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| The Insider - October 2003 |
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Mugabe a cash cow!President Robert Mugabe of Zimbabwe is an industry. A money spinning industry. A cash cow. If Mugabe Inc. were listed on the Zimbabwe Stock Exchange, it would probably be one of the top performers, competing with mining giant Rio Tinto whose share price has risen by 4 471 percent since the beginning of the year beating inflation which stands at 455 percent nearly 10 times. Full story |
Jesse surfaces in East London but disappearsGlenda of Beacon Bay in East London could not help but feel pity when a 44-year-old man knocked at her door looking for accommodation towards the end of August. The man was accompanied by his wife and two children, aged 9 years and 18 months. He told her his family had just been evicted from their family farm in Zimbabwe by President Robert Mugabe's government. She had no reason to dispute his story. Right there in front of her was a green Mercedes Benz 230 with Zimbabwean number plates. She offered him a cottage for R1 800 but waived the rent for the remainder of August.
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Politicisation of food in ZimbabweToday one-half of Zimbabwe's population of nearly 14 million is considered food-insecure, living in a household that is unable to obtain enough food to meet basic needs. A three-year drought, international sanctions and the withdrawal of international non-humanitarian support, the government's mismanagement of the economy, and the fast-track land reform programme all worked together to cause the current food emergency. The international aid community, led by the UN World Food Programme (WFP), is currently providing relief rations to over five million people and the number may well exceed seven million by 2004. The government subsidises grain through its own programme of importation and distribution, managed by the Grain Marketing Board (GMB) and the government's Food Committee. Full story |
Tall order for GonoZimbabweans, desperate for news about anything that can pull the country out of the current doldrums, were left in a quandary over the appointment of Gideon Gono as governor of the Reserve bank of Zimbabwe. The pro-government media hailed the appointment claiming Gono was the prescription that the country needed, but the private media was divided. Full story |
ZSE continues to be subduedThe Zimbabwe Stock Exchange continued to be subdued as investors awaited the 2004 budget due to be tabled on November 20. Even the appointment of a new governor for the central bank, after nearly five months of speculation, did not rekindle the market. Full story |
Innscor makes $14.6 billion profitDespite the country's seriously deteriorating economy, fast food giant, Innscor, had a turnover of $78.7 billion and net profit of $14.6 billion. And it says though hyperinflation is likely to put pressure on consumer purchasing power, it has a diversified stable business which has tremendous potential Full story |
National Foods benefits from lifting of price controlsThe lifting of price controls on some of the products manufactured by milling company, National Foods, saw some of these products, which could only be found in the informal market, returning to supermarket shelves at prices lower than those on the parallel market. And though the company continued to be dogged by shortages of raw materials it managed to post a net profit of nearly $8 billion in the first half of this year, more than 10 times the profit for the similar period last year and double that for the entire last year. Full story |
Rio Tinto laments fixed exchange rateGold mining group, Rio Tinto Zimbabwe, says the failure by the government to review the exchange rate of the Zimbabwe dollar on 1 June as had been promised by the Minister of Finance Herbert Murerwa in his Economic Recovery Plan in February, had resulted in a loss of confidence among the exporters. It had also fuelled rapid rises in other exchange rates as exporters struggled to earn enough Zimbabwe dollars to cover their expenses.
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Wankie production down by halfCoal production at Wankie was down by 50 percent in the first half of this year because of the shortage of maintenance spare parts and major components for the coal mining and processing equipment. Though the company was granted a US$5.3 million loan in June, which it expected to use to refurbish its equipment, it said this would probably bring production capacity to 80 percent. This was, however, only likely to be realised at the end of September.
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Bindura production down, profit upBindura's nickel sales for the six months to June were down by 32 percent due to two months furnace rebuild but net profit shot up from $1.5 billion to $12.8 billion. Profit for the year ending December was only $403.1 million. It says demand for nickel was firm with the company realising a price of US$3.73 a pound compared to US$2.96 last year. It was, however, unable to take advantage of this price improvement because of the two-month furnace rebuild.
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Cafca exports increase 30-foldA thirty-fold increase in exports from $126.4 million to $3.8 billion in the first half of this year helped to boost Cafca's net earnings from $326.9 million to $2.1 billion. It also earned the company an additional $2 billion primarily through exchange gains. According to the company's latest results, though domestic sales almost doubled from $2.1 billion to $4.1 billion, volumes were down 64 percent. Exports increased by 581 percent, but overall volume declined by 34 percent.
