2021 06 22 42 BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
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2021
06
Stock Market 2020
Review and 2021
Outlook
22
Leveraging digitisation
42
Sustainability best
performer
BUSINESS INNOVATION
AND ENTERPRISE IN A
DISRUPTED ENVIRONMENT
Official Sponsor
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
CONTENTS
06 22
42 50
04 Editor’s Note – Melody Chikono 32 Adjudication – Equity Axis
06 2020 Review, 2021 Outlook – 34 Award Winners – Equity Axis
Tatenda Makoni 36 CAFCA
08 Currency Fix – Victor Bhoroma 38 ProPlastics
10 VFEX – Respect Gwenzi 40 ART
14 Financial Reporting – Owen Mavengere 42 Padenga
16 Boardroom Talk – Proctor Nyema 44 Simbisa Brands
20 Capital Markets - ZSE 46 CBZ
22 Leveraging Digitisation – Joe Chirowodza 48 Zimplow
26 Beyond Covid-19 – Tapiwanashe Mangwiro 50 Seedco
28 Sponsors Remarks - Nedbank 52 ZIDA
30 Stock Market Rally – Tinotenda Gakanje
PROUDLY SP ONSORED BY 2021 Zimbabwe Quoted Companies Survey 3
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
2021
06
Stock Market 2020
Review and 2021
Outlook
22
Leveraging digitisation
42
Sustainability best
performer
BUSINESS INNOVATION
AND ENTERPRISE IN A
DISRUPTED ENVIRONMENT
EDITOR’S NOTE
governments rolling out hard lockdowns that
confined people to their homes.
Official Sponsor
Technologies came in handy, as acknowledged by
the Zimbabwe Stock Exchange listed clothing chain
Quoted Companies Survey Magazine
in June this year, which said most of its revenues
is Published by the
came through payments from creditors’ online
payments.
Banks closed shop but banking did not stop, with
96% of payments coming through digital platforms.
Operations only ticked up towards year end after
ZIMBABWE INDEPENDENT EDITOR: government relaxed restrictions.
Faith Zaba Still, that was not enough to defuse a carnage that
had frustrated gross domestic product growth.
MAGAZINE EDITOR: Some estimate that growth slowed down by about
Melody Chikono 12% after an erosion of disposable incomes and de-
industrialisation.
CONTRIBUTORS: Tourist arrivals, a key contributor to Zimbabwe’s
Tatenda Makoni
economy, plunged by 96%.
Victor Bhoroma
Respect Gwenzi Over US$1 billion was wiped out.
Owen Mavengere Measures put in place to help companies included
Proctor Nyemba the launch of the Victoria Falls Stock Exchange in
Zimbabwe Stock Exhange October, which trades in US dollars.
Joe Chirowodza There has been a listing drought at the waterfall
Tapiwanashe Mangwiro because policy inconsistences and other drawbacks
Tinotenda Gakanje have continued.
But the good news is that a few companies have
LEAD RESEARCH CONSULTANT:
indicated they will list on the new bourse.
A
Equity Axis
DECADE after hyperinflation turned However, in the midst of all this chaos, quoted
COMMERCIAL EXECUTIVE:
Zimbabwe’s economy upside down, companies delivered strong results in FY 2020.
Punish Murumbi destroying the local currency and
slashing gross domestic product by 50%,
On the backdrop of the ever changing terrain, it
has become imperative for companies to keep General and Bonded Warehousing Bonded Vehicle Storage
PROJECT C0-0RDINATORS: a more frightening crisis returned in moving forward in terms of innovation, thus the 2020
Olayayi Jack 2020.
Wilson Masawa
Tariro Gweshe
Covid-19 hit the world, and economies including
Quoted Companies Survey theme: Business
Innovation and Enterprise in a Disrupted Customs Clearing Cold Room Facilities
Zimbabwe were unsettled. Environment.
Gamuchirai Mataure For Zimbabwe, the problem was that Covid-19, In this issue we look at how companies can leverage
Road, Rail, Air and Sea Freight International Forwarding
Olga Muteiwa
estimated by the World Bank (WB) to have cost the on digitalisation under the Covid-19 pandemic.
SALES REPRESENTATIVES:
country 500 000 jobs, became a crisis within a crisis. We run an overview of the market in 2020, giving
Ozilio Chabhanga - Marketing Officer Following a temporary relief brought about by the an idea of what the future holds.
Talent Mativenga multicurrency system between 2009 and 2018, As we look at the currency implications, we also
Brenda Mutetwa
Kington Mundondo
Zimbabwe was already relapsing when the pandemic
rattled the markets in 2019.
touch on how companies can report in uncertain
times such as hyperinflation.
Full and Empty Container Logistics Distribution
Justice Mubvakure Government blunders and the health scourge Producing this magazine could have been an uphill
Mitchel Ezra
Project Management Logistics Advisory / Consultancy
placed 2020 on track to the one of the most difficult task if it was not for the support we got from our
years for Zimbabwe – almost eight million people perennial sponsors, Nedbank Zimbabwe.
MAGAZINE DESIGN & LAYOUT
plunged into extreme hardships, the WB noted. For five consecutive years they never wavered.
This was not the only problem – inflation rocketed To them we say THANK YOU.
to 839% in July 2020, sparking off a surge in prices I also wish to thank our lead research company,
and the foreign currency black market returned.
RESPONSIVE LOGISTICS
Equity Axis, for their input while all the contributors
Even the forex auction system introduced by the to this magazine are greatly appreciated .
central bank in June, which had pumped in US$800 To our readers your support can never be
TWITTER million by February this year, failed to calm market underestimated!!
@zimindependent jitters.
Firms continued with the struggle to access forex, Happy reading.
FOR YOU
FACEBOOK
but they acknowledged that the auction system had
Melody Chikono
Zimbabwe Independent
brought in positive spinoffs.
17382 Corner Bessemer & Strand The biggest lesson out of last year’s upheavals was
Road, Graniteside, Harare
Zimbabwe
that when pushed to the corner, businesses think
outside the box.
91 Coventry Road, Workington, Harare P.O. Box 792 Harare Zimbabwe
New technologies were embraced after it became EDITOR
Tel: 0242 773930-9,798894-6,
771663/5
clear that the virus would be relentless, with Telephones : +263 242 666751 - 8 ,086770044568, 0772 151 477 - 9
Fax: 0242 773854
Email:DL-IMEA-ZW-Info.ZW@Cevalogistics.com
4 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
BE THE
DIFFERENCE
By Tatenda Makoni Exchange Control (Exclusive Use of quarter ended December 2020 of presents a significant downside risk.
