By Tawanda Musarurwa

HARARE -The Reserve Bank of Zimbabwe has moved to spearhead the resuscita-tion of an Economic Crimes Court as the local economy continues to be prejudiced of bill ions of dollars through white-collar crime.

In the recent past efforts by the RBZ to combat economic crimes such as the external-isation of foreign currency or financial sector corruption seem to be coming to nil.

In the financial sector, for example, several banks have closed as their owners have mismanaged depositors' funds, yet not major convic-tions have been made.

But while presenting the Jan-uary Monetary Policy State-

ment today RBZ governor Dr John Mangudya said the policy proposal is rather based on a

broader need to plug leak-ages in the wider economy. At

News Update as @ 1530 hours, Thursday 04 February 2016Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

Zimbabwe to revive Economic Crimes Court

Dr John Mangudya

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a symposium last month, the governor lamented limited financial wherewithal that was being accrued from the local resources sector, espe-cially diamonds.

"There is urgent and com-pelling need for Govern-ment to resuscitate an Eco-nomic Crimes Court in order to ensure that the “plugging the leakages approach” advo-cated in this Monetary Pol-icy Statement is legally sup-ported," said Dr Mangudya today.

"The investigation and pros-ecution of crimes involving strategic minerals like gold and diamonds, for example, necessitates the seizure by the state of the recovered minerals which are then kept as exhibits to be used in the trial.

"The current congestion in the criminal resolution system, results in protracted pro-cesses before finalisation of economic crime cases. During this process the country lacks

access to the resources which could be generated from the liquidation of the looted prod-ucts or exhibits." The RBZ governor lamented the pres-ent cumbersome processes in dealing with resources crimes.

"The problem is further com-pounded by the fact that both the Precious Stones Trade Act [Chapter 21:06] and the Gold Trade Act [Chapter 21:03] provide for elaborate proce-dures to be followed upon the conviction of a felon before the precious stones are for-feited to the State.

"The minerals concerned have to be delivered to the Secretary for Mines who has to publicise their existence by way of publication in the Gazette. The Secretary has to wait for any claims to the minerals for two months. If a credible claim is received, then the minerals are sur-rendered to the claimant. If there is a disputed claim, the matter is referred to the High Court after twenty one days,"

he said.

"What this calls for therefore, is the institution of a mech-anism which expedites the disposal of economic crimes involving minerals so that the exhibits are quickly put at the disposal of the State.

"As was the case when Eco-nomic Crimes Court were first introduced in 2003, the specialised Economic Crimes Court would be administra-tively set up using existing legislation.

"They would be introduced using the existing court structure, that is, as a divi-sion within the Regional Mag-istrates Courts and as a Divi-sion within the High Court."

Other countries in sub-Sa-haran African have such-like institutions. For instance in 1999, neighbours South Africa set up the specialised Commercial Crime Court, and Nigeria established the Eco-nomic and Financial Crimes Commission in 2002 to curb white-collar crime.●

BH243

HARARE - Finance and Eco-nomic Development Minister Patrick Chinamasa yesterday dismissed the World Bank projection that the Zimba-bwean economy wil l this year grow by 1,5 percent, insist-ing it wil l grow by 2,7 per-cent on the back of concerted efforts the government was making to stimulate the pro-ductive sectors.

The World Bank is argu-ing that the El Nino induced drought wil l choke the per-formance of the economy.

Launching its f irst Zimba-bwe Economic Update mag-azine, the World Bank said the economy would continue to grow by an average of 2 to 3 percent inspired mainly by the growth in the services sector.

“A poor growth and wors-ening external environment contributed to a decelera-tion in 2015 and growth is projected at 1,5 percent in

2016,”

said World Bank senior econ-omist Mr Johannes Herder-schee.

“The GDP (Gross Domestic Product) growth rate slowed from 3,8 percent in 2014 to 1,5 percent in 2015 and 2016, due largely to the impact of an on-going drought, which is taking a heavy toll on agri-culture production.”

Agriculture is dubbed the

mainstay of the Zimbabwean economy, with its perfor-mance having ripple effects on the rest of the economy. Low production and a sl ide in international mineral prices is expected to minimise con-tribution of the mining sector t growth.

