A digital copy of the Business News 24 (09 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.
News Update as @ 1530 hours,Wednesday 9 July 2014 Feedback: [email protected]Email: [email protected]By Tawanda Musarurwa •... as Zimbabwe's aggregate banking capitalisation levels dip Zimbabwe's banking sector has wit- nessed a 2,5 percent and 3,6 percent decline in net capital and core capital levels, respectively as at the end of the first quarter, the Reserve Bank of Zimbabwe has said. In its Banking Sector Report for Quar- ter ended 31 March 2014, the mon- etary authority noted that continued losses by the six non-compliant banks had resulted in the dilution of the core capital during the period under review (Capital Bank has however since relin- quished its license). "On aggregate, as at 31 March 2014 the banking sector was capitalised to the tune of $909 million and $755 million in terms of net capital and core capital respectively, compared to $933 million and $784 million as at 31 December 2013. "Core Capital dim- inution is largely attributed to losses incurred by the non compliant banks during the quarter under review," said RBZ. However one commercial bank has surpassed the $100 million minimum capital requirement that will become effective in 2020 said the RBZ. With- out revealing the name of the biddable financial institution, the central bank however noted that the compliance levels had remained the same as at the end of the year. "One banking institution has already surpassed the $100 million minimum capital requirement which is effective 2020. As at 31 March 2014, a total of 14 out of 20 operating banking insti- tutions were in compliance with the prescribed minimum capital require- ments. "The compliance levels are the same as at 31 December 2013. Non-com- pliant banks are taking various meas- ures to regularise their capital posi- tions which are at different stages of implementation," reads the report. The report seems to be pointing out that the local financial services sector is dominated by very few banks as report's figures show that five banks hold over 60 percent of total depos- its, and one bank holding just under a third of total deposits of $4,82 billion. "As at 31 March 2014, five (5) banking institutions held cumulative deposits amounting to $3,02 billion, represent- ing 61,72 percent of total banking sec- tor. "One banking institution contin- ued to account for the largest share of total deposits, with deposits amount- ing to $1,46 billion and representing 29,88 percent of total banking sector deposits," said RBZ in the report. In a statement on the conclusion of the 2014 Article IV Consultation with Zimbabwe last month, the Interna- One bank exceeds $100 million minimum capital requirement
•... as Zimbabwe's aggregate banking capitalisation levels dip
Zimbabwe's banking sector has wit-nessed a 2,5 percent and 3,6 percent decline in net capital and core capital levels, respectively as at the end of the first quarter, the Reserve Bank of Zimbabwe has said.
In its Banking Sector Report for Quar-ter ended 31 March 2014, the mon-etary authority noted that continued losses by the six non-compliant banks had resulted in the dilution of the core capital during the period under review (Capital Bank has however since relin-quished its license).
"On aggregate, as at 31 March 2014 the banking sector was capitalised to the tune of $909 million and $755
million in terms of net capital and core capital respectively, compared to $933 million and $784 million as at 31 December 2013. "Core Capital dim-inution is largely attributed to losses incurred by the non compliant banks during the quarter under review," said RBZ.
However one commercial bank has
surpassed the $100 million minimum capital requirement that will become effective in 2020 said the RBZ. With-out revealing the name of the biddable financial institution, the central bank however noted that the compliance levels had remained the same as at the end of the year.
"One banking institution has already surpassed the $100 million minimum capital requirement which is effective 2020. As at 31 March 2014, a total of 14 out of 20 operating banking insti-tutions were in compliance with the prescribed minimum capital require-ments.
"The compliance levels are the same as at 31 December 2013. Non-com-pliant banks are taking various meas-ures to regularise their capital posi-tions which are at different stages of
implementation," reads the report. The report seems to be pointing out that the local financial services sector is dominated by very few banks as report's figures show that five banks hold over 60 percent of total depos-its, and one bank holding just under a third of total deposits of $4,82 billion.
"As at 31 March 2014, five (5) banking institutions held cumulative deposits amounting to $3,02 billion, represent-ing 61,72 percent of total banking sec-tor. "One banking institution contin-ued to account for the largest share of total deposits, with deposits amount-ing to $1,46 billion and representing 29,88 percent of total banking sector deposits," said RBZ in the report.