Zimbabwean dollar for Domestic consumer facing businesses like Month-on-month inflation has
T
HE operating Tra nsactions) (A mendment) Delta Corporation, Innscor Africa trended below 10% from August
environment in the first Regulations, 2020, the exchange Limited and Econet Wireless 2020.
half of 2020 was rate has remained stabilised at Zimbabwe, there was a marked Should the trend continue, annual
c h a r a c te r i s e d by around US$1: ZW$84. improvement in trading volumes inflation is likely to close the year
hyperinflation as well as As the currency stabilised in the albeit off a low base post the below 35%, a positive development
volatility in the parallel second half of 2020, and the Covid-19 induced lockdown; a for the banking sector that had been
market hinged on a background of env i ron ment fou nd some signal that consumer spend was charging sub-inflation interest rates.
equilibrium, building a view on more robust than expected under Companies ser vicing the
an exchange rate peg within the
earnings became clearer, increasing the circumstances. infrastructure industry such as
formal banking system.
general confidence. Proplastics Limited, Masimba
Annual inflation peaked at
This gave rise to corporate activity Looking Ahead Holdings Limited and Lafarge
837,58% in July 2020 and gradually
on the stock market as businesses Latest reports are implying a reported improvements in their
declined to close at 348,59% in
beca me more ag gressive, potential harvest of circa 2,8 million order books for the second half of
December 2020.
consolidating upwards and tonnes of maize for the 2020/21 2020 implying growth in capital
Activity on the stock market was
downwards to create scale and agricultural season. spend.
primarily driven by inflation
improve efficiency. Since 2013, the peak production Going into 2021, individual
hedging by local investors.
Some examples of these include season was 2016/17 with 2,1 million housing projects and government’s
The environment stabilised from
the acquisition of 100% of Dawns’ tonnes. planned budgetary allocations to
the second half of 2020 going into
share capital by African Sun Tobacco output in 2021 is general construction, will be
2021 necessitating a return to
Limited, Zimre Holdings Limited estimated at 205 000 tonnes (tons) determined by the extent of the
fundamentals for investors.
(ZHL) acquiring a control block in relative to prior season at 182 000 pandemic’s effect.
As seen from the sectoral analysis,
Fidelity Life Assurance (FLA) and tons while yields are expected to be The underlying companies on the
the banking sector outperformed
Sotic International completing their higher. ZSE are set to benefit from a
the rest, driven by FBC Holdings and
takeover of BNC. In the April edition of the World seemingly stable operating
CBZ Holdings.
The Victoria Falls Stock Exchange Bank commodities outlook, tobacco environment and an increase in
The price movement was not
(VFEX) was launched in October prices are forecast to marginally consumer liquidity.
necessarily a reflection of improving
2020. The exchange trades in increase in 2021. Company earnings will be driven
fundamentals but rather aggressive
foreign currency with the aim of It is estimated that around 70% of by volumes growth rather than
demand from strategic buyers.
attracting external investors. Zimbabwe’s population is employed inflation induced price adjustments.
Make a difference (M.A.D) today! Take responsibility
By the end of 2020, CBZ Holdings
had displaced Delta Corporation
So far, the exchange’s sole listing directly or indirectly in agriculture Several counters have invested in of your communities by disposing litter the right way.
is Seedco International, which has hence an improved agricultural their earnings capacity over the past
Limited as the largest company on
the Zimbabwe Stock Exchange (ZSE)
been relatively illiquid. season directly impacts consumer two years and are still trading below Separate all PET bottles before disposal. Recycle to
Old Mutual and PPC are expected liquidity. their replacement values in real
by market cap.
to delist from the ZSE in favour of Agriculture also supplies 63% of terms, presenting an opportunity curb pollution and ensure a clean and healthy
The ZSE opened the year with 60
counters and closed with 56 after
the Victoria Falls Stock Exchange agro-industrial raw materials to the for long-term investors. environment.
(VFEX). The relisting process has manufacturing sector implying a
the delisting of SeedCo International,
taken relatively longer than direct knock-on effect to input costs.
Zimre Property Investments (ZPI),
expected for the counters with Business volumes in the first Makoni is an Equities Sales Trader
Falcon Gold and Powerspeed
Electrical Limited.
foreign parent companies possibly
due to lengthier administrative
quarter of 2021 were adversely
affected by the Covid-19 induced
at IH Securities. She can be reached
on tmakoni@ihsecurities.com
PET Recycling Collection Points
Further delistings followed in the
processes. lockdown, however, there will likely Harare Mutare
first quarter of 2021 as Dawn and
The ZSE was the best performer be a recovery in the second quarter Plant and Factory - 41 Dover Road, Ardbennie, Harare Yellow Portion Services - No 21 Chimoio Street, Mutare
SeedCo merged with African Sun
in sub-Saharan Africa rebased to as restrictions ease, tobacco auction Tisungureiwo Co-operative -19351 Stevenson Road, Graniteside Masvingo
Limited and SeedCo International,
US dollars, as the All-Share Index floors open and maize deliveries to SHEQ Ambassadors - Kamunhu Shopping Centre Mabvuku Recycling Solutions - No 964, Industrial Road, Masvingo
respectively.
closed 2020 up by 135% y-o-y as Grain Marketing Board (GMB) begin. Bulawayo Kwekwe
The introduction of the foreign
investors’ quest for capital Food processing and food retail
currency auction market in June GN Plastics - 76 Wolverhampton Road, Bulawayo No 55 Goods Avenue, Stuart Lloyd Complex
preservation drove demand stocks will directly feel the impact
2020 saw parallel exchange rate
followed by the Nigerian Stock of increased liquidity on their
premiums plummeting from circa @DeltaCorporationInTheCommunity @Petreco
Exchange, up 40% y-o-y in 2020. earnings base. Of course, the
300% to 48%. Since the introduction
Reviewing trading updates for the possibility of a 3rd wave of Covid-19
of the auction system and SI 185
6 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
U
S dollar deposits with local deposit foreign currency on the auction market while
taking financial institutions have posing viability challenges for various exporters
grown significantly since March 2020 who surrender 40% of their foreign earnings to the
to now account for over 65% of the central bank.
money stock in the economy, thereby The local industry and miners have been lobbying
entrenching the country’s partial the central bank to reduce the surrendered position
dollarisation status. to less than 30% or institute reforms that liberalise
That foreign currency stock excludes the billions the formal foreign exchange market. The bone of
in cash that are kept away from the formal economy contention is the absence of an efficient foreign
by businesses of all sizes, households, and traders. exchange mechanism that reduces the spread
It is estimated that close to US$2 billion is between the formal exchange rate and the open
circulating in the informal sector. The multi- market rate.
