Commercial Farmers Union of Zimbabwe

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Indigenisation

Arda seeks partnerships, business ventures

Arda seeks partnerships, business ventures

ardaAgriculture Reporter 
The Agricultural and Rural Development Authority is seeking more business opportunities and partnerships to boost investment and agricultural production on its estates. In a statement, the authority said it was looking for 51-49 percent joint venture arrangements on its 21 estates in the country which hold 98 000 hectares of arable land while 19 000 hectares has an irrigable capacity.
Of the 21 estates, only one in Chisumbanje is operating viably.

Arda Seeds said it was also keen to establish joint ventures with individuals and companies in the production of several seed crops.
“Arda Seeds invites interested persons, companies and individuals to partner with it in a viable commercial seed business of preferably a 51-49 percent joint venture arrangement in favour of Arda Seeds. Potential partners must be adequately capitalised to not only provide working capital but also capital investment,” read part of the statement.

 

Arda needs new capital injection to replace its outdated seed processing equipment, packaging equipment and to revamp its seed quality laboratory.
It also hopes to secure planting, spraying, harvesting machinery and marketing vehicles.

In addition, Arda said it need more capital to renovate buildings, seed storage facilities, guest-houses and staff houses.
The authority also needs assistance for irrigation infrastructure development at its 28 hectare research plot and support of out-grower seed production schemes ad other social responsibility investments.

Arda Seeds produces and markets a number of seed crops including maize, potatoes, wheat, sorghum, millets, soyabeans, sunflower, cow peas and ground nuts among others.
The authority was facing viability problems owing largely to lack of fresh capital injection at its under-utilised estates.

Indigenisation demands stall Nuanetsi ethanol project

Indigenisation demands stall Nuanetsi ethanol project

via Indigenisation demands stall Nuanetsi ethanol project 21 July 2014 by Herbert Moyo

CONTROVERSIAL businessman Billy Rautenbach’s plans for a second ethanol project at the Development Trust of Zimbabwe (DTZ)-owned Nuanetsi Ranch in Masvingo Province may suffer a stillbirth due to his failure to cede 51% ownership in his Chisumbanje Ethanol plant to government in terms of the indigenisation law.

Rautenbach, who already owns the Chisumbanje Ethanol plant in Manicaland province, entered into a partnership with DTZ resulting in the formation of a company called Zimbabwe Bio-Energy in 2008 as the vehicle for the implementation of the ethanol project in Mwenezi district.

DTZ is a trust company run by the family of the late Vice-President Joshua Nkomo.

The project was initially supposed to be implemented in 2008, but failed to take off amid bickering between Zimbabwe Bio-Energy and the Masvingo provincial leadership over various issues including water rights to Manyuchi Dam and demands that Rautenbach participate in funding the construction of Tokwe-Mukosi Dam.

Over the past few weeks, Rautenbach and his DTZ partners have indicated their desire to establish the project, but have complained of being frustrated by Masvingo Provincial Affairs minister Kudakwashe Bhasikiti whom they accuse of settling displaced villagers on the Chingwizi part of the ranch which was earmarked for sugarcane production.

However, Bhasikiti dismissed the claims, saying apart from the fact that Nuanetsi Ranch is government land, Rautenbach was “a crook who still had unfinished business with the government in Chisumbanje where he has not ceded 51% ownership as required by the law”.

Presidential spokesperson George Charamba also appeared to back Bhasikiti when he told this paper last week that “Rautenbach, however, still had issues he needs to address concerning the shareholding in Chisumbanje. Nuanetsi Ranch belongs to government and ultimately government will have the final say on what happens there.”

In March this year, Energy minister Dzikamai Mavhaire said Green Fuel was awarded a licence to blend fuel on the understanding that it would comply with the Indigenisation Act that requires indigenous Zimbabweans to own at least 51% of any venture valued at $500 000 or more.

Green Fuel is a joint venture between Billy Rautenbach’s Macdom and Rating Investments and state-owned Arda (Agricultural and Rural Development Authority) at its estates in Chisumbanje, Manicaland.

According to Arda, government’s contribution to the project is $36,7 million, inclusive of land, while Green Fuel’s contribution is valued at $331,8 million.

Last month, Arda board chairperson Basil Nyabadza said Green Fuel would eventually comply with the indigenisation policy after clearing its start-up debts.

Rautenbach, who has courted American, Brazilian and British

Respect property rights first

Respect property rights first

via Editor | The Zimbabwean | Zimbabwe News. 16 June 2014

 

The Zanu (PF) government is talking loudly about how it plans to make the indigenisation policy more attractive to investors by making shareholding demands sector specific rather than adopting a one-size-fits-all approach.

It is clear that this abandonment of the hard-core stance that had become synonymous with indigenisation is meant as a desperate, last-ditch, piece-meal strategy to convince investors to start pouring money into the country to rescue the moribund economy.