In a statement on the conclusion of the 2014 Article IV Consultation with Zimbabwe last month, the Interna-
One bank exceeds $100 million minimum capital requirement
By Rumbidzayi Zinyuke
Zimbabwe’s chances of a successor plan to the International Monetary Fund’s Staff Monitored Programme will be determined by the successful con-clusion of the third review, the global lender has said.
An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic programmes. The programme was approved in June 2013 for the period covering the period April–December 2013 but the country received an extension to June 2014
due to delays in implementation due to the harmonized elections held last year.The IMF completed the first and second review under the SPM last month and a third review was completed at the end of June.
In statement on IMF Management's completion of Zimbabwe's first and second reviews of Staff-Monitored Pro-gramme, the financier expressed satis-faction with the progress so far made by Zimbabwe.
“The Zimbabwean authorities’ per-formance under the SMP has been broadly satisfactory and the authori-ties have taken corrective measures to ensure a track record of policy imple-mentation going forward.
“A successful conclusion of the third review could pave the way to a suc-cessor SMP, which the authorities have indicated they may request, to build
on their achievements and support a stronger policy framework,” the IMF said.
Last week, Finance Minister Patrick Chi-namasa said Government had made progress in making policy reviews in restoring the financial services sector and the mining policy reviews.
In terms of the SMP, Government has to address the 2014 fiscal gap, improve the quality of public expendi-tures, enhance financial sector stability, and move forward delayed structural reform measures.
“IMF staff will remain engaged with the authorities to monitor progress in the implementation of the authorities’ eco-nomic programme, and will continue providing targeted technical assistance to support Zimbabwe’s capacity-build-ing efforts and its adjustment and reform program,” the fund said. •
2 NEWS
SMP successor dependent on successful third review: IMF
tional Monetary Fund (IMF) recom-mended "continued vigilance in mon-itoring weak banks and a proactive approach to ensure an orderly resolu-tion of insolvent non-systemic banks."
According to the RBZ, the banking sector is 'stable' despite the existing challenges of transitory deposits, lim-ited inter-bank trading, general mar-ket illiquidity and limited lender of last
resort function. Notably, for the first quarter the banking sector achieved an aggregate net profit of $20,4 mil-lion up from $0,47 million during the parallel period last year, figures show.
Last week, Finance Minister Patrick Chinamasa said although five banks were "ill" this would not have a con-tagion effect on the broader banking sector as these were small banks. •
BH24
4 NEWS
By Rumbidzayi Zinyuke
Despite accounting for the bulk of domestic and export earning as well as being a major source of employ-ment, Small to Medium Enterprises remain the least funded sector in the country.
SMEs have traditionally failed to access funding from banks due to lack of collateral but microfinance institutions, which are the next likely source of funds, are also turning their back on them preferring to give loans to individuals for personal consump-tion.
According to a quarterly report on the microfinance industry by the central bank, only 28 percent of loans dis-bursed in the first quarter of 2014 funded the productive sector. MFIs disbursed a total of $170 million in the review period but only $48,9 mil-lion went to SMEs while $121 million was for consumption.
“The lending activities of the major-ity of the operating MFIs are skewed towards salary based loans for con-sumption purposes at the expense of support to micro, small and medium
enterprises,” RBZ said. The number of registered MFIs has gone up to 153 with the majority concentrated in Harare.
The RBZ said the sector has however been largely dominated by ten insti-tutions which control 83,7 percent of the market share in terms of loans. The largest microfinance institution had a total loan book of $54,01 mil-lion as at 31 March 2014. MFIs sub-mitting returns went down from 106 in December last year to 101 in the
review period.
“Delinquency levels in the microfi-nance sector have remained high as reflected by the level of Portfolio at Risk (PaR > 30) ratio of 27,14 per-cent as at 31 March 2014. The high PaR ratio is largely attributed to mul-tiple borrowings on the background of high interest rates,” the report said.
The sector’s total assets went up to $193,87 million from $185,73 million during the same period last year. •
SMEs still not getting enough funding
BH24
6 AGRICULTURE
By Elita Chikwati
• Relief for farmers as minimum price reaches 60 cents/kg
Cotton farmers who had been with-holding their crop in protest of low prices have started selling as buyers continue to increase prices.
Most buyers are now offering a mini-mum price of 60 cents per kilogramme up from between 30 and 35 cents dur-ing the early days of the selling season.
