News Update as @ 1530 hours, Thursday 23 April 2015

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By Rumbidzai Zinyuke

HARARE — The Zimbabwe Revenue Authority missed its first quarter reve-nue collection targets by 6 percent as poor economic conditions continue to affect inflows to the fiscus.

Net collections amounted to $803,2 million against a target of $850 million with the bulk of the revenue realised from Value Added Tax (VAT), Individual Tax and Excise Duty.

Zimra commissioner general Gershem Pasi said individual tax and excise duty contributed 25 percent and 21 percent respectively to total revenue while both VAT on local sales and imports contrib-uted 13 percent each.

The taxman collected $200,2 million under the individual tax head against a target of $192,0 million, resulting in a positive variance of 4 percent. The

figure was 4 percent up on the same period last year after $193,3 million was realised under the revenue head in 2014.

“The performance of the revenue head can be attributed to improved com-pliance levels from clients following intensive investigations, audits and fol-low-ups carried out by the Authority,” said Mr Pasi.

Company tax contributed $71,6 million to total revenue against a target of $81 million, translating to a negative vari-ance of 12 percent.

Mr Pasi said collections under this rev-enue head are expected to improve in the next quarter as 25 percent of the forecast tax liability will be paid when the second Quarterly Payment Dates (QPDs) become due in June.

Carbon tax collections for the period

under review stood at $8,4 million against a target of $7,6 million, result-ing in a positive variance of 11 percent.

Gross VAT collections in the quarter amounted to $200,5 million against a target of $157,9 million.

Net collections were $107,8 million against the targeted $157,9 million, which translates to a negative variance of 32 percent.

There was a 4 percent increase in VAT on local sales revenue from the $103,8

Zimra misses Q1 revenue targets

Mr Pasi

million that was collected during the first quarter of 2014.

The performance of VAT on local sales was attributed to the decline in the manufacturing sector capacity utilisa-tion to around 36,3 percent as well as the low disposable income in the hands of consumers. VAT on imports stood at $105,6 million against a target of $96,1 million, resulting in a positive variance of 10 percent.

The collections from imports were 86 percent up on the $56,8 million col-lected during the same period in 2014 due to an increase in the importation of goods which attract VAT.

Customs Duty collections amounted to $78,3 million missing the target of $86 million by 9 percent due to the $195,9 million customs duty that was fore-gone through various duty suppressing instruments in the period.

Excise duty was 19 percent above tar-gets at $165,4 million against $139,0 million. Excise duty on fuel contributed 78 percent of the total collections while duty on beer contributed 11 percent.

The remainder of the revenue was real-ised from tobacco, wines and spirits, second-hand motor vehicles, electric lamps and airtime.

During the same period last year, $109,8 million was realised from excise duty translating to a 51 percent increase in this year’s revenue collec-tions.

Mining Royalties were 40 percent below target bringing in $19,6 million against a target of $32,5 million as depressed international prices of minerals continue to weigh down on mining companies. Revenue collections from other taxes amounted to $46,4 million against a target of $57,9 million, resulting in a

negative variance of 20 percent.

This was mainly because the tobacco levy failed to meet the set targets due to depressed tobacco prices at the beginning of the selling season and low performance of capital gains taxes and capital gains withholding taxes due to poor performance of both the local bourse and the properties market.

Mr Pasi said the extension of the period for accepting tax amnesty applications to 30 June 2015 should provide an opportunity for those clients who failed to meet the original deadline to submit their applications, and to process pay-ment by 31 December 2015.

“I, therefore, urge all our valued clients to take full advantage of this extension and submit their applications by 30 June 2015 as there will be no further extension,” he said. ●

2 NEWS2 NEWS

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5 ANALYSIS5 NEWS

By Funny Hudzerema

HARARE — Classic Reinsurance Bro-kers, a new operator in the local insurance sector, says it is targeting a 10 percent growth in business by year-end through the full utilization of its partnerships with international firms.

Speaking at the official launch of the com-pany board chairman Mr Kizito Makoni said the firm has created networks with international insurance companies to exchange ideas in developing new prod-

ucts.

“As an insurance broker the organisation is targeting a 10 percent growth by the end of the year and this can be achievable through partnering well established firms.

“We have developed close networks with respectable international partners to intro-duce new and exciting products that can be adapted to suit the local conditions,” he said.

