Basic Layout of a Bankable Business Plan

July 31, 2015 in Business

In writing a bankable business plan, form and structure are as important as the content and substance of the plan. It is therefore important to discuss the basic formation or layout of a business plan that will make a reasonably good impression on your bankers or financiers.

by Clive Mphambela

Generally, a well-written business plan will show the reader that you are serious if it is well presented, looks good, is catchy to the eye as well and generally professionally presented. Here is what I suggest must go into your plan.

The Executive Summary: This is the most important section of your business plan. It summarises everything that is in the rest of the business plan in a compelling and interesting way. It should be the first thing your readers will see; the executive summary will either grab your readers’ interest and make them want to read the rest of the business plan or it will put them off, get them to put it down and forget about it. More than anything else, this section is important because it tells the reader why you think your business idea will be successful, in high-level terms.

This means that the executive summary should be the last section you write but it should be positioned at the beginning of your business plan. You however write this last after you have worked out all the details of your plan, and you are in a better position to summarise it. Yes, it must be a summary! Short and sweet, to arouse sufficient interest in the readers! Generally, it should be no more than two pages.


The Contents Page: Sets out the various chapters and their headings in their order of appearance in the business plan. The contents page will tell the reader where to find what information and help them in locating specific sections in your business plan. It must be included directly following the executive summary. You are advised to keep the content titles short and broad; i.e., avoid detailed descriptions or whole sentences in your table of contents.

Company Description: This section should include a high-level look at how all of the different elements of your business fit together. This section should include information about the purpose of your business as well as list the primary factors that you believe will make your business a success.
When defining the purpose of your business, be sure to list the marketplace needs that you are trying to satisfy; include the ways in which you plan to satisfy these needs using your products or services. Finally, list the specific individuals and/or organisations that you have identified as having these needs. For example, some primary success factors might include a superior ability to satisfy your customers’ needs, highly efficient methods of delivering your product or service, outstanding personnel, or a key location. Each of these may give your business a competitive advantage.

Market Analysis: This section should illustrate your knowledge about the particular industry your business is in. It should also present general highlights and conclusions of the marketing research data you collected when you were conceiving the business idea; however, the specific details of your market research studies should be moved to the appendices section at the end of your business plan.

This section should also include a clear description of the industry and its outlook. You must show an understanding of the industry size, number and variety of customers, etc. Include your target market information, an evaluation of your competition. You must describe who they are and how you compare to them, especially in the eyes of customers. Make it clear how your business offering is different.

Share the promotions and tools you intend to use in order to meet your target market expectations.

Explain your pricing and other elements of your marketing plan.

For limitations of space, we will stop here for now. We are not done just as yet. Next week we cover the last parts of drafting a bankable business plan.

l Clive Mphambela is a banker. He writes in his capacity as Advocacy Officer for the Bankers’ Association of Zimbabwe. BAZ expressly invites players in the MSME sector and all other stakeholders to give their valuable comments and feedback related to this article to him on or on numbers 04-744686, 0772206913

What is Fiscal Policy

Yesterday I touched on Monetary Policy. After reading through that and this post on Fiscal Policy I hope to bring to the fore the sources of economic pitfalls bedeviling Zimbabwe, Greece and perhaps others in similar situation: Namely that having control over Fiscal Policy and not on Monetary Policy is like a bird trying to fly on one wing!


What is Fiscal Policy

Fiscal policy is most commonly viewed by economists as one-half of macroeconomic policy, the other half being monetary policy. In its most basic form fiscal policy describes how government funds its activities and what these activities are. The putting together of a government budget, for example, is fiscal policy. Fiscal policy is seen as sustainable or rational when the public and those buying government debt instruments perceive that a government’s fiscal policy is predictable and that the government will continue to make payments on its debt. The most obvious example of a rational fiscal policy is that a government’s revenues sources (taxes, tariffs, user fees) roughly equal its expenditures on government programs. A rational fiscal policy might also be defined by a government making public its budgets and the process by which these budgets are formulated. In addition, it is common practice and rational fiscal policy for governments to prepare financial statements and to have these statements audited. Fiscal policy goes hand-in-hand with monetary policy because a country’s currency will lose its value if its fiscal policy is not seen as sustainable.