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Clan poised for significant growthClan Holdings, whose aim is to become the preferred transporter within the Southern African Development Community (SADC) region, received a new lease of life when its profit for the six months to June more than doubled that for the whole of last year and was more than eight times that for the similar period last year. The company said though the results were not exceptional, they perhaps reflected the first "signs of life" as a result of recent structural and policy changes within the group.
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Zimre profit up 508 percentReinsurance group, Zimre Holdings, had a good first half despite problems that bedeviled the country such as high levels of inflation, uncontrolled monetary growth, foreign exchange shortages, high unemployment and supply bottlenecks. Its gross premium increased by 632 percent from $5.8 billion to $42.2 billion while investment income soared 544 percent from $1.4 billion to $9.3 billion. Total revenue was up 623 percent from $7.2 billion to $52.2 billion.
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Short-term insurance bedevilled by underinsuranceShort-Term insurance company NicozDiamond says the industry is now bedevilled by under insurance so policyholders will have to battle to keep track of the spiraling price increases. It says management has to spend a lot of time getting policyholders to review their values in line with inflation and the depreciation of the Zimbabwe dollar. Inflation kicked off the year at 208 percent and had risen to 365 by half year. It stood at 455 percent at the end of September, an increase of 257 percent over the nine months.
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TA profit up 861%TA Holdings, which has just completed its restructuring exercise to focus on business with high growth potential, high margins and currency hedging, saw its net profit soar by 861 percent in the first half of this year. Its profit to June stood at $2.7 billion, up from $276.9 million during the first half of last year. Its net profit for the year ending December was $1.2 billion. Sales were up 320 percent from $5.2 billion to $21.1billion.
Full story |
Zimnat expands into the regionZimnat Lion Insurance Company, another short term insurance firm, has decided to expand into the region to cushion itself against the present negative macro-economic environment, which it says is not expected to improve in the short term. It says it had already secured a fee-based contract to manage a short-term insurance business in Uganda, while negotiations to secure another management contract in the region was at an advanced stage. It does not name the country.
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Rand strength boosts OM's sterling earningsThe strengthening of the South African rand against major currencies, particularly the United States dollar and the pound sterling, helped boost global insurance giant Old Mutual's earnings in sterling during the first half of this year. But it was bad news for South African investors. Though the embedded value was 3 percent up from December 31, 2002 in pounds sterling, it was 7 percent down in rands.
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Premier Discount gets off to a good startPremier Discount Company which started operations at the beginning of this year made a profit of $111million in the first half of this year, and it says despite the economic challenges the country is facing, prospects for the second half are encouraging.
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Zimbabwe faces acute seed shortagePoor planning and empty promises by the government could derail the country's agrarian reform as the country is currently short of seed for virtually all crops except soya beans. Though the Ministry of Lands, Agriculture and Rural Resettlement together with the Zimbabwe Seed Trader Association estimate that there has been an almost 70 percent increase in the annual demand for maize seed, from the 1990s average of 35 000 tonnes to 60 000 tonnes today, the government has done nothing to ensure that this seed is available.
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Producer price of wheat up but…The government has increased the producer price of wheat from $400 000 a tonne to $776 205 a tonne but farmers have said the price increase came too late. They also said the government should decontrol the market to enable farmers to operate viably. Douglas Tayor-Freeme of the Commercial Farmers Union said the price increase was meaningless because this year's crop had already been harvested. Full story |
Price of maize soars by 400%The price of maize at Mbare Musika had gone up by more than 400 percent between mid-May and mid-October, according to the latest report from the Famine Early Warning Systems Network, but it had only increased by 61 percent in US dollar terms. Full story |
Ministers biggest beneficiaries of cheap fuel?Killer Zivhu, leader of the Cross Border Traders Association, was blunt and straight to the point. Zimbabwe's leaders are squarely to blame for the current crisis in the country. The major reason why they are allowing to the country to collapse is that they are thriving from the chaos. Full story |
Inside story - The story of The InsiderExploiting the unregulated publishing platform of the internet, another Zimbabwe news site has been launched to meet the demand for independent, non-government affiliated news. Based in Bulawayo, Zimbabwe's second largest city, The Insider provides news for the country's business community covering economics, commodities and stock markets. The publication is independent of the government and major news organisations.Full story |
