PENRESA FOCUS ON ZIMBABWE - H.E. Emmerson Mnangagwa Hon. Constantino Chiwenga Hon. Patrick Chinamasa Hon. Supa Mandiwanzira
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PENRESA FOCUS ON ZIMBABWE
AUGUST 2018 EDITION
Produced in association with
Inside this issue, exclusive interviews with
H.E. Emmerson Mnangagwa
Hon. Constantino Chiwenga
Hon. Patrick Chinamasa
Hon. Supa Mandiwanzira
#visitzimbabwe
ZIMBABWE
Open For Business
Under the new dispensation of President Mnangagwa, Zimbabwe’s economic
transformation is driven by a stable political environment, improved business confidence,
re-engagement of bilateral investments in the country and anticipated turnaround
from key economic sectors such as agriculture, mining, industry, ICT and tourism.
A
t the World Economic Forum in Davos this business, all moving towards the national
January, President Emmerson Dambudzo vision to be a middle-income country by
Mnangagwa put the global marketplace 2030.
on notice that Zimbabwe is now “open for Since his announcement, the spirit of
business.” Since coming into power last the new dispensation has spread outside
year in November, ED, as he is affectionately the borders and the nation has been hugely
known, has made his intention clear that encouraged by the goodwill it has received
Zimbabwe has to discard its isolationist from abroad. Dr. John Mangudya, Governor
policies which led to the country being of the Reserve Bank of Zimbabwe, states:
behind by nearly two decades. He has “We want to increase the footprint of
underscored the urgent need to pursue business in Zimbabwe. It means that
rapid economic growth and a trajectory of we are changing the narrative, from a
transformation. “Opening up Zimbabwe closed economy to an open economy.”
for business means that we can trade This renewed domestic and foreign investor
freely with the rest of the world and that confidence has seen Zimbabwe’s projected
we can access capital freely and invest economic growth increase from 3.7% to
more in the infrastructure,” says Lazarus 4.5% in 2018. Investment as well, keeps
Muchenje, CEO, NetOne. In this endeavour, on pouring in with the country raking in a
this administration’s focus is on the pursuit record-breaking, US$16 Billion in foreign
of investment-led economic recovery, job investment since January. This upward
creation while enhancing the ease of doing momentum is underpinned by the
AUGUST 2018 FORBES AFRICA | 3
“ ‘Open for business’ new money coming in for explorations,”
ZIMBABWE - Open For Business
positive performance in the agriculture, states Hon. Winston Chitando, Minister of
sets a tone to mining, industry, tourism and financial Mines and Mining Development. As one
sectors, and is further spurred by increased of the leading sources of investment and
encourage a change revenue performance following the plugging export earnings, the new dispensation
in attitude. If we of revenue leakages. has sent a clear message to investors
by amending its Indigenisation Policy,
take appropriate COMMAND AGRICULTURE limiting the 51:49% ratio to diamond and
Agriculture to a large extent determines the platinum mining only. Already, the nation
actions, the country potential growth of the economy and the has been inundated with multi-million dollar
can experience an sector accounts for 50% of employment
in the country. Agriculture contributes
investments. The recently signed US$4.2
billion platinum investment agreement by
unprecedented level 15% of the country’s GDP and accounts for Karo Resources is the largest investment
of improvement in its 25% of total annual exports, with tobacco
being the country’s single highest foreign
in Zimbabwe’s mining sector to date and
will directly create 15,000 jobs. Optimism
economy.” currency earner. Building on the auspices remains high in the extractive sector with
of Command Agriculture, the current gold production projected at over 30 tonnes
Jonas Mushosho, dispensation has geared itself towards and 4.6 million carats targeted in diamond
Group CEO, continued food self-sufficiency and
nutrition, and increased land utilisation
production for the first time since organised
mining started. The country’s mineral
Old Mutual and productivity, through mechanisation exports for the first quarter of the year leapt
by 12% to US$372.5 million, owing to the
new dispensation’s policies.
MADE IN ZIMBABWE
Following definitive local and foreign
investment commitments, the industry and
the manufacturing sectors have witnessed
a steady increase in capacity utilisation and
notable expansion of some big brands such
as Nestle and Pepsi. “The US$16 billion worth
of foreign direct investment commitments
to Zimbabwe show the country is ready for
business and the economic turnaround is
around the corner,” states Confederation of
Zimbabwe Industries (CZI) president Sifelani
Jabangwe. As the big contributor to forex in
the country, Zimbabwe’s industrial sector
needs to reduce its import bill and ramp up its
capacity. Rhett Groves, Head of Corporate and
Investment Banking, Stanbic Bank, points out
that “if the economy opens up and we are
and modernisation of its agriculture sector. able to structure lines of credit, we should
Hungry to re-establish the nation’s Bread have a very good pipeline in terms of
Basket status in the continent, Mnangagwa resuscitating industry and commerce.”
is looking abroad to help reinvest within the “ ‘Open for business’ sets a tone to
www.penresa.com I info@penresa.com country. The People’s Republic of China has encourage a change in attitude,” states
pledged to assist in the drilling of boreholes Jonas Mushosho, Group CEO, Old Mutual. “If
This report could not be possible without the introduction throughout the country, while Russia and we take appropriate actions, the country
and guidance of Zimbabwe’s Ambassador to Nigeria, Belarus have made firm commitments to can experience an unprecedented level
H.E. Lovemore Mazemo. Special thanks to the Ministry of
Information for their assistance in facilitating interviews and set up agriculture and engineering plants of improvement in its economy and its
to Wilbert the “Strika” for always maintaining the position. in Zimbabwe. “The government-initiated operative environment.” With vast natural
Command Agriculture has had a very resources and resilient human capital,
PHOTO COVER: Tami Walker Photography
positive effect,” states Peter Zimunya, Douglas Mboweni, Managing Director,
Managing Director, CBZ Bank. “The support Econet, believes that “ ‘Open for business’
THIS REPORT WAS POSSIBLE THANKS TO: ignited interest in agriculture and now is an obligation for us to become
people are seeing its potential, including attractive” while Samuel Matsekete, CEO,
financial institutions which were doubting Barclays Zimbabwe, affirms that “the
the profitability of the sector.” mantra has resuscitated the creation
of business.” While there is still much
DIGGING DEEPER INTO MINING work to be done to leapfrog development,
“This new mantra is a drive for the mining Mnangagwa’s pro-business call to the
sector to attract the much-needed capital, international investment community has
to increase operational capacities, to have already begun to bear fruit in such a short
new investments in new projects, to have time.
