News Update as @ 1530 hours, Tuesday 1 July 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

The Confederation of Zimbabwe Industries (CZI) has said Zimbabwe's economy needs re-engineering as a number of local companies' operating models are still based on an obsolete import substitution mode.

CZI president Charles Msipa told BH24 last week that the country was suf-fering from the effects of an historical import substitution-based economy.

Import substitution industrialisation, a trade and economic policy that advo-cates replacing foreign imports with domestic production, was adopted by the Rhodesian government.

Overtime the protectionist policy has however led to inefficiency as local manufacturing firms have had no incentive from foreign competitors to

reduce costs or improve products. “I think we do have quite a number of firms that have simply become obso-lete in terms of their processes and their products….the world is a different place now than it was 34 years ago.

“Our economy was built on an import substitution model and in many cases we did certain things in the economy because we couldn’t import and there-fore had to have local production of

some products, but in the last 34 years there are many more competitive operators in many sectors for which we simply will not be able to be become competitive.

“Even if some of the debts are expunged from the companies’ balance sheets some of these firms are in sec-tors were they are just don’t have the competitiveness," said Msipa.

Msipa suggested that for local manu-facturing firms to realise area in which they are or can be competitive, there is need for improvement in the country's infrastructure.

He also said the companies needed to access cheap funding. “When we talk about re-engineering the economy we must focus on those things we call ena-blers, or barriers to growth. When we

fix our infrastructure, water, power…..when we create an environment that create capital inflows allowing busi-nesses to borrow affordable short-term loans you will find that firms will be able to find products and services that they will be successful at.

"But right now when we have a lot of these barriers and constraints to growth it is very difficult to create the conditions for the re-engineering,” he said.

The local manufacturing sector appears to be buckling under the pressures of operating in a sub-optimal economic environment, with industrial capacity utilisation having declined to an aver-age of 39,6 percent last year.

However Msipa says the majority of firms can be revived to the extent that

'Need to re-engineer Zim economy'

Mr Msipa

2 NEWS

By Tawanda Musarurwa

AIM-listed multi-commodity resource development company African Consol-idated Resources (ACR) has extended the date for payment of the outstand-ing consideration of $7,5 million for the purchase of Falcon Gold's Dalny Mine.

The date has been moved from July 22 to July 30. The development comes as the buy-out of Dalny Mine is set to be presented to Falgold's sharehold-ers for approval at an extraordinary general meeting penciled for July 29. ACR yesterday announced that Falgold had informed them that the Listings Committee of the Zimbabwe Stock

Exchange has determined that the proposed sale by Falgold of Dalny Mine and associated infrastructure requires approval by Falgold shareholders.

"ACR announces that Falcon Gold Zimbabwe Ltd has informed the com-pany that the Listings Committee of the Zimbabwe Stock Exchange has determined that the proposed sale by Falgold of Dalny Mine and associated infrastructure requires approval by Fal-gold shareholders at an extraordinary general meeting, which is anticipated to be held on 29 July 2014.

"The company understands this to be a formality in view of the intention by

New Dawn Mining Ltd to vote in favour of the sale in respect of its 84 percent shareholding in Falgold."In order to accommodate the decision of the List-ings Committee and the Falgold EGM, Falgold has requested, and ACR has agreed, to extend the date for payment of the outstanding consideration (being a net cost of $7,5 million) from 22 July to 30 July 2014," said the Zimba-bwe-focused company in a statement.

On the 16th of last month, AFCR announced the conditional agreement to purchase Dalny Mine subject to con-ditions precedent and further on 18 June 2014 that a circular had been sent to shareholders giving notice of a gen-eral meeting to be held on 4 July 2014 in order to request approval to allow directors to allot sufficient shares with a disapplication of statutory pre-emp-tion rights to secure the funding nec-essary to acquire the mine and to bring the company's Pickstone Peerless Gold Project in Zimbabwe to fast-tracked production. •

ACR extends Dalny payment date

they can access affordable capital and issues causing the present financial distress are set right sustainably. “The broad majority of firms are in financial

distress, some have accumulated debt because of issues to do with manage-ment mistakes or corporate govern-ance. There is need for policy initiatives

to address these issues and these com-panies can be viable if historical debts are addressed," he said. •

By Rumbidzayi Zinyuke

The Reserve Bank of Zimbabwe (Debt Assumption) Bill has been submit-ted to Parliament for review as the move to re-capitalise the central bank and restore its core functions gathers momentum.

The Bill, which was announced last month, will ensure that Government settles liabilities incurred by the bank before December 2008.