But Finance and Economic Development Minister Pat-rick Chinamasa insisted the economy would grow by 2,7 percent this year on the back

of efforts that government was putting to boost produc-tivity in the manufacturing and mining sectors.

“I do not think the 1,5 per-cent growth (projection) is correct,” he said, adding: “We are not sleeping trying to make the productive sec-tors work.”

“We are optimist that we wil l achieve the 2, 7 percent growth by year end through implementation of the pol-icies which wil l boost the mining, agriculture and man-ufacturing.

“I a m very happy that we are in the right direction and the major policies that are meant to move our country forward are now in place and what left is implementation,” he said.

Minister Chinamasa said agriculture, mining and man-ufacturing would make sig-nif icant contributions to the

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Chinamasa dismisses world Bank economic growth projection of 1,5 percent

Minister Patrick Chinamasa

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economy’s growth. While the World Bank said low invest-ment would also impact on overall economic output, Minister Chinamasa said efforts were on-going to improve the environment.

“It is not an event but a pro-cess. Any issues that demean the attractiveness wil l be addressed,” he said, while call ing on investors to speak out on issues they have res-ervations about.

Minister Chinamasa said the Zimbabwean economy was resil ient as a number of peo-ple had long predicted its

demise, which never came to pass.

“Everyone who has com-mented on Zimbabwe has said we should be finished by now. Even when I was appointed as Finance Minis-ter they said the economy would be on its knees,” he said. Mr Herderschee said it was imperative that the country addressed its neg-ative balance of trade, which has been averaging $3 bil l ion in the last few years.

He said the country’s growth rate could surpass expecta-tions if it also progressed

with efforts to mend strained relations with international f inance institutions and the western world.

“Fundamentals for growth are sti l l strong but the headwinds are increasing,” he said, add-ing that the country’s l iterate and hard working population was a key factor in efforts to boost recovery and growth.

Meanwhile, the World Bank extended a $32 mil l ion grant to Zimbabwe under the Zim-babwe Reconstruction Fund (ZimREF) to f inance imple-mentation of a number of projects.ZimREF is a pool of

donor funds from Denmark, European Union, Norway, Sweden, Sweden and the World Bank, managed by the World Bank for developmen-tal programmes.

The $32 mil l ion wil l specif i-cally go towards improving water and sanitation in seven small towns, modernising the country’s public procurement system, strengthening trans-parency and accountabil ity in public f inance management and expanding innovations in maternal and child care financing.-BH24 reporter/New Ziana ●

BH246

By Funny Hudzerema

HARARE – The Government and the World Bank-managed Zimbabwe Reconstruction Fund (Zimref ) has launched a $32 million facility to fund several programmes such as the water and sanitation, public financial management (PFM) and maternal and child health.

The $32 million will be funded by provided by Denmark, the European Union, Nor-way, Sweden, Switzerland, the United Kingdom and the World Bank’s State and Peace Building Fund.

The World Bank said the Public Procurement Modern-isation Project will receive a $1,3 million grant and a $0,6 million technical assistance from ZIMREF to support the reform of the public procure-ment system and prepare for the introduction of e-procure-ment in Government.

A second phase of $2,0 mil-lion is programmed to support the roll-out of an e-procure-ment pilot in key ministries and agencies said the bank.

“Zimref will also provide a $10 million grant for the national water project and a comple-mentary technical assistance grant from the water and san-itation programme. This grant is the first phase of a planned $20 million project which aims to improve access and efficiency in water services in selected growth centres.”

The project which is to be implemented by the Ministry of Water, Environment and Climate Change and the Zim-babwe National Water Author-ity will rehabilitate the water systems in Lupane, Madziwa, Zimunya, Gutu, Nembudzi-yana, Guruve and Mataga.

The bank also said the fund will support the preparation of National Water resources Master Plan of Zimbabwe the

commercialisation of ZINWA and the establishment of a water supply and sanitation regulator.

ZIMREF will also be provid-ing a grant of $10 million for the first phase of the new Public Financial Management Enhancement Project.

The project will support improvements in finan-cial reporting, internal con-trols, fiscal transparency and accountability in Government finances building on earlier work that help to resuscitate Zimbabwe’s financial man-agement.