4 | FORBES AFRICA AUGUST 2018
H.E. Emmerson Dambudzo Mnangagwa
President of Zimbabwe / Interview
ZIMBABWE - Open For Business
Winds
At the World Economic Forum in Davos, you stated
that Zimbabwe is now open for business. Are you
surprised by the number of investors that have come
Of Change
to the country?
Since Davos, this country has experienced a huge
influx of business people from all over the world. Global
companies and world organisations are coming to
Zimbabwe to look for business opportunities. I am happy
to say that many of them found a place in the various
opportunities that exist in our country: in agriculture,
in mining infrastructure development, tourism and ICT.
These organisations have committed themselves to
participate in the revival of our economy. For example,
President Emmerson Mnangagwa’s I met the company that is taking over the Masvingo Cold
Storage Commission in Davos and they were impressed
promise to transform the nation by by my contacts when I talked about opportunities in
broadening and revitalising its economic Zimbabwe. They came and they are going to reopen it
by the end of July; providing the money to revamp the
opportunities, while ensuring progressive systems, as well as investing in livestock. Fortunately,
steps are taken towards a democratic future, we have a programme, command livestock, to attract
most of our farmers into going into livestock; we support
have consolidated a new era of law-abiding them with finances, technology and chemicals. Our
agriculture, which is the backbone of our economy,
transparency and openness and instilled is growing and modernising. A few days ago, we had
hope amongst Zimbabweans and the world. an agriculture expo with companies from India, Brazil
and others. There is now state-of-the-art agriculture
equipment coming to this country and I can assure you
that we will help actualise this vision for modern and
P
mechanised agriculture.
Our mining sector is attracting huge investments.
resident Mnangagwa is on a mission to reassure Many companies have come; we have one company
investors and western diplomats that Zimbabwe is a which is investing in a platinum project worth
harmonious, convenient and safe place for investment. US$4.2 million and is creating 15,000 jobs. The
Following his welcome at the World Economic Forum programme will be finalised by the end of this year,
(WEF) at Davos in January, where the European but we are already on the ground. In four years, there
Union (EU) pledged their support for Zimbabwe’s new will be production, increasing our platinum production
dispensation, the President has made his top priorities by over 30%, and further down the line, it may go up
clear: revive the economy and industry through an to 40%.
enhanced ease of business, attract foreign investment Tourism too is developing and we need more room
and promote human rights. space in Harare, which means more hotels need to be
In the past few months, he has, among other things, constructed. As for Victoria Falls, we have declared it a
put into place command models for agriculture, garnered financial service centre.
US$300 million worth of investment in Zimbabwe’s Last week, I opened the Pepsi plant, a US$15 million
mining industry, arranged compensation for those whose plant which is creating a lot of jobs. We also have Hwange
land was seized, removed police roadblocks, established Thermal Unit 7 and Unit 8, which is attracting investments
a special anti-corruption court, supplied free state medical worth US$1.2 billion. There are so many companies that
care for children and the elderly and provided a temporary have expressed interest and are waiting for the results
reduction in fuel prices. He also recently commissioned of the election. However, I tell them that there is no need
a South African company to supply hundreds of train to wait, since nothing will change after the election.
wagons and locomotives for US$400 million to the Companies must just come in right now and begin
National Railways of Zimbabwe. In an effort to re-engage operating. China is at present investing in the Hwange
with the world, President Mnangagwa has cut new deals one, Kunzvi Dam (US$680 million), the International
with Belarus, Russia and China. All of these actions have Airport in Harare (US$200 million), water and sanitation
corroborated his aims and provided the beneficial and in Harare ($71m) and the new government city (US$100
positive spin the country needed. million). India and Belarus are both investing US$98
On July 30 the country will be hitting the polls and million. We have signed several agreements with India,
the President is intent on safeguarding a fair and free from pharmaceuticals to construction of hospitals, and
election. Penresa had the immense privilege to sit Belarus is investing in gold mining.
down with the President to discuss his vision, current We realise that we have resources in Zimbabwe.
projects and aspirations for the country. What we must do is to open ourselves and the
6 | FORBES AFRICA AUGUST 2018
H.E. Emmerson Dambudzo Mnangagwa
ZIMBABWE - Open For Business
economy up and make sure we guarantee the safety of global “I believe we have the qualities
capital in Zimbabwe. People must feel safe coming here so
we must guarantee property rights and the right to repatriate and the environment in which
profits and earnings. By 2030 we need to have developed this
economy to a middle-income level.
this country can be a jewel again.
I am making Zimbabwe very
Thanks to your Command Agriculture programme, you are
revitalising and rejuvenating the country’s agricultural democratic in terms of its politics.”
past. How is Command Agriculture trying to empower and
galvanize the youth to get them back into agriculture?
We are in the second phase of the Command Agriculture
programme. In the first phase, the new government did not
have the fiscal capacities to finance that kind of agriculture.
The milling companies said that they were spending billions of
dollars for the importation of grain and food into the country.
So, we asked them to reduce the importation of grain this
season. The money they were using for that would be given
to the government to pay the farmers for their produce and
give them the ingredients for farming, like fuel, chemicals,
fertilisers, seeds. We asked the farmers to put the amount of
hectares they want on the programme, so that we could advise
the farmers how many seeds and how much fuel and fertilisers
they need for a certain amount of land in that specific region.
In this way, there is no need for farmers to go to town and
negotiate a loan with the bank anymore. We even advise them
on when to plant and what to do. The programme has been a
success, but we have only focused on the bigger farms, now we
need to bring the youth and smaller farms on board.
How is your administration engaging with the diaspora to
reinvest?
The biggest contingent of diaspora Zimbabweans is in South
Africa. Then, of course, we have some in the UK, in America, in
Canada, in Australia. The South African diaspora contingent
has so far invested $400 million in the railways. The others are
coming in for housing, there is a group working now on 400,000
houses. We are still debating on the mechanism of the funding,
but we want to have a programme to build those houses.
Why is now the best time to invest in Zimbabwe?