Parliamentary Portfolio Committee on

Finance and Economic Development chairperson David Chapfika yesterday said the Bill had been received by Par-liament and would be sent to the com-mittee for review soon.

“Your Bill is before us, we have received it and I am sure it will be referred to us by Parliament soon. l am glad to note that you have reduced the debt to be assumed by Government by $238 mil-lion,” he said.

In April, the committee argued that the figures presented by the RBZ had

been inflated and asked the ministry to verify figures so that they deal with facts instead of assumptions in coming up with the amount owed to different corporate and individuals.

“Initially when we got the draft it was $1,350 billion and now it is $1,122 billion. We are happy that the issue of figures that were overstated has been addressed,” he said.

He, however, said there were still some anomalies in the figures which the committee would look into thoroughly

before passing. Giving oral evidence to the same committee, RBZ governor John Mangudya said the passing of the Bill would kick-start the revival process.

“The re-capitalisation of the reserve bank depends on the passing on of the bank’s Debt Assumption Bill by Parlia-ment and senate. What it will basically do is to clear the bank’s balance sheet so that we start on a clean slate,” he said.

He said although the Bill was subject to validation and verification by Cabinet, Government was capable of paying the full amount.

Parliamentarians had raised concern that Government might not be able to settle the debt once the Bill was approved.

“In terms of Government’s ability to pay, we are confident that they will be able to pay. All the Treasury Bills that the Government has so far issued have all been fully paid,” he said.

He noted that Government had paid in full TBs worth $150 million which had matured last week. •

3 NEWS

Cabinet to review RBZ Debt Assumption Bill

BH24

By Lynn Murahwa

ZB Financial Holdings says it is looking for looking for “third party” investors for its banking arm in a bid to meet the Reserve Bank of Zimbabwe's compre-

hensive re-capitalisation requirements.

All commercial banks are supposed to be capitalised to a minimum of $100 million by 2020, with the re-capital-isation plan submission to the central

bank having lapsed yesterday. Last week, ZBFH group chief executive Ron Mutandagayi said they had since submitted their re-capitalisation plans and it would involve a combination of trading up to the required levels and engaging investors.

“As far as the requirements for re-capi-talisation at they stand we do meet the minimum capital adequacy levels but for 31 December 2020 we are work-ing on a program that is a combination of trading up to those levels as well as looking for third party investors” said Mutandagayi.

Although admitting that liquidity chal-lenges in the economy have been a sig-nificant challenge during the first half of the year 2014, Mutandagayi said the group will continue lending cautiously

various sectors in an effort to improve the economy.

“We continue to lend to sectors that are doing well and we obviously have some sectors that are not doing so well that will require to be managed with a bit of care. We are an entirely Zimbabwean bank and we need to ensure that the Zimbabwean economy is funded ade-quately for purposes of development of the country” he said.

Giving a trading update for the first half, chairman Bothwell Nyajeka said the company's performnce so far has been below target, but they expect improved performance in the second half.

"The Group’s balance sheet has increased marginally by 2 percent as at 31 May 2014 from the levels achieved as at 31 December 2013.

Trading revenue increased by 3 per-cent. However, a depressed outturn on the equity portfolio has had a signifi-cant negative impact on overall outturn to date with the result that the Group is operating at slightly below break-even level after accounting for the unrealised loss on investments. Costs have been managed at 2 percent below the 2013 levels," said Nyajeka. •

5 NEWS

ZBFH seek investors to meet banking arm re-capitalisation

BH24

By Lynn Murahwa

The strict regulations imposed by the World Health Organisation (WHO) against the tobacco industry have caused an outcry for fairness and con-sideration by the international tobacco community.

A meeting of the International Tobacco Growers’ Association (ITGA) this morn-ing saw tobacco industry players band-ing together to advocate for fair regula-tions towards their crop.

ITGA president Francois van der Merwe said it is unfair that the tobacco com-munities have not been involved in the forming of the regulations that will dic-tate their industry.

”It is a pity that we are discussing here what’s going to happen at the Confer-ence of the Parties (COP) later this year and we have to speculate, we do not know what’s going on yet the guide-lines are going to be about growers.

“They want to regulate growers out of tobacco and we say no, that’s not going

to happen and if you do make such pro-posals you need to consult with us and involve us in the discussions and policy development,” said van der Merwe.

He said WHO should make an effort to engage the industry that they are will-ing to regulate as they will affect the livelihood of the people.

