via 2013: A year when hope turned to despair – The Standard December 22, 2013 by Ndamu Sandu
IN nine days the curtain comes down on an eventful year that showed so much promise at the beginning, before taking a nasty turn later in the year.
It was by far a tough year as executives grappled with keeping their respective companies afloat after the July 31 elections.
Standard business lists some of the highlights of 2013.
Indigenisation’s false start
In January, Zimplats signed a term sheet for the disposal of 51% to locals in a transaction worth US$971 million. This followed the signing of other term sheets between the government, Mimosa and Unki Mine, among others.
However, the transactions were not implemented as debate centred on how a local private equity firm, Brainworks Capital, had been selected to handle the transactions without the process going to tender.
The fight over the transactions involved senior Zanu PF officials. Brainworks took a back seat and came back with a bang: bought African Sun’s 12% shareholding in Dawn Properties. It then bought 32% in African Sun (ASL), which was previously held by chief executive officer Shingi Munyeza’s Nhaka Trust.
In return, Nhaka Trust got 17% shareholding in Brainworks.
Show us the money
Former Finance minister Tendai Biti was consistent is his pronouncement that diamond revenue was not flowing into Treasury coffers during the life of the inclusive government.
Enter Patrick Chinamasa. The Finance minister told legislators at a pre-Budget seminar that his ministry had not received a dime from Marange diamonds in the nine months to September, despite an initial target of US$40 million. So where is the money going?
Controversy still shrouds Marange diamonds at a time the country has been calling for the removal of sanctions on the gems.
The European Union removed sanctions on the Zimbabwe Mining Development Corporation, enabling Marange diamonds to be traded in Antwerp.
Last week diamonds from Marange Resources, Diamond Mining Company, Anjin Investments, Jinan and Kusena Diamonds, totalling about 300 000 carats, were auctioned at the Antwerp World Diamond Centre raking in US$10,5 million.
In his 2014 National Budget, Chinamasa proposed a raft of reforms that would ensure surveillance of the entire production, sorting and transmission of diamonds.
Enter the Bretton Woods
In June, the International Monetary Fund approved a supervised economic reform programme on Zimbabwe, as the country builds bridges with the global lender.
The Staff Monitored Programme — an informal agreement between country authorities and the Fund’s staff to monitor the implementation of the authorities’ economic programme — will end in the first quarter of 2014.
It is Zimbabwe’s first IMF agreement in more than a decade.
The World Bank also crafted a three-year strategy for Zimbabwe, focusing on fostering private sector-led growth, creation of an enabling environment and reducing societal vulnerabilities as it readies for eventual re-engagement with the country.
When Zimbabwe, Zambia charmed the world
The 20th session of the United Nations World Tourism Organisation general assembly co-hosted by Zimbabwe and Zambia was adjudged the best attended since the organisation’s inception in 1975.
In attendance were 121 of the 154 member states, 145 countries, 750 delegates and 900 participants from the media and private sector and 49 ministers.
Zimbabwe expects a rise in tourist arrivals spurred by the successful hosting of the general assembly.
No shopping after polls
Former Philippine First Lady Imelda Marcos once said: “Win or lose, we go shopping after the election”.
Zimbabweans won’t agree with her, as their fortunes nose-dived after Zanu PF romped to victory.
Retailers that normally enjoy brisk business especially during the festive season have reported that tills are not ringing louder this time around.
The Zimbabwean worker is worse off than he was in 2008 as companies struggle to pay salaries.
When business is not usual
The manufacturing sector is on its knees weighed-down by ageing equipment and an absence of long-term financing.
A report by the Confederation of Zimbabwe Industries showed that capacity utilisation in the manufacturing sector declined to 39,6% this year from 44% recorded in 2012.
A number of companies have retrenched, with the Zimbabwe Congress of Trade Unions saying at least 300 employees were being retrenched weekly.
Despite this sad scenario, the new administration is still drowned in the euphoria of trouncing the two MDC formations in the July 31 polls.
However, Zanu PF is promising heaven-on-earth under its economic blue-print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).
It’s the politics, stupid!
In August the Zimbabwe Stock Exchange lost 11% in a single day, due to uncertainty following President Robert Mugabe’s landslide victory over former Prime Minister Morgan Tsvangirai amid claims by the latter that the polls were rigged.
The loss was the biggest since the country embraced a multicurrency regime in 2009.
Oh no, not again
As the year staggered to a close, the nation woke up to cash queues at smaller banks. Various excuses were offered but the queues wouldn’t disappear.
It got worse when a manager of Metbank branch in Mutare had to run for dear life, with angry depositors in hot pursuit. Then recently, some angry depositors vandalised an Allied Bank branch after failing to withdraw their money.
This will be a major blow to the banking sector in its bid to rebuild the confidence.
All was not well in the sector after the government ordered banks to remove bank charges on deposits, depriving the banks of non-funded income.
Estimates by the Bankers’ Association of Zimbabwe showed that the sector was expected to lose US$73 million in potential income by the end of the year.
To its credit, the government removed the cap on bank charges and interest rates early this month.
Gideon Gono straddled across ministries during his decade as governor of the central bank. He left the post last month a battered man, after his policies failed to steer the economy to the “Promised Land”.
Gono will be remembered for his slogan “failure is not an option” in his futile fight against inflation. He will also be remembered for his quasi-fiscal activities blamed by economists for fuelling hyper-inflation.
Zanu PF has since given him a soft landing with a senatorial post in Manicaland province in the pipeline.
The banking sector also waved goodbye to Elisha Mushayakarara, who resigned as group chief executive officer of Zimbabwe Financial Holdings after 20 years at the helm.