FBC Holdings Limited says it continues to absorb exchange losses emanating from the external US$10 million loan contracted from a regional lender pending registration process with the Reserve Bank of Zimbabwe (RBZ).

BY MISHMA CHAKANYUKA

In a trading update for the third quarter ended September 30, 2019, the group’s secretary, Tichaona Mabeza said pending finalisation of the registration process, FBC is still absorbing the exchange losses.

“The group is still in the process of registering with the Reserve Bank of Zimbabwe an external loan of US$10 million obtained by FBC Holdings Limited from a regional financial institution under the legacy debt,” he said.

“Pending finalisation of the registration process, the group continues to absorb the exchange losses arising therefrom. The exchange losses are expected to reverse upon conclusion of the registration process.”

Following the declaration of the Zimbabwe dollar as the sole legal tender through Statutory Instrument 142 in June, which effectively outlawed the use of the United States dollar and other external currencies, some companies have suffered exchange losses mainly arising from their foreign obligation.

RBZ has committed to assuming the foreign legacy debts at a rate of $1:US$1 to rescue companies.

There are, however, fears that the central bank will struggle to honour the commitment given that the country has been reeling from foreign currency challenges over a period of time.

During the period, FBC recorded a 275% increase in total net income to $388,6 million from $103,6 million posted in the same period last year.

The cost to income ratio improved to 51% compared to 55% recorded in the first half of the year driven by the strong income growth between the first six months and the third quarter of 2019.

Profit-before-tax increased by 533% to $189,4 million from $30 million reported in prior year.

Administrative expenses were up 74% to $152,9 million from $87,7 million incurred for the six months ended June 30, 2019.

Mabeza said total equity attributable to shareholders of the parent company increased by 29% to $349,1 million from a comparative 269,9 million.

He said the group would continue to introduce new customer experiences and focus on digitalisation programmes.

“During the course of 2019, the group embarked on an Oracle Core Banking and digital banking system upgrade as well as an Oracle super cluster hardware upgrade for FBC Bank and FBC Building Society,” Mabeza said.

“The investment brings with it a new digital banking experience in a secure and convenient environment. The group is, however, still stabilising the internet banking platform to maximise convenience to customers.”

CAPS UNITED…(0)2
ZPC KARIBA….(1)1

GREAT teams often win matches in knife edge, moments like these and in the end they usually ensure the result go their way.

BY TAWANDA TAFIRENYIKA

With ZPC Kariba having dominated the first half in which they attacked their opponents with the determination of a bee and the spirit of an ant, it was unimaginable that Caps United would turn the tables on their opponents.

Even their usually vociferous fans appeared to be waiting in vain hope rather than conviction.

But they did it, showing great character to come back from a goal down to seal victory four minutes from full time.

That is a marker of champions, a clear demonstration they are contenders not pretenders.

The sight of coach Darlington Dodo punching the air in delight at the final whistle with his backroom staff hoisting him, told it all.

Back to winning ways and back on top of the Castle Lager Premier Soccer League pile.

Newman Sianchali who came in at the start of the second half, replacing Dominic Chungwa made the difference.

The former Highlanders forward, scored a memorable second half brace that helped Caps United seal victory and move back to the top of the Castle Lager Premiership.

Two points now separate them from nearest challengers Chicken Inn and FC Platinum with only four matches remaining in the campaign, pointing to an intriguing conclusion to the championship.

ZPC Kariba had started off brightly, launching a series of raids in Caps United’s goal and were dully rewarded for their efforts on 27 minutes with Godswill Gwara thrusting them into the lead with a low shot that beat goalkeeper Tonderai Mateyaunga.

However, second half changes by the Caps United coach helped the game turn on its head.

Dodo threw in Sianchali and Hardlife Zvirekwi who came in for Clive Rupiya.

That proved the magic as Caps United looked reinvigorated. It didn’t take time before Sianchali rattled the nets with an overhead kick on 57 minutes having initially failed to convert a rebound after Takabva Mawaya spilled a goal bound shot by Joel Ngodzo.

