Parliament to push mostly pro-economy Bills including amendments to the Indigenisation Act

HARARE


President Robert Mugabe has tabled over 20 Bills that should be expedited during the Fourth Session of the 8th Parliament, majority of which are aimed at stimulating the economy and re-aligning with the new Constitution.

Officially opening the 4th Session of the 8th Parliament, President Mugabe said while the economy is faced with a number challenges, government is doing what it can, particularly through the ease of doing business in order to revive and grow the economy.

“Our economy still faces a number of challenges which include liquidity challenges, subdued foreign direct inflows, and limited fiscal space, compounded by low revenue collections arising from depressed production, rampant revenue leakages, as well as poor mineral commodity prices on the global market.

“As a consequence, the economy registered a gradual decline with estimated growth rate for 2016 now projected at 1.2 %,” he said.

He said government in the context of ZimAsset is implementing a number of initiatives under the ease of doing business reforms with the objective of stimulating investment inflows and improve business environment.

The pro-economy bills to be tabled include a new Companies Act which will significantly reduce registration delays and facilitate the smooth operation of new businesses. The Public Entities Corporate Governance Bill will be discussed as Government aims to foster adherence to good corporate governance by public sector entities.

President Robert Mugabe government will amend the Indigenisation and Economic Empowerment Act to bring it in line with a policy clarification he issued in April this year.

President Mugabe issued the policy intervention following a row played out in the media pitting Youth Indigenisation and Economic Empowerment Minister Patrick Zhuwao and Finance Minister Patrick Chinamasa over application of the law to the natural resources and financial sectors.

On issuing the clarification, President Mugabe acknowledged that the conflicting positions on the interpretation of the empowerment law created confusion among current and potential investors thereby undermining market confidence.

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“It will be recalled that I issued a statement to clarify government’s position regarding the Indigenisation and Economic Empowerment Policy on 11th April, 2016. The relevant Act will thus be amended to bring into consonance with the enunciated policy position,” he said

The President said the Small Claims Court, the Commercial Court and the High Court are going to be merged into the Judicial Laws Amendment (Ease of Settling Commercial and other Disputes) Bill 2016. Further to that, the Zimbabwe Investment Authority Amendment Bill which will provide legal underpinning to the One Stop Shop Investment Centre will also be brought to Parliament during this Session.

Parliament will also expedite the Diaspora Policy Bill which the President said was already in place and required parliament to discuss. The policy seeks to stimulate remittances and inbound investment by Zimbabweans outside the country. Some amendments made to the Special Economic Zones Act after its passage in Parliament will also be tabled soon.  The amendments relate to some labour law provisions designed to protect workers in the Zones.

“The legislation will boost the country’s capacity to attract world-class investment, employment creation, technology transfer and innovation in strategic areas of the country’s economy.”

According to the President, the current Session will also consider the Movable Property Security Interest Bill which seeks to increase access to credit for the majority of emerging entrepreneurs. A collateral registry will be established to facilitate the use of movable property including cars, livestock and furniture, as collateral for loans.

Other Bills include the Insolvency Bill, and amendments to the Insurance Act, the Pensions and Provident Funds Act and the Insurance and Pensions Commission Act. Amendments to the Microfinance Act will be discussed and this according to the President is a result of some Micro- Finance Institutions that were licenced as deposit taking MFI’s. The Reserve Bank of Zimbabwe (RBZ) during the last quarter of 2015 registered three deposit taking MFIs Getbucks Financial Services Ltd, African Century Leasing Company and Collarhedge Finance (Private) Ltd.

President Mugabe said with the thrust on pushing financial inclusion, the Bill should be closed in the current session since the MFI sector are the providers of funding mainly to the small to medium sector which now anchors the economy. Funds had been earmarked for the capitalization of the Small and Medium Enterprises Development Corporation.

The Mines and Minerals Amendment act spilled over from the prior session and Pres Mugabe said the Bill should be concluded as the mining sector is now key to economic development in the face of the current effects of the El Nino induced drought on the agriculture sector.

“The long awaited Mines and Mineral Amendment Bill will thus be tabled before Parliament. As a matter of fact, the growth of mining is anchored on intensive exploration of mineral deposits.

