that is expected to boost revenue and profits. Its Eureka gold mine continues to drive growth. Though the crocodile operations have faced challenges, strategies to improve harvest volumes, increase prices, and re-enter the meat export market are improving returns. Strong demand for premium crocodile skins positions the company well for continued success. Overall, after returning to profitabili- ty, Padenga aims to focus on growth and shareholder returns. The company will monitor regulatory issues but remains optimistic about the future. However, no divi- dend was issued for the financial year. Padenga Returns to Profitability on Gold Productions the new underground mining equipment due to COVID-19 restrictions that affected the move- ment of the engineers from the Original Equip- ment Manufacturers. As a part of efforts to increase production, the Company entered into an equipment mobilisation and coal offtake agreement through which it will receive new underground mining equipment valued at US$15 million over two years. A con- signment of the equipment worth U6 million has since been received and commissioned into oper- ation. This is expected to increase underground production to 50,000 tonnes by mid-2023.The Company has also engaged new mining contrac- tors to open three new opencast pits to guaran- tee coking coal annual production of 772,000 tonnes per year. On the coal processing front, the Company acquired two new washing plants that will be commissioned during the second half of 2023. The washing plants will be located near the mining areas to reduce hauling and pro- cessing costs. The development of the Option Area started with the boxcut and mining of a portal that will lead to the underground mine. This new mine will augment the production of coking coal from the current 3 Main under- ground mines. Coal production from the Option Area is scheduled for 2024. “The Company has a thrust in 2023 to grow its market share of coking coal sales in neighbour- ing countries. Advanced plans to develop dedi- cated solutions for the delivery of coking coal and coke products in the region are underway,” added the Group. As a result, revenue improved by 139.76% from ZWL32.42 billion in 2021 to ZWL77.73 billion in 2022 on an inflation-adjust- ed basis. This was largely driven by the increase in sales tonnes. Gross profit increased by 226.20% from ZWL7.10 billion a prior year to ZWL23.16 billion in inflation-adjusted terms this year. However, the Company posted a loss of ZWL8.6 billion for the year. The loss was mostly attributed to the exchange rate impact on legacy debts. Legacy debts contributed ZWL30.70 billion of unrealised losses in infla- tion-adjusted terms. The key is to make the auc- tion system fully market responsive by adopting a free market policy, increasing the pace of adjustments, removing controls, tightening mone- tary policy, improving governance and boosting foreign exchange supply. An efficient market-ori- ented system will ensure stability in the exchange rate and remove distortion.

The AXiS LXXV Friday 12 May 2023 17 From Losses to Lessons: 2022 Journey Towards Growth and Resilience Zimplow Holdings Limited Zimplow Holdings Limited, which is set to list on the Victoria Falls Stock Exchange (VFEX) after announcing its intention to intention to delist from the Zimbabwe Stock Exchange (ZSE), weathered a turbulent year in 2022 owing to an arduous trading environment and the cessation of the Caterpillar dealership in September 2022. The discontinuation of Barzem activities culminated in a loss before tax of ZWL$1 billion caused by provisions of ZWL$7.4 billion, encompassing stock write-downs of ZWL$6.4 billion, exchange losses of ZWL$0.5 billion and retrenchment expenditures of ZWL$0.5 billion. The directorate is acquiring Barloworld's 49% stake in Barzem to safeguard shareholder value. In a cautionary account to shareholders dated 04 May 2023, Zimplow group company secretary Mrs. Sharon Manangazira articulated that the directorate has ratified the delisting of the corpo- ration from ZSE. “The directors of Zimplow Holdings Limited wish to advise all shareholders and the investing public that the board has approved the delisting of the company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange (the “Transac- tion”), Further details of the transaction will be provided to shareholders once all regulatory processes have been finalised. Shareholders are, therefore, advised to exercise caution and consult their pro- fessional advisers when trading in the company’s shares.” she affirmed The transition to the VFEX proffers several bene- fits to Zimplow, encompassing access to foreign capital and greater exposure to global investors. Listing on the waterfall bourse, VFEX will pro- vide Zimplow with access to a more expansive pool of investors, who are likely to be enticed by the exchange's reputation for stability and transparency. By accessing foreign capital, Zim- plow will be better positioned to fund its expan- sion plans and mitigate its exposure to the vola- tile Zimbabwean economy. However, there are also risks allied with listing on the VFEX. Zimplow will need to comply with more stringent regulatory prerequisites, which could amplify compliance costs. The company will also need to navigate the unique risks allied with foreign exchange, such as currency fluctua tions and geopolitical risks. Overall, the migra- tionto the VFEX presents both opportunities and challenges for Zimplow, and the company will need to carefully administer these risks to ensure a triumphant transition. For the 2022 financial year, Zimplow’s revenue increased by 5.9% from ZWL$22.8 billion in 2021 to ZWL$24.1 billion. The increase was driven by robust volume and price growth across all segments. Cost of sales declined by 5.4% from ZWL$14.3 billion to ZWL$13.5 billion due to diminished input costs mainly raw materials. As a result, gross profit increased by 26.6% to ZWL$10.6 billion. However, Zimplow recorded an operating loss of ZWL$106 million in 2022 compared to an oper- ating profit of ZWL$3.3 billion in 2021. This was chiefly due to a significant increase in other operating expenses which went up by 439% to ZWL$7.8 billion. Other income also declined by 236% to ZWL$1.7 billion. Allowance for antici- pated credit losses increased from ZWL$33 mil- lion to ZWL$501 million, reflecting deteriorating economic conditions. Selling and distribution costs were 16% higher at ZWL$328 million due to increased transport costs. Administrative expenses doubled to ZWL$7.9 billion due to exchange losses from increased exposure to foreign currency debts and investments. Finance costs grew by 124% to ZWL$89 million in line with higher borrowing levels. Overall, Zimplow recorded a net loss of ZWL$1.3 billion for the year compared to a net profit of ZWL$1.5 billion in 2021. Other compre- hensive income of ZWL$5.9 billion arising from the revaluation of property, plant, and equipment reduced the total comprehensive loss to ZWL$4.7 billion. The year started positively with strong demand across segments. However, the drought slowed agricultural equipment demand in the second half. Monetary tightening and lower liquidity also reduced demand for capital equipment. Although the logistics and automotive segment grew, it did not offset the termination of the Caterpillar deal- ership. Agricultural equipment: Mealie Brand export . sales grew 36% but local sales fell 16%. Imple- ments and spares sales rose. Farmec tractor sales- fell 15% but higher-powered tractors and imple- ments sales rose. Service hours grew 32% Logistics and automotive: Scanlink truck and bus sales rose 88% and 300% respectively due to improved supply and long-standing orders. How- ever, parts and service hours fell due to fleet renewal. Good Year tyre sales rose 2% despite challenges. Retread production rose 40%. Further progress is needed to meet targets. Mining and infrastructure equipment: Barzem transitioned to Tractive Power Solutions (TPS) to serve mining and construction needs, with infra- structure, skills, and funding. Alliances were secured to continue servicing major customers during the transition. Service contracts were won, boosting scale. Powermec generator demand and service hours rose 16% and 44% respectively. Solar installations rose 116%. CT Bolts matched prior year volumes but profit fell 14% on lower margins. No dividend was declared to reorganise the mining and infrastructure cluster. Outlook and strategy: Extract synergies and efficiencies from restructuring to improve results. Significant cost savings are expected. Grow TPS’s market share in mining and construction equipment, parts, and services. TPS aims to become a technical solutions partner for major fleet owners and workshops. Build resilience in Massey Ferguson and Valtra tractor brands under separate units, Farmec and Valmec. Expand Mealie Brand's small-scale mechanization range. Stabilize logistics and automotive, strengthen agriculture equipment, and transform mining and infrastructure equipment. Although unpredictable, mining and agriculture sector growth and restruc- turing provide opportunities. Based on the analysis, Zimplow’s financial per- formance deteriorated in 2022 compared to 2021 due to operational challenges and adverse eco- nomic factors. The business is likely to remain under pressure going into 2023 amid high infla- tion, currency volatility and subdued aggregate demand. Cost control and new revenue streams will be key to return to profitability. Working capital management will also be critical to navi- gating the difficult economic environment. Did you know? DELTA provides standing support to humanitarian relief institutions, and has supported 100 bursary students and 50 graduate trainees annually, totaling over 2,000 and 3,000 respectively in the past 20 years. They also engage an average of 150 apprentices annually and construct at least one classroom block each year in underprivileged communities, benefiting 18 schools across 10 provinces.