The visitors were kept in the game by Mawaya who repelled everything the Caps United strikers threw at him.

ZPC Kariba, however, finished the match with 10 men after Boniface Zuberi was sent off for a second bookable offence on 82 minutes.

Caps United went 2-1 up on 86 minutes with Sianchali completing his brace with a headed effort from a cross from the left by Valentine Musarurwa. The goal lit up Rufaro Stadium as fans broke into song and dance.

Dodo admitted after the match that his team was under pressure going into this match.
“We really wanted to win the match. This is why you could see we rushed our decisions in the first half because we were a little bit under pressure. When some teams play a day before, you always want to catch up and it’s usually very difficult to psyche the players. But I am happy with the victory, especially the second half performance was great. These boys showed character, they believe and kept probing,” said Dodo. His counterpart Godfrey Tamirepi conceded that the defeat was a setback but he was generally happy with his team’s performance.
Teams:

Caps United; T Mateyaunga, J Jangano, G Goriathi, V Ndaba, (R Chitiyo 64’) D Mukandi, J Ngodzo, P Bhamusi, C Rupiya, (H Zvirekwi 46’), J Zhuwawo, D Chungwa (N Sianchali 46’)

ZPC Kariba; T Mawaya, R Tsepo, M Kunyarimwe, B Mutukure, J Marufu, B Juru, T Chiunye (B Zuberi 72’), C Muleya, G Gwara (S Gorogodyo 86’), K Nasama (T Nyamandwe 62’), T Chamboko

ZANU PF could soon embark on a new wave of purges on senior party leaders accused of sabotaging President Emmerson Mnangagwa under the guise of flushing out remnants of the G40 faction from the ruling party.

BY BLESSED MHLANGA

The Zanu PF youth league has already been placed in charge of the cleansing exercise, after Mnangagwa, while addressing the youths last month gave a directive that remnants of the G40 working against the party should be flushed out.

“I encourage you all to continue to work hard for the good of the party and guard against the whims of the enemies of our party. We still have elements of the G40 participating among us as wolves in sheep’s clothing. These must be flushed out, not only in the youth league but also within the rank and file of the party in general,” Mnangagwa said.

G40 refers to a rival faction in the ruling Zanu PF that was vanquished in November 2017 when Mnangagwa took over from the late former President Robert Mugabe.

Most of the faction leaders went into self-imposed exile after the coup that propelled Mnangagwa to presidency overtaking then Defence minister Sydney Sekeramayi, who was Mugabe’s preferred successor. But since then, the relationship between Mnangagwa and the G40 faction has remained turbulent.

The purge is looming after Zanu PF spokesperson Simon Khaya Moyo on Wednesday this week described the G40 as a national security threat, setting the ball rolling for hostile purges of party members seen as linked to the group.

“Anybody; it doesn’t matter at what level, if they are hobnobbing with G40 they stand warned. G40 is not only a threat to Zanu PF. It is a threat to the country including the MDC. It’s a threat to national security and national security affects everyone,” Moyo said.

In 2014, Zanu PF had nasty purges of then Vice-President Joice Mujuru loyalists to prepare for Mnangagwa’s rise to the position of Vice-President. Purges continued after the vanquishing of the G40 faction in 2017.

The latest war against the G40 is likely to take a nasty turn with Information deputy minister Energy Mutodi, who is allegedly battling ill health, saying the faction, ousted from Zanu PF, had now employed maids to poison Mnangagwa’s ministers in their homes.

“Team G40 is back again with dirty tactics this time using house maids to administer poison, explosives and other harmful substances including ambushes, ministers be warned,” Mutodi said on his Twitter handle this week.

Self-exiled former Zanu PF commissar Saviour Kasukuwere, who was in the G40 faction and has reportedly been accused of mobilising fellow comrades through social media in order to return to Zimbabwe politics, immediately responded, saying Mnangagwa was just looking for an excuse to crush dissenting voices.

“The statement alluded to is a serious cause for concern. You want to continue the persecution of innocent citizens who happen to differ with your diabolical leadership? Will not be intimidated and better you pay attention to the crumbling health institutions,” Kasukuwere said.