I believe we have the qualities and the environment in
which this country can be a jewel again. I am making
Zimbabwe very democratic in terms of its politics.
After this dispensation, I opened politics up so
much that we have now got 133 parties
with 23 candidates who are running
for president. It speaks volumes about
the situation. I am saying we want
a new Zimbabwe. We must build the
Zimbabwe that we want. Whether it is
a Zimbabwe in which you want to live
and invest and in three years you
have an apartment, a car, a spouse,
or a Zimbabwe with a middle-
income with the possibility of a
holiday after three years of work.
Let us be united and peaceful but
let us be honest: hard work is the
only key to achieve that vision;
that is what I preach.
AUGUST
AUGUST 2018 FORBES AFRICA | 7
Hon. General Constantino Chiwenga
Vice-President of Zimbabwe / Interview
ZIMBABWE - Open For Business
The Country That Sits
Between Two Rivers
Hon. General Constantino Chiwenga emphasises the government’s commitment
to improving ease of doing business, ICT infrastructure and boosting education.
Vice-President of Zimbabwe since December 2017, youth, with the younger generation, but we
Hon. General Constantino Chiwenga also serves must prepare that future for them so that they
as Minister of Defence, Security and War Veterans can excel. What we are is what they shall be.
due to his role as Commander of the Zimbabwe
Defence Forces and National Army. His concern Could you tell us about the one-stop shop
and supervisory role in agriculture recently caused investment and how it is going to make doing
him to rally farmers to apply their utmost efforts business in Zimbabwe much easier for people
into ensuring an agricultural boom that will act as coming in?
a backbone of the nation’s economy. Penresa had Before anything else, we have had to look into
the enormous pleasure of meeting with him to our Common Laws to act. At the current moment,
discuss his plans and goals for the country. we are amending and deleting all those laws
which become an impediment to business. Any
What are your top priorities, especially in investor needs to see this element has been
“The future is developing infrastructure for ICT and Education? integrated into our laws, so that it is there for all
One of the latest machinery for food processing to see, in black and white.
with the youth, – for oil, soap and all that – was installed in 1962.
with the younger Then there was Zesco steel in the heavy industry. Why is now the best time to come and invest in
For the rest, the machinery dated back to the Zimbabwe?
generation, 40s and the 50s and was installed soon after Now is the best time for any investor to come
World War II. Therefore, there were no small and and invest in the country. We are re-engaging with
but we must medium industries, no manufacturing and no the world, making friends and moving forward
prepare that heavy industry to talk about. We need to get rid towards development. We want all diasporans
of all this and that is where ICT comes into play, who left for various parts of the world to come
future for them bringing in the latest machinery and equipment. back home, to help build their country. There is no
so that they can So, from industry to infrastructure, everything
needs to be modernised. ICT is also an area that
country, big or small, that can survive in isolation,
we have to share, it’s a win-win situation. We
excel. What we we want to focus on, because of our human have got all these minerals and metals: gold,
resources, we have got a highly educated labour diamonds, rubies, emeralds, chrome, platinum
are is what force. and lithium. (I don’t think anyone can beat us in
they shall be.” our reserve of diamonds.) We are also currently
Sixty percent of the population in Zimbabwe is discovering a lot of methane gas. Ours is a small
under the age of 25. What does this mean for country, sitting between two rivers, with all this
Zimbabwean society? wealth. We do not experience extreme weather
The future is for the youth. We are conditions, we have got good soil, and we can
concentrating on the sciences; STEM – Science, grow everything. At present, we are one of the
Technology, Engineering and Mathematics. few countries in our region that does not use
We want to identify young talent, and direct GMOs. Even before we had gone into high-tech,
them. We need to empower the youth through we were producing between 13 and 20 tonnes
the economy. They must be properly educated, of produce per hectare. We now want to combine
oriented to love and grow their country. The high-tech expertise with agriculture, but without
three principles of any society are culture, spoiling our soil. We are trying to look at each
customs and traditions and this is the direction province and its capital to understand which is its
our youth needs to take. The future is with the best resource and strength.
8 | FORBES AFRICA AUGUST 2018
Hon. Patrick Chinamasa
Minister of Finance / Interview
ZIMBABWE - Open For Business
Paving The Way
For The Private Sector
The Ministry of Finance’s mission to privatise and guarantee ease
of business looks to revive Zimbabwe’s economy in record time.
Hon. Patrick Chinamasa was appointed Minister want to put onto the market. We can list it for
of Finance and Economic Planning in November our domestic investors; for the public, we can
2017. He also serves as Governor of African list only 30% of it. We are doing this to reduce
Development Bank, Eastern and Southern the government’s involvement in business and
African Trade and Development Bank and the to stay in sectors the private sector does not
International Monetary Fund. In the past, he has access. In those sectors, we may seek strategic
served as Minister of Finance and Minister of partners as we go along.
Justice, Legal and Parliamentary Affairs. In this
interview, he reveals his Ministry’s plans to make What kind of initiatives are you doing to foster
the nation investor friendly, build the economy SMEs?
and open the door to the private sector. Since the last survey we conducted in 2012,
we discovered that 5.8 million Zimbabweans
You are working on the one-stop shop and you were earning their livelihood from the informal
have partially sold state-owned firms. What is sector. It’s fundamental for us to identify who “Under the new
the message to the international community? can be assisted, and come up with schemes that
The one-stop shop is to facilitate the work give them training, links to big business, skills dispensation,
of investors and make sure that investors do
not get frustrated because of the red tape. We
development, access to capital and markets. we are also
We have also been engaging the insurance
are seeking to create a one-stop shop, where companies and pension houses to see if they reforming state
under one roof, you find all the necessary can build factory shells for those who are
departments to make the decisions to effect manufacturing.
enterprises,
an investment. We are also addressing the we believe that
ease of doing business by looking at the Two months ago, you signed a historical MoU
procedures exporters have to comply with with China, which seems to be the beginning of any growth
before they export, removing the ones we think
are unnecessary. Under the new dispensation,
a new era for this country. How you think this
agreement is going to bring advantages to the
must be
we are also reforming state enterprises; we nation? private-sector-
believe that any growth must be private-sector- There is a new focus in the dialogue with the
driven. We have looked at Zimbabwe’s 93 state Chinese authorities whereby their private sector driven.”
enterprises and decided whether to completely links up with our private sector, so that our
privatise it, partially privatise it or keep owning economy becomes private-sector-driven. What
it and find a strategic partner. This opens up we are looking for is equity investment, not loan
enormous opportunities with investors. financing. That is our future pathway. We are also
open to other new friendships; we want to re-
You removed local listing and repealed the establish our friendship with Europe, which was
indigenisation law, right? our major export market and source of capital.