The AXiS LXXV Friday 12 May 2023 18 Green Densification Explained NMB Properties Promises Densification Last week NMB Holdings launched a new property development and services divi- sion, NMB Properties. Giving an update at the launch of the new division, the company highlighted that it will prioritise densification in its operations as it is a topical issue in develop- ment and a critical solution to economic and environmental sustainability. Property companies are playing a pivotal role in developing cities in Zimbabwe and they must match international standards and adhere to global trends and accept- able practices. Work and lifestyles have evolved and the mind of a property developer must rethink the spaces in which people work and live to fulfil multiple needs seamlessly. Places, where people live, work, play, shop, and learn, are now usually within convenient distances from each other. Such communities are sustainable and form the basics of urban densification we will try to discuss in this article. On the day of its launch, NMB Properties boast- ed of NMB Bank’s head office property along Liberation Legacy Way. The company describes the property as ‘a marvel of sophistication that incorporates open and contemporary workspaces.’ In Marlborough, the company opened Reoville Estate, a 26-unit gated community located west of Harare along Adylin Road. More projects are still in their various development stages across the country. Cities are intensive in their use of land, water and energy. In Zimbabwe, the bulk of the popula- tion has been concentrated in cities. A rapidly growing population usually wreaks havoc on the environment and depletes resources. Densification speaks to the increase in the number of dwelling units and mixed-use spaces per square meter (sqm). That encourages efficiency and conserva- tion as well as taps into the potential of cities becoming part of the solution to climate change. Maybe we need to start by discussing the basics of climate change. According to the UN, climate change refers to long-term shifts in temperatures and weather patterns. This refers to the signifi- cant variation of average weather conditions becoming, for example, warmer, wetter, or drier—over several decades or longer. It is the longer-term trend that differentiates climate change from natural weather variability. These shifts may be natural, but since the 1800s, human activities have been the main driver of climate change, primarily due to the burning of fossil fuels (like coal, oil, and gas), which produce heat-trapping gases. The burning of fossil fuels, cutting down forests, and farming livestock have increasingly influ- enced the climate and the earth's temperature. These have been considered the top three causes of climate change. So, in cities, activities like powering buildings, using transportation, cutting down trees, manufacturing goods, and generating electricity and heat by burning fossil fuels become catalysts of global emissions thereby causing climate change. Cities have a role to play to ensure they help in cutting carbon dioxide (CO2) emissions. Property companies must construct energy-efficient build- ings and set ups that encourage low-carbon public transport and encourage cycling and walking. Greening cities with parks and gardens reduces CO2 and helps cool urban areas. High-rise mixed-use properties can be constructed in an energy-efficient manner where unwanted heat or coolness can be channelled to another floor in need of it. For example, waste heat from a supermarket’s freezers on the ground floor can be harvested and piped to heat residences above. That kind of thinking is imperative to any prop- erty player in 2023 and beyond. According to global climate researchers, shared spaces, walkable neighbourhoods, and green buildings are the city’s raison d’etre: its people. Social psychology suggests that building a green- er city leads to greener mindsets in its citizens for two reasons. Firstly, it underscores the con- sensus about climate change that gets more indi- viduals to act on the problem. A change of behaviour ensues. Secondly, while the greener city jumpstarts its citizens’ awareness on the need for more sustainable living, its attention to densi- fication fosters a sense of community. The city now has an agglomeration of citizens with green- er mindsets that catapults it towards its sustain- ability goals. Climate change subject has previously been a relatively peripheral concern for many real-estate players but it has moved to the top of the agenda. There has been a sense of urgency to the critical role of real-estate leaders in the climate transition, the period until 2050 during which the world will feel both the physical effects of climate change and the economic, social, and reg- ulatory changes necessary to decarbonize. The climate transition not only creates new responsi- bilities for real-estate players to both revalue and future-proof their portfolios but also brings opportunities to create fresh sources of value. Property players also have a critical role to play in helping municipalities to quickly adapt to climate change realities. Climate change leaves municipalities increasingly vulnerable to climate shocks — sudden, extreme events such as hurri- canes and severe wildfires — that can upend a local real estate market, infrastructure and econo- my seemingly overnight. Despite the growing risk, municipalities have been slow to adapt. As- suming effects of climate change like wildfires and floods do actually take place, property play- ers must build resilient structures. Homebuyers are highly sensitive to sudden threats of personal harm and will change their buying behaviour. Studies suggest that demand for surviving homes within the vicinity of the fires drop precipitously as people feel less safe living there. Most home- owners who lose their homes move away rather that rebuild. The lack of services, infrastructure and community discourages many would-be new- comers from buying even at a discount Rebuilding using resilient design can help accel- erate recovery. In the aftermath of a deadly fire in Oakland, California in 1991, homes were rebuilt based on updated safety codes that required fire-retardant designs, materials and land- scaping. Streets were widened to slow the spread of future fires and a new fire station was built nearby. These changes accelerated redevelopment by making homeowners feel more secure in buying or rebuilding homes, and created new opportunities for businesses to design and build them. That said, the recommendations do make sense but Africa and Zimbabwe already had a fair share of already existing challenges besides climate change. Food and water insecurity, popu- lation displacements, and health risks are already existing challenges. Urban densification encourag- es more people to be in one place, just avoiding the term crowding or rather over-crowding. It is common in Harare that should council water be accessible on a 3-storey building, only those on ground floor can only access it due to less pres- sure. Other water sources will be looking for other water sources like drilling boreholes but that has its own challenges in terms of regulation and water safety. 17

The AXiS LXXV Friday 12 May 2023 19 Sound Risk Management and Diversified Revenue Streams Position the firm for Sustained Growth CBZ Holdings Limited T CBZ Holdings Limited, a leading financial services provider in Zimbabwe, recently released its annual financial statement for for the year 2022, highlighting its performance in various sectors amidst hyperinflation, foreign cur- rency shortages, and political instability. Despite the challenges, CBZ Holdings demonstrated resil- ience by achieving a Steller performance. Key Highlights Total income for the group jumped by 73% to ZWL 254.3 billion, with exchange gains on foreign currency position soaring by 675%. This reflected the monetary balances held largely by the banking operations and agro-business seg- ments. The company's sound risk management practices and diversified portfolio of revenue streams supported the profitability growth, with a profit after tax of ZWL 33.0 billion in 2022 compared to ZWL 26.5 billion in 2021. CBZ Holdings continued to play a significant role in supporting the economy, providing innova- tive solutions through its subsidiaries, such as banking, microfinance, insurance, wealth manage- ment, risk advisory, and properties. Notably, the company enhanced its multi-award-winning mobile app, CBZ Touch, to put freedom and convenience into its customers' hands. Datvest also added investment options to the group's clients through the launch of the Datvest Modi- fied Consumer Staples Exchange Traded Fund "ETF". The completion of the Fairview housing project was a milestone for Datvest and the group, as it continued to play a part in putting a roof above every citizen's head. CBZ Bank supported new and expansion projects in various sectors, main- taining its market leadership position. CBZ Agro-Yield remained a key strategic partner in supporting the government's quest to make the country food self-sustaining. Additionally, CBZ Holdings facilitated communi- ty-driven, sustainable, and environmentally inclu- sive projects to further the socio-economic status of underprivileged populations in Zimbabwe. Leveraging staff volunteerism, philanthropy, health, and sports development, initiatives were carried out during this period, including donations to the Makomborero Trust, a home for top-per- forming underprivileged students, and the refur- bishment of the pediatrics ward at Harare Central Hospital. Despite operating in an environment fraught with economic uncertainties and challenges, CBZ Holdings has also identified several opportunities for future growth. These include expanding digital banking capabil- ities, supporting the growth of small and medi- um-sized enterprises, and facilitating cross-border trade and investment. To mitigate challenges, the company has implemented measures such as focusing on cost optimization, increasing its share of foreign currency-denominated assets, and strengthening its risk management framework. CBZ Holdings Limited's financial statement for 2022 demonstrated resilience in navigating chal- lenging times in the Zimbabwean economy. The company's financial and strategic perfor- mance reflected a mix of positive and negative growth, with a sound risk management frame- work and a diversified portfolio of revenue streams supporting profitability growth. Further- more, the company's commitment to supporting the economy, facilitating community development, and identifying opportunities for future growth positions it well in the long run. Old Mutual Taps into Technology FinTech Viability he insurance giant and financial company, Old Mutual, has indicated its plans to launch a new financial technology unit, Old Mutual Digital Services (OMDS). The unit seeks to offer a range of services which include insurtech (in line with core business), investech, mobile money services, e-commerce, digital lend- ing, payments, and digital products and services for the retail mass market. These services are widely summarized or categorized under ‘Fin- Tech’ services, an industry that has been growing rapidly in Zimbabwe over the past few years. The FinTech industry has been growing rapidly in recent years, and Zimbabwe is no exception. The country has seen a surge in the number of FinTech startups, with many entrepreneurs look- ing to capitalize on the