RENOWNED marabi music crooner Kireni Zulu’s son, Phil Zulu , is set to come out of hibernation with a new album 10 years after stepping into his father’s shoes.

BY PRECIOUS CHIDA

Titled Hope, the six-track album will be launched at City Sports bar next month.

Zulu told NewsDay Life & Style that he had been focusing more on his other business interests although he sometimes played instruments for his father on stage.

“I was establishing myself in the motor industry, for example, supplying spare parts to various shops and individuals. I was not totally out of music, though. I have been involved here and there, moving around with my father. However, the good thing is that I am back for good now and will be consistent in releasing albums,” he said.

The musician, who has since tried to differentiate his music from his father’s, said his music incorporated some of his father’s previous songs.

“My dad is widely known for using acoustic and congas only, but what differentiates us is that I’m using all instruments. However, my art reflects his music. For example, I had a redo of his song Tommy in this album, only that it is fused with lots of instruments. In my first album, I also recorded his song Makurukasva, which he played on acoustic,” he said.

Zulu said the music on the new album was a reflection of day-to-day life experiences, including themes of inheritance and gender-based violence.

“I’m inspired by the challenges facing people in society. I come out with songs to provide soothing and express these challenges through music,” he said.

The young musician released his debut album, Zvenzeve 10 years ago which, however, performed dismally on the market. He said he was confident his second album would mark his breakthrough as he would be employing new marketing strategies.

LOCAL authorities are seeking garnishing powers to deal with defaulting ratepayers who are reluctant to pay their bills in the absence of such authority.

BY PRAISEMORE SITHOLE/DARLINGTON MWASHITA

This was highlighted at the Urban Councils Association of Zimbabwe (UCAZ) meeting, which kicked off in Bulawayo yesterday.

Speaking during the meeting, Harare mayor Herbert Gomba expressed concern over the reluctance by residents, companies and churches to pay their bills.

“We need to revamp the way we are performing in terms of revenue collection within our local authorities,” he said.

“If you look at the way we are doing it, and how Zimbabwe Revenue Authority (Zimra) is doing it, it is totally different.”

Gomba said local authorities needed to restructure departments responsible for revenue collection.
“I would suggest that we come up with a Zimra-type structure within local authorities not the current set-up, it is not working at all,” he said.

Gomba also said in countries like the United States, local authorities in a very small community have garnishee powers which see them collecting over US$270 million a year.

He added that if he had a choice, he would steal most of the people working for Zimra to work for City of Harare.

“Plead for garnishing powers, the minister and the President will be here tomorrow (today). Let us have those so that we are able to garnish church leaders that are going to holidays in Dubai without paying local authorities,” he said.

“Let’s garnish companies that owe local authorities money,” he said, adding the culture of people not paying local authorities’ bills was found in Zimbabwe only.

“If you go to other countries, you don’t just wake up ignoring the bills. We must transform the thinking of our people so that we make it imperative for them to pay municipal bills,” he added.
Gomba also expressed concern over contemporary churches especially those into healing which he said were richer than the local authorities.

“We must now adopt the same methods being used by Walter Magaya and Emmanuel Makandiwa (church leaders). If Magaya is getting much in terms of revenue, why can’t we? It tells much about ourselves as people within the local authority,” he said.

“I am a bit emotional about it. I have seen people refusing to increase rates for 10 years in local authorities and this has not helped us. If we are to approach them, let’s first clean fully our own houses.”

HARARE-Stung by the country’s spiralling inflation, government workers recently took to the streets for the first ever police-sectioned march demanding improved wages.

IPS

They asked the Finance minister Mthuli Ncube “to commit to a process of restoring the value of workers’ salaries to the pre-October 2018 status of $475 for the lowest-paid worker”.

Currently, some teachers earn about US$50 a month.

In August, consumer rights watchdog Poverty Reduction Forum Trust said the Basket of Needs for an average family of five cost about $187 in August, an increase from $154 the month before.

Amid a heavy police presence, the protesters were barred from marching to Ncube’s offices, where they intended to deliver their petition.