Yes, we have already repealed the
Indigenisation Act through my budget legislation, Why is now the best time to invest in Zimbabwe?
the Finance Act. We removed all requirements This is without any doubt the best time to come.
about the 51:49% threshold of local ownership As they say: the best time to ride an elephant is
in all sectors except for minerals, diamonds while it’s laying down. With this, I mean that there
and platinum. As for listing, one way to appeal are big challenges, but on the other side of the
to investors will be to list the portion that we challenges, there are opportunities.
AUGUST 2018 FORBES AFRICA | 9
Dr John Panonetsa Mangudya
Governor of the Reserve Bank of Zimbabwe (RBZ) / Interview
ZIMBABWE - Open For Business
Africa’s Best Kept Secret
The Governor of the Reserve Bank of Zimbabwe (RBZ),
Dr John Mangudya, confirms the need to attract global investments
in order to increase production and exports and improve forex.
Dr John Panonetsa Mangudya has been the government, through the Reserve Bank, is
Governor of the Reserve Bank of Zimbabwe providing this export subsidy scheme to make
since 2014. An economist, he also sits on many sure that the goods remain competitive in the
local and international boards and guides the markets.
RBZ bank in supporting the government in its
re-industrialisation programme and export Can you tell us a little bit about your partnership
growth through financial inclusion policies. He with Afreximbank?
talked to Penresa about the positive outcomes They have been providing bridging financing,
of Zimbabwe’s growing economy, RBZ’s export trade financing, medium-term financing to
incentive scheme and Afreximbank’s support. Zimbabwe, to supplement our export process.
Without them, we would not have achieved
The country has made a remarkable upswing what we have achieved today.
over the past five months of the new year.
“We are a born- Foreign currency receipts have reached 2.8 Zimbabwe has a very wide diaspora worldwide,
billion and gold production has jumped an 45 million people who contribute to the forex of
again country incredible 65%. So how do you feel that this the country. How is the current administration
that needs to has raised expectations that the current working or engaging with the diasporans to
administration will be able to achieve its reinvest within the country?
leapfrog to revised growth rate of six percent per year? We are providing incentives to those who
This is very positive, and we are quite happy are working in the diaspora, those who bring in
catch up with that confidence is increasing. The economy their money for domestic use. We provide them
others. As a has been growing and expanding, but that also
increases the need for foreign currency. As you
10% incentives, and we are talking about 60-70
million dollars per month in terms of diaspora
bank, we have know, most of the goods here are imported, remittances. And if we look at our exports,
from raw material to basic commodities, like we import about US$500 million per month,
put in place an cooking oil. Therefore, if the economy expands, whereas our exports correspond to roughly
export incentive so does the need for foreign currency. US$300 million per month, so there is a gap of
US$200 million. That trade deficit is financed
scheme, which How is the current administration incentivising mainly through the diaspora remittances,
is basically an and encouraging manufacturers to increase their
exports to improve the forex in the country?
and from the loans that we are securing from
Afreximbank and others.
export subsidy As a bank, we have put in place an export
incentive scheme, which is more like an Why is now the best time to invest in Zimbabwe?
scheme, to export subsidy scheme, to promote export Zimbabwe has witnessed a significant
promote exports and provide a competitive edge in the foreign shift of policy, from a closed economy to an
markets. So, for example, if you are exporting open economy. We are now minimising the
and provide a a certain amount of goods, we provide, governmental footprint in the economy. The
competitive edge say, 5-10-20% in subsidy and that is how
we become competitive. We are using the
role of the government should be to facilitate
business, and that is what it is doing — we are
by Zimbabwean US dollar as our domestic currency, which trying to remove the constraints. Zimbabwe
means that our goods become expensive in has got plenty of resources and quality assets
exporters in the foreign markets. More so if the US dollar so now we need quality investors to come and
the foreign increases. By providing a subsidy, it means
that you are basically making sure that goods
assist the economy to leap forward. Zimbabwe
is the best-kept secret in Africa and we are now
markets.” export becomes competitive. So, in Zimbabwe, unveiling it.
10 | FORBES AFRICA AUGUST 2018Reserve Bank of Zimbabwe (RBZ)
Maintaining financial stability and financial inclusion through credible policies.
ZIMBABWE - Open For Business
Opening Up The Economy
The Reserve Bank of Zimbabwe (RBZ)
upholds and supports the country’s
capital and economic drive through
export subsidies, diaspora remittances
and reducing interest rates on banking
loans.
The Reserve Bank of Zimbabwe (RBZ) was
founded in 1956 and is the central bank
of Zimbabwe. It succeeded the Central
Currency Board as a government institution
with the exclusive on issuing currency until
dollarization in 2008. It is now responsible
for banking supervision, the regularisation
of the amount of money in circulation
and monetary policy formulation and “Providing incentives, with 10% incentives. We are talking about
implementation, it also acts as a banker 60-70 million dollars per month in terms
and advisor to the government. As a and making sure that of diaspora remittances. We import about
custodian of the nation’s gold, it purchases diasporans can come 500 million dollars per month, whereas our
and refines valuable minerals, such as exports correspond to roughly 300 million
diamonds, gold and silver, through its back home, not only as dollars per month, so there is a gap of
subsidiary, Fidelity Printers and Refinery. individuals, but also as 200 million dollars,” states Dr Mangudya.