currency regime has eased inflationary pressure The central bank on its part is reluctant to let the
as businesses now receipt in foreign currency, foreign exchange market be free market determined
reducing demand for foreign currency on the as it fears that inflation might shoot through the
parallel market. roof and certain players in the market have enough
The government’s hopes for a monocurrency capital or deposits to sway exchange rates out of
were swiftly squashed by low levels of confidence line. Tied to the reservations above, the central
in the local currency (the Zimbabwean dollar) and bank still maintains its quasi-fiscal operations in
record annual inflation (659,4% in September 2019) buying gold, which consistently increases money
caused by excessive money printing to fund supply and also partially funds government
government expenditure and central bank quasi- expenditure.
fiscal operations. Between December 2017 and December 2019,
However, money supply in the local currency the central bank borrowed over US1,4 billion from
has stabilised since the beginning of 2021 with the Africa Import and Export Bank (Afreximbank)
reserve money maintaining at just above ZW$20 in three phases to import various unspecified
billion (US$237 million) in the last three months. commodities into the country for government
However, the widening spread between the programmes. The external borrowings did not pass
formal exchange rate (US$1: ZW$84.48) and the through parliament as specified in Zimbabwe’s
CURRENCY parallel market rate (US$1: ZW$130) is creating a Constitution.
Long-term economic stability
Fix &
fertile ground for various arbitrage opportunities
in the short-to-medium term. The spread also Going forward, the Zimbabwean economy needs
skews prices towards the parallel market rate an efficient foreign exchange market where rates
which maximises business profits. are market determined (with limited central bank
Auction market actor intervention to curb market failure when it is
The central bank introduced the foreign currency necessary).
Impli-
auction system on June 23, 2020 and the mechanism Other Sadc countries such as Zambia,
has played a significant role in channelling earned Mozambique and Botswana managed to
foreign currency to the productive sector where successfully relaunch their domestic currencies
70% of the total foreign currency has been allocated after flirtation with dollarisation. Theirs were
to the importation of raw materials, machinery, success stories because they introduced formal
foreign exchange markets with limited government
cations
spares, and equipment.
On the other hand, the parallel market has grown intervention and money supply is kept in sync with
from strength to strength since the introduction of economic growth.
bond notes in November 2016, filling in the gap left Zimbabwe’s central bank must commit to money
by financial institutions in buying and selling supply discipline, zero interference on determining
foreign currency at competitive bids favourable to the exchange rate and end all quasi-fiscal
foreign currency holders. operations. The central bank can never play the
foreign currency allocation and management,
TO THE ECONOMY So far, the Auction market is falling short of
market demands as it can only allocate exchange rate determination and money supply
approximately US$135 million per month versus management roles efficiently at the same time.
national demand of at least US$420 million The roles pose unbridled conflict of interest,
BY VICTOR BHOROMA create unhealthy arbitrage opportunities for other
required to import various commodities into the
country. economic sectors at the expense of others, and
AFTER the The central bank dilemma discourage export production or transparency in
exports. It is imperative for the central bank to
unsuccessful trial to Despite having a soft peg to the US dollar, the
auction market has been a successful bridge in provide regulatory mechanisms for the
implement a bringing currency stability in the economy. This liberalisation of the foreign exchange market where
monocurrency in 2019, has been aided by central bank efforts to mop up allocation is independent of its directives or
interests.
the Zimbabwean excess liquidity in the market.
The dilemma that faces the central bank is on An efficient and market determined exchange
economy has vaulted how to move from the transitory mechanism to a rate will crowd in all economic players and provide
a path to free movement of foreign currency to the
back to the multi- sustainable managed float exchange rate, how to
provide incentives to key players (such as banks, formal market.
currency regime that miners and other exporters) and maintaining its
prevailed between firm control on the country’s foreign currency
Bhoroma is an economic analyst. He holds an
2009 and 2018 with the earnings.
Despite having total foreign currency receipts of MBA from the University of Zimbabwe (UZ). For
US dollar transactions US$6,288 billion in 2020, Zimbabwe faces an acute feedback: Email him on vbhoroma@gmail.com or
growing in the formal foreign currency shortage in the formal sector due follow him on Twitter @VictorBhoroma1.
market while to inadequate foreign exchange liberalisation.
The central bank still maintains control in
dominating trade in the concurrently determining the exchange rate,
informal sector. allocating foreign currency, in buying gold and
defining the exchange control regulations.
Retention levels and Fx market
The conflicting central roles have created
unsustainable subsidies for importers who get
8 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
Victoria
Falls
Stock Exchange:
a white elephant or a product in development
By Respect Gwenzi economy as a whole). De Sousa et
T
al’s research results imply that the
HE Victoria Falls Stock number of listings and turnover
Exchange (VFEX) is now ratio correlate with performance of
in its ninth month since a bourse.
it was set up in October board. The stock market was appreciation on the internet. These
2020. So far, the bourse Lessons learnt: announced in October 2020, a manoeuvres have pushed for the
has only attracted one • Within a 20-year timeframe, the month and half after the resumption mainstreaming of cryptocurrency
listing. This is perhaps a world first five years of a stock market set of trading on the ZSE, which had, and thus the timing of Coinbase
record for any stock market within the tone for the remaining 15 years, however, seen the suspension of listing was perfect.
the same period. led by a number of listings and dual listed counters including Old A good idea executed at the wrong
The VFEX registered its first trades market turnover as pivotal Mutual Limited, PPC and SeedCo time or forcibly executed without
two weeks after its launch, yet indicators of future success. international. much attention to more significant
another negative indicator. A • Low activity at formative stages A separate exchange housing dual fundamentals may be disastrous.
measly total turnover of just US$180 as well as a limited number of listed counters was thus seen as a Zimbabwe had just banned equities
was achieved on the respective first counters attracted indicate a long- way of accommodating the in June 2020, barely 12 years after
day of trading. To further term likelihood of failure as a stock relegated counters from the ZSE another ban at the height of
demonstrate that the listing did not exchange (as measured by 3 Key main board. hyperinflation when the country’s
generate meaningful attention from Performance Indicators’ (KPI) It was important to keep the dual currency was depreciating at a
investors, the shares of the company above) listed companies on the local scary rate, inflation rising and forex
that listed, Seed Co International, •Initial market cap is not financial markets scene as it would scarcer.
had an initial asking price of 21,9 US necessarily an important variable have an impact on investor Foreigners were struggling to
cents but only sold for 18c, which to consider, at least not in the early perception of the country and it remit portfolio disposal receipts but
was also a discount on its primary years of a newly setup exchange. would further impact capital desperate to exit the ZSE. The
Botswana Stock Exchange listing •Size of a national banking sector markets depths. Completely doing populace had low confidence levels
price of 22c. is the most reliable leading indicator, away with dual listed counters in the currency and the government.