Farmers said they hope the prices will continue to firm and surpass last sea-son’s highest price of 66 cents per kg.
Bindura farmer Batsirayi Musanhi said he had been withholding his crop in anticipation of high prices and has since started delivering to the collection
points. “We have been offered sixty cents and we have started delivering the cotton. We hope buyers could con-tinue to increase prices so that we will be able to settle our debts and remain with a profit,” he said.
Zimbabwe Commercial Farmers Union president Wonder Chabikwa said the move taken by buyers to increase prices was good as it will enable grow-ers to break even. He however com-plained that there were still some cases where farmers were getting low prices.
He said the cost of production for cotton was 52 cents per kg. “Farmers with the capacity to negotiate for good prices are getting reasonable offerings for their crop. Some farmers cannot nego-tiate with buyers and will therefore get low prices,” he said. Chabikwa said the
situation could have been better for all farmers if representative organisations had been allowed to negotiate prices on behalf of their members.
“This season is now gone and farmers have to deal with buyers as individuals. The Competition and Tariff Commission prohibited collective bargaining of pro-duce prices between ginners and farm-
ers unions.
“The cotton sector never used to have problems when we had the Cotton Marketing Board. CMB would work the cost of production, put a mark up and together with farmers and the Minister of Agriculture would come up with via-ble prices,” he said.
Presidency Council chairperson Gari-kayi Msika encouraged buyers to offer viable prices so that they get the crop they financed. “We do not promote side marketing. Buyers should also offer high prices so that they retain their sponsored crop,” he said.
The cotton sector has been dogged by the issue of low price which has forced many growers to switch to tobacco. •
Cotton buyers increase prices
BH24
8 MINING
BH24 Reporter
Freda Rebecca gold mine's gold sales for the year ended March 31, 2014 reached 58 704 ounces, declining 10 percent from the prior year.
This was attributable to "production set-backs" during the period. Regional mining conglomerate Mwana Africa CEO Kalaa Mpinga said the issues had been resolved.
"The Freda Rebecca gold mine suffered some production set-backs in the past financial year – temporarily lower min-ing grades and production interruptions with the failure of a leach tank. The problems had been resolved by the end of the financial year. We are now in a position to evaluate the viability of adding gold production from the repro-cessing of old residues."
In Zimbabwe, Mwana Africa has inter-ests in the Freda Rebecca gold mine and the Trojan and Shangani nickel mines. In a statement accompanying the results, Mpinga said the group's "principal success" during the period came with the resumption of sales of nickel in concentrates by BNC’s Tro-jan nickel mine in terms of an off-take agreement with Glencore.
BNC production resumed profitably with nickel sales of 7129 tonnes for the year. "Our principal success came with the resumption of sales of nickel in concentrates by BNC’s Trojan nickel mine in terms of an off-take agreement with Glencore. The significant cash-flow improvement that stemmed from higher nickel prices was complemented by solid production outcomes following
the shift to mining the ore body’s high-er-grade massives.
"Nickel prices have improved in response to Indonesia’s decision to restrict exports of nickel in ore, and while I am certain that the price will be volatile in the near term, we are expecting it to have strengthened by 2017.
"At the start of the past financial year we were contemplating having to ask shareholders for additional funding, but we took an early decision to change direction. The improved cash flow from BNC enabled us to reverse $28m of the previous year’s $43,7m BNC assets impairment. Operationally, we undertook a fundamental restructuring to cut corporate costs," he said. With the resumption of nickel shipments,
group revenue increased 30,5 percent to $142,5 million from the $109,2 mil-lion recorded in the prior comparable period.
EBITDA rose 40,4 percent to $25 mil-lion from last year's recorded figure of $17,8 million. As a result of the improved revenue inflows, Mwana's attributable group net profit for the profit rose to $36,6 million, compared to net loss of $28,6 million in the prior year.
“Despite some temporary setbacks at the beginning of the year, Mwana has made substantial progress in the past financial year – progress that has con-tinued since the year’s end – and that has resulted in a significant strength-ening of the Company’s financial struc-ture," said Mpinga. •
Mwana Africa profits rebound
AdM-DI156506-
BH24
The equities market has extended yesterday's gains inching up 0.50 per-cent as a number of heavily capitalised counters traded positively.