opportunities presented by this emerging sector. The growth in the Fintech industry has been driven by a number of factors, including the increasing use of mobile phones and other digital devices, the rise of e-commerce, and the need for financial services that are more accessible and affordable than traditional banking. Old Mutual is already a huge player in the investment arena and a dominant player in real estate investment at that. Since its foundation on May 17th, 1845, Old Mutual has stood the test of mutual and remained a going concern through its ability to innovate and stay abreast with cur- rent market dynamics, which include adapting and adopting to technology changes. However, not every innovation is relevant, and therefore it is imperative to analyze the market and demogra- phy a company may be getting into before reach- ing a formidable conclusion. The FinTech industry in Zimbabwe is still rela- tively small compared to other African countries such as Kenya and South Africa. However, it has been growing steadily over the past few years. According to a report by EY Africa, the FinTech sector in Zimbabwe is expected to grow at a compound annual growth rate (CAGR) of 20% between 2020 and 2025. While some quarters believe change is difficult despite being inevitable and hence a slow growth in technology adapta- tion in Zimbabwe, the challenge can be attributed to affordability since change comes at a price. In January of 2023, Zimbabwe's internet penetration rate stood at 34.8 percent of the total population, which is 5.74 million users out of a population of 16 million people. This is below the average penetration rate of 45% in Africa, and 70% glob- ally. On the upside, the Fintech industry has seen pos- itive growth over the years, despite being gradu- al. One of the key drivers of this growth has been the increasing use of mobile phones in Zim- babwe. According to data from the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), there were over 14 mil- lion active mobile phone subscriptions in Zimba- bwe as of December 2021. This represents a pen- etration rate of over 90%, making mobile phones one of the most widely used digital devices in the country. Another thing to consider here is that some individuals have more than one mobile con- nection, which raises the bar. However, it is a different scenario when it comes to smartphone

20 The AXiS LXXV Friday 12 May 2023 Tech startups to reach potential customers or pro- vide services that require a reliable internet con- nection. In line with this, the country is also battling with shortage of skilled and international- ly competent talent in the FinTech industry in Zimbabwe. Many startups struggle to find employees with the necessary skills and experi- ence to help them grow their businesses. While mobile money has made financial services more accessible to many people in Zimbabwe, there are still significant gaps in financial inclu- sion. Many people still do not have access to formal financial services or do not understand how to use them effectively. This also goes back to the aforementioned issue of affordability. To some degree, as with any digital platform, cyber- security is a major concern for FinTech compa- nies in Zimbabwe. There is a need for robust security measures to protect against cyber threats such as hacking and fraud. The FinTech industry in Zimbabwe is also becoming increasingly crowded, with new startups entering the market all the time. This makes it challenging for new entrants to stand out and gain market share. Despite these challenges, there are still opportuni- ties for companies (Old Mutual) looking to enter the FinTech industry in Zimbabwe. Some of these opportunities include mobile money services: Mobile money services continue to be one of the most significant opportunities in the FinTech industry in Zimbabwe. With millions of people using mobile phones but not having access to traditional banking services, there is still significant untapped potential for mobile money providers. According to Zimstat, the infor- mal economy in the country contributes the hugest chunk of gross domestic product, and accounts for most of the 88% who are informally employed. These informal players rely on mobile banking and less on the traditional banking which may come as rigid. In the same space with the given developments in the economy, digital payment solutions such as Paynow are also becoming increasingly popular among consumers. This can be a leverage for a player with enough funding like Old Mutual to monopolize as it remains viable in the medium-term. The leverage for Old Mutual lies in its capital capacity for funding the innovation, as well as its reputation in the market. However, the lack of visibility for the EazySend introduced last year is a clear indication of what the company needs to focus on as it taps into new waters, which is marketing. remittance service that allows both CABS and non-CABS customers to send foreign money locally utilising the company's extensive branch network. The company increased involvement in money transfer by signing up over six hundred merchants. Customers can use MyOldMutual, Old Mutual's digital platform, to pay premiums, renew insurance policies, study policy details, file insurance claims, process loan applications, pur- chase retirement products, check rental balances and pay rentals online. The new endeavour will, therefore, be a pedestal to offering these services and more to a larger market.Despite the growth potential of the Fin- Tech industry in Zimbabwe, there are several challenges that need to be addressed. While there are opportunities for entrepreneurs looking to enter the FinTech industry in Zimbabwe, there are also several challenges that they need to be aware of. These include regulatory framework, infrastructure, financial inclusion and cybersecuri- ty. The regulatory framework for FinTech compa- nies in Zimbabwe is still evolving and can be challenging for FinTech startups. The Reserve Bank of Zimbabwe (RBZ) regulates the financial sector, and any new entrants into the industry must comply with its regulations. This can be a time-consuming and costly process, par- ticularly for startups with limited resources. There is a need for clear guidelines on issues such as licensing requirements, consumer protection, and data privacy. Innbucks is one example of how the regulatory environment can disrupt innovation in the fintech industry. Simbisa Brands established Innbucks to assist its customers with the age-old problem of smaller-denominations change in its fast-food business. It quickly evolved into some- thing more useful when it enabled people to transfer money. This is when the RBZ stepped in, closing down InnBucks in April of 2022 for operating without a ‘licence’. After a partnership with a microfinance company, InnBucks returned four months later. The quality of digital infrastructure in Zimbabwe also needs improvement to support the growth of the FinTech industry. This includes issues such as internet connectivity, as aforementioned, and power supply. The country is still battling to have a stable power supply after rampant power outag- es in the prior year which extended into 2023. Service providers have since recorded losses due to inactivity or expensive methods of ensuring power supply where servers and boosters are located. While mobile phone penetration is high in Zimbabwe, internet connectivity is still limited in some areas. This can make it difficult for Fin penetration as, according to ECONET, the coun- try stands at a 52% penetration rate. 22% of devices attempting to connect to internet services are feature phones with limited data handling capacity. This places Zimbabwe well behind Kenya, which has a penetration rate of 80%, while South Africa, our neighbor, has a penetra- tion rate of 90%. Another factor driving growth in the FinTech industry is e-commerce. The COVID-19 pandem- ic accelerated the shift towards online shopping as people look for safer ways to purchase goods and services. This created opportunities for Fin- Tech companies that offer online payment solu- tions. While the World Health Organisation declared the novel pandemic over, some of the effects on lifestyle are still present. This includes the increased reliance on technology, mobile working, and the easiness of doing anything and everything. Mobile money services have been one of the key drivers of growth in the FinTech industry in Zim- babwe. Mobile money platforms such as Eco- Cash, OneMoney, and Telecash have become popular among consumers who do not have access to traditional banking services or prefer not to use them. These platforms allow users to send and receive money, pay bills, and buy airtime and data bundles, among other things. In addition to mobile money services and in line with the new offering from Old Mutual, there are also several other types of FinTech startups oper- ating in Zimbabwe. These include peer-to-peer lending platforms such as GetBucks and Steward Bank's Kwenga; digital payment solutions such as Paynow; investment platforms such as C-Trade; and insurance technology (Insurtech) startups such as Cassava Smartech's EcoSure. Presently, there are several key players in the FinTech industry in Zimbabwe and these include EcoCash, Telecash, Innbucks, Paynow, and OneMoney. EcoCash is a mobile money platform that was launched by Econet Wireless Zimbabwe in 2011. It allows users to send and receive money, pay bills, buy airtime and data bundles, among other services. OneMoney is a mobile money platform that was launched by NetOne in 2018. It offers similar services to EcoCash, including money transfers, bill payments, and airtime purchases. Innbucks was launched by Simbisa to allow sending and receiving of foreign currency through Simbisa branches, as well as make payments in foreign currency. Old Mutual introduced a relative product in the prior year, CABS EezySend, which is a domestic #Issue: LXX ' ' Term of The Week Capital gains tax Understanding the term In Zimbabwe, the capital gains tax is applied to both movable and immovable property, as well as the sale of shares and other securi�es. For example, if an individual purchased a piece of land for $100,000 and later sold it for $150,000, they would be subject to a capital gains tax on the $50,000 profit they made. The capital gains tax is an essen�al source of revenue for the Zimbabwean government, and it is used to fund various public services, programs, and infrastructure projects. The revenue generated from the tax helps to support the country's economic development and improve the standard of living for its ci�zens. For instance, the funds are used to finance the construc�on and maintenance of roads, bridges, schools, and healthcare facili�es, among other projects. capital gains tax remains an important tool for the Zimbabwean government to generate revenue and promote economic development. The government periodically reviews the tax rates to ensure that they align with the country's economic goals and priori�es while also encouraging investment and growth. Capital gains tax is a tax that is levied on the profits realized from the sale or transfer of an asset that has increased in value. This type of tax is applied in many countries around the world, including Zimbabwe. The tax is calculated based on the difference between the sale price and the purchase price of the asset, adjusted for infla�on, and in Zimbabwe it is currently set at a maximum rate of 20%.