To date, no additional listing has where “a higher 1% private credit would have sent a negative picture Savings could not be consolidated
been recorded and no foreign provided by the banking sector and to the rest of the world with regards due to inflation and a historical
participation has been registered other financial institutions is to the rule of law, policy consistency, culture driven by fears of a recurring
either. A number of companies associated with a 1% higher number property rights and other matters, hyperinflation. These are all
initially primed to hop on to the of listed companies, a 0,4% higher which had already dented the concocting factors militating
bourse have so far not yet firmed on market capitalisation (% GDP) and country’s status for two decades. against the promulgation of hybrid
the move. a 0,7% higher turnover ratio 15 years My persuasion is that the stock exchange.
These are early signs pointing later”. formation of the VFEX was solely The failure of VFEX to attract two
towards a failed exchange, but •In-line with predicting a stock driven by the need to pacify some of the three dual listings, which
before a conclusion is drawn, exchange’s liquidity, researchers counters dropped from the ZSE, but were on the ZSE clearly shows that
studies show that a period of at least look towards an economy’s national also emboldened by the ill-fated the odds are highly tilted against its
five years should be used as scale savings level and historical saving ambition to attract new listing success. The two, which are Old
over, from which a more informed patterns. This, in the long-run capitalising on the expected few Mutual and PPC, could have been
assessment can be made. Empirical facilitates demand levels as well as forced listings. thought of as low-hanging targets,
research carried out by Albuquerque both stock exchange transaction As with anything in the capital but their reluctance to hop onto the
de Sousa et al (2016) tries to narrow volume and trade frequency. markets, timing is important. A VFEX shows very low confidence
down tell-tale signs of future stock In the study above the time month ago, Coinbase, an exchange from issuers of securities; even as
market success and failure based horizon for study is very important for cryptocurrency listed on the there may be low confidence from
on a set of three variables. De Sousa in the sense that it informs a more Nasdaq. It soon generated more the investing public.
et al’s 59 country investigation reliable conclusion to be reached. It interest and investors pushed its The fact that the management of
focused on the variables listed is also clear that the timeline for the Initial Public Offering (IPO) price VFEX remains the same with that
below within the first 20 years of review of the VFEX at this point is beyond its reference price of US$250 of ZSE also demonstrates that there
bourse establishment. short of the timeline prescribed in to close its first day of trading at is little in terms of substance
Resea rchers measured the study cited above. However, a US$381. The listing of came at a time separating the two except for a
performance at a 16-20 year point lot of underlying issues would need when the cryptocurrency revolution separate depository. Authorities will
using Market Cap: GDP (as a proxy to be interrogated so as to establish has shifted gears up with renewed have to go back to the drawing
for size of stock exchange), Turnover the likely future outcomes of the strength. board and seek to promulgate stable
Ratio (measure of market liquidity) bourse. The most popular cryptocurrency, policies and a stable macro-
and the Number of Listed Firms The VFEX was initially formed as Bitcoin, had scaled by about 80% environment that attracts savings
(indicates diversification potential a reactionary response to a failed from the beginning of the year, with and investments.
of exchange and its importance to dual listing system on the ZSE main meme coin, Dogecoin gaining wide
TO PAGE 12
10 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
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through legislation adjustments. Given the 50% premium on economic readjustments to foster
It further has to look at technical Exporters who list on the VFEX will parallel market rates, exporters’ sustainable capital markets growth.
aspects to spruce up the image and
Reports
retain 100% of their export earnings losses in the current year are likely
operational aspects of the bourse to
entice issuers of securities, who are
on incremental volumes above their
average monthly volumes over a
to go up as much as 20%. Now what
happens when exporters increase Gwenzi is the lead analyst
Get connected today!
GPS Tracking sales@powertel.co.zw
mainly on the sidelines engaging a predetermined period. This is their production volumes beyond and Managing Director of
wait-and-see attitude. Some of the almost an equivalent of the yester the current average? Equity Axis, which is a financial
considerations that will need to be year export incentive. They gain retention and thus media company, specialising in
made to increase the allure of the While this would be a positive in reduce the loss suffered on the financial research,
VFEX, include separating the a normal economy where exchange primary and larger production broadcasting and publishing
Victoria Falls town as a standalone rates clea rly mir ror t he share highlighted above. A key thing economic and business
jurisdiction in terms of taxation and fundamentals and market forces, in to note is that the loss does not go updates.
exchange control regulation. the case of Zimbabwe, it is not a away but rather it reduces. So for a
The move is tantamount to positive and thus will, in my view company listed on the VFEX, it will
derisking the Victoria Falls, which do little to entice new listings on the have to increase production levels
would increase investor appeal. The VFEX. first above its normal levels, which
bourse may also look at partnering In terms of value, exporters are is not an easy thing to do.
leading exchanges such the lost between 12% and 15% on export Some of these adjustments may Harare - Head Office: No.16 Birmingham Road, Southerton, Harare, Zimbabwe
Johannesburg Stock Exchange (JSE) receipts surrender to RBZ given the require more capital investment. It Sales VoIP: 08611 208 028 | 08611 208 053-4 Office VoIP: 08611 370 001-16
08611 208 035 | 08611 208 125
Harare- Joina City: 2nd Floor, Joina City, Cnr Jason Moyo/Julius Nyerere Way, P.O. Box 7600,
or London Stock Exchange (LSE) disparity between the interbank and may also mean adjusting the current Harare Zimbabwe | Office VoIP: 08611 208 280 / 1
Client Services (24hr): VoIP 08611 208 222-6
through management contracts. the parallel market rates. The rate production processes at a cost. The 0714 000 026/28 Bulawayo: Ground Floor, Fidelity Life Centre, Cnr Fife Street & 11th Ave, Bulawayo, Zimbabwe
Recently, government instituted of loss widens with the widening of government has to adjust policies of 0717205183 | Toll free 888 (on 08611) Office VoIP: 08611 370 020/ 21/23 Tel: 0292- 880202/ 883522-3
Gweru: Shop # 5, Nkabazwe Centre, MIPF Building, 7th Street, GWERU
Selfservice:- http://selfservice.powertel.co.zw:8080/selfservice/
Mobile VoIP: 08611 208 033 Office VoIP: 08611 208 296
Mutare: Shop 21, First Mutual Centre, No. 86 Herbert Chitepo Street, Mutare, Zimbabwe
Mobile VoIP: 08611 208 054 Office VoIP: 08611 208 295
12 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
By Owen Mavengere
O
N October 11, 2019,
the accounting
profession regulator
in Zimbabwe, the
Public Accountants
and Auditors Board
(PAAB) made a pronouncement
that International Accounting
Standard 29, Financial Reporting
in Hyperinflationary Economies
(IAS29), had become applicable in
Zimbabwe.