Classic Reinsurance Brokers was officially

registered under the Insurance Council of Zimbabwe last year to start to operations in the country.

“The insurance sector in the early 2000 contributes 1,2 billion every year but the figure declined to $69 000 in 2008 due to economic hardships.

As an insurance company we pledge to create sustainable partnership in achiev-ing a common goal of creating value,” said Mr Makoni.

He also said the insurance sector is lack-ing experienced consultancy to develop and come up with new products rather than relying on consultancy from other countries.

“Our vision is to be a world class provider of innovative reinsurance consultancy ser-vices in Africa but that starts at home here in Zimbabwe. We cannot conquer Africa without proving it here,” he said.

The launch was attended by senior exec-utive in the insurance sector. Mr Makoni said the company will be approaching the market to discuss in greater details new products to cover specialist areas such as health, political riot, agriculture, profes-sional risks and credit card schemes. ●

New insurance firm targets 10pc growth in 2015

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7 NEWS7 NEWS

BH24 Reporter

HARARE — Zimtrade, the local trade promotion body, will undertake a mar-ket research in Zambia to establish the export potential of Zimbabwean prod-ucts and services in that country.

In its March newsletter, Zimtrade said the research, which will be carried out in the second quarter of this year, will gather market intelligence covering transport logistics, regulatory require-ments, among others.

“Trade between Zimbabwe and Zambia is governed by the COMESA and SADC Trade Agreements, which offer prefer-ential treatment of qualifying products into each other’s market.

Zambia is the fourth largest export destination for Zimbabwean products accounting for 3,3 percent and 3,4 percent of total exports in 2013 and 2014 respectively,” the trade promo-tion body said.

Zimbabwe’s manufacturing sector is operating at 36,3 percent with only 40 percent of the local companies still exporting their products as the major-ity have either closed shop or mas-

sively reduced their production levels.

In a bid to revive the country’s exports, Zimtrade has in the past few years carried out similar market researches in Angola, Mozambique and South Sudan.

ZimTrade, in collaboration with the Confederation of Zimbabwe Industries, is also co-ordinating the participation of local companies at the Zambia Agri-cultural and Commercial Show (ZACS) to be held in Lusaka from July 29 to August 3.

The Show will be held under the theme, “Innovation beyond the Golden

Jubilee”, in recognition of the fact that Zambia celebrated 50 years of inde-pendence in 2014.

ZACS is a multi-sectoral event, which showcases agricultural machinery and implements, industrial equipment among other agricultural products.

Zimbabwe’s major exports to Zambia include, plastic products, iron and steel products, agricultural equipment and implements, cement, paper and wood products, medicaments, alcoholic & non-alcoholic beverages, sugar con-fectionery, food preparations, edible oils, chemicals and fertilisers, among others. ●

Zimtrade to research Zambian market

Lusaka

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HARARE — The equities market bucked losses over the last couple of days to marginally gain 0.01 (or 0,01 percent) to close at 157.57, mainly driven by Innscor which was 1,51 cents solid at 59.01 points.

On the downside, seed producer SeedCo lost a cent to close at 96 cents, while Meikles dropped 0,50 cents to close at 9,50 cents and crocodile skin producer Padenga went down 0,10 cents to close at 9,80 cents. The indus-trial index rose by 0.38 (or 0,24 per-cent) compared to the prior week.

Volumes were reasonable in today's trades, buttressed by trades in Econet, CBZ and BAT, while the value of trades stood at $706 .

The mining index went down by 0.90 (or 2,05 percent) to close at 42.93 after BNC was 0,10 cents lower at 4 cents. However, Falgold, Hwange and RioZim

maintained previous trading levels at 0,40 cents, 3,50 cents and 6 cents respectively. On a week on week basis

the mining index shed 4.89 points (or 10,23 percent).

9 ZSE REVIEW

Bourse closes week stronger

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JOHANNESBURG — South Africa's National Union of Mineworkers (NUM) is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level work-ers, according to union sources familiar with the matter.

"For the basic wage at the entry level, we are planning to demand a raise to 10,000 rand ($823) a month in the first year from 5,700 rand at present," said one NUM source, who asked not to be named. This was confirmed by a second source in the union.

That would set the stage for tough nego-tiations and a potentially protracted dis-pute with companies in South Africa's gold sector, where profit margins are under pressure.

