Source: ‘Public sector accounting remains a challenge to the profession’ – NewsDay Zimbabwe February 27, 2019 ICAZ chief executive Gloria Zvaravanhu INTERVIEW: MELODY CHIKONO Gloria Zvaravanhu was recently appointed chief executive of the Institute of Chartered Accountants of Zimbabwe (ICAZ). NewsDay reporter Melody Chikono (ND) caught up with Zvaravanhu (GZ) to talk about her new […]
Gloria Zvaravanhu was recently appointed chief executive of the Institute of Chartered Accountants of Zimbabwe (ICAZ). NewsDay reporter Melody Chikono (ND) caught up with Zvaravanhu (GZ) to talk about her new role at the helm of the accountants body. Below are the excerpts;
ND: What have been the main issues affecting the accounting practice in Zimbabwe?
GZ: The topical issue has been the accounting and reporting implications of the multi-tier pricing system that was prevalent in the market. The separation of the nostro and the RTGS FCAs in October 2018 brought about questions about which reporting currency should be used for financial reporting. The lack of a market observable exchange between the two types of accounts complicated issues of asset and liabilities valuations. The monetary policy review of February 20, 2019 has, however, sought to address that and the Reserve Bank governor makes mention of these valuations and accounting complications, as one of the reasons for the reforms in his monetary policy statement. What remains to be attended to is how these developments affect the reporting for companies with December year ends, whose reports are still to be finalised. The institute has submitted its recommendations to the Public Accountants and Auditors Board (PAAB) and a position from PAAB is expected soon.
Another fundamental issue affecting the practice of accounting principles in Zimbabwe and globally is that of corporate governance. The risk of weakened corporate governance practices influencing accounting principles and affecting the functioning of public and private institutions is a real threat that could pose great compromise on financial reporting integrity. A functional economy requires functional and strong institutions in which sound corporate governance is a key ingredient. A compromise on the governance systems also negatively affects investment attractiveness. As ICAZ, we see it as our duty to play a crucial role in ensuring that good systems of governance are practised, and where they are not, that these are reported to enable corrective action to be taken so as to preserve integrity of the financial management and reporting ecosystem.
MC: There has been debate on the appropriate classification of Treasury Bills (TBs) under accounting standards, more so, the treatment of discounted bills. What is the best way for accounting for such?
GZ: As an institute, we have invested extensively on the issue and in accordance with International Financial Reporting Standards (IFRS), the TBs are financial instruments and should be accounted for as such in accordance with IFRS 9, which is the relevant accounting standard for such instruments. IFRS 9 gives clear guidance on how financial instruments should be classified, as well as the impairment considerations thereof.
Without going into too much technical detail on the classification guideline Under IFRS 9, financial assets are classified and valued at either amortised cost, fair value through other comprehensive income or fair value through profit and loss, based on the entity’s business model and the contractual cash flow characteristic of the instrument.
At first, there seemed to be a lot of debate with respect to what the right accounting treatment of the TBs should be, given the peculiar characteristics exhibited by the instruments in the Zimbabwean economy, as you rightly pointed out. The institute, through its continuous professional development programmes as well as through the activities of its various member firms, has issued guidance papers on this matter and believes at this stage that the market is congruent on the treatment.
ND: Many organisations are struggling with how to report cash and cash equivalents, especially under an environment where they have money in the banks, but failing to pay their creditors due to unfunded nostro accounts. From an accounting perspective, what do you think should be done to address the challenge in a professional way?
GZ: These are the reporting complications mentioned above, which the monetary policy review has sought to address. The introduction of the interbank foreign exchange trading will provide a formal system of accessing foreign currency to those who were not getting allocations previously. The interbank trade will also provide an observable exchange rate for the valuation of cash and cash equivalents and assets and liabilities as a whole.
The PAAB is expected to issue guidance on the accounting, reporting and audit considerations of the functional currency developments, to which process ICAZ provided input.
As we deal with these issues, there is a need to make this a collective responsibility in ensuring that the accounting or other complications faced by public and private sectors, are not by design arising from weak governance systems, as this has a huge impact on the country’s fiscal and monetary dynamics.
