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Private sector major culprit of graft: Zacc boss – NewsDay

BY MTHANDAZO NYONI

THE Zimbabwe Anti-Corruption Commission (Zacc) says the private sector is the major culprit in corruption as players are evading taxes and inflating figures, among other ills causing serious damage to the economy.

Presenting a paper during the Zimbabwe National Chamber of Commerce (ZNCC) 2021 annual congress in Victoria Falls yesterday, Zacc chairperson Loice Matanda-Moyo said corruption was causing serious damage to the economy and should be nipped in the bud.

“I think the private sector is the major culprit of corruption in Zimbabwe,” Matanda-Moyo said.

“We only started in government because we realised that if we started with the private sector, there was going to be an outcry to say, why start with us not the government. Private sector’s corruption is the one which is really causing damage to the economy.”

She said most companies were evading paying taxes through understating the value of goods.

“That is why you misstate and then again you start saying this machinery cost US$20 000 when it cost US$2 000. When you export you then minimise the prices. Why, because you do not want to pay the duty associated with that exportation,” she said.

Matanda-Moyo said they carried out an investigation into the export of tobacco to the Netherlands and found out that tobacco companies misstated export figures.

The Zacc boss said corruption was costing the world about US$1 trillion through bribes while an estimated US$2,6 trillion is stolen annually through Acorruption.

She said 5% of the global gross domestic product, according to the United Nations, was lost in corruption and 10 times the amount of official assistance is corruption.

In Zimbabwe, according to the Reserve Bank of Zimbabwe, we are losing between US$1,7 billion and US$1,9 billion through illicit dealings annually.

“We really need to do something about it,” she said, adding that “we are now coming to the private sector. I think we have already started arresting companies for smuggling of goods”.

Matanda-Moyo revealed that chief executives of some banks in Zimbabwe were not banking money in the very banks they were leading.

“We carried out that survey. So, if a CEO of a bank does not have confidence in his or her own institution, who then is going to bank money in those banks? Nobody,” she said.

She said since 2019, Zacc has had 12 convictions on corruption cases, recovered 80 vehicles and one house, adding that it was also assisting the Zimbabwe Revenue Authority to recover taxes.

Speaker of National Assembly Jacob Mudenda said to recover economically amid COVID-19, Parliament needed to enact legislation that promoted a digital economy.

ZNCC president Tinashe Manzungu said the 7,8% economic growth forecast for the country was being threatened by a volatile parallel market exchange
rate.

The ZNCC conference, which started yesterday and ends tomorrow, is running under the theme Managing Disruptive change.

 Follow Mthandazo on Twitter @MthandazoNyoni 

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Robbers prey on mistrust of financial system – NewsDay

ZIMBABWE’s troubled monetary system has led residents to stash cash at home. But this also makes them targets.

Tariro remembers hearing a sudden bang on her kitchen door, the kind that produces shivers. She peeked through the window and saw 10 men armed with crowbars. They wanted to enter.

The 54-year-old ran into her bedroom shouting mbavha, Shona for thieves, as the men knocked down the door.

“They tied my mouth with a top I was wearing before bathing and said that I should co-operate, or they would kill me,” says Tariro, who asked to use only her middle name out of fear of being attacked again.

They found US$700 in her church uniform, as if they knew exactly where to look. Then they left.

Tariro believes the robbers came after her because she used to work for a non-governmental organisation where she earned United States dollars. “They assumed I had a lot of money in my house,” she says, still shaking at the memory.

Her decision to hoard cash stems from Zimbabwe’s cratering economy and rapid currency changes over the past two decades that have decimated the country’s monetary system and made keeping money under the bed more palatable than putting it in the bank. Not only has such stockpiling affected Zimbabweans’ ability to grow a savings account, it also has made an increasing number of people targets for robberies.

In 2009, Zimbabwe introduced a multicurrency system that made it possible for residents to use the US dollar, the South African rand and other currencies. But the US dollar, which was the dominant currency, became scarce a decade later and government reverted to the local currency. Officials introduced a separate account to deposit foreign currency, but all bank balances that held US dollars were converted to Zimbabwean dollars. Nearly overnight, people’s money was worth much less.

Zimbabweans like Tariro stopped trusting banks. Fearing sudden changes in policy, many people started keeping foreign currency — which depreciates slower than the Zimdollar — at home.

“There is no incentive for keeping money in the bank,” says Farai Mutambanengwe, founder and executive officer of the Small and Medium Enterprises Association of Zimbabwe, a lobbying organisation that promotes access to markets.

