BH24 Reporter

HARARE – The Confederation of Zimbabwe Industries (CZI) will tomorrow hold a Symposium on internal devaluation of the dol-lar, as part of national efforts to enhance competitiveness of local industry to drive economic recov-ery.

The conference will take place at the Meikles Hotel, in Harare, and follows call made by the cen-tral bank on the need to explore means to internally devalue the dollar in the absence of monetary tools for a country using foreign currencies adopted in February 2009.

Zimbabwe dumped its own cur-rency to counter the ravaging impact of hyperinflation, which

peaked at about 231 million at the height of its economic crisis in 2008.

There have been concerns from different circles over the downside of the multi-currency, dominated by US dollar; especially its effect on industry in light of the depreci-

ation of the currencies of Zimba-bwe’s major trading partners.

Economic analysts have advo-cated that Zimbabwe joins the Rand Union, while others called for return of local currency, but there has never been unanimity on which of the suggested solu-

tions works best for the country.

However, CZI believes in the continued use of the multi-cur-rency, despite challenges posed by depreciation of South African Rand and Zambian Kwacha.

Other experts, including the Reserve Bank of Zimbabwe have recently called for internal devalu-ation of the dominant and national reporting currency, with lessons to be borrowed from the experi-ences of countries such as Latvia and Lithuania.

Discussions will focus on cost drivers in Zimbabwe: analysis and recommendations and debate on whether internal devaluation is a strategy Zimbabwe should actively pursue.●

News Update as @ 1530 hours, Tuesday 08 December 2015

Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

CZI internal devaluation symposium set for tomorrow

BH24

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By Twanda Musarurwa

HARARE – Government has finalised the legislative frame-work that will cater to the set-ting up of special economic zones (SEZs) across the coun-try, Industry and Commerce Minister Mike Bimha has said.

"Government has now finalised on the legislative framework to guide the establishment of special economic zones....when you have a legislative framework it helps you in giv-ing clarity to what you want to achieve, it also gives the investors confidence of what they are going in for, because it clearly lays out what is entailed and how the law will protect those who are going to play in the special economic zones," Minister Bimha told a Zimbabwe National Chamber of Commerce (ZNCC) meeting yesterday.

SEZs are designated geo-graphical areas that operate under different economic rules

from the rest of the economy.

And Government is consid-ering replicating the model used for the Sunway City SEZ in Harare, which consists of a residential park, industrial park and Export Processing

Zone park.

"We have identified Sunway City, near Ruwa, as an inte-grated economic zone in terms of the various activities apart from manufacturing.

"So we would also like to rep-

licate what you find in Sun-way City in other areas of the country...and there are inves-tors that are interested in developing the infrastructure of Sunway City.

"Sunway City's investment is in two ways. First is invest-ment in providing the infra-structure, then you also get players who come to invest in those areas where the infra-structure has been provided. So we would like to see a replication of Sunway City in other centres where this is necessary.

He added that Government is considering making the cot-ton-to clothing value chain and the leather-to-leather value chain will be constitute part of the SEZs strategy.

The Government has identi-fied the establishment of SEZs as a strategy to boost eco-nomic growth and develop-ment under its five-year eco-nomic policy, ZimAsset.●

3 NEws

Minister Bimha

Govt finalises SEZs legislative framework

BH244

HARARE – Financial tech-nology firm, Getbucks Zim-babwe’s initial public offer (IPO) opened on Monday with the firm targeting to raise $3,2 million ahead of its list-ing on the Zimbabwe Stock Exchange (ZSE) on January 16, 2016.

Getbucks Zimbabwe is cur-rently owned 55 percent by Mauritius registered Getbucks Limited and 34.06 percent by local firm Brainworks Capi-tal Management with pension funds holding the remaining shareholding.

The shareholding will however be diluted after the listing in

line with regulatory require-ments although the two firms will remain major sharehold-ers. To raise the $3,2 million, Getbucks Zimbabwe said it is putting on offer 93 567 251 shares for the public to sub-scribe.