ND: As ICAZ, what challenges have you faced over the years that you feel need attention?
GZ: The major challenge that the accounting profession in Zimbabwe faces, which ICAZ needs to address, is the lack of public sector accounting and professional qualifications, so as to improve financial management in the public sector. The ICAZ, together with PAAB and the International Federation of Accountants (IFAC), is seized with rolling out the public sector qualification in the immediate term. Of great concern to ICAZ, in relation to this matter, has been the lack of sufficient representation of chartered accountants serving in the public sector. ICAZ will work on creating a pathway for the public sector professional to becoming a chartered accountant. This will be done while upholding the quality of the chartered accountant qualification at the highest level. The institute applauds the Public Entities Corporate Governance Act for calling for representation by chartered accountants in relevant governance structures, such as audit committees. The private sector has been steps ahead in terms of ensuring chartered accountants are represented on their relevant governance structures, as evidenced by board and committee compositions of most private entities.
The other key area of development for ICAZ is the need to develop capacity for local universities to run the Zimbabwe Certificate in Theory of Accounting, which is a prerequisite for the ICAZ qualification pathway. Currently, NUST (National University of Science and Technology) is on board and various other universities are at different stages of accreditation. There is also need for ICAZ to fully localise the setting and marking of its qualification exams in the medium to long-term as this will ensure full customisation of the qualification to address local needs. This will be done without compromising the global flair of the qualification through the various global reciprocal arrangements the institute has in place with internationally renowned chartered accountancy bodies.
Another area which is already being addressed by the recently introduced ICAZ Vimbiso Scholarship Fund, is to ensure that all capable and deserving students with a desire to study accounting are able to do so without facing financial barriers, through the provision of financial assistance by the institute and its members.
ND: What are the challenges being faced by your practitioners in the country?
GZ: The practitioners in the country are subject to the same economic challenges that all other businesses in Zimbabwe are facing, and for most practitioners, the challenge is around ensuring that the value they deliver is seen beyond cost-management initiatives and that they are remunerated appropriately for the quality of their work, time and effort in an economy facing liquidity and affordability challenges. Under the prevailing circumstances, the institute continues to stress, support and monitor the integrity and professionalism of its practitioners, and works to ensure that fair value and recognition is continuously accorded to them.
More hard-facing for the institute and its practitioners is the issue of brain drain, where experienced and qualified staff members are leaving the profession and country for greener pastures. Practitioners are failing to retain qualified members in the country. Currently, over 50% of the institute’s members are outside the country. South Africa has 33% of the institute’s members and this is the reason why the South African chapter is hosting the ICAZ 2019 Winter School at Sun City in August 2019. The Winter School is aimed at connecting with members outside the country as well as pushing the foreign direct investment agenda for the country. Most ICAZ members outside the country hold positions of influence, even as it relates to investment destinations for the portfolios they manage.
MC: You have just been appointed as the new ICAZ chief executive, what’s your vision for the institute?
GZ: I have joined the institute at a milestone juncture when ICAZ has just celebrated 100 years of existence. It is a period of reflection and envisioning of how the next 100 years should look like for the institute. ICAZ’s vision is to be the pre-eminent professional body in the development and promotion of accountancy, assurance and advisory services, business and good corporate governance practices. This was the primary purpose for which ICAZ was enacted through an Act of Parliament.
The ICAZ council has a vision and strategy which is clearly articulated for the coming number of years, which I will spearhead and deliver on. Key amongst the desires of the institute is the public sector project articulated above, which will see ICAZ playing a critical role in the standardisation and strengthening of public sector financial management. It is also hoped that this will encourage professionals to take an interest in serving in both central government and local authorities for the betterment of the country.
ICAZ also aims to widen and strengthen the influence of CA(Z) in Zimbabwe and abroad and a key imperative is the widening of reach of the CA(Z) through growing the membership while bettering the quality. ICAZ membership currently stands at about 2 400, of which 50% of these members are outside the country. This number is way too little to fully serve the economy and will need to grow in line with the economic growth projections.