The bank added that the bank will extended an additional funding of $10 million to the health sector to complete Zimbabwe’s ongoing health sector development project that supports the introduction of results based financing in rural and low-income clinics.

In his remarks during the

signing ceremony of the fund Finance and Economic Devel-opment Minister Patrick Chi-namasa said the World Bank team was in the country to brainstorm on a country financing programme.

“We are working frantically to produce a country strat-egy paper to determine funds required.”

He added that priority sectors for funding would be infra-structure, agriculture, mining and manufacturing, among others.

Minister Chinamasa said the Government accepted the World Bank’s ‘frank’ assess-ment of the country’s econ-omy, which has started to struggle for growth after an impressive rebound following dollarisation in 2009.

Before that, Zimbabwe’s economy had contracted by as much as 52 percent between 1998 and 2008.●

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Govt, Zimref launch $32 million fund

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HARARE – The Zimbabwe Farmers Union (ZFU) yes-terday urged farmers to take advantage of the rains that have been falling across the country over the past few days to replant crops that did not germinate and those that wilted under the sweltering heat.

ZFU president Mr Wonder Chabikwa said the torrential rains being received were affecting farming operations in some parts of the country with heavy soils.

“As you know the rains came late in some areas so plant-ing was delayed and the cur-rent wet spell is a welcome relief to most late planters,” he said.

“Those farmers with plants that did not germinate should replant during this wet spell,” he added.

Mr Chabikwa said while farm-ers welcomed the rains,

planting in some areas had been affected.

“Areas most affected are tobacco growing areas that include parts of Zvimba and Hurungwe in Mashonaland

West and Macheke in Masho-naland East where heavy soils are found. He said 70 percent of farmers had planted crops while the remaining 30 per-cent had not, as they waited

for the rains.

Mr Chibakwa urged farmers who had not planted to plant early maturing varieties in case the rains persisted.-New Ziana.●

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Farmers urged to replant

BH2410

HARARE - The mainstream industrials returned to positive trading buoyed by made an upturn in Nat-foods, to push the market 0,51 percent up to 101.51 points.

National Foods was the only gainer, adding 18,18 percent to close at 260c.

On the downside Proplas-tics fell 4,35 percent to 2.2c.

Heavyweights Delta and Innscor fell 1,57 per-cent and 1,25 percent to 52,17c and 19,57c respec-tively. Zimre dropped 1,54 percent to 1,28c, and Bar-clays shed 0,7 percent to 3.9c.

Volumes were fair, mostly on the back of trades in Delta, Natfoods, and Inn-scor, to give a turnover of $654K.

The mining index was again unchanged

- BH24 Reporter ●

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Equities market recovers

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MovERs CHANGE TodAy PRiCE UsC sHAKERs CHANGE TodAy PRiCE UsC

NatFoods 18.18 260.00 PROPLASTICS -4.34 2.20

DELTA -1.56 52.17

ZIMRE -1.53 1.28

INNSCOR -1.25 19.75

BARCLAyS -0.76 3.90

ECONET -0.22 22.00

iNdEx PREvioUs TodAy MovE CHANGE

INDUSTRIAL 100.99 101.51 +0.52points +0.51%

MINING 19.53 19.53 +0.00 POINTS +0.00%

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15 diARy oF EvENTs

The black arrow indicate level of load shedding across the country.

PowER GENERATioN sTATs

Gen Station

03 February 2016

Energy

(Megawatts)

Hwange 420 MW

Kariba 285 MW

Harare 30 MW

Munyati 29 MW

Bulawayo 24 MW

Imports 0 - 300 MW

Total 1371 Mw

—10 February 2016 - Nampak Zimbabwe Annual General Meeting: venue 68 Birmingham Road, southerton, Harare: Time 12:00

—18 February 2016 - 70th Annual General Meeting of the members of CAFCA ; Place: Boardroom at the company’s registered office at 54 Lytton Road, Workington, Harare; Time: 12:00 hours

—23 February 2015 - 38th Annual General Meeting of the members of Powerspeed Electrical limited; Place: Powerspeed Boardroom, Gate 1, Powerspeed Complex, Corner Cripps Road and Kelvin Road North, Graniteside, Harare; Time: 1100 hours

25 February 2016 - Extraordinary General Meeting (“EGM”) of the shareholders of Radar Hold-ings limited; Place: Tanganyika House, 6th Floor Boardroom, Harare; Time: 0900 hours...