At the onset of the COVID-19 pandemic government started allowing official transactions in foreign currency again in March 2020. But residents remain wary of unpredictable fluctuations. Even those paid through the banking system distrust it. Some prefer to buy foreign currency on the black market to preserve the value of their money.

“There is no incentive for keeping money in the bank.”

Harrison Dumba, who works as a chef at a local restaurant, says he gets paid in local money through a bank transfer but immediately buys US dollars on the black market because they don’t lose value quickly.

“I do not see the benefit of keeping my money in the bank,” says the 36-year-old. “It can lose value while you think you are saving money.”

The coronavirus has caused even further economic hardships, as lockdowns and decreased travel affect jobs. The Zimbabwe Republic Police national crime office recorded nearly 3 500 robberies last year. Between January and March of this year, police had already counted more than 2 300 burglaries.

The United States of America Department of State has pointed to money stuffed in pillows and pockets as a motivator for robberies. “Criminals have specifically targeted businesses and residences known to house or store large sums of cash,” according to an April 2020 safety report.

Zimbabwean officials acknowledge the rise in crime but play down its connection to a failing monetary system. Ruth Mavhungu-Maboyi, Home Affairs and Cultural Heritage deputy minister, attributes the surge in violence to an increasing availability of guns and a lack of police vehicles. She points to a spate of recent arrests — including those of seven suspects in recent burglaries — as signs that authorities were working to curb crime. But she also emphasises the need for residents to trust banks.

“Does keeping your money at home really bring something?” she says. “Instead, it can get stolen. Encouraging people to keep money in the banks is an issue of safety.”

The uptick in crime hasn’t had only financial consequences; it has had psychological ones too.

Since the attack, Tariro finds it hard to trust people.

“My life has not been normal since then,” she says. She is renting part of her house out to other families, so she doesn’t have to live alone.

She panics when dogs bark. And she spends money immediately after getting it because she doesn’t feel comfortable keeping it anymore. —Global Press Journal

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Cassava SmarTech Zimbabwe : Revenue Diversification Pays Off for Cassava Smartech – marketscreener.com

CASSAVA Smartech Zimbabwe Limited trading as EcoCash Holdings Zimbabwe says the group’s revenue diversification strategy is paying off, as evidenced by the exponential revenue growth in the Insurtech and the Vaya Technologies business units.

The group’s financials for the year ended February 28, 2021, shows that the overall revenue decline of 26 percent to $14,3 billion compared to $19,3 billion in the prior year was largely offset by the growth in the Insurtech business.

“Although group revenues closed the year at $14 billion compared to $19 billion in the prior year, due to the impact of regulatory changes and the Covid-19 pandemic, this was mitigated by a rigorous cost-cutting drive,” group chairperson Mrs Sherree Shereni said in a statement of the financials.

She said the foreign exchange losses decreased by 45 percent, to close the year at $4,6 billion and these mainly relate to USD denominated debenture balances.

Mrs Shereni noted that as part of its revenue growth strategy, the Group will continue its focus on revenue diversification and innovation into the future.

She said during the year, the Insurtech business contribution to overall revenue increased to 15 percent from 9 percent in the financial year ended February 29, 2020, largely attributed to the growth of the short-term non-motor insurance business.

“The Vaya Technologies business also uplifted its performance contribution from 2 percent in the financial year 2020 to 7 percent in the 2021 financial year,” she said.

EcoCash revenue contribution at 60 percent was lower than 75 percent in 2020, with the decline as a result of a revenue diversification strategy that saw growth in the Insurtech and VAYA Technologies business.

Mrs Shereni said Steward Bank’s contribution remained stable and is expected to continue on the upward trend on the back of the system upgrade completed in April 2021.

Trading in the shares of Cassava Smartech Zimbabwe on the Zimbabwe Stock Exchange (ZSE) was suspended with effect from October 1, 2021, as the company had remained in default of publishing its audited financial statements for the year ended February 28, 2021.

However, following publication of the financials the ZSE has lifted the suspension in trading of Cassava shares effective today.

The company in a statement had attributed the delay to certain technical accounting matters that took time to be resolved.

According to the financials, EBITDA margin closed the year at 15 percent lower than 26 percent in 2020.

Mrs Shereni said the focus, therefore, remains on innovatively driving growth, consolidating the gains of the cost-cutting measures, and further reducing operating costs in FY22.

During the period under review, Cassava said through its partners, it supported a low cost, low input, climate-smart conservation farming approach called “Pfumvudza” in order to complement Government efforts towards a resurgence in agriculture and food security.