“The message to the World Health Organisation is if you want to regulate the sector you better start talking to the sector because we will not allow and stand back to have you make deci-sions from Geneva which will impact

on farmers in rural areas who provide a livelihood for their growers.”

Also speaking at the event, permanent secretary in the Ministry of Agriculture Mechanisation and Irrigation Develop-ment Ringson Chitsiko said Zimbabwe was significantly dependent on the tobacco sector.

"The economic and social importance of tobacco to Zimbabwe, like in Malawi, is immense in the form of engaging over 100 000 farmers each with dependent family members of 10, employing over 300 000 workers directly, generating

over $650 million in green leaf sales, creating employment for another 1,5 million indirectly and value addition of close to $1,2 billion to key export mar-kets," he said.

Last year, Zimbabwe's production increased from 144,5 to 167 million kilogrammes, earning $612 million in grower earnings and $1 billion in export earnings.

The crop accounted for 11 percent of the gross domestic product (GDP), constituting 61 percent of all agricul-tural exports. •

7 AGRICULTURE

Tobacco growers query 'unfair' regulations

AdM-DI156506-

BH24

9 NEWS

Telecash transactions top $15 millionBH24 Reporter

Telecel Zimbabwe’s mobile money transfer system, Telecash, has handled $15 million since its inception early this year as the company seeks to increase its visibility in the mobile money space.

The local mobile money space has been heating up largely because of its huge revenue potential and the major role it plays in facilitating infor-mal trade. Telecel was the last to enter the industry after Econet’s Ecocash and NetOne’s Onewallet.

Giving oral evidence to the Parliamen-tary Portfolio Committee on Communi-cation, Technology, Postal and Courier Services, Telecel general manager Angeline Vere said the service had grown considerably and company was hoping to double the service’s sub-scriber base by end of the year.

“More than $15 million has been moved through Telecash since its launch. Currently we have 600 000 Telecash subscribers and we hope to reach 1,2 million by end of the year,” she said. She said the agent base had also grown to 3600 and they were also working on expanding it.

The issue of agents has also been a contentious issue in the industry and this resulted in Econet baring its agents from associating with Telecash. The issue was resolved when the Reserve bank of Zimbabwe resolved issued a directive which basically said that mobile money agents can conduct ser-vices for multiple mobile financial ser-vice providers.

Despite the mobile money success in the country, the service remains expensive for most users. Vere said

the service became expensive due to the levies and taxes imposed by gov-ernment.

“We respected the Government initi-ative to introduce the 5 cents levy all mobile money transactions but that charge is passed on to the consumer because more than 60 percent of what the mobile network operator makes through mobile money services goes to the agent. The margins are very thin so the 5 cents invariably affects the end user.

“If you add the 5 cents and the Value Added Tax, the service becomes expensive for the consumer and they decide not to use it,” she said.

She added that the reason most peo-ple are unbanked is that they cannot afford the high bank charges so the charges being passed to mobile money consumers will invariably make it unaf-fordable.

“We would like to urge government to remove VAT on the service and remain with the 5 cents levy to make things cheaper and easier for all the parties involved,” she said. •

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BH24

The equities market continuing on a downward trend as macro-economic fundamentals remain weak.

Eight counters trading in the negative, while only three traded positively today.

This led the industrial index to slip 0.07 points to close at 186.49 points.

Zimplow recorded the biggest loser after dropping a hefty 7.50 cents to close trade at 5 cents whilst Innscor and Old Mutual each dropped 2 cents

to trade at 77 cents and 260 cents respectively. Ok Zimbabwe was 0.50 cents lower to close at 17.50 cents, Fidelity Life lost 0.20 cents to settle at 8.50 cents and Edgars shed 0.10 cents to 12.20 cents.

On the upside; Natfoods added 5 cents to close at 215 cents while Delta moved up a cent to close at 130 cents and ZPI increased 0.04 cents to settle at 0.89 cents.

The mining index also retreated a fur-ther 3.29 points driven to close at 58.03 points driven by losses in Hwange. The counter was 2.70 cents lower at 4.80 cents. Bindura , Falgold and Riozim maintained previous trading levels.

— BH24 Reporter •

11 ZSE REVIEW

Equities remain depressed on weak economic fundamentals

Zimbabwe's current economic slump (if we can really call it that) is simply the result of a partially achieved eco-nomic transition from the old order.

Today we carry a story in which Con-federation of Zimbabwe Industries president Charles Msipa said a num-ber of local manufacturing firms can no longer compete in the present cut-throat business environment.