Charles Mubwandarikwa, Harare chairperson of the Progressive Teachers’ Union of Zimbabwe, said “government officials never feel the pain of inflation; we only need better wages to overcome inflation”.

“It is now becoming increasingly difficult to properly price goods,” Denford Mutashu, president of the Confederation of Zimbabwe Retailers, said.

Zimbabwe’s annual inflation rate is the second-highest in the world, after Venezuela, at 300% according to the International Monetary Fund (IMF).

Although two months ago, Ncube ordered the Zimbabwe Statistics Agency to stop publicising the country’s annual inflation figures, an IMF mission to the country in September, led by Gene Leon, conducted a review and progress.

“Policy actions are urgently needed to tackle the root causes of economic instability and enable private-sector led growth,” Leon said.

He listed the ability to contain fiscal spending as a key challenge, adding tightened monetary policy was needed to stabilise the exchange rate.

“Risks to budget execution are high as demands for further public sector wage increases, quasi-fiscal activities of the RBZ [Reserve Bank of Zimbabwe] that will need to be absorbed by the central government, and pressure to finance agriculture could push the deficit back into an unsustainable stance,” Leon said in a statement.

The recommendations by the IMF would make it difficult for government to accede to the wage increase demands.

But trade unionists like Zivaishe Zhou, who is the national co-ordinator of the Zimbabwe Agricultural Professionals and Technical Association, said that inflation was impacting citizens and said that corruption was responsible for the country’s economic demise.

“In Zimbabwe, surely nothing has been damaged by the sanctions, which are aimed at few companies and individuals; we have a corrupt government that is not accountable to anyone,” Zhou said.

Dewa Mavhinga, the Southern Africa director with Human Rights Watch, agreed: “Zimbabwe authorities misinform the public that targeted sanctions are responsible for collapsing the country’s economy which is untrue. Rampant corruption and bad governance are the root causes of the country’s economic crisis.”

The European Union (EU) and United States (US) slapped Zimbabwe with financial and travel bans that targeted top Zanu PF officials for purported human rights violations and electoral fraud in 2001.

Last month, government supporters held an anti-sanctions march, just as the US included State Security minister Owen Ncube on its list of restricted persons.

Zimbabwe responded by threatening the US ambassador in the country with unspecified action, with Foreign Affairs minister Sibusiso Moyo saying “we have the means to bring all this to an end, should we deem it necessary or should we be pushed too far”.

US ambassador to Zimbabwe Brian Nichols had stated in an interview on Trevor Ncube’s Heart & Soul television channel that corruption, rather than sanctions, had done more harm to the economy.

President Emmerson Mnangagwa’s government has pinned the blame on the Zimbabwe Democracy and Economic Recovery Act (Zidera), passed in 2001 by the US Senate, prohibiting Zimbabwean entities from doing business with the first world nation.

“Zidera has blocked Zimbabwe’s access to international credit markets, leading to the drying up of traditional sources of external finance,” Mnangagwa told a gathering of anti-sanction marchers last month.

For Owen Dhliwayo, a Zimbabwean civil society activist, “corruption in the Zanu PF government has been prevalent even before the enactment of Zidera”.

Experts like Mlondolozi Ndlovu, who holds a Master’s Degree in Society and Media Studies from the country’s Midlands State University, agree: “The amounts that have been reported to have been stolen by government officials here even as reported by State media, shows that even with sanctions upon it for as long as there won’t be corruption, Zimbabwe can still manage to do very well in terms of its economy.”

In July, Zimbabwe’s former Environment, Tourism, and Hospitality Industry minister Priscah Mupfumira was arrested the Zimbabwe Anti-Corruption Commission (Zacc) over an alleged $95 million corruption scandal emanating from a National Social Security Authority (NSSA) forensic audit report detailing a litany of corrupt activities at the $1 billion state pension entity.

Mupfumira is currently out on a bail of $5 000.

This month, Joram Gumbo, Minister of State for Presidential Affairs in Mnangagwa’s Office, was arrested for prejudicing the government of $1 million during his time as Transport minister when he reportedly influenced Zimbabwe Airways, a government airline, to enter into property deals with his sister.