Markets watch T 2023. This is against ZWL1212.5448 traded on the governed RBZ-Auction Market on Tuesday this week. The latest spike in PMR widened premiums between the two markets by 55.1% raising the cost of living. However, the latest flourish of the PMR is an indication that the Central Bank is not sleeping, pumping money into the market. The logic is clear. If the ZWL liquidity is low, the rate to US dollars will be high. However, flooding the market with ZWL will cause a high demand for the greenback, as meaningful transac- tions, including paying rentals, buying food, and medical fees are now paid largely in US dollars. As it battles with currency inflation, Central Bank rolled out gold-backed digital coins on Monday this week. However, no material impact has been shown to date as the rate continues to spike and prices continue to soar. The zero impact shown by the gold-backed digital currency since its launch might be due to a confidence deficit in the Zimbabwe dollar and RBZ policies themselves. However, it is too early to put a line on the effectiveness and efficiency of the tokens. Maybe in the long run, they will bear an output. However, it should be cognisant that the proper viability of the tokens needs to be buttressed by policy consistencies, tightening of the money supply and transparency. Regional Markets Rand Touches 3-Year Low The South African Rand touched ZAR19 against the greenback, the lowest since April 2020 and down more than 10% since the beginning of the year, amid growing concerns about the deepening domestic power crisis, as well as ongoing corrup- tion issues in the country. South Africa has been plagued by persistent he Parallel Market Rate (PMR) peaked to a region of ZWL2600 and ZWL2700 against the greenback on the 11th of May power cuts since 2008, with the situation becoming more severe in recent years, attribut- ed to the troubled state-owned power utility Eskom, which has a history of significant finan- cial losses and poor planning. Furthermore, allegations of mismanagement and corruption within Eskom have contributed to its current state. The ongoing power crisis has had a significant impact on the country's economy and produc- tivity, resulting in supply chain disruptions, higher production costs and, consequently, elevated inflation. Kwacha Slides to 18.2 The Zambian Kwacha decreased to 18.2 against the US dollar on the 11th of May 2023, from 18 against the greenback last week. Meanwhile, the Stanbic Bank Zambia PMI fell to 48.7 in April 2023, pointing to the second consecutive month of contraction, although easing from 46.9 in the previous month. New orders and output decreased amid money short- ages in the economy and related cash flow and financing issues with customers. At the same time, the drop in employee expenses reflected a staffing level ticked lower for the second straight month. The recent improvement in the strength of the currency resulted to limit rates of inflation in the private sector. Pula Hits 13.3 against US Dollar The Botswana currency, Pula decreased to 13.3 from a higher of 12 hits last week amid a mounting global crisis, from the Ukraine war to the US debt crisis which is affecting market performances. The Central Bank of Botswana held its bench- mark interest rate steady at 2.65% on April 28th 2023, to continue supporting the domestic economy while containing inflationary pres- sures. Governor Moses Pelaelo said inflation should trend downwards in 2023 and is expect- ed to reach the 3%-6% objective in the second quarter of 2024, despite the expected fluctua- tions. The annual inflation rate in Botswana picked up to 9.9% in March 2023 from an over one-year low of 9.1% in the previous month, far above the central bank's 3%-6% target range. Shilling Woes Persists The Kenyan Shilling continued its downward trend against the US dollar after hitting KES116 on the 11th of May 2023. This is the worst per- formance of the shilling since the beginning of the year amid mounting US dollar challenges and credit bailout woes. Meanwhile, the Stanbic Bank Kenya PMI stood at 47.2 in April 2023, down from 49.2 in the previous month. The latest reading signalled a substantial decline in the country's private sector economy amid steeper falls in customer demand. Both output and new orders dropped sharply. Data showed that the latest downturn in produc- tion was led by manufacturing and services, con- trasting with expansions in the agriculture, con- struction, and wholesale & retail categories. Em- ployment grew at the fastest pace since the beginning of 2023 amid a further pile-up in backlogs. On the price front, overall cost infla- tion remained severe, prompted by rising import prices due to weaker currency. Naira edges closer to 2-Week Low The Nigerian currency hit its lowest on the 11th of May 2023 after trading at 160.1 against the US dollar. However, the Stanbic IBTC Bank Nigeria PMI rose to 53.8 in April 2022 from an over two-year low of 42.3 in the prior month. The latest reading pointed to a renewed expansion in the country's private sector, after two consecu- tive months of declines. Both new business and output increased sharply amid an easing of the cash crisis which has severely affected the economy in recent months. Rebounds in activity were seen across each of the agriculture, manufacturing, services and wholesale & retail sectors. Meanwhile, employment fell slightly as compa- nies remained cautious in hiring. On the price front, input costs picked up faster, but further efforts to attract customers led firms to increase their selling prices at the softest pace for three years. Parallel Market Rate Surpasses ZWL2.5k Against US Dollar The AXiS LXXV Friday 12 May 2023 21

The AXiS LXXV Friday 12 May 2023 ZSE WEEKLY COMMENTARY The ZSE soared to record highs in the week under review as demand for safe haven drove the prices of stocks amid fears of a rampant ZWL inflation following the runaway exchange rate which saw the interbank recording the highest magnitude of currency depreciation this week. The mainstream ZSE All Share Index surged by a stag- ering 32.45% to close at 59538.57 points. Gains were spun across all the market's main indices, while heavily skewed towards market heavies which firmed 39%, followed by medium caps and penny stocks which went up 23% and 3% respectively. Overall month-to-date gains scaled up to 43.84%, which is the highest monthly outturn in over 13-months so far. Nominal year-to-date returns closed the week at 205.4%, which translates to 81% in US$ terms. The ZSE is now the best performing bourse in Africa on a year-to-date return basis, in US$ terms, followed by Malawi Stock Exchange which closed at 50%. Meanwhile, Zimplow is set to delist from ZSE for a subsequent listing on VFEX, while First Capital Bank will halt its trading on ZSE on Friday, the 12th of May. On the US$ denominated bourse, VFEX, the All Share Index halted a bear run in the week under review on surging 4.02% to close at 89.18 points, trimming year-to-date losses to -6%. An aggregate of US$213,017 exchanged hands on VFEX in the week under review, up from US$396,481 traded in the prior week. Meanwhile, WestProp Holdings Limited listed its ordinary shares on Monday at US$10/share, and has not yet attracted any activity. The company, however, sought to postpone the listing of its preference shares. Despite the gazetting of blended inflation as the official inflation statistic in the country, speculations and indica- tions of a runaway ZWL inflation have triggered demand for safe haven in hard currencies and ZWL denominat- ed assets. This has seen the ZWL exchange rate premium between the formal and informal currency market sur- pass 100%. The ZWL depreciated by -11.7% against the US$ on the Reuters Auction market to close at ZWL1212.5448 per US$ in the week under review, while on the interbank market the unit shed off -10.91% to close at ZWL1222.274. ZSE ASI ZWL INTERBANK ZSE ASI VFEZ ASI ZWL INTERBANK ZSE TOP 10 MEDIUM CAP INDEX SMALL CAP INDEX 44,952.21 85.74 1,088.9411 49,689.11 85.84 1,096.9741 54,058.72 82.20 1,112.7253 59,355.89 82.46 1,125.6671 58,885.96 83.81 1,212.5448 59,538.57 89.18 1,222.2740 32.45% 4.02% -10.91% 26,357.02 93,580.10 745,612.03 29,541.33 99,331.49 745,613.66 32,561.63 103,771.89 745,652.79 36,506.16 106,191.27 751,443.12 35,576.01 111,996.55 770,500.59 35,813.01 114,893.40 770,499.89 35.88% 22.78% 3.34% 25 22

The