There is also a lot that needs to be done by the institute in increasing the service offering for its members so that they are well supported to serve the various industries they are in.
MC: What is it that you will do differently at ICAZ?
GZ: The issue shouldn’t be so much what I will do differently as it should be about the results that need to be achieved. My aim is to build on the work done before me, (surely 100 years of strong existence means things were being done right!), carry on from where the institute was left off and get it to its desired destination for the period that I will be at the helm. Whether I do more of what was done before or something different should still result in the desired vision of the institute being achieved.
Having said the above, there are, however, always individual biases to certain matters when one is at the helm and I am no exception to such biases;
One, I desire to see the institute and its members being more actively engaged in the economy and influence the economic direction of the country from a policymaking perspective and wherever else the expert contribution of chartered accountants is required.
Two, the issue of ethics and good governance has been topical, both locally and internationally. It encompasses the fight against corruption, which is imperative in investment attractiveness. ICAZ’s core value is integrity and under my leadership the institute will position itself to perpetuate the adoption of good business and personal governance practices and ethical behaviour for the betterment of the institute and the country.
Three, the current environment is characterised by significant changes especially related to technological advancement. The issue of relevance of the profession becomes key.
Continuous professional development in the emerging technologies and trends to remain relevant and alive to changes will be a focus area. This will also encompass other key skills required in business to enable the chartered accountants to give of their best value.
MC: What is the institution’s outlook for 2019?
GZ: The outlook is bright and exciting. That’s how I can sum it up. The proof of the pudding is in the eating. Let’s do another interview again in 10 months. A lot will have happened. But before that, let’s meet at the Investment Attraction Winter School at Sun City in South Africa, August 29 to September 1 2019.
Source: ZimFund gets US$145,5m for water, sanitation, power projects – NewsDay Zimbabwe February 27, 2019 ZimFund manager Emmanuel Nzabanita BY COLIN MOYO INTERNATIONAL donors have contributed US$145,5 million towards water, sanitation and power projects in the country, a Zimbabwe Multi-Donor Trust Fund (ZimFund) top official has revealed. Speaking on the sidelines of a meeting with […]
INTERNATIONAL donors have contributed US$145,5 million towards water, sanitation and power projects in the country, a Zimbabwe Multi-Donor Trust Fund (ZimFund) top official has revealed.
Speaking on the sidelines of a meeting with African Development Bank (AfDB) officials in Bulawayo yesterday, ZimFund manager Emmanuel Nzabanita said the objective of the fund was to improve provision of water, sanitation and energy in the country.
“Our contributing donors include Australia, Denmark, Germany, Norway, Sweden, Switzerland and the United Kingdom,” he said.
AFDB is the administrator for ZimFund.
Nzabanita said the fund was bankrolling two projects, namely Urgent Water Supply (UWS) and Sanitation Rehabilitation Project (EPIRP).
“The objective of EPIRP is to assist Zimbabwe to improve the availability and reliability of electricity supply through rehabilitation of generation, transmission and distribution facilities,” he said.
African Development Bank country manager Damoni Kitabire said at Marvel substation in Bulawayo, three 60 MVA transformers were installed more than 50 years ago and one of the transformers failed in 2009; in Gweru, the Chertsey substation was decommissioned 14 years ago.
According to Nzabanita, ZimFund is financing the replacement of a 90MVA transformer at Chertsey substation and a 175 MVA transformer at Marvel substation in Bulawayo, to supply approximately
300 000 households in the City of Kings and other surrounding provinces.
“The substation [Chertsey] supplies power to a number of institutions such as hospitals, clinics, colleges, universities and schools,” he said.
About US$8 million was allocated to Marvel and Chertsey projects.
ZimFund traces its roots to the cholera outbreak that hit the country in 2008, during which about 4 000 people lost their lives and 100 000 affected.
ZimFund says the breakdown of water and sanitation infrastructure compounded by unreliable power supply led to inadequate provision of safe and clean water in the country.