However, if it is investor confidence that Mugabe and his government are looking for, they are obviously not doing enough. They seem to have forgotten that one of the main reasons why they got into trouble with both local and international investors in the first place was that they showed a stubborn disrespect for property rights. So if they genuinely want to see economic recovery they must adopt a positive and holistic way of restoring and respecting property rights. There are no short cuts.

Widespread reports of the invasion of conservancies, farms and other properties have hit the headlines once again. Army officers, politicians and selfish individuals masquerading as war veterans are once again grabbing properties willy-nilly.

What is particularly disturbing about this is that the government does not seem to have the capacity to deal with the invaders, who seem to have developed a thick skin and now refuse to listen even to their senior leaders. No investors would want to risk their shareholders’ money investing in a country so obviously full of lawlessness. They do not want to risk their properties being seized at the drop of a hat.

The government, starting with the Head of State, must urgently address the problem of property rights. They have to deal with past offenders and put in place an effective mechanism to compensate those who have lost their properties in the past.

Even if they completely ditched the indigenisation policy, investors would still shun this country if there continued to be no guarantee that property rights would be respected in the future. The trouble is – nobody believes what they say any more. If they want people to take them seriously they have to ACT.

Repeal Indigenisation Act: Robertson

Repeal Indigenisation Act: Robertson

via Repeal Indigenisation Act: Robertson – DailyNews Live 14 July 2014 by Guthrie Munyuki

HARARE - As Zimbabwe hurtles towards more economic problems, leading economist and journalist John Robertson believes President Robert Mugabe’s administration is running out of time to fix the economy.

And with the country’s debt now pegged at $9,9 billion, prospects of relief appear too distant for the scarred economy, which has stubbornly continued to stare the rugged and puffing Zanu PF government in the face.

Robertson, often disparaged by senior Zanu PF officials over his unrestrained criticism of both Mugabe and the liberation movement’s policies, this week told the Daily News that government must bin the Indigenisation and Economic Empowerment Act.

“Investors who are not indigenous are now prevented from even considering further developments because of indigenisation laws,” Robertson said.

“Indigenisation should be driven by an eagerness shown by indigenous Zimbabweans to start new businesses, not a determination to take a controlling interest in any business started by anybody else.

“All talk of indigenisation should be abandoned and the act should be repealed. Indigenisation should become a natural process, the pace of which should be set by revising company registration laws to encourage a much bigger number of Zimbabweans to identify business opportunities and follow through with determination to become the promoters of new businesses.”

The indigenisation and empowerment programme has split opinion, with pro-Zanu PF groups backing the policy while business and pro-democracy groups believe there must be rational implementation.

Among the key arguments raised by groups calling for cautious approach are that government must not apply a “one-size-fits-all” approach and should skew the shareholding thresholds in favour of foreign investors, whose direct investment is needed to kick start dying enterprises.

Zanu PF is weighing up its options following proposals by the business community and interest groups to review the indigenisation policy.

It is yet to finalise its proposed amendments, which could curry favour with foreign investors.

Robertson said the immediate task of government should be the restoration of production in the economy.

“Our major problems stem from measures that caused a sharp decline in productive capacity. We have produced less of just about everything since the land reform programme was launched,” said Robertson.

“Because we produced less, the country no longer earned the export revenues needed to service its debts. Because we produced less, we have had to import more.

“With smaller exports and bigger imports, the money has drained out of the country. We will best clear the debt by increasing exports and that requires increase in production.”

Zimbabwe’s principal debt has ballooned by nearly 40 percent from $6,1 billion last year to $9,9 billion now.

The external debt stood at $8,9 billion as at December 31, 2013, which is 69 percent of Gross Domestic Product (GDP), and the total domestic debt stood at $994m, constituting eight percent of GDP.

Zimbabwe’s outstanding public and publicly guaranteed external debt, (including Reserve Bank’s external debt), stood at $6,964 billion, representing 54 percent of GDP in nominal terms.

Of the total public and publicly-guaranteed external debt of $6,964 billion, $5,012 billion (72 percent) was public debt, while $1,356 billion (20 percent) was publicly-guaranteed debt and $596m (eight percent) was RBZ debt.

Zimbabwe owes various bilateral creditors including the Paris Club and Non-Paris Club lenders such as the African Development Bank (AfDB), the World Bank (WB), the International Monetary Fund (IMF) and the European Investment Bank (EIB), among others.

Despite having established a debt management office, pessimism persists on the back of depressed production.

“The debt management office will achieve nothing if it does not help bring about an increase in production. It cannot negotiate the debt away; we won’t be considered for debt relief until the government stops defending the policies that caused the damage to the productive sectors,” added Robertson.

“To increase production, we need investment capital, but with too little money available for medium to longer-term investment, we need to encourage investment inflows.

“Investor confidence is therefore essential, but our indigenisation laws, which deeply entrench disrespect for property rights, make Zimbabwe an unacceptable investment destination.