This pronouncement was to
apply to all entities that report
based on the International
Financial Reporting Standards
(IFRSs).
This implied that financial
statements for entities operating in
Zimbabwe for the financial periods
ending on or after July 1, 2019 were
to be prepared and presented using
IAS 29. releva nce and fa it hf ul relatively stable foreign value.
The effect of preparing and representation. currency. Amounts of local Its predictive value is increased
presenting financial statements In other words, this information c u r renc y held a re because it can be used as an input
using IAS 29 is that current year will not be useful to the users of immediately invested to to processes employed by users to
a mou nt s to g e t he r w it h financial statements in terms of maintain purchasing power; predict future outcomes. Although
corresponding figures for the decision-making relating to the • The general population the financial information will not
previous period and any information reporting entity. regards monetary amounts be a prediction or forecast, it will
in respect of earlier periods are The rate of loss of purchasing not in terms of the local possess predictive value because it
stated in terms of the measuring unit power in a hyperinflationary currency but in terms of a can be employed by users in making
at the end of the reporting period. environment is such that relatively stable foreign their own predictions. The
This is achieved by restating comparison of amounts from currency. Prices may be confirmatory value of financial
financial statements using a general transactions and other events that quoted in that currency; information will also be enhanced
price index that reflects changes in have occurred at different times, • Sales and purchases on credit by IAS 29 because it will provide
general purchasing power. even within the same accounting take place at prices that feedback about (confirms or
In Zimbabwe, this is achieved by period, is misleading. compensate for the expected changes) previous evaluations.
the use of the ZWL Consumer Price This is regardless of whether the loss of purchasing power Although the procedures for IAS
Index (CPI) as published by the financial statements are based on a during the credit period, 29 restatement of financial
Zimbabwe Statistical Office historical cost approach or a current even if the period is short statements may be cumbersome and
(Zimstat) and the Reserve Bank of cost approach. Information will and require more time than conventional
Zimbabwe (RBZ). therefore be useful only if it is • The cumulative inflation rate financial statements, it is necessary
In a non-hyperinflationary expressed in terms of the measuring over three years is because not restating the financial
economy, assets, liabilities, income unit current at the end of the approaching, or exceeds, statements may lead to production
and expenditure are recorded on reporting period. In other words, 100%. of irrelevant financial statements
the dates at which they were that is, figures informed by the In addition to the application of which does not faithfully represent
acquired or when the respective generally prevailing price levels or procedures outlined in IAS 29 in what it purports to represent.
transactions occurred. inflation at the end of the reporting preparation and presentation of The effect of the difference
This is the historical basis of period. financial statements, restatement between the restated and the
accounting as prescribed by the Financial statements prepared requires a lot of judgment on the unadjusted financial information
International Financial Reporting applying IAS 29 show a column for part of management. will be so material that it can
Standards (IFRS). unadjusted financial information These judgments may differ reasonably be expected to influence
The impact of inflation and the for the current and previous between different entities but the decisions that the users of general
associated changes in inflation are reporting period and a column for treatments may all be compliant purpose financial reports make on
ignored as they are immaterial to restated financial information for with IFRS. The consistent the basis of those reports.
the financial statements as a whole the current and previous reporting application of these procedures and
and are unlikely to impact the period. judgements from period to period
decisions of the users of the financial This will enable the user of is more important than the precise Mavengere is the Institute of
statements. financial statements to note the accuracy of the resulting amounts Chartered Accountants of
The financial information effects of the restatement made to included in the restated financial Zimbabwe technical manager.
produced will be useful because the amounts on the financial statements. He can be reached on
there is no significant change in statements. Judgments, which were applied technical@icaz.org.zw
prices in the general macro- Although IAS 29 does not establish by the entity during the initial
economic environment. an absolute rate at which application of IAS 29, should
Considering the prevailing hyperinflation is deemed to arise, it continue to be used for subsequent
hyperinflationary environment in gives characteristics of the periods so as to avoid influencing
Zimbabwe, reporting of operating economic environment of a country, the decisions of users of financial
results and financial position in the which a re indicat ive of statements through changing
local currency without restatement hyperinflation. accounting procedures rather than
is not useful. These financial Some of these characteristics are: the underlying information.
statements will not possess the • The general population IAS 29 increases the relevance of
qualitative characteristics of useful prefers to keep its wealth in financial information by enhancing
financial information, that is, non-monetary assets or in a its predictive value and confirmatory
14 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
By Proctor Nyemba conflict with your other obligations? Do not deny the company an influence and how, that is, what their
If yes, consider resigning. If you opportunity of having another weaknesses or pain points are.
capable person serving on the Board. For example, if the MD/ CEO knows
When and how decide to stay, you risk having a
tainted record in terms of that one of the Board members’
to quit from a professional attention as well as poor 3. When unhappy with the weaknesses is money, they will try
time management and planning. company, especially the to give it to him in the form of
Board of When you accept an appointment Managing Director allowances.
Corporate to the Board and find that out of the
four meetings of the Board, you can The Board of Directors is
This is how Board member
becomes ‘corrupt’ as they will be
Directors. only attend one due to other responsible for recruiting and getting vast allowances by virtue of
commitments, you will not be adding supervising the Managing Director their position on the company’s
When you get appointed as a Board any value to the company. (MD). Once you recruit the MD, you board.
member for any company, a time will When you are a Board member, then provide oversight and risk They will now be working at the
come when you have to exit. It is there are certain expectations people management of the company mercy of the MD /CEO whom the
important to prepare for that have of you and delivering is one of through the Managing Director. board members are supposed to
moment. them. This means, the Managing Director supervise.
Below are red flags indicating that We have seen situations where MUST be fully accountable to the Now if this favour is extended to
your term could come to an end and people feel proud of being a Board Board. Many times, after joining as a many Board members, it means the
how to exit honourably. member even when they are not Board member, you may find the MD MD has definitely taken control and
adding any value to the company. has visible weaknesses steering the any decision the MD will make will
1. Term limits If you are a Board member and you company. It may be he/she was not be approved synonymously by the
do not have time to attend the competitively recruited and might Board whose members no longer
If your term has come to an end, it meetings, the best thing to do is to have ‘overwhelming’ influence on have moral authority to question the
is time to let go. It is difficult to add put in a resignation to the person who the Board. If you generally feel the MD’s position.
something new if you overstay. Do appointed you. Managing Director is not good and Now if you are coming in as a new
not hang on. Quit honourably. you raise concern on this to the Board Board member to such an entity you
but they are not listening, it is a red are likely to get a cold reception
2. No time to attend flag. should you raise any concerns.
Board meetings Given my other As a new Board member, you can The Board members are already
commitments, I am easily see things which are not right vulnerable and cannot prevail over
If you are finding it difficult to but when you raise your complaints, the Managing Director. The best
attend Board meetings as and when unable to continue you might also see a lot of resistance. decision for you as a new Board
you are called, it is high time you quit. There exists organisational politics member is to quit since you cannot
Most of the time when Board
serving up to my in many entities and the MD might add significant value to the Board.