supply chain disruptions and economic uncertainty affecting prices. However, increased demand from the automotive and electronics industries may help support prices in the long term Copper (US$/t) Copper prices have remained mostly stable this week, hovering around $8,500 per metric tonne. However, there has been a slight dip in prices due to weak global demand and macroeconomic factors. Looking ahead, copper prices may experience some upward momentum in the short term due to the expected growth in demand from China and the shortfall in supply. However, caution is advised due to the con- tinuing unpredictability of the copper market. Aluminium (US$/t) Aluminium prices have remained relatively stable this week, with a slight increase in demand from the auto- motive and packaging industries. The ongoing global transition to renewable energy sources has also boost- ed demand for aluminium, particularly in the produc- tion of solar panels and wind turbines. However, concerns over the impact of the COVID-19 pandemic on global economic growth continue to weigh on the market. Despite these uncertainties, analysts remain optimistic about the longer-term outlook for aluminium prices. Nickel (US$/t) The demand for nickel from the steel industry remained strong, but weak global demand and con- cerns about trade tensions put pressure on prices. As a result, nickel prices remained stable with some minor ups and downs. Looking ahead, the nickel price forecast for the next week suggests that prices may experience some volatility due to uncertainty around the global economic recovery and ongoing geopolitical tensions. However, some analysts predict that prices may trend slightly upward in response to increased demand from the electric vehicle and battery industries. For the rest of the year, nickel prices are expected to remain rela- tively stable with some potential for upward momen- tum in the short term. Brent/Oil (US$/b) Oil prices slipped on Friday, heading for a fourth weekly decline, as renewed economic concerns in the United States and China revived concern about fuel demand growth in the world's two largest oil consum- ers. The U.S. Federal Reserve will probably need to raise interest rates further if inflation stays high, Fed Governor Michelle Bowman said on Friday, adding that data so far this month has not convinced her that price pressures are receding. Weekly Commodity Pulse Gold (US$/oz) In the period under review, the spot gold price remained relatively stable, with a slight increase towards the end of the week. Spot gold remained near a five-week peak as the dollar fell, making the precious metal more attractive to other currencies. Looking ahead, we predict that the gold price will continue with a possible upward trend in the short term. However, as the global economy stabilizes, the demand for safe-haven assets like gold may decrease, leading to a decline in prices towards the end of the year. It's important to note that the gold market can be volatile and unpredictable, and any unforeseen events could drastically affect the price. Therefore, investors should always exercise caution and diversify their portfolios to mitigate risks.. Platinum (US$/oz) This week, the price of platinum remained relatively stable, with slight fluctuations due to global economic uncertainty, geopolitical tensions, and supply chain disruptions. However, towards the end of the week, platinum prices experienced a modest increase due to rising demand from the automotive industry and increased investment interest. For the week ahead, platinum prices are expected to remain stable, with minor fluctuations depending on market sentiment and economic data releases. Looking ahead, the platinum market is likely to remain volatile, with ongoing The AXiS LXXV Friday 12 May 2023 24

If approved, the Bretton Woods lender will be expected to wire the billions to the exchequer in a month given that the financing has been budget- ed for the financial year 2022/23 ending on June 30. Among the reforms attached to the proposed funding is the strengthening of domestic revenue mobilisation with a focus on the budding digital economy. -BusinessDaily MTN in advanced talks to sell some West African assets MTN Group is in advanced talks with Axian Group to sell some of its West African markets, according to people familiar with the matter, as Africa’s largest mobile operator trims its portfolio. The companies are negotiating on prices for MTN’s assets in Liberia, Guinea-Bissau and Guinea-Conakry, said the people, who asked not to be identified as the information is private. The deal has not been finalised, and there is no guar- antee that a transaction will go ahead, they said. The three countries accounted for 1.6% of MTN’s revenue in 2022, according to data compiled by Bloomberg. A representative for MTN declined to comment. A spokesperson for Mauritius-based Axian didn’t have an immediate comment. MTN’s Chief Executive Officer Ralph Mupita has been evaluating the company’s portfolio as the mobile phone company narrows its focus and resources on core markets, which include its big- gest West African assets, Nigeria and Ghana. MTN operates in 19 countries in the region, and has exited certain Middle Eastern businesses such as Afghanistan, Yemen and Syria. Africa, which has a young population and a bur- geoning market for smartphones, has proved to be an attractive place for companies targeting tele- com deals. In 2022, Axian bought Millicom Inter- national Cellular’s Tanzanian operations. The firm’s telecommunications unit has invested in towers, undersea cables, data centers, financial technology as well as a number of phone opera- tors in countries such as Madagascar and Senegal. South Africa’s Vodacom Group attracted interest from Emirates Telecommunications Group Co. as its parent company, Vodafone Group Plc, weighs options for the business, people familiar with the matter said in December. -News24 IFC’s new funding platform aims to help Africa’s digital economy reach $700 billion by 2050 We recently had the opportunity to speak with Amena Arif, the IFC Country Manager for Kenya, Tanzania, Uganda, Rwanda, Burundi, Somalia, and Malawi. In her role, Ms Arif oversees all advisory and investment operations in her cluster of coun- tries, focusing on developing new investment opportunities and supporting clients to create jobs. She spoke about the role of venture funding in Africa’s tech startup ecosystem and IFC’s new $225 million funding platform for venture capital firms and companies in Africa, the Middle East, Central Asia, and Pakistan. The fund aims to strengthen the venture capital ecosystem and invest in early-stage companies that address devel- opment challenges through technological innova- tions in sectors such as climate, financial services, healthcare, education, agriculture, and e-com- merce. Arif stated that the platform is intended to help build the digital economy in these regions and make equity investments in tech startups to help them commercialize and become scalable ventures. Arif also highlighted that startups in Africa, the Middle East, Central Asia, and Pakistan often face funding limitations, despite having good ideas. These regions receive less than 2% of the global venture capital fund, which is significantly lower than other regions. Although African tech startups received about $4 billion in 2021, which is more than what they received in 2020, it is still not enough. IFC has been working in this ecosystem for several years and has invested or mobilized about $1.3 billion in the African tech ecosystem over the past five or six years. Additionally, the IFC has made approximately $2 billion in funds that invest in the venture capital ecosystem, both directly and indirectly.In Arif’s words, “We think that Africa’s digital economy can grow to be over 700 billion dollars by 2050. So how do we help it get there? This $225 million platform is part of our effort to do that.”-KenyanWallstreet LinkedIn closes China service, cuts over 700 jobs Social networking firm LinkedIn announced on Tuesday that it will close down its last service available in China, citing "fierce competition and a challenging macroeconomic climate". Microsoft-owned LinkedIn was one of the few US technology companies to successfully operate a social media site in China, where the internet is heavily regulated and censored. The company had introduced a unique domestic version of the career networking platform operated locally in order to comply. In 2021, new sign-ups for the LinkedIn app in mainland China were suspended by the firm, which referenced a "significantly more challenging operating environment and greater compliance requirements in China". Microsoft then replaced it with a simplified version called InCareer, which allowed local professionals to continue to find and apply for jobs as well as stay connected with their network. "After careful consideration, we've made the deci- sion to discontinue InCareer effective August 9, 2023," the platform said in a statement on Tues- day. "Despite our initial progress, InCareer faced fierce competition and a challenging macroeco- nomic climate, which ultimately led us to the decision of discontinuing the service," LinkedIn said. An email from CEO Ryan Roslansky published online added that closing the China service would result in "a reduction of roles for 716 employees". But a representative from the company told AFP that LinkedIn would "continue to have a presence" in the country by focusing on "assisting compa- nies operating in China to hire, market, and train abroad". The US firm once achieved a rapid rise in China, benefiting from a culture of connections, or "guanxi", in which one's contacts and professional network are essential assets. However, LinkedIn has been marginalised in recent years as innovative local apps have surged in popularity. -eNCA Sudan: Price of basic commodities go up by 60% as fighting escalates The cost of commodities and services has shot up in Sudan as fighting escalates in the country. According to the United Nations humanitarian agency, the price of basic commodities such as fuel, food staples, and water has gone up by 60 percent or more due to supply challenges resulting from the clashes in Khartoum and other parts of Sudan. This is a new setback to Sudan's stagnant economy. Shortages of main goods such as flour and vegetables have been reported in the capital along with unprecedented price hikes. Khartoum is the business hub for most industries and services. Factories are located in parts of the city where intense fighting is happening. Some of them have been looted. Sudan is an important exporter of gum Arabic, gold, sesame, peanuts, and livestock. But the economy has been held back by decades of sanctions and international isolation, as well as mismanagement and corrup- tion. People have been struggling with years of spiking inflation and sharp currency devaluations. The situation worsened after the 2021 military coup when international financial institutions halted Sudan's aid programs. - Africanews