“With almost no investment inflows ($400 million in approved investment plans does not mean that $400 million has flowed into the country yet) hardly any jobs are being created.”

The veteran economist blamed mounting economic problems on what he perceived to be government’s poor attitude towards the IMF’s prescribed Staff Monitored Programme (SMP).

Said Robertson: “The IMF’s Staff Monitored Programme is designed to get us onto the right track to a recovery. So far, government has resented and resisted almost all their attempts to steer us towards that track.

“The SMP should be extremely beneficial, but government is unwilling to take the necessary steps.”

An SMP is an informal agreement between Zimbabwe and the IMF to monitor the implementation of the country’s economic programme.

The SMP focuses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.

Last week, the IMF said it could extend Zimbabwe’s SMP deadline for the second time as the country has missed a number of targets due to a deteriorating economy.

“…a number of quantitative targets and structural benchmarks were not met,” IMF said in a report.

“A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework.”

The Zanu PF government has been grappling with a myriad of problems, chief among them hard cash for civil servants’ salaries and critical services.

Investors continue to blow their noses on attempts to make them choose Zimbabwe as an alternative investment destination.

They remain suspicious of the Zanu PF government, whose biggest undoing has been making contradictory policy pronouncements, especially on indigenisation.

In the absence of meaningful investment and cash inflows, Zimbabwe Revenue Authority (Zimra) has stepped up its revenue collection, albeit in controversial circumstances, to shore up bare treasury coffers.

“Government’s desperation for money has prompted Zimra’s aggressive behaviour. This has already reduced the number of taxpaying companies as some have been rendered bankrupt by the confiscation of bank balances,” noted Robertson.

“The issues most in need of attention are:

  • The collateral value of land should be restored by putting farmland back into the market.
  • With a market value, the land could be used as security for bank loans and farmed more productively.
  • Zimbabwe could restore food self-sufficiency and begin to restore manufacturing capacity and a favourable Balance of Payments.
  • Job creation would improve, but to bring about rapid employment growth, the labour laws should be made much more acceptable to investors.”

All firms should cede shares: Nhema

All firms should cede shares: Nhema | The Herald

via All firms should cede shares: Nhema | The Herald March 13, 2014

THE Minister of Youth Development, Indigenisation and Economic Empowerment, Cde Francis Nhema, says all companies, particularly those in mining, are obliged to contribute to the community share ownership scheme. Addressing the Joint Command and Staff Course Number 27 at the Zimbabwe Staff College in Harare yesterday, Minister Nhema said all companies should comply with Government regulations on the community ownership schemes in line with Zim Asset.

He criticised reports of squabbles arising from the scheme in some provinces, saying Government will not go back on the programme hence the need for all companies to comply.

Cde Nhema said for Zimbabwe to meet the targets set in Zim-Asset, every citizen should contribute to the fulfilment of goals starting with food self sufficiency at household level.

“It is important that there is need to secure food security at household level first, until there are enough reserves at national level,” he said.

Zim-Asset is the economic blueprint set to drive economic and social transformation of the country.
The Joint Command and Staff Course Number 27 was attended by a total of 55 students drawn from the Zimbabwe Republic Police, Zimbabwe Defence Forces, the Air Force of Zimbabwe and SADC countries.

There have been divergent comments on the Marange-Zimunya Community Share Ownership Trust launched by President Mugabe on July 25, 2012 where all the five companies operating in the area pledged to contribute US$10 million each to the Trust.

Last week, the mining companies told Parliament that they were not aware of the Marange-Zimunya CSOT and had not made any pledges towards its implementation, with former Mines and Mining Development Minister Dr Obert Mpofu echoing their sentiments.
However, former Youth Development, Indigenisation and Empowerment Minister Cde Saviour Kasukuwere came out guns blazing accusing the mining companies of dishonesty.

“For anybody to try and suggest they were not aware of the legal provisions contained in our laws and the instruments which were gazetted is really, really deceitful,” Minister Kasukuwere — who is now in charge of the Environment, Water and Climate portfolio — said.
“In all the ceremonies that were held, all the ministries — Mines and Mining Development, Local Government and the President’s Office — were all involved in setting up these community trusts.

“For one to say they did not hear or they didn’t know about it is just displaying dishonesty of the highest order. You cannot display dishonesty to this level and the communities of Marange deserve what is due to them.

“They (the mining companies) must be responsible and show respect.”
Minister Kasukuwere said he could not have fabricated the dummy cheque that was displayed at the launch of the community trust.
“Kasukuwere does not work in a bank to come up with a dummy cheque,” he said.

“How do I know the signatures of the bank officials? Let’s be responsible and ensure that the communities are benefiting from their resources, that is the bottom line.”

Cde Kasukuwere said the US$10 million for the community share trust was suggested by the Ministry of Mines and Mining Development on the premise that the community could not be given 10 percent shares because the Zimbabwe Mining Development Company, Government’s investment arm, was already in partnership with the companies. — ZBC-Herald

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