“The strength and agility of our business, combined with the professionalism, resilience, and innovative foresight of our teams, are expected to carry our business into the future, resplendent with digital opportunities.

“Our technology-driven platforms and processes offer significant advantages, and we continue to drive innovations and deploy them where the need is greatest.

“Consistent with that, the Group has continued to take advantage of this accelerated digital thrust to come up with new products and services that better respond to the evolving needs of our customers, guaranteeing a strong business that is transforming and is well placed to deliver sustainable growth into the future,” Mrs Shereni said.

According to the Group’s financials, the fintech business unit which is their largest operating unit constitutes about 80 percent of the total Group revenue.

Within the fintech business unit, 80 percent of the revenue comes from the mobile money business unit, EcoCash.

The goup has $2,7 billion of related party payables which relate to debentures which were assumed pursuant to the demerger of the group from Econet Wireless Zimbabwe Limited on November 1, 2018.

A total of 1 166 906 618 unsecured redeemable debentures with an annual compounding coupon rate of 5 percent were issued at a subscription price of 4,665 US cents per debenture and these are accounted for as a long-term related party payable.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Vic Falls targets international capital free flow – The Zimbabwe Mail




HARARE – Government is exploring ways to establish an offshore financial services centre in Victoria Falls as part of broader efforts to support the free flow of international capital into the country,  Finance and Economic Development Minister Professor Mthuli Ncube, has said.

The centre is expected to develop and deepen the financial services sector through provision of opportunities for global investment.

Prof Ncube disclosed this yesterday in Victoria Falls at a Commodity Exchange Workshop attended by captains of the mining industry, senior Government officials, mining experts, small-scale and large-scale miners, and officials from the Dubai Gold and Commodities Exchange.

The workshop is being hosted by the Victoria Falls Stock Exchange in partnership with the Dubai Gold and Commodities Exchange. 

“As you might be aware, the Government of Zimbabwe is exploring the setting up of an offshore financial services centre in Victoria Falls of which the envisaged commodities exchange will be a key component. The offshore financial services centre will help develop and deepen the financial service sector, through provision of opportunities for global investment. We can all agree that investment is essential in driving economic growth and creating an attractive investment climate is one step towards achieving that,” said Prof Ncube.

“An offshore financial services centre is in reality an attempt to create an investment environment in which international capital can flow freely. Free flow of capital requires both the supporting legislation, and the underlying products — of which the commodities exchange is part of the infrastructure that provides the investment products.” 

Turning to what a commodity exchange entailed, Prof Ncube said it encompassed both the physical spot and derivative markets. 

“The physical market is where buying, selling and subsequent delivery of commodities like oil, grain and metals takes place whilst the derivative market deals with financial securities that help participants in the physical market to hedge risk. The physical commodity markets can also be subdivided into agricultural, base metals, precious metals and energy markets. Derivative markets can be classified as Over the Counter or Exchange Traded,” he said.


Prof Ncube led a high level ministerial delegation to Dubai where Victoria Falls Commodity Exchange signed a strategic MOU with Dubai Gold Commodity Exchange and the two exchanges are already operationalising the agreement.

DGCX is a leading derivatives exchange in the Middle East and has played a pioneering role in developing the regional market for derivatives trading, clearing and settlement. 

“It is therefore prudent and opportune for VFEX to tap into their expertise in setting up a commodities exchange as. As part of the agreement, the DGCX will extend technical support, knowledge and skills to VFEX, with the ultimate aim of establishing an international commodities exchange in Zimbabwe. My Ministry has supported the VFEX since it was mooted as an idea and we are encouraged to see that such a young exchange is quickly looking to broaden its products and services,’ said Prof Ncube.

Speaking at the same occasion, Mines and Mining Development Minister Winston Chitando said the mining sector was one of the main pillars of the country’s economy, contributing over 45 000 in formal employment and at least 50 percent in export earnings annually. 

He said the Second Republic led by President Mnangagwa launched the US$12 billion Mining Industry Strategy in 2019. 

“Under this policy document, priority is given to investments in exploration, opening of new mines, beneficiation and value addition of minerals as well as expansion of projects. A commodity exchange would complement this strategy as it represents an organised market for the finished or semi processed product from the mining sector. A transparent market may help curb smuggling in the sector and also assist miners in planning,” he said.

“As the Minister of Mines and Mining Development, I have to fulfil the vision set by His Excellency, in terms of growing the sector to a US$12 billion  industry.” – Herald


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