25 February 2016 - The 49th Annual General Meeting of Mashonaland Holdings limited; Place: The Boardroom, 19th Floor, ZB life Towers, 77 Jason Moyo Avenue, Harare; Time: 1200 hours...

THE BH24 diARy

BH2416

lUsAKA - ZAMBIA will cut the sale of treasury bills by half after yields climbed to a record, as Africa’s second-largest copper producer seeks to cut spending and encourage private borrowing, Deputy Finance Minister Christo-pher Mvunga said.

The central bank will offer 450-million kwacha ($40m) worth of treasury bills at an auction this week, down from the 900-million kwacha on offer in January, when yields on the one-year securities reached 27 percent, compared with a rate of 14,49 percent for similar Kenyan securities.

The bank will also cut the amount of bonds it will put out to tender by 40 percent to 600-million kwa-cha. Zambia’s budget has come under strain as prices for the copper that the country depends on for more than 70 percent of exports, languish near six-year lows and a power crisis cuts out-put.

The government has run consec-utive budget deficits that it has financed both locally and exter-nally, leading to higher borrow-ing costs. President Edgar Lungu announced spending cuts in November as Zambia tries to rein

in the deficit.

"As you reduce expenditure, the need for borrowing also reduces," Mr Mvunga said on Tuesday. "The reality is we don’t want to crowd the domestic market. It’s part of the effort to promote private par-ticipation in the domestic mar-ket."

The government is seeking to borrow 2,5-billion kwacha locally this year, according to Finance Minister Alexander Chikwan-da’s budget speech in October. That’s about a third less than the amount budgeted for in the pre-vious year.

The Bank of Zambia’s treasury bill auction sizes have gradually grown since 2012, when it offered 350-million kwacha in January of that year. The reduction in the bonds and treasuries the cen-tral bank is offering is the first in at least four years, according to data from the Bank of Zambia compiled by Bloomberg.

The yields on Zambia’s $1-bil-lion Eurobonds due 2024 rose two basis points to 15,47 per-cent by 11.18am in Lusaka. That compares with 14,69 percent for similar-maturity dollar debt

of Ghana, rated a step lower at Moody’s Investors Service and Standard & Poor’s.

While Zambia has offered 900-million kwacha at treasury bill auctions since October 2014, demand has been weak even as yields rose. At the last auc-tion in January, the central bank sold 900-million kwacha worth of securities. Two weeks before that, the sale raised 232-mil-lion kwacha. Inflation rose to a 12-year high of 21,8 percent last month.

"yields across the curve have been under considerable upward pressure over the past year, amid rising inflation expectations, con-cerns about public sector borrow-ing requirements and exchange-rate pressure," Standard Bank in Johannesburg said in a note to clients last month. The govern-ment’s reducing domestic bor-rowing "could be supportive of bills and bonds if seen through."

Still, yields may only fall "mar-ginally as doubts linger over the government’s ability to stick to the domestic borrow-ing target," before general elec-tions in August, Standard Bank said.-Bloomberg●

REGioNAl NEws 17

Zambia to cut treasury bill sales as yields soar

loNdoN — Anglo American’s shrinking market value could eject the global miner from London’s blue-chip equity index at the reshuffle next month, potentially triggering a broader sell-off.

Plunging commodity prices last year shrank Anglo’s mar-ket capitalisation to $5,6 bil-lion as its shares fell 76 per-cent to record lows last year, making it the worst performer in the FTSE 100 index. This compares with a market cap of £31 bill ion in 2011 and more than £9 bill ion in 1999, when the stock was listed in London.

The risk of demotion may spark a sell-off that could be worsened by tracker funds rebalancing portfolios to account for Anglo’s fall from grace.

"Anglo has been out of favour, which may force the issue," Macquarie analyst Alon Olsha said when asked if Anglo could keep its place in the index. "Anglo is facing very challenging conditions and the market is questioning the credibility of the restructur-

ing plan."