This, he says, is because these firms were set up under an import substitu-tion-type economy.

Following the Rhodesian government's Unilateral Declaration of Independ-ence in 1965 and the subsequent imposition of economic sanction by the United Nations Security Council the same year, internal self-sufficiency was the principle that featured in Rho-desian policy-making which resulted in, among other things, the policy of import substitution.

In the contemporary era economies are fundamentally based on outward-look-ing development policies that prioritise trade and investment attraction.

Zimbabwe has since promulgated numerous policies, including the Indus-

trial Development Policy, the National Trade Policy and the investment policy.

It is therefore critical that the Govern-ment further enhances the effective implementation of these policies.

For therein lies our solution: that is, in effective implementation.

The Industrial Development Policy, for instance, has a special focus on the set-ting up of industrials clusters.

The local manufacturing can become stronger to the extent that it harnesses and optimises the benefits of industrial clusters through stronger forward and backward linkages.

This will also facilitate export diversifi-cation.

A Local Export Manufacturing Capacity Survey 2013 that was launched earlier this year by ZimTrade shows that the country has not yet industrialised to the point of producing a wide range of finished goods

The survey showed that only 40 per-cent of manufacturing firms currently operating in the country are exporting their products.

But the issue goes back again to improving efficiencies in the local man-ufacturing sector.

Because the main challenges at the moment have to do with efficiency, cost competitiveness, and policy con-sistency among other factors there is a need, going forward, for the Govern-ment to instigate a strategic response

on these matters.

Such a response should typically include identifying where the country’s manufacturing strengths lie. To this extent, investment incentives should be structured accordingly to drive the country towards exploiting its competi-tive advantages.

The effective implementation of an industrial development policy will also mean corresponding effectiveness in trade policy insofar as industrial and trade policies always - or at least ide-ally - should go hand-in-hand.

When the industrial begins to operate at full capacity and with high efficien-cies, and firms have identified their strengths, trade growth is but a natural consequence. •

12 BH24 COMMENT

WANTED: Outward-looking development policies

BH24

Anglo American’s platinum unit, Amplats, is going ahead with its announced plans of selling off its strike-hurt mines in South Africa, as part of plans to divest under-perform-ing assets valued at as much as $4 billion.

The company, Britain's The Sunday Times reports, has appointed Fir-stRand Ltd. (FSR)’s Rand Merchant Bank to auction some of its Rusten-burg-based mines, which have been in operation since the 1950s.

In an April interview, chief executive officer Mark Cutifani said he didn’t think those mines were key for the company.

His statement took on a whole new meaning after Amplats reported it had lost output worth about $1.1bn during the five-month strike over pay at its mines, the same ones that last year accounted for over 40% of the company’s total platinum production.

Other assets up for sale, the Sunday Times says, include copper mines in Chile and nickel holdings in Brazil.

Sibanye Gold (NYSE:SBGL) —South

Africa’s top bullion producer— has been repeatedly hinted as the most likely buyer for Anglo's mines in the platinum belt.

Cutifani, who became CEO in April 2013, said last year he considered

performance at the mining group to have been "unacceptably poor" and set a goal of improving Anglo's return on capital to at least 15% by 2016 from about 8% in June.

South Africa, Africa’s largest econ-

omy, holds about 80% of the world's known platinum reserves, accounting for about 70% of global output, used for jewellery, catalytic converters in vehicles, and as a key source of hard currency for the country, among other applications. ― Mining.com •

14 REGIONAL NEWS

Anglo American goes ahead and puts platinum mines, other assets up for sale

enjoy the CAIO ride!

BH24

16 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

1 July 2014

Energy

(Megawatts)

Hwange 518 MW

Kariba 750 MW

Harare 38 MW

Munyati 32 MW

Bulawayo 20 MW

Imports -50 MW

Total 1360 MW

16 July - Mobile Markets & Telecoms Forum Conference & Exhibition, Place: Holiday Inn (Harare), Time: 8:00am

23 -25 July - Mine Entra, Place: Zimbabwe International Exhibition Centre, Bulawayo

24 July - OK Zimbabwe Thirteenth Annual General Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time: 15:00 hours.

THE BH24 DIARY

BH24

18 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

ZPI 4.71% 0.89 ZIMPLOW -60.00% 5.00

NATFOODS 2.38% 215.00 HWANGE -36.00% 4.80

DELTA 0.78% 130.00 NICOZDIAMOND -4.00% 1.20

OK ZIM -2.78% 17.50

INNSCOR -2.53% 77.00

FIDELITY -2.30% 8.50

EDGARS -0.81% 12.20

OLD MUTUAL -0.76% 260.00

IndicesINDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 186.56 186.49 -0.07 POINTS -0.04%

