Parastatals reform gathers pace
Hainan Airlines acquired a controlling shareholding in Air Zimbabwe as government moved out of the airline it had brought to its knees.
Air Zimbabwe is now a member of the Star Alliance and Hainan has already ordered four 787 Dreamliner planes from Boeing which would be delivered in the first quarter of 2014.
Former Air Zim’s group CEO Peter Chikumba told Standardbusiness last month he was always confident that the airline would rise again.
“Like the Biblical Moses, I took Air Zimbabwe from Egypt and left it in the desert. The airline needed Joshua to take it to the Promised Land and fortunately Hainan came at the right time,” he said.
In the Bible, Moses took the Israelites from Egypt into the desert and Joshua made sure that they reached Canaan.
State Enterprises and Parastatals minister Gorden Moyo said that the Air Zim success story would be replicated on all the parastatals.
IMF, World Bank lifts Zim out of the woods
In a landmark development, the International Monetary Fund and the World Bank gave Zimbabwe a US$4 billion line of credit to help improve the liquidity situation.
The move saw interest rates falling southwards with banks charging rates of between 5% and 7% per annum.
Banks are now jostling for clients to lend money to and they have extended the tenure period to five years, a welcome development for industry which needs long-term capital for retooling and to replace ageing equipment.
Community trusts drive ZSE activity
There was hectic activity on the bourse with locals becoming active players due to liquidity improvement. Gone are the days when foreign investors would dictate the market and contribute more than 60% to total monthly turnovers.
Of interest is the participation of community trusts that are awash with cash.
The Chegutu-Mhondoro-Ngezi-Zvimba Community Trust is on the verge of snapping up a 14,1% stake in the country’s largest bank by deposits, CBZ. The shares were held by Libya Arab Foreign Bank which is pulling out saying Harare gave sanctuary to the late Libyan strongman Muammar Gaddafi.
The Unki-Tongogara Community Share Ownership Trust has also been active on the stock market and it is tipped to take up a significant stake in one of the banks which are yet to meet the central bank’s minimum capital requirements.
Government finally struck off the salary bill 75 000 ghost workers giving Treasury some fiscal space to manoeuvre. Finance minister Tendai Biti said with the fiscal space, government is now able to reward the loyal civil service “which has been diligently doing its work despite poor salaries”.
Pro-poor, people’s budget
For the first time in 10 years, the Ministry of Finance presented a pro-poor and people’s budget. In his 2013 budget, Biti surpassed the benchmarks in his allocation to health and education saying the sectors needed more funding if the country is to edge closer to meeting the Millennium Development Goals.
Whereas the Abuja Declaration says 15% of the total budget should go to health, Biti allocated 19,5% of the US$8 billion budget to the sector. Education was allocated US$2,16 billion (27% of the budget).
Biti also allocated more capital expenditure.
US$10 billion wealth fund launched
Despite the bickering on who would be in charge of the Sovereign Wealth Fund (SWF) among the ministries of Finance, Mines, Youth Development, Indigenisation and Empowerment, Zimbabwe finally launched a US$8 billion fund to cater for future generations. The fund uses minerals as its base.
Adios RBZ, says Gono
Reserve Bank of Zimbabwe governor Gideon Gono announced that he is resigning in February next year before the end of his second and final term in office in December.
Gono said that he was quitting to put more energy on his chicken project which debuts on the stock exchange in October.
His resignation was rejected by the Ministry of Finance which pleaded with him to complete his term of office while it hunts for a suitable successor.
Diamonds are forever
New discoveries were made at the Chiadzwa diamond fields in Marange.
After the discovery of 50 000 more hectares with diamonds, government is now inviting more players onto the concessions.
In total 170 000 ha of land is diamond-rich.
Despite the hiking of application fees to US$5 million from US$1 million, the Ministry of Mines says the response has been overwhelming.
New exploration data leaked by officials from the Ministry of Mines shows that at the current extraction rate, the reserves would last for the next 60 years.