The company said in Decem-ber that it would offload three-fifths of its assets. The FTSE 100 reweighting, due on March 18, will be based on March 2 closing prices. If a company falls to 111th posi-tion or below, it is removed from the index. Anglo is hov-ering near the bottom of the list.

The mining component in the FTSE 100 fell sharply to 3,6 percent last month from 15 percent at its peak in 2010, data from the London Stock Exchange showed.

"The investment proposition is quite weak at the moment ... some companies are at a liquidity risk," said PwC UK

mining leader Jason Burkitt. "you don’t want to (try to) catch a falling knife." Miners across the globe now account for less than 1 percent of total market cap, the lowest in 15 years, according to Citi analysts. yesterday, Anglo was the sixth-largest mining company by market cap.

"The action plan to respond to this downturn is proba-bly going to decide whether they will stay in the FTSE," said Hanré Rossouw, portfo-lio manager at Investec Asset Management.

Anglo has suspended its divi-dend until the end of this year and announced plans to cut its workforce to 50 000 from 135 000 and reduce its assets to no more than 25 from

55. It is expected to outline which mines will be sold or shut down during its financial results later this month.

But the turnaround plan has failed to impress investors, given the large debt load.

"The case of Anglo is diffi-cult because they have strong liquidity, they’ve got bank facilities and that gives them the ability to muddle through, potentially for another four years," Mr Rossouw said.

"But some investors are ask-ing them to get capital now before things get worse … because for Anglo’s bal-ance sheet to be sustainable through the cycle, they need to reduce the debt level by $3 bill ion to $4 bill ion at least."

The cycle will be dictated by the pace at which miners cut output to offset slowing demand in China. Liberum Capital analyst Richard Knights said: "We haven’t even seen negative demand from China yet, and you stil l have accelerating supply in some of the key commodi-ties." - Reuters●

iNTERNATioNAl NEws 18

Anglo in danger of getting the boot from UK’s blue-chip index

loNdoN — Rarely has an industry lost so many jobs with such little effect. HSBC has frozen hiring and pay; Barclays plans to cut 1 200 jobs; and Deutsche Bank will cut bonuses after posting a stinging loss last year.

It’s already been a grim year for bankers’ jobs. But it ’s not been the only one. In all, half-a-million jobs have been eliminated across the indus-try since the global financial crisis of 2008.

And it ’s likely to become worse in Europe this year, as revenue stagnates. On Tues-day UBS reported a slump in investment banking revenue during the fourth quarter.

Despite the wave of firings, costs at investment banks remain stubbornly high — both in absolute terms and as a proportion of revenue. The cost-income ratio at UBS’s investment bank was stil l 93 percent, the company said on Tuesday.

Front-office headcount at top global firms tracked by research firm Coalition has fallen 23 percent since 2010; overall costs are down only 8 percent. Revenue fell 12 per-cent between 2010 and 2014, according to Coalition. So, profitability has taken a hit: returns on equity are below 2010 levels at Deutsche Bank, Barclays, Credit Suisse, UBS and BNP Paribas.

European firms were slower than their US counterparts

to eliminate jobs. Average compensation per head has changed little in the past five years, largely because invest-ment banks kept faith in an eventual rebound that would reward those that had kept experienced staff.

Many were stil l hiring in some areas: the rise in reg-ulation and risk-management requirements since 2008 pushed firms to add compli-ance staff, damping the effect of cuts elsewhere and doing

little to generate extra reve-nue.

Non compensation costs — such as technology and over-heads linked to new regu-latory requirements — were unchanged.

Firms have also had to grap-ple with fines, costlier capital charges and taxes.

The good news is the next round of cuts might have more of an effect: the bulk of the investments in regulation and compliance have been made, even if nobody would bet on a drop in regulatory costs. Even so, the rebound hasn’t come and the business model is stil l broken. Banks need to cut entire businesses, rather than simply jobs.

It’s too early to tell if banks will make tough decisions when deciding where to wield the axe. Hiring freezes and pay cuts are a start — but they will not be enough. - Bloomberg●

19 analysis19 ANAlysis

Banking job cuts do little to stem costs