MINING 61.32 58.03 -3.29 POINTS -5.37%

Stocks Exchange

Previous

BH24

20 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,352.45 +6.43 +0.27% 27June

Kenya 4,885.09 +51.07 +1.06% 30June

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 42,482.49 +714.93 +1.71% 30June

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 186.56 -0.52 -0.28% 30June

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day —"SucceSS equalS goalS... all elSe iS commentary." - Brian tracy

Globalshareholder.com

BH24

Gold futures rallied to a 14-week high on Tuesday, as a broadly weaker U.S. dollar boosted the appeal of the pre-cious metal. Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

On the Comex division of the New York Mercantile Exchange, gold for August delivery rose to a session high of $1,333.10 a troy ounce, the most since March 24, before trimming gains to last trade at $1,325.70 during European morning hours, up 0.28%, or $3.70.

Gold ended Monday’s session up 0.15%, or $2.00, to settle at $1,322.00. Prices were likely to find support at $1,305.40, the low from June 25 and resistance at $1,339.10, the high from March 21.

Also on the Comex, silver for Septem-ber delivery tacked on 0.18%, or 3.7 cents, to trade at $21.09 a troy ounce.

The dollar has come under pressure since data last week showing a 2.9% economic contraction in the first quar-

ter bolstered expectations that the Fed-eral Reserve will keep rates on hold for an extended period.

Speaking Monday, San Francisco Fed President John Williams underlined this view, saying the bank will probably need to hold interest rates near zero for at least another year, despite signs that the economy is improving.

Investors were turning their attention to the U.S. nonfarm payrolls report for

June, due to be released one day early on Thursday, for further indications on the strength of the labor market.

Analysts expect the U.S. economy to have added 210,000 jobs this month while the jobless rate is seen steady at 6.3%.

Elsewhere in metals trading, copper for September delivery inched up 0.06%, or 0.2 cents, to trade at $3.205 a pound as traders digested data on

China’s manufacturing sector. Gov-ernment data released earlier showed that China’s official manufacturing pur-chasing managers’ index rose to a six-month high of 51.0 in June, in line with expectations and up from 50.8 in May.

Meanwhile, China’s final HSBC Pur-chasing Managers Index came in at 50.7, weaker than a preliminary read-ing of 50.8 but higher than May's 49.4 figure. ― Investing.com •

22 INTERNATIONAL NEWS

Gold rallies to 14-week high on softer dollar

An opportunity has arisen to enable HelpAge Zimbabwe to facilitate the implementation of the Rural WASH project, to improve water, sanitation and hygiene in Bubi District

1. Carry out an assessment of the WASH related health risks and needs within - General Bookkeeping- Cash book and petty cash management the targeted population and make recommendations for actions which are - Order and control office stationery consistent with agreed guidelines and protocols. - Liaise with project staff in procurement and maintenance of project stocks

2. In conjunction with the local authority and relevant government departments records make recommendations regarding HelpAge Zimbabwe response to unmet - Preparation of Donor Financial reports needs. - Bank reconciliations

3. Facilitate the implementation of SafPHHE in conjunction with the WASH - Filing all office documentsofficer and/or other stakeholders. - Financial and programmes reports, vouchers, program and office meetings

4. Involve affected populations in assessment of the situation and in planning minutes activities and the design of water and sanitation facilities. - Monitoring and securing adherence to organization and donor administrative

5. Identification and training of ward based SafPHHE facilitators and health club processes facilitators. - General Office Administration

6. Write regular reports adhering to HelpAge Zimbabwe and donor reporting

formats as required.

- Degree in Accounting or equivalency and/or accounting

- Computer knowledge 1. Degree in Environmental Science or other relevant qualification

- Knowledge in Pastel/accounting package 2. Knowledge of public health and one or more other relevant areas (e.g. health

- Skills to manage own work and meet deadlines promotion, community development, education, community water supply).

- Clean Class 4 driver's licence 3. The post holder should have at least two years` practical experience in

appropriate community health programmes. 4. Experience and understanding of community mobilisation in relation to water

Send CV and an application letter to info@helpage.co.zwand sanitation activities. Deadline for application 30th June, 2014.5. Sensitivity to the needs and priorities of disadvantaged populations.