The organisation was established to help the country rehabilitate key water and sanitation, and power infrastructure, particularly in municipalities that were most affected by the cholera outbreak.
Source: Stop being cry-babies, aspiring female politicians told | Newsday (News) BY STEPHEN CHADENGA/HAZVINEI MWANAKA ASPIRING female politicians should desist from being cry-babies as public office was not for the faint-hearted, a government official has said. Speaking at a Women’s Coalition of Zimbabwe (WCoZ) meeting in Gweru last week, Midlands provincial development officer in the […]
ASPIRING female politicians should desist from being cry-babies as public office was not for the faint-hearted, a government official has said.
Speaking at a Women’s Coalition of Zimbabwe (WCoZ) meeting in Gweru last week, Midlands provincial development officer in the Women’s Affairs ministry, Sithembile Dube, said women who fight for political space should be knowledgeable about the field and develop thick skin for them to survive.
“One of our weaknesses as women is continuing to be cry-babies,” Dube said.
“We should shift from this position and enhance our knowledge and research so that we base our arguments on factual evidence. We should have statistics on women representation in politics and other spheres, where women want space before we go on to fight for that space.”
Dube said fighting for women rights took courageous people who have the capacity to “grab the bull by its horns”.
WCoZ Midlands vice-chairperson Florence Guzha said women needed to fight the patriarchal system that rendered them subordinate to men.
Guzha challenged men to be instrumental in uplifting women as they were the ones at the forefront of suppressing the rights of women.
“Women can be better leaders than men, but due to socialisation and the patriarchal nature of our society, they (women) are made to be inferior,”Guzha said.
“We need men to help us move up the political ladder as they are the ones that are down treading us.”
Padare/Enkundleni/Men’s Forum on Gender Midlands chapter chairperson, Edson Kuregbwaseka, said women needed to support each other and fearlessly fight for political space.
“There is need for women to put more strength when it comes to fighting for positions of authority,” he said.
Gweru Urban ward 8 councillor Notal Dzika said women should not expect softness when it comes to politics as the game was for those with the hearts of warriors.
“As much as men might want to support them women must also understand that the politics is hard turf area and they (women) should come prepared when they want to join the race,” said Dzika.
Addressing a similar gathering in Masvingo, WCoZ Masvingo chapter chairperson Joyce Mhungu said participation of women was far and in-between and that they were working on finding ways to encourage women to take up decision-making positions, starting from community levels.
“We were also looking at the challenges that are hindering women from participating and what can also be done to uplift them,” she said.
“As WCoZ, we launched the ‘Strengthening Women’s Advocacy for Inclusive Governance’ SWAG campaign last year, which is based on Section 56 of the Constitution about equality and non-discrimination; meaning on decision making processes, men and women are equal,” added Mhungu.
She hoped that by 2023 women’s participation would increase, including young women and those with disabilities.
“We hope that through the campaign, come 2023, most women will be educated and will be willing to participate in governance and electoral processes,” she added.
According to sections 17 and 56 of the Constitution, there should be equal representation of women in every sector, politics included.
In previous polls, female political aspirants complained of intimidation, violence, harassment, victimisation, name-calling, body-shaming and cyber-bullying as hindering them from participating in politics. Vote-buying, which creates an imbalance for women who are traditionally under-resourced, was also another hindrance.
Source: Zim accelerates ease of doing business | The Herald February 27, 2019 Minister Mutsvangwa Felex Share Senior Reporter Government says a fully-fledged Zimbabwe Investment and Development Agency (ZIDA) that will process investment approvals within a day will be fully operational this year. This is part of Government’s public enterprise reform programme to advance President […]
Felex Share Senior Reporter Government says a fully-fledged Zimbabwe Investment and Development Agency (ZIDA) that will process investment approvals within a day will be fully operational this year.
This is part of Government’s public enterprise reform programme to advance President Mnangagwa’s Vision 2030 of turning Zimbabwe into an upper middle income economy.