Gainers outnumbered losers 10 to three in today's trades as the industrial index pushed up 0.94 points to close at 188.80 points. Giant telecoms Econet added 1.2 cents to close at 73.2 cents,
while Seedco gained 1.01 cents to trade at 72.01 cents.
OK Zimbabwe went up by a cent to close at 18 cents.
Insurer Old Mutual picked 0.7 cents to settle at 256 cents whilst Fidelity Life, Hunyani and NMB gained 0.5 cents each to trade at 9.5 cents, 2.5
cents and 5.5 cents, respectively. n the downside, First Mutual dipped 1.7 cents to trade at 4 cents, while CFI went down 0.06 cents to close at 2.25 cents. ZPI shed 0.05 cents to close at 0.9 cents.
Activity on the bourse was slightly improved as 59 counters were involved in trades and turnover was higher at $2,9 million from yesterday's $2,2 mil-lion. Foreign purchases amounted to $2,1 million as OK Zimbabwe was the favoured stock with a value of $1,8 mil-lion bought on another special bargain.
The mining index was flat at 55.33 points as Bindura, Falgold, Hwange and Riozim all maintained previous trading levels. ZSE's market capitali-sation stands at $4,9 billion. — BH24 Reporter •
10 ZSE REVIEW
Equities advance gains
SPECIALISTS IN DRIVESHAFTS AND PROPSHAFTS, STEERING RACKS, BALL JOINTS, DRAGLINKS, TIE ROD ENDS, CV JOINTS, TRANSMISSIONS, UNIVERSAL JOINTS, FLANGES, BEARINGS,
BUSHES, YOKES, GENERAL ENGINEERING, BELL SPARES, AIR BRAKES AND PNUEMATICS, SUPPLY AND SERVICE EXCHANGE FOR COMPLETE AXLES, ENGINES AND GEARBOXES.
Zimbabwean doctors have certainly broken new ground! A team of 50 worked on the eight-hour delicate pro-cedure to successfully perform the first ever major surgery on conjoined twins at Harare Children’s hospital last week.
The children’s parents and, undeniably, the whole nation is ecstatic that the pro-cedure went well. Zimbabwe has had five documented cases of conjoined twins since independence and only one was referred outside the country, while in two instances the babies died before surgery. So we are justified for being happy about this heroic feat.
We suddenly feel very confident that our health sector is on a mend. Maybe this is a revolution for the health sector as a whole.
After a decade of brain drain, the health sector has been hounded by problems that include shortage of medication, lack of necessary equipment and little remuneration for doctors and nurses who even resorted to strikes to be heard.
People would die in a queue waiting for
attention or trying to find the required medication. If you were too poor to afford private hospitals, as most of Zimbabweans are, then you are doomed. So the next best plan was to go where the doctors and medication were found.
Zimbabweans raising money to go to South Africa, India or some other country in Europe to get such delicate procedures done has been a common feature.
As happy as we are that the operation on the twin boys was successful, we have to come ask ourselves these per-
tinent questions: does this mean that everything in the health sector is back to normal? Are we going to be able to make it cheap for Zimbabweans to get local treatment and eliminate the need to travel to India?
The answer is No.
We still have a long way to go before we can say that.
Deputy Minister of Health and Child Care Paul Chimedza aptly summed it. After visiting the boys he said this was a sign that the health sector was on a mend but more was needed.
“This is something that the nation should sit and take note of; that our professionals can stand head-to-head with other professionals across the world and do exactly what they can do. What we probably need to do is to give the professionals the environment to do their work, the tools of the trade, and to support them in whichever way we can,” he said
Undoubtedly Zimbabwe had one of the best health experts and we can still have that. What we desperately need
is the money to make it happen.
Retaining expertise in an economy that is ailing is difficult but we need to have such surgeons and doctors if we are to have a semblance of a healthy health sector. The team of 50 definitely need to be paid and so does every other pro-fessional in the country. They also need to work in an environment where it is easy to do their duties.
We need funding in the health sector and we need it fast. So Government needs to come up with ways to get that funding.
This operation has been a wake-up call to Government that we still have the expertise but they are just not per-forming because there is no money. To pay them or make their working condi-tions better!
Government should get investment into the sector and once we have made the health industry functional, you might be surprised at how many doc-tors and surgeons are willing to come back home.