meetings are called for, check if they capability know which Board members to
TO PAGE 18
16 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY
QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
FROM PAGE 16
If the Board just rubber-stamps no separation of powers. the requisite professional above red flags, resigning will be the
the position of the CEO/ MD, of what You must be weary of such qualifications, skills and experience best decision you can make as a
use is it as far as oversight and risk companies that set up window to deliver the role due to limited professional corporate director.
management are concerned? dressing boards because they want support. In addition, you could also resign
to get benefits such as loans or In that case, the ‘good structures’ when you go through a company’ s
4. Ownership interference under donations. are just for window dressing because documents and you are not happy
minding your role/ mandate They try to project the image of on the surface the company has a with the direction it is taking.
good governance by establishing Board of Directors, which is not Given that the board is responsible
You may also join a Board and find structures that indicate good functional should you dig deep. for oversight, risk management and
that the owners are interfering in the governance to outsiders. In that case, having been appointed going concern, every business must FROM PAGE 18
day-to-day activities of the business. Structures like Internal audit, to such a board, you are unlikely to have a strategic foundation.
This is a big problem in the private external audit, Board of Directors and add any value as the Board is not in However, it is possible to find no Take time to help people see the case you are appointed to another in the share prices since valuations
sector where you find the owner is documented policies and procedures, a position to make decisions or strategic foundation for the business. business clearly. Also, try to articulate board. If you leave a bad record, it depends a lot on future value which
the Board chair, Managing Director try to reflect impressions of good influence strategic direction. Now if you review the strategic plan this to the person who appointed you may become problematic. It is very is a result of good governance and
and Finance Manager and his/her governance. The best thing to do would be to or things which have been articulated on the Board. important to engage people before risk management.
decision is final. However, on a closer look, you will resign. and you see that the business is not If everything else fails, resign. you do anything.
Usually, the appointment of the find that the internal audit is not moving in the right direction, you However, before you resign, manage It is important to resign in a
Board is as a result of the bank’s empowered to be effective - they How do you write a report to the Chair, present relationships. professional way to ensure no one is For more comments and
advice so that the company projects have no budget, they report to the resign? it to the full board and if you see that Before you even write a letter, talk
to the Board chairperson or the
hurt in the process especially the
shareholders. For some public
feedback please send to
boardroomtalk@icd.co.zw or
good governance practices. In reality, Board through the Managing Director no one shares your views, it may be
nothing works as there is limited or or the head of the department lacks time to consider exiting. person who appointed you. As a companies, if a key member of the ceo@icd.co.zw
To sum it up, when you see the
professional, you must be concerned board exits, it could cause a run on
TO PAGE 19 with relationship management in the company in terms of loss of value
18 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BY PROUDLY SP ONSORED BY 2021 Zimbabwe Quoted Companies Survey 19QCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
Capital Markets:
Innovation in a
Disrupted
Environment
By ZSE service firms. enterprises to access working and the willingness to be publicly
This year’s theme of the Zimbabwe capital for the survival of their scrutinised both at business and
THE Zimbabwe Quoted Companies Sur vey;
“Business Innovation and Enterprise
businesses.
It was also crucial for the
personal level.
Listing is also a testament to focus
Stock Exchange has in a Disrupted Environment” exchange to proffer innovative on sustainable business decisions
stood the test of resonates with the tumultuous solutions that add value for investors and the consideration of all
periods that both the economy and and the listed entities and as a result stakeholder concerns. Listing is not
time over the years capital markets have gone through. the ZSE launched the Victoria Falls an easy route when you have to
and remains the The impact of Covid-19 was felt both Stock Exchange (VFEX) in October expose yourself to competition and
at business and personal level. 2020. VFEX trades in United States public scrutiny.
backbone of the Not only did it hit the local dollars and is meant to attract both To all the issuers, the ZSE deems
country’s capital economy but led to bankruptcies local and international issuers by you our ambassadors and economic
markets. and job losses in the most advanced providing opportunities to diversify heroes and we salute you. The ZSE
D
economies. Covid-19 is amongst us, investment portfolios and hedge also congratulates the singled out
and now is the time for businesses against exchange rate risk. VFEX is winners and takes pride in their
ating back to 1894,
to think beyond Covid-19, come up currently working on establishing achievements.
the ZSE has evolved,
with survival strategies and be a junior mining board targeted at In conclusion, operating in a
from the automation
innovative and change business small-scale miners. disrupted environment requires a
of the exchange in
models. Now is also the time for The junior mining board will shift in dynamics as continuing with
2 0 1 5 ,
adaptability and flexibility as include lower capital requirements existing operating models may not
demutualisation in
business innovation is no longer an and have less stringent rules whilst suffice for businesses. It is therefore
2017, roll out of View Only Terminals
option but an absolute necessity. allowing junior exploration and crucial for listed companies to stay
in 2017 and roll out of ZSE Direct, an
In a disrupted environment, mining companies to participate. involved in developments at the
online trading platform, in 2020.
collaboration, not competition is the The ZSE appreciates that the frontiers of innovation by testing out
The ZSE has also complemented
way forward. For the ZSE, this Quoted Companies Survey remains and piloting new technologies.
its traditional service offerings with
means building collaborative integral to the capital markets, For any business to survive,
training to ensure both prospective
ecosystems that enhance better having been part of the capital innovation and agility is required.
issuers and investors are equipped
services for our stakeholders. This markets for over 24 years. The Capital markets are also evolving
with the right information and
is the route that the ZSE has Quoted Companies Survey provides and the ZSE remains committed to
know-how. This has enabled the
undertaken in order to create value an independent gauge on how the continue adapting to the
bourse to remain resilient despite
to its stakeholders. ZSE Issuers have performed. environment to ensure that it
the changes in the economic
The ZSE entered a joint venture Whilst the ZSE takes pride in all remains relevant. New products
environment.
with Harare Receivables Exchange its issuers, it also recognises the such as REITs and commodity
Over the years the ZSE has
(“HRE”) and launched the Zimbabwe independent analysis that seeks to backed ETFs will be pursued to
remained relevant as an avenue for
Receivables Marketplace (ZRM) in reward those that are deemed ensure there is market and product
long-term capital creation and
September 2020. ZRM provides a outperformers. In the eyes of the diversity going forward.
investment and this has been due to
platform where suppliers of quality ZSE, all issuers are winners taking
the stature of the underlying
buyers (listed companies) can cognisance of the bold steps taken
security issuers. The profile of the
discount their receivables to access by Issuers in making their affairs For any further information, you
ZSE has, as expected, changed over
working capital. public by listing on the ZSE. can contact: Email: info@zse.co.zw
the years, but today the 55 currently
Such a solution by the ZSE can Listing is indeed a hallmark of the Website: www.zse.co.zw
listed entities represent the breadth
assist not only the listed companies intent to abide by the highest
of the Zimbabwean economy from
but also small-to-medium corporate governance standards
primary extraction industries to
20 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BYQCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
LEVERAGING
DIGITILISATION to the 2021 Zimbabwe Quoted Companies Survey Winners
IN COVID-19 TIMES
THE Covid-19 pandemic has resulted in unprecedented adverse
effects to both advanced and developing countries. The pandemic
has changed the way businesses, industry and society operate.