“On conclusion of the IPO, it is envisaged that the entire issued share capital of Get-bucks Zimbabwe of 1 093 567 251 ordinary shares will be listed on the ZSE,” Getbucks said.

The public offer, which is being underwritten by DBF Capital Partners Limited, closes on January 8. Get-

bucks Zimbabwe said in the event of an over subscription, shares would be allocated on a pro-rata basis.

The firm said listing on the local bourse would allow it to “attract focused and perma-nent capital,” access more appropriate risk-adjusted cost of capital than the company has currently managed to get as a private company, unlock shareholder value as well as strengthen and enhance the visibility of its brand.

“The strategic objective of Getbucks Zimbabwe is to retain and grow its market share in Zimbabwe through

a sustainable business model that offers competitive inter-est rates while managing its cost of funds,” the company said.

Getbucks Zimbabwe com-menced operations in the country as a microfinance institution in 2012, has 56 employees and 13 branches nationwide. It says its loan book has over the years grown to $11 million.

The Reserve Bank of Zimba-bwe recently upgraded the company's license to offer microfinance banking ser-vices, allowing it to also take deposits.- New Ziana.●

5 NEws

Getbucks targets $3,2 million as IPO opens

BH246

By Twanda Musarurwa

HARARE -The Reserve Bank of Zimbabwe (RBZ) says it is opti-mistic towards an improvement in the country's state of deflation on the basis of anticipated price movements in the South African economy.

ZimStats figures show that the country's inflation had reached -3,3 percent this October, and has been projected to remain in the negative in 2016.

However, RBZ director for eco-nomic research and policy enhancement Mr Simon Nyarota said the recent currency (rand) depreciation will inevitably have an upward impact on that coun-try's inflation rate in the coming months if it persists.

And to the extent that South Africa is Zimbabwe's largest trading partner, inflation move-ments in the former should have implications on the former's price movements as well.

"I don't think that the deprecia-

tion of the rand is going to con-tinue affecting us negatively, because at some point the depre-ciation of the rand is going to

cause prices in South Africa to rise. Once that happens then our imported inflation from South Africa is going to go up.

7 NEws

Zim deflation to ease on imported inflation: RBZ

8 NEws

"In other words we are going to be importing more expensive South Africa goods. So as prices in South Africa will go up and then we will have that ripple effect in this country, and at that point we may have positive inflation," said Mr Nyarota.

The RBZ official said the only other option for Zimbabwe to deal with the scourge of deflation was to enhance the productivity of the local manufacturing sector.

"In other countries such as Japan they used quantitative easing to deal with deflation, but we can-not do that in this country and we have to look at other situa-tions....I think one of the lim-

ited strategies we can use in this country are structural reforms

such as the IMF has suggested, so as to improve productivity," he

said, adding that local manufac-turers should take advantage of the weak rand to import capital goods from our southern-most neighbour.

"When you have got falling prices mainly due to volatile global prices and other international developments this could be wel-come in that you will be import-ing at lower prices. For example right now we would urge produc-tive sectors to buy equipment at cheaper prices due to the weak rand, and also we know from the 2016 National Budget that VAT and duties have been removed for the importation of capital goods, so that is of benefit to this country."●

BH24

TAA:DI251386-Y22

Laz DI324241-D15

9

HARARE - Yesterday's gain proved to be just fleeting as the mainstream industrial index slid back in the red, losing 0.21 to close at 114.42.

Activity on the local bourse was largely subdued.

Two counters traded in nega-tive territory. Seed producer SeedCo was $0,0125 weaker

at $0,8500 while sugar proces-sor starafricacorporation lost a significant $0,0065 to close at $0,0015.

Heavyweights BAT, Delta and Econet remained unchanged at $12,2000, $0,7200 and $0,1800 in that order.

Gains were seen in two coun-ters. Giant insurer Old Mutual

was $0,0050 stronger at $2,1050 and ART rose $0,0010 to $0,0100.