The basic wage is not the only remuner-ation miners get, nor is it the only labour cost to companies. Miners also get vari-ous allowances structured into their pay packages.

NUM, which represents 57 percent of the workforce in the gold sector, said in March it might ask for increases of up to 100 percent in the gold, coal and dia-mond sectors, but was still finalising its demands. The sources did not disclose

the demands in the sectors outside of gold. South Africa's mostly black mining labour force is increasingly restive two decades after the end of apartheid, with perceptions prevalent that the earnings which have been made in the industry have not flowed fairly to workers.

NUM is also competing for working-class hearts and minds with its arch-rival, the Association of Mineworkers and Construction Union (AMCU), which has poached tens of thousands of its mem-bers on the platinum belt in a violent turf war that erupted in 2012.

The new NUM wage demand plans would not affect Gold Fields, as the union signed a three-year deal with the company two

weeks ago for a 21 percent increase for the lowest-paid workers to 7,000 rand.

But the NUM has upcoming talks with AngloGold Ashanti, Harmony Gold, and Sibanye Gold, whose two-year wage agreements with the union expire in June.

They will almost certainly baulk at big, double-digit demands at a time when inflation in Africa's most advanced econ-omy is 4 percent and as they contend with depressed prices and rising power and labour costs.

Spot gold is currently fetching just over $1,190 an ounce, about 38 percent down from its historic peak of $1,920 scaled in September 2011, and South Africa's once towering bullion industry has long been in a state of steep decline.

Harmony has been battling to turn a profit and reported a headline loss of 496 million rand ($43 million) in the three months to Dec. 31, 2014.

AMCU, which is striving to make inroads in the gold sector and led a five-month strike last year in the platinum sector, is expected to submit its own gold wage demands next month. — Reuters ●

REGIONAL NEWS 11

SA mine union plans to demand gold wage hikes of 75 pc: sources

12 DIARY OF EVENTS

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

POWER GENERATION STATS

Gen Station

24 April 15

Energy

(Megawatts)

Hwange 442 MW

Kariba 614 MW

Harare 30 MW

Munyati 29 MW

Bulawayo 26 MW

Imports 0 MW

Total 1153 MW

29 April — The Fifty-Fifth Annual General Meeting of the Shareholders of British Amer-ica Tobacco Zimbabwe (Holdings) Limited; Place: British American Tobacco Zimbabwe Offices, Manchester Road, Southerton, Harare; Time: 1000 hours.

4 May 2015 - Zimplow Holdings' Sixty Fifth Annual General Meeting of shareholders; Place: Zimplow Holdings Head Office, Northend Close, Northridge Park, Borrowdale; Time: 10:00 hours

THE BH24 DIARY

13 ZSE

ZSEMOVERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

INNSCOR 2.62 59.01 MEIKLES -5.00 9.50

BNC -2.43 4.00

SEEDCO -1.03 96.00

PADENGA -1.01 9.80

INDICES

INDEX PREVIOUS TODAY MOVE CHANGE

INDUSTRIAL 157.56 157.57 +0.01 POINTS +0.01%

MINING 43.83 42.93 -0.90 POINTS -2.05%

Stocks Exchange

LONDON — Seven UK hedge fund managers are worth more than 1 bil-lion pounds ($1,5 billion), up from four executives last year, according to an annual wealth ranking compiled by the Sunday Times.

Odey Asset Management founder Crispin Odey and his wife Nichola Pease have almost doubled their combined wealth to 1.1 billion pounds ($1.7 bil-lion), according to the Sunday Times Rich List 2015.

Odey Asset Management’s profits tre-bled to a record 174 million pounds in 2013-14, with Odey earning 47.8

million pounds, the newspaper said in a statement on Friday. Mr Alan How-ard and Mr Michael Platt, co-founders of Brevan Howard Asset Management and BlueCrest Capital Management, jointly lead the list with fortunes of 1.5 billion pounds each. Platt, whose wealth was unchanged from last year, caught Mr Howard, whose personal for-tune dropped 100 million pounds after topping the 2014 list, according to the data.

Hedge fund managers are taking on more clients as the U.K. economy grows at the fastest pace since 2008 and investors look to their expertise to

help offset a slump in yields from fixed income amid record-low interest rates.