“To facilitate increased mineral exploration, the Minerals Exploration and marketing Corporation Bill which will integrate the current Minerals Marketing Corporation of Zimbabwe and the Mining Promotion Corporation will be brought before the current session,” he said.

In the energy sector, the President said prime focus is on boosting power generation capacity. Several projects including the Kariba South Expansion and Hwange are ongoing hence the ministry is crafting for presentation to Parliament the Renewable Energy Policy and an Independent Power Producers Framework which should enhance private sector investment in the energy sector.

He noted that the Kariba South Power Extension Project was now 60% complete with the first 150MW unit expected to be ready by December 2017. The Hwange Power Station is expected before the end of this year paving way for commencement of actual work in the first quarter of 2017. President Mugabe also added that works were underway to establish a natural gas powered electricity generating plant and three 100MW solar power plants.

“The Ministry is in the process of crafting for presentation to Parliament, the Renewable Energy Policy and an Independent Power Producers framework which should enhance private sector investment in the energy sector.”

The Public Sector Procurement Bill and the Occupational Safety and Health Bill, the Zimbabwe Youth Council Bill, the Electronic Transactions and Electronic Commerce Bill, a bill on the re-organisation of the Civil Aviation Authority of Zimbabwe and the Data Protection Bill will also be debated.  He said the re-organisation of the Civil Aviation Authority of Zimbabwe will facilitate the establishment of joint ventures in the developments of airport infrastructure in the country.

In terms of manufacturing, the President said the establishment of the National Competitiveness Commission will coordinate the crafting and implementation of measures to improve the competitiveness of the local companies.

According to the President, other Bills to be brought before Parliament include the Constitutional Court Bill, the Rural District Council Bill, Regional Town and Country Bill, the Traditional Leaders Bill, the Prisons Bill, and the Marriages Bill. The Coroner’s Office Bill which will pave way for the setting up of the Coroner’s Office responsible for medico-legal investigations will also be brought before Parliament. However, some Bills are a carryover from the previous session.

President Mugabe said the growing incidence of droughts in Zimbabwe presents a clarion call for the country to build capacity to effectively cope with disasters linked to climate change. He said while government has embarked on climate change mitigation and adaptation programmes, Parliament is expected to ratify the Paris Agreement which allows the country to benefit from programmes on climate change, The Nagoya Protocol on access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation will also be tabled for ratification and accession.

The Manpower Development Act will be amended and government is to launch the 2016-2026 STEM Policy Strategy to support Zimbabwe’s quest for industralisation and modernization within the framework of the African Union Agenda 2063.

Due to the increased usage of plastic money, President Mugabe said legislators should in the current session also prioritize the Cyber Crime Bill.

Meanwhile, President Mugabe said government is committed to improving the welfare of legislators hence construction of the parliament building in Mount Hampden has commenced under a Chinese grant.

Some of the Bills that sailed through the 3rd Session include the RBZ Debt Assumption Bill, the Joint Venture Bill and the Local Government Bill among others.

SecZim issues first ATP licence to the Escrow group

HARARE


Following the gazetting of Securities Alternative Trading Platform rules in August, the Securities and Exchange Commission of Zimbabwe has issued the first licence to a local company.

An alternative trading platform is a system that provides or maintains a market place or facilities for bringing together buyers and sellers of securities but does not set rules for subscribers or discipline or seek to control the participants other than by excluding them from trading.

SEC chief executive Tafadzwa Chinamo said the regulator had licenced Financial Securities Exchange (FinSec), a subsidiary of the Escrow group and had also seen interest from several investors and companies.

“We have to date successfully licensed one applicant, FinSec but we have seen increased interest from several other investors and companies,” he said.

Escrow CE Collen Tapfumaneyi said there was an opportunity for ATPs to fill in the space which is not being covered by the main stock exchange. He said the process of acquiring the licence was lengthy but the group had taken advantage of the delay to sharpen its strategies and the products on offer.

The group is looking at attracting companies that currently have over the counter trading like Old Mutual Zimbabwe, Empowerment schemes (Employee Share Ownership Trusts and Community Share Trusts), agriculture co-operatives and “other products.” ATP products are not only related to equity trading but the platforms can trade debt and securities lending.