The mining index was unchanged at 21.51 as Bindura, Falgold, Hwange and RioZim maintained previous price levels at $0,0125, $0,0050, $0,0300 and 0,1040, respec-tively. - BH24 Reporter ●

ZsE10

Equities fall back into the red

BH2411

MOvERS CHANGE TOday PRIcE USc sHAKERs CHANGE TOday PRIcE USc

ART 11.11 1.00 STARAFRICA -0.65 0.15

OLD MUTUAL 0.23 210.50 SEEDCO -1.25 85.00

INDEx PREvIOUS TOday MOvE CHANGE

INDUSTRIAL 114.63 114.42 -0.21 points -0.18%

MINING 21.51 21.51 +0.00 POINTS +0.00%

12 ZsE TABlEs

ZsE

INDICEs

Stock Exchange

BH2413

14 dIaRy OF EvENTS

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

POWER GENERaTION STaTS

Gen Station

08 December 15

Energy

(Megawatts)

Hwange 554 MW

Kariba 468 MW

Harare 30 MW

Munyati 23 MW

Bulawayo 22 MW

Imports 0 MW

Total 1068 Mw

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•11 december 2015 - Buy Zimbabwe awards; venue: Rainbow Towers, Harare

THE BH24 dIaRy

ACCRA - Ghana's utility regulator increased tariffs for electricity and water by up to 89 percent on Monday in a renewed bid to attract competi-tive private investment to the sector as the West African nation grapples with a crippling power crisis.

Electricity prices were put up by 59,2 percent and water by between 69 percent and 89 percent depending on usage, the Public Utilities Regu-latory Commission (PURC) said in its first major change in tariffs since 2013.

The main opposition party con-demned the hikes, which are to take effect on December 14, and said it would block implementation.

"It is the highest level of insensitivity ever witnessed by Ghanaians under the Fourth Republic, and certainly just before Christmas and in a year that Ghanaians have known nothing but untold sufferings and hardships. It should not happen," the party said in a statement.

The PURC said the increases, which had been delayed for several months to allow it to sensitise the public to the need for such a move, were driven largely by a shift from a cheaper hydro-dominated genera-tion mix to thermal power.

They were also to make up for increasing chemical and power pur-chase costs incurred by the water company, it said.

"The significant change and the increasing dependency on thermal generation has greatly impacted the cost of electricity generation by the utilities service providers," it said.

The West African country is grappling with a chronic power crisis that has crippled industrial growth and forced

the government to contract emer-gency powerships to make up for a supply shortfall of up to 500 mega-watts.

Nana Yaa Dzantua, head of exter-nal affairs at the PURC, told Reuters that despite the increases, about 32 percent domestic lifeline consumers would still enjoy subsidies on power.

The rises were also in fulfilment of Ghana's three-year aid deal with the International Monetary Fund which

the government signed in April to restore a fiscal balance and fix the power crisis. The pact has reduced the government's popularity.

Monday's tariff hikes are expected to further push up consumer inflation, which stood at a four-year high of 17,4 percent in October.

"The utilities constitute basic expenditure for households and con-sidering the fact that these increases are coming in December when there is already pressure on spending, we expect to see some additional infla-tion pressure," said Sampson Akligo of the Accra-based Investcom group.

-Reuters●

REGIONaL NEWS 15

Ghana approves major hikes in electricity, water tariffs

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Oil traded near the lowest level in more than six years amid spec-ulation a global glut will persist with OPEC having effectively abandoned its strategy of limiting output to control prices.

Futures were little changed in London after falling 5,3 percent on Monday. The Organisation of Petroleum Exporting Countries, which failed to agree to produc-tion curbs at a Dec. 4 meeting, is setting aside its quota of 30 million barrels a day until mem-bers gather again in June. Energy shares led a 1,1 percent drop in the MSCI Asia Pacific Index. US crude stockpiles probably expanded for an 11th week, a Bloomberg survey showed before Energy Information Administra-tion data Wednesday.

Oil’s slump has deepened as OPEC extended a fight against U.S. shale producers amid a sur-plus estimated by the Interna-tional Energy Agency at almost 3 billion barrels. The lack of any limit on the group may lift the lid on millions more of addi-tional crude supply in 2016 from countries including Iran, which is seeking to reclaim market share when sanctions are lifted.