The other hedge fund billionaires are Mr Alexander Knaster of Pamplona Capital, Mr Michael Hintze of CQS Man-agement, Mr Robert Miller of Search Investment Group and Mr David Har-ding of Winton Capital.

Representatives for Howard, Platt, Knaster and Hintze declined to com-ment. Mr Miller did not return a phone call and e-mail outside business hours. Representatives for Harding, Odey and Pease declined immediate comment. — Bloomberg ●

14 INTERNATIONAL NEWS

UK hedge fund billionaires almost double

BH24

By Sifelani Tsiko

African plant breeders should use bio-technology to boost indigenous crop production and preserve the continent’s rich agricultural biodiversity from extinc-tion, according to experts in the Com-mon Market for Eastern and Southern Africa (COMESA).

Speaking during the launch of the 2014 International Service for the Acquisition of Agri-biotech Applications (ISAAA) global report on commercialised bio-tech crops in Harare recently, COMESA senior biotechnology policy advisor Dr Getachew Belay said the utilization of biotechnology by plant breeders could help the continent to address a myriad of agricultural related challenges includ-ing hunger, increasing population and declining food production.

“This is the problem with global biotech-nology, it's not addressing indigenous crops,” he said. “There is need for a strong political will and concerted efforts by African plant breeders to use biotech-nology to enhance the nutritional and productivity levels of indigenous African food crops.” Research into indigenous food crops, Dr Belay said, will enable agricultural extension workers to advise

smallholder farmers in their respective countries to continue to grow local crops that address their own needs. “African researchers should take the lead in promoting biotechnology research on African crops,” he said. “Only African sci-entists or those working in Africa know the desires of African farmers and con-sumers and we should not hesitate to use new equipment and techniques to “genetically sequence, assemble and annotate the genomes” of thousands of indigenous African crops.”

The launch of the 2014 ISAAA global report coincided with a regional biosafety training that sought to strengthen link-ages to manage biotechnology products among African countries given the fact that the countries share common bor-ders across which goods and services move. COMESA through its Regional Biotechnology and Biosafety Program supported the National Biotechnol-ogy Authority of Zimbabwe (NBA) to organise the workshop which sought to promote the development of biosafety systems with the Sadc region. Other partners which supported Zimbabwe to host the regional training workshop included the African Biosafety Network of Expertise (ABNE), Southern Afri-

can Network for Biosciences (SANBio), Department of Science and Technology, Biosafety South Africa, Public Under-standing of Biotechnology (PUB) and Department of Agriculture, Forestry and Fisheries (DAFF). According to the latest global report on biotech crops, a record 181,5 million hectares of biotech crops were grown globally in 2014, at an annual growth rate of between 3 and 4 percent, up 6,3 million hectares from 175,2 million hectares in 2013. Commercialisation of biotech crops is in its 19th year and most countries across the globe have registered double-digit growth rates.

In Africa, only three countries - South Africa, Burkina Faso and Egypt have commercialised genetically modified (GM) crops, while 19 countries have established biosafety regulatory sys-tems, four countries are developing regulatory systems, 21 countries are a work in progress, and 10 have no National Biosafety Frameworks (NBFs). Experts say one of the reasons for slow adoption of biotechnology is the lack of functional regulatory systems, including inability to perform timely decision-making. Other factors, they say, include the absence of national

legislation, regulations, risk assessment policies or procedures and inadequate capacity for implementing functional regulatory systems. Agricultural experts say the world’s agro-biodiversity is dis-appearing at an alarming rate. For sev-eral major crops, up to 80-90 percent losses in variety over the past century have been reported.

Zimbabwe has lost a number of local crop varieties due to neglect, erosion of local indigenous knowledge systems, promotion of improved varieties, lack of incentives for locally adapted crops and recognition of the keepers of crop diver-sity among other factors.Public health experts and agriculturalist bemoan the erosion of indigenous vegetables such as tsunga, nyevhe, mutsine, derere rebupwe, regusha, rename, renyunje and indigenous crop varieties such as sorghum, pearl and finger millets, cow-peas, bambara nuts and other neglected and under-utilized crop species (NUS) such as taro and madhumbe which they argue are important in improving the nutrition of people particularly now when there is a rise in non-communi-cable diseases such as cancer, diabetes and others. ●

16 ANALYSIS

Biotechnology can boost Africa's indigenous crop

16 ANALYSIS