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Tapfumaneyi also said the ATP would further the aims of financial inclusion and transforming the country’s anaemic savings and investment culture. “ATPs by nature work on an open equity market participation to all and therefore gives an opportunity for people in marginalised and peripheral areas to come and trade on a transparent platform. At the same it will also give brokers more business.”

The critical aspect would be the technology and FinSec would aim to match world class standards but adopt home grown solutions at a lower cost. Tapfumaneyi would not disclose the investment required for creating an automated platform but hinted that it would be around $5 million.

He emphasized that FinSec would not be a competitor to the Zimbabwe Stock Exchange, but rather an independent and alternative exchange platform for listing and trade execution which would complement the main board. “Consider ATPs as some sort of incubator for the main board and therefore the possibility of dual listings is very slim.”

Tapfumaneyi said the group would conduct road shows and ‘expose’ the product to potential players.

Barclays to dispose Egypt ops in $500m deal; Zim could be harder to sell

LONDON


Barclays is calling time on 150 years of history in Egypt by agreeing to sell its operations in the country to a Moroccan rival in a $500m deal that will slightly boost its capital levels and shed 1,500 staff.

Attijariwafa Bank, the biggest bank in Morocco by revenue, is buying all of Barclays’ operations in Egypt, having seen off competition from Saudi and Emirati competitors.

Barclays, which is in the process of selling its much larger South African-listed subsidiary, has been looking to offload its Egyptian and Zimbabwean operations since deciding to drastically cut back its African presence this year.

Jes Staley, who took over as Barclays chief executive late last year, has decided to focus on its UK and US operations, while selling or cutting back activities in Africa, continental Europe and Asia.

The Egyptian business has 56 branches focused on retail and corporate banking. The sale will add about 0.1 percentage points to Barclays’ common equity tier one ratio — the key measure of a bank’s financial strength.

The deal, which removes about £2bn of the £51bn of risk-weighted assets that Barclays had in its non-core unit at the end of March, is expected to close by the year end. Barclays’ Zimbabwean unit is likely to be much harder to sell.

The bank is in talks to sell its French arm to a private equity group and aims to shrink its non-core unit to £20bn by the end of the year and to fold the division back into the rest of the group early next year.

Staley said: “I am pleased to announce a further reduction in our non-core business. Today’s announcement demonstrates our continued focus on improving the group’s returns and our ability to execute our strategy quickly.”

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Barclays first established a presence in Egypt in 1864. It expanded its operations in the country through a joint venture with Banque du Caire 30 years ago before steadily taking full control over the past two decades.

In May, Barclays sold the first chunk of its 62 per cent stake in its African unit via a R13bn ($946m) placing with institutional investors. It was then restricted from selling more shares for 90 days under a lock-up agreement that expired in August.

Having given itself until 2019 to complete the African sale, Barclays has consistently expressed confidence that it could sell the rest of its shares on the open market if no strategic bidder materialised. Its former boss Bob Diamond is one of the potential bidders that has expressed an interest. However, it was reported last month that Diamond’s quest for Barclays’ African assets had suffered a setback after US private equity group Carlyle pulled out of the consortium.

But Barclays is widely expected to push ahead with the African disposal as fast as possible, favouring a sale into the market rather than an outright disposal, which could be bogged down with regulators. It is likely to keep a stake of 10 to 20 per cent in the South African-listed operation. – Agencies

ZB Financial Holdings, IDC removed from US OFAC list

HARARE


The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) removed ZB Financial Holdings, its subsidiaries, the Industrial Development Corporation along with other individuals and entities from the list of Specially Designated Nationals and Blocked Persons that were designated under the Zimbabwe-related sanctions programme.

According to an update from OFAC, ZB Holdings and its banking subsidiaries, IDC, Chemplex Corporation, Zimbabwe Fertiliser Company, three farms (Gowrie, Longwood and Mlembwe) and individuals Aeneas Chigwedere, Jocelyn Mauchaza-Chiwenga, Georgina Nkomo (John Nkomo’s widow), Abina Chapfika, Ever Chombo, Grace Charamba and the late Sabina Mugabe and Charles Utete.