The country’s economic reform plan, the Transitional Stabilisation Programme (TSP), is underpinned by structural reform measures to mitigate the challenges and risks faced by the economy.
These measures include deepening the ease and cost of doing business reforms to improve competitiveness and establish a One-Stop Shop Investment Centre, public enterprise reforms and labour law reforms.
Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa told the media after yesterday’s Cabinet meeting that an inter-ministerial committee to provide One-Stop Shop investment services was now fully operational.
“Cabinet also noted that the legislation to underpin the operations of ZIDA is now before Parliament,” she said.
“A fully-fledged ZIDA, which will complete the processing of investment approvals within a day is set to be fully operational by there and of the second quarter of 2019.
“This is bound to significantly improve the investment climate in the country, and thereby stimulate economic development in line with the goals in Vision 2013.”
The ZIDA Bill also seeks to provide assurance to investors about the country’s commitment to property rights.
Minister Mutsvangwa said Cabinet reconsidered its decision of April 2018 to convert the National Competitiveness Commission into a Department under the Ministry of Industry and Commerce.
“Following a submission by the Minister of Industry and Commerce and in light of prevailing international best practice, Cabinet approved the recommendation by the Minister that the National Competitiveness Commission should continue to operate as an autonomous entity that is premised on private sector involvement.”
She said Cabinet had also received progress reports on the Implementation of 100-day projects.
She said Transport and Infrastructural Development Minister Joel Biggie Matiza briefed Cabinet on five priority projects under implementation.
These include dualisation of the road from tollgate to Melfort along Harare –Mutare Road, dualisation of road from Norton to tollgate along the Harare- Bulawayo Road where surfacing of the nine kilometre stretch was completed and work on the rail over is underway and construction of Pembi Bridge approaches.
“The computerisation of the learner’s driver’s licence at VID Eastlea under a Public Private Partnership arrangement is 95% complete,” Minister Mutsvangwa said.
“The procurement and installation of the hardware and software has been completed. What remains is linking the platform to the SAP payment system.”
Under Primary and Secondary education, Minister Mutsvangwa said, 200 units of the proposed 300 Primary Mobile Science Laboratory units are now in place while tendering for science kits for 3000 primary schools is underway.
“Construction work at the 10 Satellite schools in Kariba and Siakobvu District in Mashonaland West and Zvishavane, Mberengwa and Shurugwi Districts in Midlands Province are at various levels of completion,” she said.
Source: Coal production set to surge – NewsDay Zimbabwe February 27, 2019 BY MTHANDAZO NYONI PRIVATE coal miner Makomo Resources says it expects to produce 350 000 tonnes of coal per month this year on the back of an anticipated increase in demand from the Zimbabwe Power Company (ZPC). The ZPC has taken a stance […]
PRIVATE coal miner Makomo Resources says it expects to produce 350 000 tonnes of coal per month this year on the back of an anticipated increase in demand from the Zimbabwe Power Company (ZPC).
The ZPC has taken a stance to cut on coal imports due to forex challenges and procure all its requirements locally.
Makomo managing director Raymond Mutokonyi told NewsDay that the year ahead looked bright for the coal miner and would ramp up production to meet the anticipated increase in demand.
“This year looks good for us, looking at what is happening in our region, especially in South Africa where electricity is in short supply. So we will fail to import, which will force everybody to be serious about local production,” Mutokonyi said.
“We project that ZPC will need a lot of coal because they are our biggest customer. So, because they would want to have maximum output, especially as we go towards winter, we are projecting that volumes will start to increase. We will be operating at full throttle, producing between 300 000 tonnes and 350 000 tonnes (of coal) per month,” he said.
Mutokonyi said their production was demand-driven and last year the production was subdued.
“We were marginally down last year,” he said.
He said they were facing challenges such as high inflation and rising costs.
“. . . but we are seeing a bright future. Obviously, industry can’t close because of anything. As long there is a market, we will be there. So, we see the production firming up . . .,” he said.
Makomo Resources is the largest privately-owned coal producer in Zimbabwe, and it supplies the country’s thermal power stations, industrial and agricultural sectors.