6. Demonstrated experience of integrating gender and diversity issues into public health promotion.

7. Good oral and written reporting skills. 8. Good communication skills and ability to work well in a team. 9. Ability to work well under pressure and in response to changing needs. 10. Ability to travel at short notice and to work under difficult circumstances 11. Good written and spoken English and Ndebele are essential.

2. Vacancy: Administration Assistant

Station: Bubi District

Key Result Areas Job Description

Qualifications and Person Specification

SKILLS AND COMPETENCIES

To Apply

- 2 years` experience in office administration

1. Vacancy: Participatory Health and Hygiene Education Officer

TLM-DI

159207

-T26

Two vacancies have arisen in HelpAge Zimbabwe.

BH24

By Limbikani Kabweza

Econet is unhappy about being excluded by Zesa from selling pre-paid electricity tokens via the EcoCash mobile money platform. It doesn’t make sense to them how the Govern-ment won’t let them provide conveni-ence the market needs.

The issue has come up in more than

half of the conversations I’ve had with Econet executives these past three or so months.

It’s unfair, they say. The Government and Zesa, must realise how they stand to get more revenue by letting more people pay easily.

And while Zesa, Econet and the Gov-ernment (through VAT on transactions

& Income tax) all make more money, the customer would benefit a lot too.

We actually agree with Econet on this. In fact we've been one of the most vocal advocates of reason and fairness on the issue. It is a big problem when a company that has monopolistic control over a resource decides to play exclu-sion games. The problem is that Econet

itself plays these exclusion game very well too.

They’re considered masters at it. The company has generally had the atti-tude that they don’t owe anyone any explanation. So much to the extent that, even as a publicly listed company, they now bar journalists from attend-ing the announcement of their results.

And if, at Econet PR events designed to promote new products, the journalists attempt to ask about these exclusion games they are told to stick to the sub-ject of the day.

Econet has played the exclusion games with third party service providers look-ing to reach Econet customers via SMS or USSD.

Just last year Econet silently switched off all bulk SMS except that going through one aggregator they had selected. If you were using bulk SMS to communicate with clients, your SMS just suddenly wasn’t going through anymore.

24 ANALYSIS

Man in the mirror: What Econet can learn from being excluded by Zesa

25 ANALYSIS

And they owed no one an explana-tion. I say that because if Econet just laid bare what the process is and how service providers can access the net-work then it would be better. Anyone that has tried to do VAS will also tell the same story of exclusion and lack of clarity of the process.

You could say Econet is not strictly a monopoly, and you would be right. But surely, if anyone is excluded from more than 60 percent of the mobile subscribers in a country, it’s as bad as a monopoly.

With that size of market share, their policy stance by default becomes that of the industry. Even though its not Econet’s fault or their responsibility to create an organised VAS ecosystem, they can do a lot more to improve it.

Their inaction promotes the situation we’re in now where Econet itself is free to send football SMS spam while seemingly blocking legit VAS from hap-pening.

The same way they want Zesa to open up the electronic tokens so any company is free to integrate (and the market gets to choose which service they prefer), is the same way Econet

should liberate VAS so any third party is free to get in and the market chooses which ideas are great and which ones ultimately succeed.

Right now Econet just has a terrible reputation of blocking and stealing VAS ideas. The reputation may very well not be based on facts, but their “we don’t owe the market any information” stance breeds the theories.

Econet has also played the exclusion games with the banks. First, the banks were told outright that they could only offer mobile money through Eco-Cash and not via the network directly through a “neutral” switch.

An essentially unfair offer as it doesn’t make sense for the bank to have a mobile wallet that depends on the competition’s mobile wallet.

With increased pressure, Econet capit-ulated but offered another poisoned deal; the banks were free to integrate at network level but they had to pay more for any USSD traffic that com-petes directly with EcoCash.

It’s like Zesa saying to Econet “here, you can sell electricity tokens via Eco-Cash, but you pay 6 times more than

NetOne does.” The public’s opinion of situation between Econet and the banks has favoured Econet. This is mostly because banks themselves have nasty and real financial exclusion issues.

But if we’re okay with Econet excluding the banks, maybe it's ok for Econet to exclude third party VAS providers too? And maybe it's ok for Econet itself to be excluded? The point is that exclu-sion is unfair and it hurts everyone; the competition (ok), the customers (bad)

and even the company that’s doing the exclusion (bad too).

Look no further than what TelOne has had to go through over the decades because of being afforded the power to exclude. Hell, look at ZESA itself.

The game of exclusion being played on them is an opportunity for Econet to look in the mirror and acknowledge what they have become. ― TechZim •