Other RBZ subsidiaries include: Aurex, for capital bearers, contributes “That trade deficit is financed mainly
the production of gold jewellery, Export through the diaspora remittances, and
Credit Guarantee Corporation which to opening up the economy, from the loans that we are securing from
insure Zimbabwe’s exports, Homelink, building roads, buildings, Afreximbank and others. So, diasporans
that mobilises foreign currency from are very important in terms of financial
Zimbabweans in the diaspora and the hydropower stations, flows. Therefore, providing incentives,
Zimbabwe Asset Management Corporation. and so on.” and making sure that diasporans can
With assistance from the African Export- come back home, not only as individuals,
Import Bank and the establishment Dr John Mangudya, but also as capital bearers, contributes to
of a US$200 million facility, it also re- Governor of RBZ opening up the economy, building roads,
established RBZ’s lender-of-last resort buildings, hydropower stations, and so on.”
function. As a member of the Alliance for the US dollar as our domestic currency, Recently, RBZ engaged the Bankers’
Financial Inclusion, it aims to increase the which means that our goods become Association of Zimbabwe to reduce
level of access to formal financial services expensive in the foreign markets. More interest rates on loans thus confirming the
in Zimbabwe from 69% to 90% while so if the US dollar increases,” explains bank’s mission of being a transformative
improving the proportion of financially Dr John Mangudya, RBZ’s governor. “By and responsive institution. Under the
included small business to 80% by 2020. providing a subsidy, it means that you are guidance, attention and supervision of
Driven by the Reserve Bank’s export basically making sure that export goods RBZ, Zimbabwe is gently moving towards
incentives, Zimbabwe’s exports have become competitive.” a financially stable and inclusive reality
grown 36% (US$3.8 billion) in 2017 in According to RBZ figures, the biggest whereby the bank has provided the
relation to the previous year. The RBZ contributor to forex are exports, while circumstances in which it can open up
introduced US$200 million and US$300 diaspora remittances come in second with and really blossom.
million export incentive schemes in a significant contribution of 25%, growing
2016, which subsequently saw export exponentially from US$552 million in 2012
receipts totalling US$7.4 billion. These to over US$935 million in 2016. This has
incentives are aimed at increasing been a result of incentives set in place 80 Samora Machel Avenue.
competitiveness of Zimbabwean exports, by RBZ to encourage diaspora funds. “We Harare, Zimbabwe.
as well as boosting production and export are providing incentives to those who are Tel: +263 867 700 0477
www.rbz.co.zw
led growth. “In Zimbabwe, we are using working in the diaspora, we provide them
AUGUST 2018 FORBES AFRICA | 11Financial Sector
Resilient strategies in a cash-lite economy
ZIMBABWE - Open For Business
Banking On The Future
W
hile the new administration under President Emmerson Dambudzo Mnangagwa has focused on re-
engagement and an open economy, the country still suffers from a cash crisis as a result from past
low production levels, trade deficits and FDI shortage. To add to this, the cash crisis is worsened by
the use of the United States dollar instead of the country’s own currency. “The area where we most
struggle, particularly in the financial sector, has been the capacity to do business with other countries,
companies and banks internationally,” states Dr. Lance Mambondiani, Managing Director, Steward
Bank. Necessity is the mother of invention and despite tight liquidity, Zimbabwean banks recorded a
34% surge in profits during 2017.
The current administration’s financial inclusion initiatives target broadening access to the provision
of vulnerable groups with financial services, which is critical for sustainable economic growth and
development. Inclusion requires ICT, and the advent of EcoCash has literally transformed Zimbabwe
into a cash-less society, processing about 90% of transactions in the entire mobile money field with
98% of the country’s mobile money subscribers on EcoCash as well. “When we started our service in
2010, the financial inclusion penetration rate in Zimbabwe was about 10%,” states Douglas Mboweni,
Managing Director, EcoNet. “Today, that rate has risen to 70%. We took a financial product which was for
the few and made it available to the masses.” Stanbic Bank launched a Host-to-Host solution for their
clients, which enables the customer to migrate 100% of their transactions from manual to electronic
capture. In cash-lite Zimbabwe, all financial institutions have utilised technology and mobile money to
get the unbanked in their systems.
In 2017, Zimbabwe received $698.9 million of diaspora remittances into the country accounting for
49% of total international remittances in 2017. “The diaspora is very critical to us, in several aspects,”
states Jonas Mushosho, Group CEO, Old Mutual. “We have partnered with a tech company called
The country’s ZimPay and enable them to collect payments directly from the bank accounts of people in diaspora
financial institutions on behalf of CABS.” The Diaspora Infrastructure Development Group (DIDG) out of South Africa recently
won the $400 million tender to resuscitate the National Railways of Zimbabwe (NRZ). “We had a
provide innovative team in the U S reaching out because we saw that they are yearning for a channel to participate to
the economy back home,” states Samuel Matsekete, CEO, Barclays Zimbabwe. “We used to see these
solutions to promote people as money transfer channels, however, we learnt from this that they want to participate in the
financial inclusion, country’s development.”
The recent $100 million loan from the British government and Standard Chartered bank has played
economic growth a part in easing the cash crisis but the country is still a decent way away from solving its shortages.
and investment Despite this, the nation’s financial institutions have shown resilience and a knack for innovative
solutions, which when backed by a strong, stable leadership, will flourish and promote economic
security. growth and investment security.
12 | FORBES AFRICA AUGUST 2018CBZ Bank
Partners for success in the personal, corporate and commercial banking sector.
ZIMBABWE - Open For Business
Looking At The Entire Value Chain
Zimbabwe’s leading financial institution’s
support of different sectors, including
SMEs, agriculture, and its investment in
digital platforms contributes massively
to the growth of the country’s economy.
The CBZ Bank was founded in 1980
as the Bank of Credit and Commerce
Zimbabwe and in 2004 was re-organised
and renamed subsidiary of CBZ Holdings
Limited. It is one of the financial
services institutions licensed by the
Reserve Bank of Zimbabwe, the central Growth through Smart Partnerships.)’
bank and national banking regulator, “We heard that last year’s and this
and offers a vast array of innovative year’s editions are considered the best
banking and financial solutions. In supporting Indaba for SMEs,” affirms
December 2017, the bank was declared Zimunya. However, CBZ Bank attributes
the largest financial services provider in its 20% growth in the first quarter of
Zimbabwe with assets valued in excess 2018 to the heavy investment it has
of US$1.992 billion with shareholders’ made in digital platforms. In a bid to
equity of US$188.11 million. “As a go paperless and enhance financial
financial institution, we are the biggest inclusion through a cash-light society,
bank here,” explains Managing Director, “We try to create value from June 1 2018, all the Bank’s
Peter Zimunya. “We control over 20% of branches no longer process manual/
the deposits, over 24% of borrowings everywhere. We start paper Real Time Gross Settlement
and over 22% of bank operations. We are
virtually in every sector.”
from microfinance, (RTGS) and Internal Transfer requests.