Taurai Kandishaya, national co-ordinator of the Zimbabwe Citizens Forum, a civil society organisation with links to the ruling Zanu-PF party, agreed.

“The reason why westerners imposed sanctions on Zimbabwe was to cripple our economy,” Kandishaya said.

Since Mnangagwa came to power, Zimbabwe’s human rights situation has worsened.

In August 2018, he unleashed the military on protesters who questioned the delayed release of the presidential election
results.

Six people were shot and killed as a result.

In January, 17 more people were shot and killed by members of the military after protests erupted following the hiking of fuel prices.

On November 6, although government had given a nod to the civil servants strike to go forward, heavily armed police blocked the protesters from marching to the Finance ministry where they intended to deliver their petition detailing their grievances.

OIL and gas exploration company, Invictus Energy has raised $1,5 million from new and existing investors to fund its Cabora Bassa project in Zimbabwe.

BY MISHMA CHAKANYUKA

The funds will be raised by issuing 57 692 310 shares at an issue price of $0,026, which represents a 13,3% discount to the 10-day volume-weighted average price (VWAP).

“Invictus Energy Limited (ASX) is pleased to announce it has received binding commitments for a placement to raise $1,5 million (before costs) by issuing 57 692 310 shares at an issue price of $0,026 which represents a 13,3% discount to the 10 day VWAP,” the company said.

“Shares will be issued to new and existing institutional and sophisticated investors under the company’s existing ASX listing rule 7.1 and 7.1 a placement capacity. A total of 18 592 121 shares will be issued under the company’s listing rule 7.1 allowance and 39 100 189 shares being issued in accordance with Listing Rule 7.1A.”

The funds will be used to finance the development of the group’s Cabora Bassa gas-condensate project in Zimbabwe.

The project encompasses the Muzarabani Prospect, which is potentially the largest, undrilled seismically-defined structure onshore Africa.

Invictus managing director, Scott Macmillan said the placement received surplus demand from what the group had targeted.

“The demand and bids for the placement was well in excess of our target and we thank our existing shareholders and the new incoming shareholders for their strong support. The company looks forward to an exciting growth phase as we focus on discussions with potential farm partners and the future exploration programme,” he said.

The funding will ensure that Invictus is well sponsored through this growth phase as farm-out discussions develop and preparatory works for the on ground exploration phase commence.

Last week, the company requested for a trading break of the company’s securities until the group releases a capital raising update to the market.

In the half year, ended December 31, 2018, Invictus widened its losses to AUD481 313 (US$340 160) from AUD210 782 (US$148 939) in the previous year, as exploration activities added to the company’s costs.

As at December 31, 2018, the carrying value of the capitalised exploration and evaluation properties of the consolidated entity stood at $5,15 million, an increase from the June 2018 figure of $4,58 million.

Invictus’ assets declined to AUD8,39 million (US$5,93 million) from the end of year results ended June 30, 2018 figure of AUD9,61 million (US$6,78 million).

Black Twitter is fuming and a petition carrying over 60 000 signatures, titled Reinstate African Union Ambassador Arikana Chihombori-Quao, is demanding the return of the permanent ambassador of the African Union (AU) to the United States, who was fired by the African Union Commission president, Moussa Faki Mahamat for her disapproval of France’s constant expansionism in West Africa.

It is quite lamentable that those who take a bold stand for justice for the African continent are either quarantined, murdered or muzzled before their voices are heard.

The dismissal of the Zimbabwean international, Chihombori-Quao, after she condemned France’s continued exploitation of former colonies, is appalling, disappointing and shameful.
The French exploitation of former colonies in Africa is widely known and noted to the extent that its mention should not cause discomfort in any circles of power.

In March 2008, former French President Jacques Chirac suggested that without Africa, France would slide down into the rank of third world power.

Chirac’s predecessor François Mitterand had already forecasted in 1957 that: “Without Africa, France will have no history in the 21st century.”

France has been holding the national reserves of 14 countries since 1961: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon.