“It’s hard to find any bullish fac-tors that will drive oil prices up,” Will Yun, a commodities ana-lyst at Hyundai Futures Corp. in Seoul, said by phone. “The global glut is expected to be prolonged as Saudi Arabia won’t cut its pro-duction to accommodate Iran’s return.”

Brent for January settlement was at $40,97 a barrel on the Lon-don-based ICE Futures Europe exchange, up 24 cents, at 4:51 p.m. Seoul time. The contract

slid $2,27 to $40,73 on Monday, the lowest close since February 2009. The European benchmark crude was at a $3.24 premium to West Texas Intermediate, the US marker grade.

Crude supplies

WTI for January delivery was 7 cents higher at $37,72 a bar-rel on the New York Mercantile Exchange. It declined $2,32, or 5,8 percent, to $37,65 on Mon-day, also the lowest close since

February 2009. The volume of all futures traded was about 23 per-cent above the 100-day average. Prices are down 29 percent this year.

The MSCI Asia Pacific Energy Index decreased for a fifth day, losing as much as 3.9 percent. Australian producer Santos Ltd. sank 13 percent in Sydney while PetroChina Co. fell 2,6 percent in Hong Kong.

In China, the customs adminis-tration reported a drop in exports for a fifth month in November while a decline in imports mod-erated as policy makers sought to spur domestic spending. The country imported 27,3 million metric tons of crude, a 3,8 per-cent rebound from a five-month low in October.

Crude inventories in the US, the world’s biggest oil consumer, increased by 900 000 barrels in the week ended Dec. 4, accord-ing to the median estimate in the Bloomberg survey of eight ana-lysts. Supplies climbed to 489,4 million barrels through Nov. 27, more than 120 million above the five-year seasonal average.

- Bloomberg●

INTERNaTIONaL NEWS 16

Brent trades near 6-year low as OPEc seen lifting lid on supply

By Kristen Berman

Imagine you’re a professor. You have assignments that you release at the start of the semester but they don’t need to be turned in until the end. How should you design your curriculum?

Putting yourself in your students’ shoes, you would likely let each stu-dent choose how and when they turn in each assignment.

Since students intimately know their unique schedules, they should best be able to decide when to complete the work. Makes sense, but is it correct?

In 2002, psychologists Dan Ariely and Klaus Wertenbroch tested this ques-tion.

They split students in the same class into three groups. The first group had freedom to choose their own schedule for turning in assignments. The second group was given a specific schedule: they had to finish each paper by a cer-tain date, spaced out over the course of the term. The third group was given the same assignments, but told they could set their own deadlines for com-pleting them.

what happened?

To answer this, let’s first put ourselves in the viewpoint of the professor. It would be difficult to dictate when stu-dents turn in papers, when in reality there is no actual deadline. To create a deadline out of thin air would feel unfair. But if slightly manipulating stu-dents will actually help them in the long run, does it make it better?

This dilemma has come up time and again with the numerous companies I’ve worked (big and small including Google, Netflix, Lyft to Expedia, Fidelity, VolunteerMatch, etc) During almost every engagement, we’re asked:

Behavioral Economic principles some-times feel manipulative. How can they play a role in user-centered product development and marketing?

To understand this, let’s see what hap-pened with our professor.

The first group with no deadlines gen-erally got very little done and turned in papers late, earning worse grades. The third group who set their own deadlines did considerably better with both time-lines and grades.

But the winner? The second group—the students who were handed a schedule from someone else. Instead

of endless choices for when to start writing the papers, external deadlines enabled the ability to plan. Instead of burdening students to remember when to start each assignment, the deadlines helped curb procrastination.

The well-meaning professor who doesn’t provide deadlines still ends up influencing his “users” – just not inten-tionally.

This lesson is the essence of what behavioral economics research has found time and again. It is the person who designs the environment in which we live in who has the most influence on our decisions as opposed to the per-son who is actually making the deci-sion.

The conflict between behavioral eco-nomics and product ethos arises because this notion of influence through design many times conflicts with a typical product team’s mental model of the user.