Clients now can perform transactions
CBZ Bank has grown its loan book to and then we grow via CBZ Touch, CBZ Internet Banking and
about US$941 million in 2018, validating Paynet.
its support of different sectors of the projects to corporate The bank’s philosophy in focusing
economy, and with infrastructure projects dimensions.” on creating value has permitted them
worth US$28 million. “We are everywhere,” to assist the growth of a number
claims Zimunya. “We have built 1,309 Peter Zimunya, of sectors and ultimately drive the
stands in Victoria Falls and they have all
been sold off. We have a low-cost housing
Managing Director country’s economy forward. “If you
look at us back in 1995, we started
project going on in Gweru, Bulawayo. We of CBZ Bank off focusing more on microfinance
focus on low-cost, but we also have high- and then we grew,” states Zimunya. “If
density and low-density projects. We are you look at our share in the corporate
also part of a partnership: we want to just the primary agriculture. What about, market, you realise it’s huge. So, we
raise US$1.50 million, which is supposed for example, downstream industries, start from microfinance, and then we
to finance the building of 470,000 houses which are linked to agriculture? If you grow projects to corporate dimensions.”
at an initial stage. So, that money is going don’t look at the entire value chain, you Its vision of diversity while relying upon
to the development of the land.” They lose value somewhere.” a digitalised future ensures its position
also are renowned for their contribution SMEs play a major role in the as one of the most innovative financial
to agriculture whereby they focus on economic development of Zimbabwe, institutions in the country.
a centre for innovation, while fostering employing more than 5.7 million people
a learning environment internally. “We and generating an excess of 60% of Union House
control 30% of the market share in this the GDP in 2013, and CBZ has been at 60 Kwame Nkrumah Avenue
sector,” asserts Zimunya. “We have been the forefront in supporting the growth P.O Box 3313
doing agriculture for a long time, and so, of the sector. In 2017 and 2018, they Harare, Zimbabwe
Tel: +263 (4) 748050-79
we asked ourselves how we can add value hosted the International SME Indaba www.cbz.co.zw
and fund the entire value chain and not (2018’s theme was ‘Enhancing SME
AUGUST 2018 FORBES AFRICA | 13Moses Kurenjekwa
Managing Director of Ecobank Zimbabwe / Interview
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Driving The Currents Of Growth
Ecobank Zimbabwe leverages on its digital strategy to ensure
financial inclusion, while supporting key sectors in agriculture,
mining and mobilising diaspora remittances.
Ecobank Zimbabwe Limited (EZW), a registered What kind of services or products is Ecobank
commercial bank and financial services provider, providing to SMEs in order to unlock economic
began operations in Zimbabwe in January 2011. development?
Taking over the helm in 2016, Moses Kurenjekwa As a bank, we are mindful of the need to
has been at the forefront of its digital revolution be in sync with these developments and to
and performance transformation. We sat down remain relevant by providing support to this
with him to discuss Ecobank’s profit surge, its key sector and improve its contribution to the
focus on agriculture, SMEs and Zimbabwe’s economy. In recognition of that, we’ve recently
diaspora. launched the Emerald Club, a dedicated business
banking service package for SMEs and emerging
With the adoption of the multicurrency regime corporates. Under this package, we will harness
there has been a lot of change. Despite this, our group capabilities and local competencies to
your profits last year surged by 122% to above offer customised solutions for SMEs and grow
“The current USD30 million. What are the initiatives that them to emerging and eventually large corporates
you implemented which brought about this through a managed programme. We have
increased surge? dedicated personnel to focus on the SME portfolio,
focus on When we entered the Zimbabwe market in
2011, there were many players already on the
which contributes about 20% of our revenues.
agriculture by scene, some with over 100 years of experience in The Zimbabwean diaspora has a crucial role for
the space. We had a choice to go in and compete forex in the country. How is Ecobank engaging
the government head-on with the rest but we carefully chose a it at the moment?
has only meant niche focus on trade opportunities. This strategy The diaspora is an important market for us and we
was a best fit for our business because being a are very active in terms of remittances. We work with
increased part of the biggest Pan-African group in Africa, the most known global remittance networks and
involvement we were able to leverage on our group synergies
to harness support for the economy through
internally, we have a product called Rapid Transfer
(RT) which allows cross border P2P transfers in
of Ecobank various trade instruments. Our phenomenal Africa to provide a seamless way for our diasporans
financial performance has been hinged on that to contribute to the economic development of their
in mobilising strategy which also saw us being recognised in home countries. In addition, our ubiquitous Ecobank
lines of credit Local Top Companies Awards 2017 as the best Mobile App has now been integrated with mVISA
bank in Zimbabwe in terms of performance. and MasterCard Masterpass to allow card holders to
to support the transfer money and make payments globally.
agricultural The new dispensation has implemented the
Command Agriculture scheme to revitalise How is Ecobank Zimbabwe leveraging digital
value chain.” the economy. How is Ecobank assisting to technology to increase financial inclusion?
promote the agricultural sector? As a group, we are migrating from the traditional
The current increased focus on agriculture banking models to convenient digital channels. For
by the government has only meant increased individuals, we have developed products that are
involvement of Ecobank in mobilising lines of enabling the unbanked to start banking. Last year,
credit to support the agricultural value chain from we launched the Express Account where through
input raw materials mobilisation to crop marketing. the Ecobank App, a customer can open an account
Ecobank have done significant transactions in three minutes. The great thing about it is that your
to date and we continue to focus on these, as account number becomes your phone number. We
we understand the pivotal role of agriculture in have had great results with this as we target the under-
steering the economy forward. banked and unbanked sectors of the economy.
14 | FORBES AFRICA AUGUST 2018Old Mutual
Solid foundations established on one core promise.