The removal from the list will come as a relief to ZB and IDC who have in the past noted that the embargo placed on the companies had severely undermined their operations. The sanctions had also hampered the companies efforts to attract investors.

Analysts also say the removal also provides a boost to the country’s re-engagement programme with international financial institutions ahead of side-meetings at the annual International Monetary Fund/World Bank conference.

ZB has often had its capitalisation plans derailed with investors pulling out of transactions because of the prohibitions while the bank has also failed to get international credit lines.

In March, ZB management said the group had been lobbying hard to get the sanctions removed.

For IDC, funds have in the past been intercepted while the group has also failed to close numerous investment deals.

Early this year, Barclays Bank agreed to shell out nearly $2.5 million to OFAC in order to settle claims related to the violation of U.S. sanctions by processing transactions for government-backed entities in Zimbabwe.

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According to the Treasury, Barclays processed 159 transactions totaling around $3.4 million from July 2008 to September 2013 to or through financial institutions in the U.S., including the company’s New York branch, for corporate customers of Barclays Bank of Zimbabwe, which were majority-owned by people that are on U.S. sanctions lists.

The US imposed sanctions on the country in the early 2 000s mostly targeted at Zimbabwean politicians Washington accused of undermining democracy and human rights, and involved asset seizures and travel bans. Among those targeted were President Robert Mugabe and First Lady Grace.

Several Zimbabwean companies have had their export receipts, amounting to millions of dollars, seized over the years by the office owing to the sanctions.

Agribank and the Infrastructure Development Bank of Zimbabwe were removed from the list in February, giving room for US companies.

IPEC wants audit into Fidelity’s Southview project after concerns of weak controls

HARARE


A forensic audit into the affairs of Fidelity Life Assurance has unearthed corporate governance deficiencies some dating as far back as pre-dollarisation and as such the Insurance and Pensions Commission has tagged the managing director Simon Chapereka and financial director German Mushoma as not being fit for office.

The commission has also called for a further audit into the Southview Park project amid concerns of weak internal controls which could have prejudiced the company and policyholders at the expense of staff and purchasers of properties. According to documents containing recommendations from IPEC following the audit, gleaned by FinX, Fidelity should establish, the quantity and recover all prejudice on the Southview project. The company should also recover multiple stands which were allocated to staff and related parties without being paid for while the same groups could also have paid lower prices for some of the stands.

The audit done by KPMG from April, at the instigation of IPEC, found that Chapereka and Mushoma could have prejudiced the company and policyholders through undeserved profit sharing, bonuses, education and security allowances and interest underpayments. IPEC called for the recovery of all personal gains made by the two.

However well-placed sources say that management is yet to respond to the findings of the report and as such no action has been taken by the board.

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Chapereka is said to have allocated himself 12 residential stands at Fidelity’s Manresa and Southview projects and advanced himself an interest-free housing loan of $300 000. The loan had a tenure of 10 years, with monthly repayment installments pegged at $500; implying by the end of the repayment period, he would have repaid $60 000. This could potentially prejudice the company of $240 000. Mushoma, is said to have also abused loan facilities while he also allocated himself several stands.

The MD is also accused of failing to declare his personal interest in Fidelity Life Pharmacy where FLA holds 35% while the transaction to acquire the shares was not authorised by the board.  In that respect, the group should recover its share of profits in the pharmacy business.

IPEC is also pushing for the reconstitution of the Fidelity board to ensure that it has diverse skills and maintain a balance between executive and independent directors in line with best practice and good corporate governance. “This should happen as soon as the KPMG forensic audit is responded to.”

The commission also said FLA will need to restate its financial position to make them compliant with previously violated accounting standards. “The commission will also seek the opinion of PAAB on the violation of accounting standards and determine if BDO, FLA’s external auditors acted above board. “This opinion is important considering that the relationship between the insurer and auditor may have been compromised by the fact that the FD, MD, Finance GM and the Head internal auditor came from BDO before joining FLA.”

Concerns were also raised over a ZPI transaction, pension commutation levels and non-compliance with legislation.

The audit is said to have cost almost $500 000.