Zim News Blog -NEWS NETWORK

BOLD legislative frameworks are urgently needed to improve the efficiency of disaster risk management in the country to save lives.

The Disaster Risk Management (DRM) Bill has been in the pipeline since 2023.

Addressing delegates and stakeholders during an all-stakeholder conference on the DRM Bill organised by ActionAid Zimbabwe in partnership with the Department of Civil Protection, Local Government and Public Works minister Daniel Garwe said the reccurring disasters were a wake-up call for robust legislative frameworks.

“Globally, the past two decades have seen some of the worst disasters recorded,” he said.

“Tropical storms, floods, droughts and earthquakes have caused massive loss of lives, livelihoods, property and infrastructure setting back development achievements across the globe.”

Added Garwe: “Closer home, we have witnessed a number of disasters of a catastrophic nature such as the 2016 El Niño-induced drought, Cyclone Elinein 2000.

“It is, therefore, imperative that disaster risk governance be comprehensively strengthened by updating and realigning legislative frameworks, policies, strategies, plans and institutional arrangements that provide the foundation for disaster risk reduction.”

He said strengthening disaster risk governance was one of the four priorities of action set out in the Sendai Framework for Disaster Risk Reduction 2015-2030.

“The DRM Bill should seek to establish a disaster risk management system that is anticipatory, proactive, inclusive and accountable,” Garwe said.

“The Bill should point to financing options for disaster risk management to facilitate allocation of resources to lower tiers of government which are impacted most by disasters as well as ensure that all stakeholders are involved in disaster management decision-making processes, including persons with disabilities and marginalised communities.”

RESERVE Bank of Zimbabwe (RBZ) deputy governor Innocent Matshe says the banking sector continues to show resilience and stability, as foreign currency deposits rose 13,3% in the year ended October 31, 2024.

This comes as the banking sector faces liquidity challenges on the back of currency volatility and hawkish monetary and fiscal policies.

These policies are being implemented to shore up the local currency.

In his presentation at the Zimbabwe Independent’s annual 2024 Banks and Banking Survey and Awards held yesterday in Harare, Matshe said the banking sector was navigating through tough times.

“Condition and performance of the banking sector continue to demonstrate resilience and stability as reflected by adequate capital levels, satisfactory asset quality metrics, stable liquidity and sustained profitability,” he said.

“Out of 19 operating banking institutions, only one is experiencing liquidity challenges and is currently operating under a Corrective Order issued on April 2, 2024, under Section 48 of the Banking Act [Chapter 24:20].”

He said RBZ was closely monitoring the bank’s condition and performance as the institution’s shareholders were implementing corrective measures.

Despite this, he added, confidence in the banking sector improved significantly.

“Confidence in the banking sector improved significantly as depicted by growth in foreign currency deposits from around US$2,33 billion in October 2023 to US$2,64 billion as of end of October 2024,” Matshe said.

In October, the International Monetary Fund’s technical assistance team noted that adopting the Basel III global liquidity standards in Zimbabwe was now a high priority as it raised concern about the liquidity of local banks.

Basel III, a set of international banking regulations, lists higher and better-quality capital, better risk coverage and the introduction of a leverage ratio as a backstop to the risk-based requirement for banks.

It also introduces measures to promote the build-up of capital that can be drawn down in periods of stress and introduces two global liquidity standards.

In July 2023, actuarial science data showed that most banks failed to remain adequately capitalised and were on very shaky ground despite holding billions of depositor funds based on the Basel III standards.

This was based on the Basel III Capital Accord in particular, whereby a bank should calculate its banking economic capital using internal models like the Z-Score to meet Basel’s financial stability standards.

However, Matshe said as of September 30, 2024, all banking institutions were adequately capitalised.

“The average capital adequacy and tier one ratios for the banking sector were 37% and 32,4%, respectively,” he said.

“Credit risk in the banking sector remained low, albeit with a marginal deterioration in the aggregate non-performing loans to total loans ratio, which stood at 3,2% as at end September 2024.”

He said the banking sector continued to maintain strong liquidity positions, reflected by an average prudential liquidity ratio of 57,54% as of September 30, 2024.

“All banking institutions, except one, were compliant with the minimum prudential liquidity ratio of 30%,” Matshe said.

“The banking sector continues to demonstrate resilience and stability, as reflected by adequate capital levels, satisfactory asset quality metrics, stable liquidity and sustained profitability.”