The monetary policy governing such a diverse aggregation of countries is operated by the French treasury.

Under the terms of the agreement which set up the central banks of the mentioned countries and the West African CFA franc, the central bank of each African country is obliged to keep at least 65% of its foreign exchange reserves in an “operations account” held at the French treasury, as well as another 20% to cover financial liabilities.

It’s now estimated that France is holding close to $500 billion African countries’ money in its treasury, and would do anything to silence anyone who wants to expose this dark side of the old empire.

Chihombori-Quao is definitely not the first nor the last to get punished for sharing her honest and truthful views on the neo-capitalist Western-sponsored underdevelopment of Sub-Saharan Africa.

Thomas Sankara, the founding President of Burkina Faso, tried to liberate his country from Western influence and he was assassinated.

He refused aid packages from the International Monetary Fund because they came with strings attached.

Sankara famously asserted: “The one who feeds you usually imposes his will upon you.”

At the summit of the Organisation of African Unity (OAU) in July 1987, he tried to persuade other African countries to collectively refuse to pay their financial debts to their former colonisers.

“The origins of debt go back to colonialism’s origins,” he said, his voice punctuated with emotion.

“We cannot repay the debt because we are not responsible for this debt. On the contrary, others owe us something that no money can pay for. That is to say, the debt of blood.”

One of the core objectives of the African Union — the successor organisation of the OAU, encapsulated in the African Union Constitutive Act, emphasises its position on eradicating all forms of colonialism.

It clearly states that its purpose is: “To defend the sovereignty, territorial integrity and independence of its member States.”

However, the apparent grounds of termination on Chihombori-Quao’s appointment are not in tandem with both the OAU Charter and the AU Constitutive Act.

Chihombori-Quao has spoken worldwide to explain and empower all peoples of African descent to unite and build the “Africa We Want” as adopted in the African Union Agenda 2063.

Paradoxically, her bold statements on the kind of Africa we want to have in 2063 got her fired, which also explains that the Agenda 2063 is a façade. Visibly, Africans are not in control of their own destiny.

The autonomy of the African Union as a multilateral organisation comes into the spotlight, interrogating its president, Mahamat’s decision-making.

If he is that allergic to criticism of manipulative tactics by neo-colonial powers, then it is sufficient to say that the regional bloc is captured by an overseas power.

Instead of standing with Africa as required by his role, the AU president chose to appease the French at the expense of Africans, simply because the staple of the AU annual budget is sponsored by foreign donors.

A bone of contention and a source of concern has always been this extreme degree of dependence on external sources of funding which has dispossessed the regional institution of the power formulating independent decisions.

Apparently, most of the decisions are meant to please the sponsors at the expense of meeting the needs and interests of Africans.

The most beautiful quote on Pan-Africanism is one by the former President of Ghana, Jerry Rawlings who once said: “You may Christianise me, but do not try to Europeanise me.”
However, with leadership that reflects Western interests while sacrificing corps who try to address the neo-imperialist challenges, it is safe to say, Pan-Africanism is dead and all that Kwame Nkrumah, Samora Machel, Sankara, Jomo Kenyatta, Julius Nyerere, and Patrice Lumumba sought to achieve for the continent, is now history.

Sankara once stated in a 1985 interview with the Swiss journalist, Jean-Philippe Rapp that: “You cannot carry out fundamental change without an amount of madness. In this case, it comes from nonconformity, the courage to turn your back on the old formulas, the courage to invent the future.”

This is the exact path of positive madness that Chihombori-Quao wanted to walk down when it dawned on her that it is not only the French who have enslaved Africans for too long, but Africans have been enslaved way too long to the extent that they are now satisfied with being slaves.

Hence, she got sacked by the African Union for her bold, but honest stance on Pan African matters.

Conclusively, in the stance and spirit of Ubuntu that binds us as Africans, this article calls for more signatures on the petition to reinstate Chihombori-Quao as AU ambassador to the United States.

 Takudzwanashe Mundenga is a Zimbabwean journalist, with special interest in the African political economy. He writes in his own capacity and can be contacted on mundengatakudzwanashe@gmail.com.