Kenya to tap another Sh136bn loan from the World Bank Kenya is standing in line to secure another Sh136.5 billion loan from the World Bank as it seeks funds to ease the cash flow crisis and boost its dwindling foreign exchange reserves that have taken a hit from the weakening shilling. The board of the World Bank Group is scheduled to meet on May 26 to approve the $1.0 billion (Sh136.5 billion at current forex rates) to Kenya through its Development Policy Operation (DPO) framework. DPOs are provided in the form of non-earmarked loans, credits, or grants that support the country’s economic and sectoral policies and institutions. Shell wins legal case over Nigeria oil spill Britain’s highest court ruled Wednesday it was too late for people in Nigeria’s Niger Delta region to lodge pollution claims against energy giant Shell after a huge oil spill more than one decade ago. The Supreme Court said in a state- ment that its five judges “unanimously” reject- ed an appeal over the 2011 spill, upholding prior rulings that claims were not made before a legal deadline. Nigerian claimants say their shoreline faced a “devastating impact” from a leak at the Bonga oilfield which unleashed 40,000 barrels of crude into the Gulf of Guinea. Shell said the spill was swiftly contained. The claimants had sought Wednesday to overturn rulings from two lower courts, arguing that the oil spill constituted a “continuing nuisance”, a legal definition to which the deadline would not apply. The Supreme Court however disagreed and declared the leak was a “one-off event or an isolated escape”, in a judgement which does not affect a separate legal action against Shell over other spillages. “The claimants’ argument that there is a continuing nuisance, because on the assumed facts oil is still present on their land and has not been removed or cleaned up, is rejected,” said Judge Andrew Burrows.-The Guardian Nigeria Tech war: China chip imports shrink as trade ties with Japan, South Korea and Taiwan weaken in the face of US restric- tions China’s chip imports continued to slump in the first four months of 2023 amid a global semi- conductor industry downturn and continued value chain adjustments in the face of ongoing US restrictions on the export of advanced chips and semiconductor equipment to the country. China imported 146.8 billion integrated circuits (IC) between January and April, down 21.1 per cent from the same period last year, according to data published by the General Administra- tion of Customs on Tuesday. The total value of chip imports slumped 25.6 per cent to US$105.6 billion, down from US$141.9 billion last year, according to the customs data. In contrast, in the first four months of 2022, the total quantity of China’s chip imports dropped 11.4 per cent year-on-year to 186.1 billion units while the total value increased 12.2 per cent amid a global chip shortage at that time. The global chip market has seen a shortage turn into a glut since late last year, and China continues to be pressured by US sanctions on the export of advanced chips and chip-making equipment to the country, as the US-initiated Chip 4 Alliance – which includes South Korea, Japan and Taiwan – comes into shape.- South- China MorningPost Africa needs $700bn of finance for green energy and metals Africa will need more than $700-billion in finance over the next decade to develop renew- able power and mines to extract the metals required for the green energy transition, accord- ing to Standard Bank Group. The continent’s financial institutions won’t be able to provide even half of that and most of the money will need to come from investors from elsewhere, Kenny Fihla, chief executive officer of Stan- dard Bank’s corporate and investment banking unit, said. “Many of the minerals that are required to build solar panels, lithium batteries, wind turbines and so on, are found in sub-Saharan Africa,” Fihla said. “Our team has also quanti- fied the amount of investment that is required in that space as in the order of hundreds of billions of dollars.” African governments are under pressure to extend power supply to the 600-million people — about half of the continent’s population — who currently don’t have access to electricity. At the same time, copper and cobalt deposits in the Democratic Republic of Congo and Zambia, lithium reserves in Zimbabwe and platinum and manganese seams in South Africa are seen as key to providing the materials needed for everything from solar panels to electric vehicle batteries. -Mining Weekly Business Around The World The AXiS LXXV Friday 12 May 2023 25

Politics Around The World expanded campaign and harsh strikes against Gaza". Palestinians said the exchange of fire began with several loud explosions in southern Gaza, sending up large plumes of smoke. The Israel Defense Forces (IDF) said an aircraft targeted Islamic Jihad operatives travelling in a vehicle to a con- cealed rocket launcher in the Khan Younis area. -BBC Hundreds of rockets fired at Israel amid deadly IDF airstrikes in Gaza Israel’s army and Palestinian militants exchanged heavy cross-border fire on Wednesday, with hun- dreds of rockets launched from Gaza towards Israel after the Israel Defense Forces (IDF) carried out deadly strikes on what it says are Islamic Jihad organization targets along the strip. The latest violence comes a day after Israeli mili- tary airstrikes killed three leaders of the Palestin- ian militant group and 10 other Palestinian men, women and children in Gaza and led to threats of retaliation. Israel has been bombarding the Islamic Jihad’s operatives and infrastructure, using unmanned drones for surveillance as it monitors militant preparations to propel rockets, IDF chief spokesman Rear Adm. Daniel Hagari said Wednesday. At least six Palestinians were killed in Wednes- day’s airstrikes, the Ministry of Health in Gaza said, revising down its earlier count. Hamas, the Palestinian militant movement that runs Gaza, issued a statement Wednesday strongly suggesting that its forces were releasing rockets towards Israel, shortly after the IDF said firmly it believed Hamas was not doing so. “The Palestinian resistance with all its factions, led by the Nasser Salah al-Din Brigades, is partic- ipating now in a unified manner by teaching the enemy a lesson that it will not forget and con- firming that Palestinian blood is not cheap,” said the statement, issued by Muhammad al-Buraim, an official in the joint resistance committees in Pales- tine.-CNN Thailand election: Campaign freebies may be a ‘band-aid solution’ with fiscal risks Thailand is preparing itself for a general election this month, and bread-and-butter issues — such as minimum wage, farm subsidies and welfare — will be top of voters’ minds. Southeast Asia’s second-largest economy is still recovering from the Covid-19 pandemic — though tourism has revived and unemployment is below 1%, the country faces a slew of problems. Energy and electricity bills are high; the number of employers is still below pre-pandemic levels; household debt levels are rising at an alarming pace; and annual per-capita income growth has been falling since 2018. That’s why most political parties are focusing their campaigns on giveaways like subsidies and tax exemptions — populist pledges that econo- mists fear will derail the nation’s fiscal balance. Contenders can be divided into two categories: parties that support the pro-military establishment and a pro-democracy camp of opposition factions. In the former group are the newly minted, conser- vative United Thai Nation Party, helmed by Prime Minister General Prayut Chan-o-cha; the Democrat Party (Thailand’s oldest conservative faction); and the military-backed ruling Palang Pracharath Party. The second group consists of the social democrat- ic Pheu Thai, led by former leader Thaksin Shi- nawatra’s daughter Paetongtarn Shinawatra; the progressive Move Forward Party; and Bhumjaithai, a pro-democracy but also a pro-monarchy outfit. -CNBC Niger intercepts nearly 1,400 Boko Haram followers - Army Nearly 1,400 followers of jihadist group Boko Haram have been intercepted fleeing into Niger following clashes with a rival Islamic State group, according to the army. The exodus into southeastern Niger started in March, when the Islamic State West Africa Prov ince (ISWAP) pursued Boko Haram in its forest hideout of Sambisa, northeastern Niger.Niger's armed forces have so far caught 1,397 people, many of them women and children, according to a statement from the army's southeastern region, seen by AFP. They have been handed over to the Nigerian mili- tary authorities, it said. "Around 30 terrorists" who refused to surrender were killed, it added. Boko Haram launched a bloody campaign in northeastern Nigeria in 2009 that has left over 40,000 dead and displaced around two million from their homes, according to UN figures. It became globally notorious in 2014 for abducting 276 schoolgirls in the town of Chibok, 96 of whom remain missing.