The Zimbabwe Independent is one of three publications under the privately owned media house, Alpha Media Holdings (AMH), with the others being NewsDay and The Standard.

AMH also owns an online radio station Heart & Soul.

FINANCIAL juggernaut, CBZ Holdings Limited (CBZ) has shifted its focus away from leveraging on First Mutual Holdings Limited (FMHL) in entering the regional space owing to it being blocked from upping its stake in FMHL.

Recently, the Competition and Tariff Commission (CTC) was said to have blocked CBZ from purchasing additional shares in FMHL.

As CBZ has a shareholding of 36,22% in FMHL, it made a mandatory offer to the remaining shareholders of the firm for their shares.

According to the Zimbabwe Stock Exchange, firms are required to make such an offer of their stake in a firm reaches 35%.

This additional share purchase was going to be used by CBZ to enter the regional market with a stronger balance sheet as FMHL operates in countries like Botswana, Malawi and Mozambique through its various operations including insurance.

However, the CTC blocked the move, telling CBZ that its purchase of a 31,22% stake in FMHL in September 2023, taking its overall stake to 36,22%, was enough for now.

“Although CBZ will be working separately from FMHL, CBZ will be a major shareholder in FMHL. Going into the region, it would have been faster and easier for us to go into the region obviously on the back of FMHL,” CBZ group chief executive officer Lawrence Nyazema said in an interview with journalists on Wednesday evening.

“But there are independent opportunities. Or let me say, there are opportunities that are independent of FMHL in the region.

CBZ is looking to strengthen its balance sheet further to attract lines of credit and capital from the international market.

As of September, the powerful financial institution had a balance sheet worth US$1,2 billion.

“We are a strategic investor in FMHL and will remain so. At 31,22%, we effectively hold a third of the shares, Nyazema said.

“Alongside Nssa [National Social Security Authority], which holds a significant stake, we collectively own almost 70% of FMHL.

“This strong position enables us to work closely with management to achieve some of the long-term ambitions we had set out for the business.”

He said CBZ intended to leverage on its capital-light subsidiaries to enter the regional market now.

“Banks face stringent regulations and require significant capital to establish operations in new markets, making international expansion through them a slower and more complex process,” Nyazema said.

“In contrast, businesses like Datvest, our asset management arm, are capital-light, and their successes in Zimbabwe can easily be replicated in other regions. This gives us an opportunity to expand into one or two countries by June 2025.”

He said CBZ’s revised strategy underscored the group’s broader focus on exploring international opportunities.

“We are no longer limiting ourselves to neighbouring countries,” Nyazema said.

On the domestic front, CBZ is prioritising efforts to boost liquidity in Zimbabwe’s economy through increased lines of credit.

Nyazema said the group was actively raising additional funding to address liquidity challenges and stimulate economic activity.

“Our goal is to secure more lines of credit to effectively address liquidity challenges,” he said.

“Once we succeed in this area, the benefits will go beyond CBZ, impacting the entire economy positively.

“It’s about creating stability and ensuring the availability of funding to key sectors.”

PARLIAMENT has called on Treasury to fully fund the employment costs for the Auditor-General’s Office to improve operations at the government arm.

The report presented by the Public Accounts Committee, said funding would ensure that the AG’s Office conducted more audits according to its mandate.

It said the funding would raise income from audit fees while reducing reliance on the Treasury allocation in the long-term.

“Treasury should promptly disburse the allocation for digitalisation and retooling in the first quarter to accelerate the automation of all audit office processes by the government’s e-governance, e-procurement and international auditing best practices,” the committee said.

“Treasury should disburse 50% of the budget allocated towards the renovation of the Burroughs House in the first quarter of 2025 to kickstart renovations and avoid prolonging paying rentals at PAX House, which are US$11 551,56 per month.

“Treasury should allocate foreign currency to the Office of the Auditor-General so that it can directly purchase motor vehicles from suppliers.”

The parliamentary committee said that would also avoid challenges related to fluctuations in exchange rates that could impact the delivery of the vehicles.

The report said Treasury should fully fund training and development so that the audit office can enhance human capital capacity and professional development.

“Treasury should fully fund the staff loan revolving fund to enable the audit office to retain staff,” the committee said, adding that training and development should be fully funded as it is fundamental for auditors to continuously upgrade their skills.

“Treasury must release the audit office’s budget allocation in the first and second quarters as audit work is at its peak in these periods.”