Econet has released its results for the half year ended August, 31, 2017 showing significant growth in both revenue and profits. Revenue for the period was up by 17 percent to $353 million while profit was up 228 percent to $49 million from $14,9 million prior year comparative.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose by 31 percent to $139 million from $106 million recorded in the same period last year.

The results also reflects the reduction in the group's finance costs following its $130 million capital raise which was used to pay off its foreign debts. Econet managed to reduce its finance costs during the reported period by $ 10,7 million after repaying its US dollar debt with the funds raised from its Rights Offer, which was concluded earlier in the year. In the first half of 2016, the company paid $15,2 million in finance costs. Chief Executive Officer, Douglas Mboweni attributed the strong performance to continued innovation within the business with non-voice products increasing their contribution.

"Our focus is to use technology to transform, in a deep, meaningful and fundamental way, how our customers transact and do business, and to provide convenience through technology," said Mr Mboweni.

"In line with our TMT strategy, we recently launched Kwesé TV in Zimbabwe, in partnership with Econet Media Limited. We are encouraged by the employment opportunities and new skills that have been created in our country as a result," Mr Mboweni said. Data, Ecocash and other non-voice products now constitute 63 percent of the company's total revenues. Consistent with the rapid growth in data usage and increased smartphone penetration, data revenue grew by 9 percent, from $52,8 million to $63,4 million during the period under review. Mobile financial transacting service EcoCash's revenues rose by 45 percent, from $39,2 million to $57,1 million. Commenting on the results, Econet Wireless Zimbabwe's Finance Director Roy Chimanikire said the company continued to grow shareholder value in a difficult operating environment.

"Our results demonstrate diligent execution of our strategy. Our key message has been that we are growing the non-voice elements of our business. The trends that we are seeing are very encouraging. As we continue to evolve into a fully converged TMT business, we see our business changing in the depth and quality of its revenue streams and its return potential. We are well positioned to take advantage of the opportunities that are available to us in this market," said Mr Chimanikire.

"Our Rights Offer, which raised $130 million to settle all our United States Dollar debt, enabled us to avert a potentially disastrous situation for the business, had we defaulted on our debt obligations," he said. Commenting on the business outlook, Mr Mboweni said the future looked bright.

"Going into the future, we will continue to strive to deliver more value to our customers through tailor made product offers, as well as market segmentation and product bundling across all the three pillars of our TMT model. In view of the current cash shortages, and the growing use of digital financial transactions, our solutions are now a preferred mode of transacting, and we are working on further scaling up our mobile transacting and banking systems to accommodate increased demand," said Mr Mboweni.

 

- The Herald Zimbabwe

More than 70% of Africa’s population depends on subsistence agriculture for food, jobs and income. The continent has immense potential to feed itself and the world – it’s home to over 60% of the world’s uncultivated arable land. But this potential isn’t being realised.

Africa is a net food importer. Imports are expected to increase from USD$39 billion in 2016 to over USD$110 billion by 2025.

Food production is desperately low in the region. This is largely because of poorly developed farming technologies which drive rain fed farming practices. On top of this is the fact that there are poorly developed climate and weather alert systems to help farmers plan for crop seasons and adopt better ways of farming.

Farmers can’t access reliable and usable weather data. Information is often unavailable and even if it does exist, the quality is poor or it’s inaccessible to those who need it most. Farmers don’t get efficient information on drought forecasts, rainfall distribution and pest outbreaks.

This is because African governments and development agencies don’t understand and prioritise the value of climate and weather data. This has stifled investment in infrastructure and proper functioning of state institutions charged with collecting and serving climate and weather data.

There are funds that African governments can tap into. One example is the Green Climate Fund adopted in 2011 as the funding arm of the United Nations Framework Convention on Climate Change. It has raised USD$10.2 billion to finance adaptation and mitigation projects and programmes in developing countries.

For the fund to deliver on its potential, it must finance infrastructure on basic meteorological observations, for example, to generate climate and weather data fit for agricultural purposes. This will provide a boost for farmers’ ability to withstand dry and rainy seasons and to adopt the correct farming practice.

Africa needs to acknowledge and welcome the role of the private sector too. Without its investment Africa won’t be able to bridge the massive gap in infrastructure needed to collect reliable data, and to make it easily available. But that would mean sharing what data there is. A major rethink of how this is viewed is long overdue.