We need them. •
12 BH24 COMMENT
Adequate resources should compliment medical talent
BH24
Ghana’s central bank will probably increase its benchmark interest rate for a second time this year to tame inflation and arrest the slide in Africa’s worst-performing currency.
The Bank of Ghana will raise the rate by 1 percentage point to 19 percent, according to four of seven economists surveyed by Bloomberg News.
The rest expect it to be left unchanged for a second consecutive meeting. Gov-ernor Kofi Wampah will announce the committee’s decision today at about 11 a.m. in Accra, the capital.
The currency of the world’s second-big-gest cocoa producer has weakened 30 percent against the dollar this year, the worst among 24 African currencies tracked by Bloomberg.
Cedi depreciation drove inflation higher for a ninth consecutive month to 14.8 percent in May, a four-year high.
“In such an environment where the currency has depreciated unabatedly, the central bank will have to tighten
interest rates,” Yvonne Mhango, a Johannesburg-based sub-Saharan Africa economist at Renaissance Capi-tal, said by phone July 7. “There’s sig-nificant upside risk for inflation.”
Moody’s Investors Service cut Ghana’s credit rating on June 28 by one step to
B2, five levels below investment grade, citing a budget gap it estimated will exceed 10 percent of gross domestic product for a third year in 2014.
Pressure to increase government wages, rising borrowing costs and arrears will limit the government’s
ability to narrow the budget gap to 8.5 percent this year, Ridle Markus and Dumisani Ngwenya, Africa strategists at Absa Capital in Johannesburg, said in an e-mailed note to clients on July 7. The cedi gained 1.1 percent to 3.2975 per dollar at 9:26 a.m. in Accra. ― Bloomberg •
14 REGIONAL NEWS
Ghana central bank seen raising key rate to support currency
BH24
16 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATSGen Station
9 July 2014
Energy
(Megawatts)
Hwange 578 MW
Kariba 750 MW
Harare 43 MW
Munyati 28 MW
Bulawayo 20 MW
Imports 0 MW
Total 1419 MW
14 July - BNC Results Presentation update, Place: Chapman Golf Club, Time: 9.30 to 11.30 am.
16 July - Mobile Markets & Telecoms Forum Con-ference & Exhibition, Place: Holiday Inn (Harare), Time: 8:00am
23 -25 July - Mine Entra, Place: Zimbabwe Inter-national Exhibition Centre, Bulawayo
24 July - OK Zimbabwe Thirteenth Annual Gen-eral Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time: 15:00 hours.
1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am
Quote of the day — ""No maN is ever whipped uNtil he quits - iN his owN miNd." - NapoleoN hill Globalshareholder.com
The dollar was little changed in Asia on Wednesday as investors awaited the release of minutes from the Federal Reserve’s policy meeting last month.
In late afternoon Tokyo trading, the greenback was quoted at 101.64 yen, against 101.57 yen in New York Tues-day. The euro bought $1.3617 and 138.38 yen, from $1.3611 and 138.24 yen.
“The event of the day will be the FOMC (Federal Open Market Committee) min-utes,” National Australia Bank said in a note. Among the key issues, traders want to know “how much importance is being given to the better data of late and the approach of the Fed’s targets in inflation and employment”.
At its June meeting, the Fed slashed its 2014 growth forecast for the US econ-omy after a severe winter but kept pol-icy on hold, showing faith in a modest rebound. While the bank has been cut-ting winding down bond buying, interest rates have been next to zero for years and markets are keen to know when they might rise — which would support the dollar. Fed officials now expect the
benchmark federal funds rate to reach 2.5 percent by the final quarter of 2016, slightly higher than the projection they made in March.
“Admittedly, the change could partly reflect the shuffling of personnel on the FOMC rather than any underlying shift in the interest rate outlook,” Capital Eco-nomics said. “But we will be looking for any signs of a more hawkish tilt.” Deal-ers are now keeping an eye on China,
which said Wednesday that inflation came in at 2.3 percent last month, slow-ing from 2.5 percent in May.
On Thursday Beijing will release its June trade statistics, while next week will see April-June economic growth data for the world’s number two economy.
The dollar eased against most other Asia Pacific currencies. It weakened to Sg$1.2428 from Sg$1.2457 on Tues-day, to 59.75 Indian rupees from 59.82
rupees, and to 11,626 Indonesian rupiah from 11,696 rupiah.