The transition from fossil fuels to cleaner energies is a global pursuit. But it is faster and more intensive in some countries than others. Take the case of South Africa. Heavily dependent on coal, the country is proceeding with a more intense transition in which renewable energies are set to play a growing role.

Renewable energy technologies have recently established their role in the global energy supply mix. This is because they have begun to overcome two big hurdles.

The first was concerns about high cost. The second was their inability to provide secure energy supply. A number of factors have improved their accessibility and affordability.

These include technological improvements, economies of scale and increased competition.

The share of renewable energies in the overall energy mix will certainly have an impact on electricity market dynamics.

This includes energy prices, which are the most effective signal to users and potential investors about alternative energy sources.

That is why understanding how a higher share of renewable energy in the energy mix influences electricity prices can help policy makers.

The impact on retail prices of electricity is not uniform. It differs from country to country, and is influenced by regulatory frameworks. Nor is it the same over time.

For example, in Spain, the higher renewable energy share in the mix led to higher electricity prices between 2002 and 2009.

This was due to the high costs of the renewable energy technologies at the time. After 2009, prices fell.

This was attributed mostly to the reduction of production cost of the renewable energy technologies as well as the economies of scale created.

We set out to look at what affected an increase in the share of renewable energy in the mix.

Variables included improvements in technologies, reductions in the cost of producing renewables, changes in market structures and increasing competition.

In all 34 Organisation for Economic Co-operation and Development (OECD) countries in the study, we confirmed the positive impact of increased share of renewable energy on the retail price of electricity.

But we did find that, under certain market conditions, the inclusion of renewable energies in the supply mix could increase the cost of production. This was then passed on to the end-users.
Variables used

The econometric model was based on a panel of 34 OECD countries. The variables we used were:
retail electricity prices,
electricity generated from renewable sources as a percentage of total gross electricity production,
a measure of each country’s level of development (the gross domestic product per capita measured in constant 2010 US dollars),
greenhouse gas emissions by the energy sector as a percentage of total greenhouse gas emissions,
energy dependency, and
the market share of the largest electricity generator.

We included greenhouse gas emissions by the energy sector because European Union (EU) countries operate an emission trading scheme.

Fluctuations in these emissions have a direct impact on the marginal cost of energy production.
Energy dependency indicates the degree to which the countries are dependent on energy imports.
The measure of the market share of the largest electricity generator in the market is included because an increase in this variable would indicate a reduction in competition.

But we made adjustments. One, for example, was for each country’s level of economic development and greenhouse gas emissions by the energy sector as a percentage of total greenhouse gas emissions.

Not all 34 countries had data on the level of competition in the market. So, in evaluating the impact of this variable, only 23 European Union countries remained in the sample.

In these countries we found that a 1% increase in electricity generation concentration led to a 0,091% decrease in retail electricity prices.

This suggests that increased market power led to a price reduction.

This contradicts perfect competition theory. But it’s in line with other research that found that countries with higher market concentration have more government subsidies which decreases electricity prices. The caveat here is that subsidies have to be used efficiently, else prices rise.

Overall, from our results, and controlling for the other factors, a 1% increase in the renewable energy share in the supply mix was responsible for the increase in retail electricity price in a range between 0,03% and 0,046% in each of the countries and period examined.

Do these results, therefore, call on countries like South Africa to tread carefully on promoting the adoption of renewable energies for fear of electricity price increases?
The answer is complex.

Policy options

Projections show that in the next two years, renewable energy technologies will — at the very least — be competitive on price with fossil fuels.

Renewable energies have the potential to be even more cost effective in the future.

This means that the relationship between a rising share of renewable energy in the overall electricity mix of a country and the retail price of electricity will eventually be negative.

As our research underscores, the structure of the electricity market influences the impact of renewable energies on the retail price of electricity.

But the impact differs in regulated monopolised markets compared with open and competitive markets.