A lack of data

In the horn of Africa farmers in Somalia are grappling with droughts and poor rainy seasons. This has affected food production, making more than 5 million people food insecure. These farmers have no knowledge of how long and how intense the droughts will be. Information like this would help them decide when to plant and harvest.

In Cote d’Ivoire, cocoa farmers live in fear of heavy downpours in the rainy season which can lead to their farms flooding. This is a major threat to cocoa which accounts for 20% of the country’s gross domestic product. Around 5 million people depend on the cocoa industry.

Cocoa farmers in Cote d’Ivoire can use climate-smart farming practices to know when to ferment and dry cocoa beans. Flickr/SOCODEVI

If farmers were warned about intense rainfall they could take action to try and mitigate the risks. For example, those in low-lying areas could enhance soil structure to improve water filtration in times of flooding.

The National Meteorological and Hydrological Services is mandated by national laws and recognised in the Convention of the World Meteorological Organization.. Its aim is to collect and serve meteorological and hydrological forecasting and warning systems at country level. But it operates well below capacity in several African countries because of under funding and low visibility.

In Africa, about 80% of the data from the meteorological service is unable to provide proper climate information and early warnings. This is as a result of decades of neglect by governments. It is worse in Africa than anywhere else in the world because massive investment and modernisation is needed.

Some African countries have a small number of operational meteorological stations to make important data available. In the Omo-Gibe region of Ethiopia, for example, hydrological equipment was installed three years ago by the government and the UN Economic Commission for Africa.

But the World Metrological Organization estimates that an additional 4000 to 5000 basic meteorological observations are needed across the continent. The World Bank estimates that about USD$1 billion is needed to modernise Africa’s meteorological services. It also estimates that a minimum of USD$400 million to USD$500 million per year will be needed to support modernised systems, including staff costs and operating and maintenance costs.

The private sector could play a role

Governments don’t have the capacity and expertise to provide complete solutions, particularly when it comes to the investment needed. They will require partnerships in the agriculture, insurance and telecommunication sectors. These partnerships are necessary for the collection and the delivery of data and for critical services including risk analysis, commodity prices, insurance and secure payment schemes.

There are good examples of innovative solutions being put in place. ECONET, a local mobile phone operator in Zimbabwe, recently started a large scale weather-indexed insurance for farmers in Zimbabwe, known as Ecofarmer. The service has benefited 900,000 farmers so far.

Strong political support is needed to increase smart systems through partnerships – between national authorities, technical agencies, non-governmental organisations and the private sector.

But, most importantly, African governments must invest in modernising their weather and climate data. And they must forge strong partnerships with private companies and businesses.

Stephen Yeboah, PhD student, Swiss Graduate School of Public Administration (IDHEAP), University of Lausanne

This article was originally published on The Conversation. Read the original article.

Econet Wireless says its extraordinary general meeting to consider a proposed $130 million capital raise will go ahead as planned on Friday, setting itself on a collision course with the Zimbabwe Stock Exchange which directed the company to postpone it until ‘certain technical issues’ are clarified.

The rights issue has generated some controversy largely due to its requirement that shareholders pay abroad to subscribe, a move that analysts say would disadvantage pension funds and other minorities who might not be able to follow their rights. Econet says it needs to raise the cash offshore to pay off its external debt, which it has increasingly struggled to amortise due to Zimbabwe’s foreign currency crisis. 

ZSE chair Caroline Sandura said in a statement issued late on Wednesday the bourse asked Econet to defer its vote on the transaction.
But Econet countered with its own statement in which it said it had, along with the central bank, put up a facility to allow local shareholders to participate in the rights offer.

It said a rights offer account has been opened with Econet’s wholly-owned subsidiary Steward Bank, where local shareholders would deposit the proceeds of the rights offer in accordance with the timetable published in the company’s circular dated 17 January 2017. The underwriter, Econet Global, will pay the equivalent of the amount contributed by the resident shareholder to the international receiving bank, Afreximbank.

“Those resident shareholders who follow their rights by paying into the designated local account shall be deemed as having discharged their obligations as set out in the Rights Offer Circular and shall be entitled to the issue and allotment of their Rights Offer shares,” said Econet.

“In the circumstances, members are advised that the extraordinary general meeting shall proceed as published in the circular,” it added, saying members should disregard “any notice to the contrary not coming from the company.”

ZSE’s Sandura is yet to respond to the latest move by Econet.

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