The greenback fell to 32.33 Thai baht from 32.40 baht, to 43.36 Philip-pines pesos from 43.48 pesos, and to Tw$29.90 from Tw$29.91. It edged up to 1,012.19 South Korean won from 1,011.11 won. The Australian dollar eased to 93.36 US cents from 93.86 cents, while the Chinese yuan eased to 16.39 yen from 16.40 yen. ― AFP •
21 INTERNATIONAL NEWS
Dollar steady in Asia ahead of Fed minutes
By Esther Dzviti
Following the recent initiative by the Government to send a delegation of senior policy makers to China to learn from China’s economic growth success story, it is important to understand what Zimbabwe can learn from China and how it can apply the lessons to its
current situation .
There is a vast range of literature on the growth story of China’s economy; different economists attribute the country’s growth success to different approaches and models.
However this article focuses on the
institutional approach to China’s eco-nomic growth success because it is an approach I deeply feel has not been intensely explored by economists in Zimbabwe.
Little has been discussed on how an institutional approach can revive the Zimbabwean economy, the main focus
has been on economic models and not much difference has been seen in the implementation of the models.
If Zimbabwe applies an institutional approach to its economic growth agenda and customizes the lessons learnt from China to its own case, Zim-babwe will be telling the same story as
22 ANALYSIS
An institutional approach to Zimbabwe’s economic growth predicament
China is or even a better one and the country can become a best case sce-nario for other developing countries.
Research papers have shown that the Chinese market-oriented reforms and opening up started in 1979. In the past three decades, economic growth in China has been impressive.
According to Douglas North, a renowned economists, for China pro-ductivity increase, is the ultimate driv-ing force for economic growth, and a good measure of that is GDP or income on per capita basis. How then did this productivity increase came about?
Fu Jun an institutional economist of Peking University in China strongly argues that this productivity increase in China is as a result of an Institutional approach.
According to Fu economically, a good institution is the one that coordinates economic agent’s behaviours in ways that maximize productive hours and minimise non- and counter-productive hours. This line of investigation is a linchpin of theory-building in neo-polit-ical economy.
Drawing on the logic of institutional
economics, Fu proposed that real economic growth is a function of how sophisticated a country develops two sets of institutions -- one hierarchi-cal (government) and one horizontal (market).
Fu has an interesting way that he addresses the issues, he uses what he calls to be an MBW model, where M stands for market; B for bureaucracy (or rather hierarchy); and W for wealth.
Logically it echoes the classic question by Ronald Coase, that is, where do we draw the line between the market and the firm?
Theoretically, W would be at its best if management costs in the B dimension equal transaction costs in the M dimen-sion.
This institutional logic applied in China and can apply in Zimbabwe as well.
The approach follows two main initia-tives:
First, all things being equal we look at whether a country has put in place a sophisticated system of impersonal testing, selection and recruitment of talented people for its hierarchy? Talent
is what get the ideas rolling and it’s a critical element to the success story of China.
Second, since hierarchy begets power and power corrupts, we also look at whether a country developed a sophis-ticated web of checks and balances and embedded it in a rule of law system?
In the horizontal M dimension, the crit-ical variables are provisions of person-ified incentive, property rights protec-tion, and patent system to encourage innovations, and anti-trust law to keep markets competitive and efficient in allocating resources.
If these hierarchical and horizontal building blocks are in place, the model predicts good economic performance.
China’s institutional approach and open-door puts the country in a bet-ter position to duplicate established human knowledge about both hard- and soft-technologies on a global scale, and entry into the WTO points to the efficacy of market competition on com-parative advantages.
Such pro-knowledge and pro-compet-itive institutional re-orientation in line with advanced economies, both hierar-
chical and horizontal, is the fundamen-tal driver for the rapid economic growth in China in recent decades.
This was just a glance of what the insti-tutional approach is about and what is has done for the Chinese economy.
Just taking the two main mentioned initiatives which are focusing on the pool of talent and developing a system of checks and balances embedded in the rule of law system, will not require much capital injection.
But moral elements are the key to the successful implementation of an insti-tutional approach, dedication, commit-ment and genuineness in application are essential characteristics to this kind of approach.
We personally believe that if we are able to apply this strategy in polices the economy will benefit tremendously and post results will emerge from the implementation of our good policies.
An institutional approach should be one key option Zimbabwe seriously needs to consider to resolving its economic predicament. •