Another factor to keep in mind is when considering an increase in electricity prices as a result of renewables is that the associated marginal cost is low while the environmental benefit is high.
But policy makers need to evaluate and proactively deal with the specific environments they are operating in, particularly the short-run consequences of changing the equilibrium of an energy system.

For example, in developing countries economic and social reasons need to be considered equally while the environmental benefit might be considered an added bonus, not the main purpose.
In developed countries, however, the aim might be purely environmental coupled with social awareness.

— The Conversation

 This report is based on the research co-authored by Anne Marie Oosthuizen, currently reading for her Masters in Economics at the University of Pretoria

RESIDENTS from Gweru’s Mkoba and Woodlands Park high-density suburbs have threatened to protest against the city council’s failure to provide water to ratepayers and deal with its dumpsite, which is six metres away from houses and is proving to be a health hazard.

BY BRENNA MATENDERE

Administratively, Woodlands falls under rural Vungu, but is receiving water, sewer and refuse collection services from Gweru City Council.

Speaking at a community meeting held in Mkoba by the Information for Development Trust last week, residents expressed anger at the failure by the authorities to rectify the irregularities.
Patience Musambasi called on fellow residents to confront council to force it to urgently act on the water crisis that had been worsened by the establishment of Woodlands suburb.

“We are failing to get enough water in Mkoba because supplies have been extended to Woodlands, yet the developers were supposed to have their own arrangements for water. It is high time we confronted the authorities and rebel over the issue,” she said.

Pasipano Chimbima, from Woodlands Park, said: “We get services like water, sewer reticulation and collection of refuse from the Gweru City Council. However, our councillor sits on the Vungu council. It does not augur well. We want our councillor to be at Gweru council. We must organise ourselves and march to the Gweru City Council and force them to make sure the councillor sits in their meetings.”

However, that is unlikely to happen since the councillor was elected as a rural councillor for the area in the 2018 elections.

Ward 16 community development chairperson Obert Rupanga said the issue of the dumpsite, which is six metres away from houses, has not been solved since 2012 and called upon residents to protest against the inaction by council.

“In 2012, the land developer had told us that by December of that year, the dumpsite, which is a health time bomb, would be removed from Woodlands. However, up to now, no action has been taken.

People are suffering due to the presence of the dumpsite,” he said.

“Gweru General Hospital dumps and burns expired drugs at the dumpsite and a strong smell rises from the place and wind blows it into our houses. We do not know if we are still safe in terms of our health.”

He added that shoemaking company Bata also dumps smelly hides and other forms of waste at the site, making it unbearable for the Woodlands residents.

“If you are driving and you overtake a truck coming from Bata carrying some rotten animal skins and other used up things, you will not be able to contain the stench. Those are things being dumped at the city’s dumpsite, where the first house is six metres away. Just imagine what those families are enduring,” Rupanga said.

“This is a situation we are saying must end. We need solutions from the Gweru City Council,” he said.

Residents also complained of frequent sewerage blockages.

Vungu ward 16 councillor Parirenyatwa Nyika said he was facing serious challenges in trying to settle the problems in Woodlands.

“The challenge is that when we go to the Gweru City Council, they say the land belongs to Vungu and when we go to Vungu, they also refer us back.

Gweru Residents Association director Cornelia Selipiwe said: “Our fear is that council will end up saying we are now demolishing houses near the dumpsite because in the first place, it was irregular to parcel out stands near the dumpsite.

“There is what is called a buffer zone, which was supposed to be observed in parcelling out stands near the dumpsite. So as residents’ leaders, our fear is now that if we continue to push, that will affect some residents who may have their houses demolished,” Selipiwe said.

Council’s deputy director in charge of planning, Tapiwa Marerwa, emphasised that home-seekers must check if the developer has a certificate of compliance.

Gweru mayor Josiah Makombe said he was aware of the challenges that residents in Woodlands are facing and indicated that relevant departments at council would look into the matter.

“Our departments at council are working flat out to solve the challenges that the people in Woodlands are facing. The major challenge we are having is of resource constraints, but we are seized with the matter. Our priority is to ensure that all our residents get satisfactory service and so in line with that goal we look into grievances of all our rate payers,” he said.