-Africanews Southern African nations to deploy troops in east DRCongo Southern African countries on Monday agreed to deploy forces to help quell violence in the eastern Democratic Republic of Congo, where armed groups have terrorised civilians for decades. A summit of the 16-bloc Southern African Develop- ment Community, which includes South Africa, Angola, Mozambique and Tanzania, backed the deployment “to restore peace and security in east- ern DRC”, SADC said in a statement from the Namibian capital Windhoek. The decision was reached at talks attended by several heads of states, including DRC’s President Felix Tshisekedi, his South African counterpart Cyril Ramaphosa and ministers from the 16 mem- bers regional group. The meeting did not give the numbers to be deployed nor a timeline for the deployment. It will also add to an East African regional mili- tary force that has taken over some areas previ- ously occupied by the M23 militia since Decem- ber but has so far failed to thwart the insurgency. The Tutsi-led rebels are still present in North Kivu and still occasionally clash with rival mili- tias. The East African Community (EAC) force draws on troops from Burundi, Kenya, Uganda and South Sudan. Armed groups have plagued much of mineral-rich eastern DRC for three decades, a legacy of regional wars that flared in the 1990s and 2000s -The Guardian Nigeria Israel and Palestinian militant groups in Gaza Strip ‘negotiate ceasefire Israel and Palestinian militant groups in the block- aded Gaza Strip have reportedly negotiated a ceasefire after a bloody episode of violence that left 21 people in Gaza dead and brought daily life in Tel Aviv to a standstill. Extra News TV, an Egyptian state-run station that has close ties to the security agencies, said on Wednesday evening that Egyptian officials – who frequently mediate in the conflict – had successfully brokered a pause in the fighting. There was no immediate confirmation of the agreement from Israel or Palestinian Islamic Jihad, the militant group primarily involved in the flare-up in the Hamas-dominated Palestinian enclave. Shortly after the announcement, more rockets were fired towards Israel, raising questions over whether or when a truce would take effect. Gaza militants fired about 270 rockets into Israel on Wednesday afternoon in response to surprise Israeli airstrikes that began a day before that killed 21 people, including three Islamic Jihad senior commanders and at least 10 civilians. Sev- eral salvoes in less than an hour set off air raid sirens in towns and cities across southern Israel on Wednesday afternoon, including the country’s commercial and cultural hub, Tel Aviv, 50 miles away. Israel’s powerful Iron Dome air defence system intercepted at least 62 projectiles, and there were no immediate reports of serious damage or casual- ties. The Israeli military also said it had successfully deployed David’s Sling, a new mid-range air defence missile system, for the first time, but did not give further details.-The Guardian Turkey raises public worker salaries by 45% days before elections The Turkish government is raising its workers’ salaries by 45 percent, President Recep Tayyip Erdogan has said, five days before Turks vote in presidential and parliamentary elections. Polls show Erdogan in a tight race with the main oppo- sition presidential candidate, Kemal Kilicdaroglu. Erdogan announced the pay rise on Tuesday at a meeting in Ankara that discussed the economic and social rights of public workers through a framework called the Public Collective Bargaining Agreement Framework Protocol. “We are increasing wages by 45 percent, including the welfare share,” the president said, according to a statement on the government’s website. “Thus, we are raising the lowest public worker wage to TL15,000 [$768 per month].” Erdogan added that he would continue to work on raising the wages and pensions of civil servants. “In July, we have preparations based on the infla- tion difference and welfare share,” he said. Turkey’s economy is a key issue heading into Sunday’s elections. Unorthodox interest rate cuts sought by Erdogan sparked a devaluation of the Turkish lira in late 2021 and sent inflation to a 24-year peak of 85.5 percent last year.-Aljazeera Saudi Arabia resumes diplomatic work in Syria after its return to the Arab League Saudi Arabia will reopen its diplomatic mission in Syria, the Saudi foreign ministry said on Tuesday, nearly a decade after diplomatic ties were cut and two days after Syria was readmitted into the Arab League. Some Arab states, including the United Arab Emirates, have turned the page with Damas- cus, reversing years of isolation over President Bashar al-Assad's crackdown on protests in 2011 and the ensuing civil war. Sources told Reuters in March that Damascus and Riyadh had agreed to reopen their embassies. The Saudi foreign ministry did not say on Tuesday when the embassy would re-open. Syria's state news agency said Damascus has decided to resume the work of its diplomatic mission in Saudi Arabia. Contacts between them had gathered momentum following a landmark China-brokered deal to re-establish ties between Saudi Arabia and Iran, a key ally of Assad, a regional source aligned with Damascus had said. The United States, an ally of Saudi Arabia, has opposed moves by regional countries to normalise ties with Assad, citing his government's brutality during the conflict and the need to see progress towards a political solution. Some Arab countries are also opposed. The Saudi foreign ministry said the decision would support regional security and stability.- France24 Israel and Gaza militants in heaviest fighting for months Palestinian militants in the Gaza Strip have fired almost 300 rockets at Israel and the Israeli mili- tary says it has hit 50 Islamic Jihad targets, in the heaviest fighting in nine months. Six people have been killed and 45 injured in Gaza, local medics say. Several were hurt rushing to shelters in Israel, where most rockets have been intercepted or fell in open areas. It comes a day after 15 Palestinians were killed in Israeli strikes on Gaza, including three Islamic Jihad leaders.Islamic Jihad, which is the second biggest militant group in the territory after Hamas, had sworn to avenge their deaths. Egyptian media reported on Wednesday evening that Egypt had brokered a ceasefire, but there was no immediate confirmation from the two sides. Soon afterwards, another rocket barrage was fired towards southern Israel and there were further strikes in Gaza. An umbrella organisation representing armed factions in Gaza earlier warned that "if Israel increases its aggression, dark days await it". Isra- el's Prime Minister Benjamin Netanyahu told mayors that it was "ready for the possibility of an 26 The AXiS LXXV Friday 12 May 2023

New production coming online and penetrating value segments supported volume gains, with spar- kling beverages fizzing 10% higher to claim an outsize market share despite limited PET capacity. Sorghum beer volumes in Zimbabwe ascended 9%, propelled by alternative packs, innovative flavors and exploiting regional capacity. In neighboring Zambia, Delta's volumes spiked 28% as new sorghum beers seduced customers. An uptick in Zambia's economy promised prosperity but currency depreciation drove costs up as dispos- able incomes remained tight, with high maize prices adding to hardship. In South Africa, 12% volume growth for sorghum beer signified captur- ing share from illicit homebrews via distribution gains and imminent local production to choke costs. An economic rebound following COVID-19 buoyed sales, though higher fuel and electricity levies pressured spending. Despite experiencing an increase in volumes in Zambia and South Africa, the firm has yet to achieve profitability as it focus- es on penetrating the market and solidifying its brands in neighboring countries. African Distillers, Delta's spirits subsidiary, grew 18%, lifted by a 14% upswing in spirits, 16% uplift in wines and 23% upsurge in ciders. Expand- ed distribution and in-country supply enabled com- petitive pricing, cementing market dominance despite health regulations and trade constraints roil- ing key clients. Schweppes Holdings Africa, an associate of Delta, faced several challenges during the year. In the first half of the year, the company was constrained by a shortage of fruit juices, which adversely affected its production and sales. Additionally, trading chal- lenges in formal sectors further impacted the com- pany's operations. Furthermore, a prolonged plant breakdown had a significant impact on the supply of water and Minute Maid juice drinks. On the other hand, Nampak Zimbabwe, a packaging com- pany, sustained volume growth and benefited from a recovery in key customer segments. Despite facing economic challenges, the company was able to maintain its growth trajectory, which is a posi- tive sign for its future prospects.Moving forward Delta has arranged to get in bed with Heineken to further the firm’s business foothold in the region. Delta's sparkling performance, especially in Zimba- bwe, affirmed its adaptive business models can overcome macro-economic and operational chal- lenges, though heavy local currency debts and imports render the group exposed to exchange rate shocks and restrictive policy changes. Productivity hiccups from power outages and scarce water impact operations, but with new capacity coming online, Delta is poised to overcome present chal- lenges and continue outpacing peers. Overall, rising above economic difficulties and supply vulnerabili- ties, Delta's adept management produced stellar results in a year of adversity, suggesting even more effervescent outlooks ahead. FINANCIAL MARKETS AT A GLANCE 2023 ZSE All Share Index ZSE Top 10 Index ZSE Small Cap Index Interbank Market Rate 8006.31 0.04% JSE All Share Index BSE All Share Index LuSE All Share Index NGSE All Share Index TOP 5 WEEKLY RISERS TOP 5 WEEKLY FALLERS AFDIS ARISTON BAT CFI DELTA DAIRIBORD HIPPO Bridgefort MEIKLES OK SEEDCO STAR AFRICA TSL Tanganda 68000 1371.43 628997.5 66343.93 124523.54 18229.73 116301.77 1000 59053.1 9806.99 25301.62 239.6 15000 47004.6 49000 1250 680000 66343.93 97680 16019.77 91425 1000 48818.69 6846.34 20000 229.93 13540 37113.5 Latest Price ZWL Cents Previous Week ZWL Cents EDGARS NTS RTG TRUWORTHS 2500 1400 2700 350 3250 1400 3005 400 Ecocash ECONET ZIMPAPERS 10500 42492.6 656 8030 37918.34 598.17 MASHHOLD FMP 2100 3495.21 1815 2222.06 ARTZDR LAFARGE PROPLASTICS