The product team’s mental model goes something like: “It is not our role to make decisions for the user. It’s our role to design a product that empow-ers the user to do what’s right for them.” This mental model is the heart

of all debates around limiting choices, defaults, and other behavioral econom-ics tactics.

This mental model seems strong because it feels good. It feels like we’re on the righteous side of the argument to fight for the user and against manip-ulative design.

But the problem with this mental model is that it’s impossible. One of the major lessons of the past half century of psy-chological research is that it’s impos-sible to design a system in which the user has full agency on their decisions.

By being the one who designs the system (however we choose to do it) we are inherently designing deci-sions. Sadly, a typical product team’s high ground stance that neglects this responsibility may actually be making the user worse off – a little like our ide-alistic no-deadlines professor did to his students.

But we can agree, the professor exam-ple is easy. We know that it’s good for students to get better grades. A harder dilemma arises when we don’t know what’s best for a given user. Or, when what’s ‘best’ for a user may actually widely vary across different users.

17 analysis17 aNaLySIS

How startups should use behavioral economics

18 analysis18 aNaLySIS

The question becomes: Can we use design to influence a user when we’re not 100% sure what’s best for them?

Imagine a world where we don’t know what is the exact method that would help you prioritize your emails. In this case, it’s tough. Do we as product designers help you prioritize and risk being a little wrong or should we put the full responsibility on you?

We’d give you all the emails at once, with no priority distinctions, in hopes that you would test different approaches and over time and many attempts, land on the optimal email organizational system.

The Google inbox team has thankfully instituted features, and seems to be continuing to do so, that help users prioritize their email.

Instead of making us contemplate the pros and cons of responding to each email we receive, Google’s product team has tried to design the system in a way that could decrease email stress and increase productivity and confi-dence.

Even if Google doesn’t’ know the 100 percent correct method of prioritisation

for you personally, they are 100 per-cent sure that sitting back and doing nothing to help you is not the right answer.

For a second, more extreme example, think back to the start of mobile App stores. How should developers decide the price of their apps? Both Google and Apple didn’t know.

The product team’s mental model would say that every user (in this case, developers), may want to charge something different.

It would say that it is not Google or Apple’s role to control the marketplace. As such, neither App store instituted a policy regarding free vs. paid. Instead, they left it up to each developer to set a price.

So, when one app developer in one category decided to go free in order to attract customers, all other developers in that category had to compete at the free level. One app regresses to free and no one in the group gets upfront revenue.

70 percent of apps are free on the Play store and the large majority of top apps are free. While this may be compelling

to end users, it destroys the app devel-oper’s ability to earn a living wage.

By not designing the system actively up-front, Google and Apple still designed the system. Developers now can’t charge and still expect to attract users. This is not a defined preference for the developers – developers had no choice in their pricing strategy.

These are two cases where guidance on what to do in the face of uncertainty is vital. By every measure the engi-neer, marketer or product designer has more knowledge than the user, even if it’s not perfect knowledge.

They have more time to indulge in the process of deeply considering what the user can or should do. Users are busy humans, without the depth of knowl-edge of the specialised product team.

In these cases the product team’s high ground moral stance should be to spend time to narrow on what behav-ior the user is likely trying to achieve with their product and then aggres-sively remove all barriers in the way of achieving it.

When teams spin discussion cycles arguing if they should include a default

or not for fear of influencing the user too much, they are forgetting the coun-terfactual. By not including the default, they are still actively influencing users.

This decision forces the user spend their time and effort figuring out the best choice and thus makes it much harder (maybe impossible) for them to do the behavior they hired the product to do.

As social scientists we believe that there are fundamental reasons to ensure that we actively create the choice architecture in order to be help-ful rather than harmful—and that it makes people’s lives better and longer. It’s on us to design the system that does this.

As a product team you get to decide if you’re the professor that sets dead-lines, knowing it helps students learn more and achieve higher grades, or if you are the professor that chooses to leave it up to the students to decide how to optimize their schedules.

In both cases we are designing the sys-tem on behalf of the students – but in one case it’s not intentional. -

techcrunch.com●