BY Joe Chirowodza Policymakers today face an Economic Forum, 2015). of economic activity. In some
T
environment transformed by Creating digital markets and sectors, it has allowed digitally
he introduction of Non- information and communications boosting digitisation can yield enabled firms to continue trading
Pharmaceutical technology (ICT). significant economic benefits and while others are shuttered.
Interventions (NPIs), More people today have access to lead to substantial social benefits to Digitisation has a strong impact on
such as lockdown a mobile phone than to electricity; societies and communities. enterprises, both in manufacturing
restrictions and social the amount of data generated Digitisation has the potential to and services industries, where
distancing measures, globally is expanding exponentially. boost productivity, create new jobs, converging trends are detectable in
have led to innovative ways to In every country, government and and enhance the quality of life for the way micro, small and medium-
communicate as well as do business business leaders are deciding society at large. sized enterprises interact with
with each other. Restrictions on through their policies and strategies Hence technology acts as an customers and employees. The main
movement, factory closures and for ICT, Inter net access, enabler in providing goods and factors for successful adaptation are
supply chain disruption have led to communications media, and digital services to clients since customers’ the ability to collect and exploit
a sharp global downturn in applications how to promote and expectations do not change even in data, the interconnection of value
manufacturing. structure the digitisation of their a pandemic. Although challenges of chains and the creation of digital
Covid-19 has also exposed the economies. These choices have digitisation exist, the benefits customer interfaces and mitigation
weakness of global value chains in enormous consequences. outweigh the disadvantages hence of cyber threats.
responding to demand shocks and Countries that have achieved this calls for the need of leveraging Digitisation can substantially
dealing with operational risks. The advanced levels of digitisation much of the digitisation process in lower market entry barriers,
United Nations Educational, though having digital technologies order to benefit all business opening up potential markets that The Board,Management and Staff of the Zimbabwe Stock Exchange Limited (ZSE) congratulates all the
Scientific and Cultural Organisation and ICT applications by consumers, stakeholders and the society at firms can serve, and create new
(Unesco) defines digitisation as the enterprises, and governments, have large. ones. The widespread use of winners of the 2021 Zimbabwe Quoted Campanies Survey.
creation of digital objects from realised significant economic, Digital technologies may be seen algorithms enables online platforms
physical, analogue originals by social, and political benefits. For as a gateway to solve many of the to exchange goods and services
means of a scanner, camera or other them, digitalisation is a pathway to problems arising from the crisis. including labour. Algorithms are
The Zimbabwe Stock Exchange Limited (ZSE) is a securities exchange regulated in terms of the Securities
electronic devices. prosperity. Technology can have a profound also transforming traditional and Exchange Act (24:25) to provide for the listing and trading of finacial securities.
It is undertaken as part of a According to the United Nations effect on citizen’s daily lives and companies, enabling them to better
process that includes, selection, Conference on Trade and ensure them access to health manage their assets and processes,
assessment of needs, prioritisation, Development (UNCTAD, 2018) services, access to information, and while redefining their strategies
ZSE Listed Companies
preparation of originals for industrial use of digital technologies communication with competent according to innovative solutions.
digitisation, metadata collection is at different stages of readiness in authorities, among other things. Digitisation affects labour
and creation, digitisation and various parts of the world. Digitalisation accounts for more relations between employers and
creation of data collections, I ndu s t r i a l robot s h ave than 15% of global GDP and is employees in traditional businesses
submission of digital resources to experienced rapidly growing expected to rise to more than 50% and industries, because it drastically
delivery systems and repositories. deployment, especially since 2010, by the year 2023 (UNCTAD, 2019). changes the organisation of work
Digitalisation is transforming the even though their use remains Digitisation also has a significant and the relationship between
world in almost every aspect of life concentrated in developed and a impact on job creation: A 10% employer and employee. As a result
during the last few decades. The few developing countries at an increase in digitisation reduces a of digitisation, the organisation of
access to internet, increase of advanced stage of industrialisation. nation’s unemployment rate by work is characterised by increased
people using mobile phones, social The use of additive manufacturing 0,84%. From 2009 to 2010, flexibility, which affects when,
media and other ICT services has also grown rapidly. However digitisation added an estimated 19 where and how tasks are performed.
changed the way people interact, this growth partly relates to the million jobs to the global economy, This may bring advantages to
communicate, learn expiry of some core patents, so that up 5% from the estimated 18 million employers and employees, in the
and improved accessibility of 3D jobs added from 2007 to 2008. Since form of improved work-life balance
systems mainly regards technology the outbreak of the Covid-19 and more autonomy.
wo r k that is somewhat dated and pandemic, countries have adopted Services account for at least 50%
i n concerns prototyping and product these measures with the support of of GDP in over half of the world’s
almost development. emerging technologies. This is the countries and about 65% of the
ever y Furthermore, frontier 3D-systems first pandemic during which world’s total GDP. In particular, the
allowing for decentralised batch technology has been widely adopted last decade has seen a large increase
country. production of final goods from to understand and control the in the share of services in most
multiple materials remain expensive contagion. developing countries.
but are expected to be widely The pandemic has accelerated
accessible by 2022–2025 (World existing trends for the digitisation TO PAGE 24 website:www.zse.co.zw
Email:info@zse.co.zw
22 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BYQCS | BUSINESS INNOVATION AND ENTERPRISE IN A DISRUPTED ENVIRONMENT
FROM PAGE 22 often ending up accelerating a Regional initiatives found in many African countries as
process of gradual digitisation of it provides conducive online
for digitisation
It is well understood that advances their financial offer that was already services. However there is still room
In 2013, the AU (African Union)
in telecommunications and ICT in the making. for improvement in many sectors,
founded the “Smart” Africa
more broadly have made this From a development a l in particular in the media fraternity.