ZIMBABWE - Open For Business
A Century Of that will drive the economy going into the
future. So, we have made it our deliberate
strategy to make financial inclusion a
Custom-Made
critical part of the way we do business
in Zimbabwe,” affirms Mushosho. “The
first building block, both for the SMEs and
Financial Services
informal sector, is financial literacy. We
have developed a programme for financial
literacy where we offer free support to
individuals and SMEs to help them have a
good understanding of financial markets
and products. We also provide funding
Old Mutual implements new initiatives, assists SMEs and to the sectors through a microfinance
deploys capital in order to ascertain Zimbabwe’s economic revival. institution which we registered and
opened last year.”
Old Mutual is an international diversified The group has also been working on
financial services company offering reconfiguration of existing properties
investment, savings, insurance and banking to make them suitable for SMEs. Earlier
solutions. It has carried out business in this year, they invested in Eastgate
Zimbabwe for over 120 years. Customers Market, a new multiuse centre for
largely include individuals, large local SMEs, accommodating about 500 small
institutions and leading multinationals. “Our to medium scale enterprises, which
organisation officially opened its first office will serve light industry and retailing
in Harare in 1902 and has been part of the customers. It is projected to launch within
fabric of Zimbabwe, supporting the people the year. Old Mutual also has a banking
of Zimbabwe, throughout the past century,” performances in our core businesses,” subsidiary, Central African Building Society
states Group Chief Executive Officer of Old confirms Mushosho. “There were very (CABS), the largest mortgage financier
Mutual Zimbabwe and Old Mutual Rest of significant investment returns on the in the country which is also committed
Africa MD, Jonas Mushosho. stock market, where the Zimbabwe Stock to supporting SMEs in agriculture and
For the year 2017, Old Mutual Zimbabwe, Exchange Industrial Index went up by other industries. CABS has also made a
reported a 139% increase in profits, 130%. The growth in our profits is therefore significant contribution to reducing the
achieving the impressive figure of US$219 a combination of strong operational housing backlog with its main projects
million, compared to the previous year’s performance of our businesses which is happening in Harare and Bulawayo.
US$92 million. This has been due to a supported by a well thought out strategy; Old Mutual’s vision and experience is
strong performance in its operations, as and the favourable fortunes from the stock embedded within the country, a financial
well as the group’s exposure to the listed market.” services company that has grown with
equities market. “Our profits jumped The growth of the informal sector and the nation, providing essential support,
from $92 million to $219 million in 2017. the increasing number of SMEs in the encouragement and assistance along the
This performance is on the back of very country are key trends in our market. It is way. Its sense of duty and responsibility has
significant growth in our life insurance crucial that financial institutions support driven the economy and safeguarded its own
business, where we had 279% growth the development of these sectors, success through the integrated financial
in adjusted operating profit and in our therefore, Old Mutual’s dedication to the services customised to meet Zimbabwe’s
banking business where we saw a sectors has been significant. “Investing in core needs. Mushosho elaborates, “as the
growth in surplus of 7%. So, we had solid the informal space helps to create SMEs largest financial group, we have a two-fold
role: first, we should support the economic
recovery of the country. Secondly, we
“Investing in the informal space helps believe we must support the communities
you create SMEs and make them among which we operate.”
drivers of the economy. So, we have
made it our deliberate strategy to make
financial inclusion a critical part of
the way we do business in Zimbabwe.” Mutual Gardens
100 The Chase (West). Emerald Hill, Harare
Jonas Mushosho, P.O Box 70. Harare, Zimbabwe
Tel: +263.4.308400 • Fax: +263.4.303717
Group CEO, Old Mutual, Zimbabwe www.oldmutual.co.zw
16 | FORBES AFRICA AUGUST 2018Stanbic Bank
Committed to making a real difference to financial services in Zimbabwe.
ZIMBABWE - Open For Business
Serving The Nation
Stanbic Bank’s commitment to growing the Zimbabwean economy is
seen by its facilitation of working capital requirements for exporters.
Stanbic Bank’s ‘fit for purpose’ solutions grow and Through collaboration with their Standard
safeguard finances as they support endeavours Bank counterparts, Stanbic was also sole
through meaningful partnerships in business and lead arranger of the US$120 million debt
corporate banking. package for the Zimbabwe Power Company
In 2016, Stanbic contributed to about 46% of (ZPC), for the expansion of the existing power
the mining sector’s working capital requirements infrastructure at Kariba South Hydro Power Rhett Groves,
and over the past 12 months, their contribution Station and Hwange Thermal Power Station. Stanbic’s Head
has been recorded at 71%. “We are very strong in This deal enabled 300MW to be added to the of Corporate and
this sector and have a prominent role,” affirms power grid for the benefit of Zimbabwe and Investment Banking
Rhett Groves, Stanbic’s Head of Corporate and neighbouring countries.
Investment Banking. “We have been very active in Stanbic Bank’s main aim is to take up a strong
terms of lending to the mining sector on shore and position in the new Zimbabwe while remaining
off shore. We have supplied lines of credit for the relevant to their clients. Their commitment to
mining sector, in particular for platinum, gold and the energy, mining and agricultural sectors
chrome. All minerals are very important for export remains steadfast while they remain open to
and we deliberately developed a mining desk in exploring new promising sectors, always at Stanbic Centre
59 Samora Machel Avenue
the bank. Zimplats, the biggest player for platinum, the ready to serve their nation in resuscitating P.O. Box 300, Harare, Zimbabwe
for example, is 100% banked by us.” the economy. www.stanbicbank.co.zw/
AUGUST 2018 FORBES AFRICA | 17Barclays Bank of Zimbabwe
Operating in Zimbabwe for over 105 years.
ZIMBABWE - Open For Business
Looking Forward To Growth
The acquisition of the majority about SMEs is that with them you can
shareholding in Barclays Bank of make a significant impact under the
Zimbabwe Limited by FMBcapital financial inclusion policy thrust of the
Holdings PLC provides a unique wider economy. Barclays Zimbabwe’s
opportunity for positive change and 106-year strong heritage of serving
acts as a catalyst for development corporate and individual customers will
focusing on regional opportunities. be preserved and complemented with
FMBCH’s unique capabilities.