TURNALL Willdale RioZim 2515 14375 20161.92 760 389.25 23000 2510.11 14375 19540 750 400 20000 First Capital Bank CBZ FBCH FIDELITY FML GBFS NMBZ ZBFH ZHL 4996.47 30600 17000 3800 2500 2675 7500 10652.5 1450 3617.52 29000 16500 3400 2500 2650 6600 10652.5 1314.91 Latest Price ZWL Cents Consumer Consumer Staples Previous Week ZWL Cents Latest Price ZWL Cents Materials Sector Previous Week ZWL Cents Latest Price ZWL Cents Financial Sector Previous Week ZWL Cents FMP AFDIS FCA ZIMPLOW OK 3495.21 68000 4996.47 6380 9806.99 1363.21 24895.83 1825.85 2280 3391.16 BAT Willdale 628997.5 389.25 -51002.5 -10.75 64% 58% 58% 56% 53% -8% -3% COUNTER PRICE CENTS CHANGE Latest Price ZWL Cents ICT Sector Previous Week ZWL Cents Latest Price ZWL Cents Real Estate Sector Previous Week ZWL Cents 1222.2740 -10.9% 770499.89 3.34% 35813.01 35.88% 59538.57 32.45% 77776.88 0.65% COUNTER PRICE CENTS CHANGE % CHANGE % CHANGE 52209.06 -0.16% 8150.79 0.68% 59538.57 35813.01 ZSE Top 10 Index All Share index ZSE Top10 index WOW 36% MOM 62% YTD 191% 59538.57 61860.61 ZSE Financials Sector All Share index ZSE Financials index WOW 13% MOM 53% YTD 116% 59538.57 68972.41 ZSE Industrials Index (New) All Share index ZSE Industrials Index (new) WOW 28% MOM 69% YTD 224% 59538.57 34056.73 ZSE Real Estate Index All Share index ZSE Real Estate Index WOW 24% MOM 53% YTD 92% 8006.31 59538.57 BSE All Share Index BSE All Share index WOW 0.04% MOM 1.6% YTD 3.6% 8150.79 59538.57 LUSE All Share Index LUSE All Share index WOW 0.7% MOM 10.7% YTD 11.1% -25.0% 60% Interbank Market Interbank All Share index 59538.57 64569.7 ZSE ICT Index All Share index ZSE ICT Index WOW 34% MOM 51% YTD 269% 59538.57 122744.62 ZSE Consumer Discretionary Index All Share index ZSE Consumer Discretionary index WOW 20% MOM 82% YTD 246% 5953… 770499.89 ZSE Small Cap Index All Share index Small Cap index WOW 3.3% MOM 11% YTD 70.4% 59538.57 114893.4 ZSE Medium Cap Index All Share index Medium Cap index WOW 23% MOM 54% YTD 214% 59538.57 79749.28 ZSE Consumer Staples Index All Share index ZSE Consumers Staples index WOW 38% MOM 65% YTD 226% 59538.57 31672.41 ZSE Materials Index All Share index ZSE Materials Index WOW 11% MOM 35% YTD 133% 77776.88 59538.57 JSE All Share Index JSE All Share index WOW 0.7% MOM 3.3% YTD 6.5% 52209.06 59538.57 NGSE All Share Index NGSE All Share index WOW -0.2% MOM -2.9% YTD 1.9%

Regional Economic Watch pandemic response. Last year, it spent a third of its overseas aid budget housing refugees inside the UK, a British aid watchdog said in March. Between 2020, when the UK was the third-biggest contributor to U.N. humanitarian appeals in Africa, and 2022, its contribution dropped by 55%. Mitchell declined to say how much the UK would contribute for 2023.Funding for U.N. appeals does not reflect all donor money for Africa, but relief agencies and government officials say it is indicative of broader contribution trends. Britain isn’t an outlier – and Russia’s invasion of Ukraine last year has accelerated the exodus, humanitarian officials say.Between 2021 and 2022, the continent’s humanitarian needs rose by nearly 13%. But leading donors, including Canada, Sweden, Japan, Norway, and the Netherlands, all scaled back funding for Africa, the U.N. data showed.The United States has in recent years stepped in to fill gaps. Washington nearly doubled its contribution for the U.N.’s Africa appeals between 2020 and 2022. Last year, it provided nearly $6.4 billion, or over 56% of all funding. Without it, overall U.S. humanitarian spending will fall by nearly 20% to $10.5 billion in 2023, with a further decline to $8.5 billion next year. WFP has cut rations in Nigeria, Central African Republic, Burkina Faso, Cameroon, Mali, Mauritania and Niger. Without additional financing, the agency told Reuters, it will halt all assistance for over 700,000 refugees and internally displaced people in Chad this month. Sudan was hosting over 1 million refugees, mainly from South Sudan, Eritrea, Ethiopia and Syria, before the outbreak of fighting last month. A third of Sudan’s own 46 million citizens also relied on aid, according to the U.N.But the lack of funding has forced WFP to cut back on nutrition interventions for mothers and young children since last year. Now, the violence has brought some humanitarian operations to a standstill. Aid workers have been killed, food aid looted, and WFP says it’s running out of stocks.UNHCR is appealing for an additional half billion dollars for Sudan. But the U.N.’s joint appeal for the country – a request for $1.75 billion that predates the latest violence – is only 15% funded. Mozambique Some of Mozambique’s exports to China will soon have a significant reduction in tariffs, under an Agreement on Preferential Treatment for Goods Originating in Mozambique, signed between the two countries. According to Maria Gustava, Mozambique’s ambassador to China, cited in Monday’s issue of the Maputo daily “Notícias”, the agreement provides for the national products in question to enter the Chinese market with a 98 percent reduction in unpaid duties. “The final details are missing for its implementation, but the agreement is very important as it guarantees that Mozambican products enter the Chinese market with ease. Right now, we are working on the phytosanitary aspects and the registration of companies that can export to China,’ she said. The diplomat explained that Mozambique exports wood, fish products, minerals (titanium) and oilseeds to China.In turn, Mozambique imports from China machinery, manufactured products, and construction equipment, among others. She noted that, due to the Covid-19 pandemic, many Mozambicans who bought products in China to resell in the country had to stop, but with the reopening of the Asian nation, hopes were reborn and some have already resumed their trips. “We want more investment in industry, especially in agro-processing and minerals, because that creates jobs. We also need investment in infrastructure, and human resource development. This is the message we have been giving to our Chinese counterparts”, Maria Gustava explained. Zimbabwe Australia-listed Invictus Energy on Monday confirmed the presence of light oil, gas condensate and helium at its Cabora Bassa project in Zimbabwe, sending its shares up 8.7%.The company said that mud gas analysis from the Mukuyu-1 well drilled last year had proved the presence of hydrocarbons in multiple reservoir pay zones. “Analysis shows the presence of light oil and rich natural gas condensate, with condensate gas ratios estimated at between 30 and 135 barrels per million cubic feet,” it said.The analysis also confirmed the presence of helium gas in commercial concentrations comparable with global helium producing fields, the company added. Helium is a key component in the manufacture of semiconductors, liquid crystal display (LCD) panels and fibre optic wire.Invictus said it plans to drill a second well, Mukuyu-2, during the third quarter of this year. “Success at Mukuyu-2 and confirmation of a significant discovery will further unlock the value of our material portfolio,” said Invictus Energy Managing Director Scott MacMillan. Sudan The battles between the Sudanese army and the paramilitary Rapid Support Forces that erupted in the capital Khartoum in mid-April have now engulfed large parts of Sudan, killing hundreds, wounding thousands and unleashing a humanitarian disaster that could not have come at a worse time.Africa was already facing a deepening set of crises – from drought to floods and a growing list of armed conflicts – that has seen demand surge for life-saving humanitarian assistance. Now, according to an internal U.N. estimate obtained by Reuters, 5 million additional people in Sudan will require emergency assistance, half of them children.By October, some 860,000 people are expected to flee to neighbouring countries including Chad, placing additional strain on nations already facing some of the world’s most under-funded humanitarian crises. (For a FACTBOX please click Read full story)Yet a Reuters analysis of United Nations funding data for Africa shows financial support from key donor governments is dropping off. Securing additional money is a long shot, 12 aid workers, diplomats and donor government officials told Reuters. More likely, they said, funding gaps will grow as Europe focuses on Ukraine, post-Brexit Britain turns inward, and some lawmakers in the United States, the world’s largest donor, target budget cuts. Every day, hundreds of Sudanese trek across the desert scrubland and dry riverbeds that make up large sections of the country’s 1,400-km (870-mile) border with Chad. Some 30,000 have arrived so far, according to the U.N. refugee agency UNHCR, which expects it will need to establish five new camps to accommodate them.Aid agencies are rushing to distribute emergency food and register new arrivals, but resources are tight. Even before the latest crisis, U.N. humanitarian appeals for Africa faced a $17-billion funding gap this year, risking leaving millions without lifesaving assistance. Desperation is growing among the refugees. Chadian soldiers used whips on Sunday to beat back dozens of women who had started grabbing bags of provisions in Koufroune, another border village, when they saw that supplies brought by a Turkish aid group were running out. DONORS PULL BACK Between 2020 and this year, Africa’s needs reflected in U.N. appeals grew nearly 27%. But as wealthy countries began looking inward to shield their citizens from the COVID-19 pandemic, many cut back on humanitarian activities abroad. Britain, for example, announced in 2021 it would temporarily reduce its aid budget to 0.5% of gross national income from 0.7% to pay for the The AXiS LXXV Friday 12 May 2023 28