initiative, which aims to achieve
possible by facilitating production, perspective, this accelerated shift Recommendations to improve
socio-economic development
sales and delivery at distance. towards a digitisation of financial digitisation
through ICT’s (Information and
Services firms are generally more services can prove to be an There is need for the government
Communications Technology). It
knowledge intensive and more unexpected boon for financial to build the digital essentials.
involves the strengthening of
likely to leverage digital technologies inclusion amid the disruptions Digital products and services
broadband connections and the
(after all, how else to source services brought about by Covid-19. cannot be created in a vacuum;
implementation of e-government
inputs and sell products, which are Before the crisis, digital finance essential components need to be in
features. These include electronic
often intangibles even where (and chiefly mobile money) had place: physical infrastructure,
services for citizens, electronic IDs,
associated with goods). There is already proven to be a fundamental foundational digital systems (such
unified communication and a cloud-
strong evidence that firms that enabler of financial inclusion in as digital identification and mobile
based infrastructure through a
begin trading in services are more developing a nd emerging money), and capital to invest in
digital government platform. The
profitable and grow more quickly economies, especially when it came innovation. These are the basic
member states also commit to
than those that do not – and that to reaching and serving the most ingredients needed for existing
promote and fund e-applications,
digitisation amplifies these effects isolated and financially underserved firms to adopt more productive
e-education, e-health, e-tourism,
(Martín-Peña et al., 2019). Once individuals. In the wake of the technologies, and for digital
e-agriculture and e-commerce. The
again, the need for affordable pandemic, this rapid surge in entrepreneurs to build and innovate.
goal is to harmonise policies and
connectivity, and for a majority of interest for fintech solutions (on the Having reliable infrastructure and
frameworks, to generate more
the population to be using it, is part of governments, businesses and interoperable systems means that
demand for goods and expand
fundamental. the general public) is bound to have firms and service providers can
markets, to attract large-scale
The digital finance industry has substantial implications in terms of focus on their core business, without
investments and to create new
been playing a key role in developing an increased potential for digital having to build an enabling
industries and jobs.
and providing services and channels to promote financial environment from scratch.
In sub-Saharan Africa (SSA), gains
innovations that have mitigated, at inclusion on a global scale. There is need for the government
have been particularly apparent in
least partially, the disruptions to stimulate demand.
the financial sector: mobile money
brought about by the pandemic on Challenges of transactions account for an average
The country can progress rapidly
multiple aspects of people’s lives. In in digitisation by encouraging the
digitisation of nearly 25% share of the GDP,
developing and emerging contexts, adoption of new applications by
There are many new technologies compared to 5% in the rest of the
especially, there has been a strong individuals, businesses, and their
which have been developed during world.
surge in interest for the ample own agencies. One way to stimulate
the Covid-19 pandemic such as During the pandemic, Kenyan and
potential that fintech (that is i.e. demand is to ensure that citizens
geolocalisation apps, facial Rwandan central banks relaxed
financial technology) carries in can perform all government-related
recognit ion a nd A r t ificia l regulations, and telecom operators
preserving people’s livelihoods and tasks such as paying taxes, renewing
Intelligence (AI)-based software for eased terms of service to promote
businesses that have been, and drivers’ licenses, and enrolling in
the enforcement of quarantine. use of mobile money and safe retail
continue to be, threatened by the school using broadband networks.
Many of these actions have been transactions. Teleworking, although
pandemic, thereby enabling and Beyond that, demand for ICT
enabled by emergency legislation more challenging in SSA, also
sustaining – within societies – the services depends on technological
and may have significant impacts increased, with greater usage of
flow of cash, credit, deposits, literacy and skilled human capital.
on human rights and fundamental Kenya’s e-Citizenship portal for civil
investments, salaries, government- Policymakers can invest in
freedoms. and vehicle registration, and
to-persons (G2P) and peer-to-peer digitisation by providing training
These are data-intensive tools videoconferencing in court
(P2P) transfers, among others, at programmes and incentives for
and, while the right to privacy is proceedings in Rwanda. Public
national and regional levels. education. They can also boost
clearly being restricted, all human health has also benefited, with anti-
The public and private sector’s usage by promoting high-speed
rights could potentially be affected. epidemic robots monitoring
response to the Covid-19 crisis has broadband services and ensuring
In order to limit governments’ patients, and delivering food and
been promoting an overall that these networks are both widely
abuses, these restrictions must medication in Rwanda, and social
acceleration of the digital financial available and affordable.
respect the rule of law and fulfil the med ia gener a l ly keepi ng
inclusion process in developing There is need for public-private
conditions set by human rights law. communities informed.
contexts, especially in a number of partnerships in digitisation
The World Health Organisation
countries (such as West African The Government needs to come
ones), where it was still lagging
(WHO) itself has acknowledged that Digitisation in up with joint public and private
human rights provide a crucial
behind compared to regional trends Zimbabwe partnerships with the private
framework for ensuring the
(Peyton, 2020). The country is among a number sectors as well as donors in order to
responses are effective and
On the side of the demand for of developing countries which need progress in the digitalisation
proportionate.
finance, both developed and to improve its digitisation process process. Public and private
To buttress the above point, the
developing countries have in many sectors. A few sectors such partnerships will unlock the much-
quantum-leap in the digitisation of
experienced substantial growth in as the financial and banking sector needed investment, which will
our lives requires that measures
the subscription and use of digital as well as the telecommunications transform many government
adopted by governments during the
financial services, as people have sector have advanced digitised institutions to digitise. The
health crisis uphold the protection
looked for alternative ways to run services. The financial and banking government, however, needs to play
of individuals with regard to the
and manage the financial aspects sector is currently ahead in an oversight role in ensuring that
processing of personal data. Privacy
of their lives, in light of extended digitising its processes and offer there is equity in the digitisation
and data protection have a pivotal
periods of lockdown, physical clients with a variety of online process.
role, essential in building and
distancing, and livelihood transactions for payments.
sustaining trust in digital solutions.
disruptions. In addition, the
Those rights are not an obstacle to
On the side of the supply, telecommunications sector, which Chirowodza is an independent
the protective responses adopted by Trade Consultant who is also in his
traditional financial institutions includes mobile companies such as
governments, they are the guarantee first year PhD in economics student
(FIs) have been forced to radically Econet, Telecel and NetOne have a at the University of Fort Hare in
that such responses will be taken in
rethink their business models and variety of digitised products, which south Africa. He can be contacted at
full consideration of human dignity
delivery mechanisms, by investing it offers to its customers. Of late chirowodzajoe@yahoo.com or
and integrity.
heavily in their digital channels, Econet has gone regional and is jchirowodza@gmail.com
24 2021 Zimbabwe Quoted Companies Survey PROUDLY SP ONSORED BYYou can also read