On October 10 2017, Barclays Bank Plc. Corporate Social Responsibility (CSR)
concluded with FMBcapital Holdings PLC remains a significant component of
(FMBCH), the sale of Barclays’ majority BBZ’s business programme and outlook,
interest in Afcarme, which owned 67.68% focusing mainly on the development and
of Barclays Bank of Zimbabwe Limited capacitation of the youth. “Our community
(BBZ). FMBCH is a Mauritius incorporated investment is anchored on interventions
holding company, which owns a controlling that relate to the youth,” describes
interest in banking operations in Malawi, “We are confident Matsekete. “Our interventions seek to
Botswana, Mozambique, Zambia and bequeath the youth with financial skills,
now Zimbabwe. The acquisition of BBZ is that we will emerge employability skills and entrepreneurial
a highly strategic growth opportunity for
FMBCH, and represents inward capital
out of this transition skills. Within that, we look carefully at
who to partner with.” Over the past three
investment in Zimbabwe. better positioned to years, the bank has partnered with the
With its $556 million of total assets Zimbabwe Farmers Union to promote
and US$19.8 million net profit last year, respond to the needs young farmers to play a bigger role in
Barclays Bank of Zimbabwe Ltd becomes of our clients and offer Zimbabwe’s mainstream agriculture
a significant part of FMBCH. Newly sector and to enhance the practice of
appointed Managing Director for Barclays appropriate and even farming as a business. This has resulted
Bank of Zimbabwe, Samuel Matsekete, is
confident of a smooth transition with the
tailor-made solutions in a total investment of nearly $500,000,
benefitting more than 30,000 young
change programme firmly on course. He for our market.” farmers across the country.
is clear that whilst the bank is focused Barclays is the second oldest bank in
on ensuring the best service for its Samuel Matsekete, Zimbabwe, but the merger is very much
customers and clients, the transition Chief Executive Officer representative of fresh opportunities
also presents a unique opportunity and an even brighter future. “One
to implement information technology at Barclays Bank hundred and six years of being part of
solutions and other positive changes for the Zimbabwean commercial life has
the benefit of customers and clients.
of Zimbabwe created a heritage which will set us apart
He believes the change into a regional as we grow the business into the future,”
group means the bank will be more asserts Matsekete. “We understand
effective in serving its wide range of the nuances and potential of the local
clients. “We are confident that we will that would have otherwise taken us market. Our unique positioning as part
emerge out of this transition better longer to go through.” FMB’s presence of a regional player means that we will be
positioned to respond to the needs in Zambia, Malawi, Mozambique and investing time to understand the region
of our clients and offer appropriate Botswana with the holding company in as a bank and seek to tap into regional
and even tailor-made solutions for our Mauritius provides a neat commercial opportunities too.”
market. We want to emerge stronger ecosystem and a gateway for financial
in terms of our offering on technology flows into mainland Africa.
platforms,” he states. “Our product range Barclays Bank of Zimbabwe offers
will be wider and our service a greatly personal and electronic banking
enhanced experience. We will be in a services to Retail, Business Banking Barclays House
position to leverage some of the regional and Corporate and Investment Banking Cnr First Street & Jason Moyo Ave
P.O Box 1279
ecosystems of clients and businesses. segments. Within the Business Banking Harare, Zimbabwe
As we change our information systems segment, SMEs are also catered for. zw.barclays.com
we will leapfrog some of the evolution Matsekete explains: “what we also like
18 | FORBES AFRICA AUGUST 2018Hon. Supa Mandiwanzira
Minister of ICT and Cyber Security / Interview
ZIMBABWE - Open For Business
Creating
A Knowledge-Based Society
The Ministry of ICT and Cyber Security aims to establish a vibrant,
secure ICT sector to spur economic growth and drive innovation.
Following President Mnangagwa’s inauguration, We need to create a culture of innovation, to
a new cabinet, the Ministry of Information be a harbour of innovation on this continent.
Communication Technology and Cyber Security We came up with an idea to drive innovation
(MICTCS) was established, merging the ICT through the US$25 million fund financed by the
and Cyber Security Ministries, with Hon. Supa government and the telecom operators through
Mandiwanzira at its helm. Hon. Mandiwanzira has the Universal Services Fund. We then made
been Minister of ICT, Postal and Courier Services this fund available to young entrepreneurs with
since 2014, and is also a renowed journalist and innovation ideas in the world. This has, so far,
entrepreneur. Penresa had the honour to meet kicked off well and we hope we will create our
with him to discuss the Ministry’s initiatives and own Silicon Valley, so that Zimbabwe can be seen
vision for Zimbabwe’s future. as a problem solver in the world.
President Mnangagwa has said that developing You are partially privatising three of the major
ICT infrastructure and harnessing technology companies as part of the telecom sector “We need to
innovation is a key goal for the government. reforms. Are you doing this for the sole reason
What kind of programmes or initiatives have you of increasing your capital resources and create a culture
implemented in the last four months to increase
speed and connectivity in the ICT sector and
expanding the network?
The first reason for this is that the government
of innovation,
infrastructure? has recognised that part of its costs come from a to be a harbour
My mandate from the President was to identify lack of performance by state enterprises. Now we
technologies that are now prevalent elsewhere, have a general policy which calls for full or partial of innovation on
particularly in the developed world. We are privatisation. Telecommunications are considered this continent.”
building an infrastructure that we can then use a strategic industry, so it is being only partially
for everything that requires technology, with a privatised. We want to attract investors who have a
network connectivity across all the major parks track record of success in telecommunications. With
of the country. We think this is important, not only no hard currency to back up the investments, you
for providing communication platforms for the cannot make any progress, but now, thanks to the new
community, but more significantly for financial mantra of this government, we can attract investors
inclusion. We are also broadening access to from outside the country who bring money to the table.
technology, to the internet, to the information
super highway. We have started the construction A final message of confidence: why would
of community information centres by converting you say that now is the best time to invest in
post offices into these kind of centres. With Zimbabwe and in its ICT sector?
these community information centres we aimed Zimbabwe has an economically diverse society;
at training the rural population on how to use a we have a strong organic agricultural sector and
computer. We are now taking that a step further we have mining for some of the most sought-
and trying to create village information centres: after minerals in the world. We believe that for
we are bringing containers with at least 15 everything that we will do in the country, we will
computers and lighting to the villages. need a stable and robust telecommunication
system, data networks and infrastructure in order
What do you intend to do with your US$25 to make enterprises profitable. Anyone who believes
million ICT Innovation Fund for the Zimbabwean in growing the economy depends upon these
ICT sector? technologies.
AUGUST 2018 FORBES AFRICA | 19You can also read