Some economists, known as Keynesian economists, believe that fiscal policy can help governments manage the economy to ensure full employment. Keynesians believe that when private economic activity is not creating enough demand in the economy to create full employment that fiscal policy can be used to increase demand and therefore stimulate enough economic activity to create more jobs. This idea of active government management of the economy through fiscal policy is derived from John Maynard Keynes, whose book The General Theory of Employment, Interest and Money was published in 1936 during the Great Depression.

As is well known the Great Depression was a time when unemployment was prolonged at very high levels compared to preceding historical periods. This motivated Keynes to recommend that government should take action to increase employment. The General Theory is oftentimes seen as the first time that a respected economist proposed that government and not the private sector can create employment. The General Theory is also seen as the beginning of macroeconomics as a subfield of economics.

An active fiscal policy then is the use of government taxing and spending policy to stimulate demand in an economy. In political debates, the use of government fiscal policy to increase demand is now known as a “fiscal stimulus”. If the private sector is not investing enough in productive assets and not spending to increase output, including the hiring of employees, then Keynesians believe that a fiscal stimulus created by government will start an upward cycle of economic activity. As government spending increases through a fiscal stimulus, the stimulus will provide more income to private individuals who will therefore spend more through consumption. This increased spending, this increased demand, will encourage private companies to begin spending more for output to meet the higher demand. This increase in output in turn will mean the hiring of more people. These newly hired employees will then spend more themselves, more demand is created and more output is produced to meet this demand, and an upward cycle of economic activity ensues. This idea of an active fiscal policy is also known as “demand management”.

Keynesian economists believe that a fiscal stimulus is created when a government spends more than it receives in taxes and other revenue sources; this is called “deficit spending”. There are several ways that a government can use deficit spending to create a fiscal stimulus and the differences in these ways to create a stimulus are often the subject of political debates in the formation of government fiscal policy. Economists who believe that government programs help people recommend that government should spend more on government programs. This increased government spending then increase demand. Other economists recommend that a fiscal stimulus be created through a reduction in taxes because taxes are seen as a drain on private on economic activity.

Rest In Peace Cecil

28 July 2015

Zimbabwe – US dentist, Dr Walter Palmer, shot a well-known lion popularly known as Cecil, triggering a world-wide outrage.

Police in Zimbabwe have arrested two people over the death of Cecil, the country’s most famous lion, and say Mr Palmer, believed to be back home, may also face poaching charges.

Cecil was a major tourist attraction at Zimbabwe’s famous Hwange National Park

Palme Lodge
The dental practice run by Mr Palmer in Bloomington, Minnesota.

Rest In Peace Cecil!


Monetary policy is associated with interest rates and availability of credit. Instruments of monetary policy have included short-term interest rates and bank reserves through the monetary base. For many centuries there were only two forms of monetary policy. Monetary policy was seen as an executive decision, and was generally in the hands of the authority with seigniorage, or the power to coin. With the advent of larger trading networks came the ability to set the price between gold and silver, and the price of the local currency to foreign currencies. This official price could be enforced by law, even if it varied from the market price.

Paper money called “jiaozi” originated from promissory notes in 7th century China. Jiaozi did not replace metallic currency, and were used alongside the copper coins. The successive Yuan Dynasty was the first government to use paper currency as the predominant circulating medium. In the later course of the dynasty, facing massive shortages of specie to fund war and their rule in China, they began printing paper money without restrictions, resulting in hyperinflation.

With the creation of the Bank of England in 1694, which acquired the responsibility to print notes and back them with gold, the idea of monetary policy as independent of executive action began to be established. The goal of monetary policy was to maintain the value of the coinage, print notes which would trade at par to specie, and prevent coins from leaving circulation. The establishment of central banks by industrializing nations was associated then with the desire to maintain the nation’s peg to the gold standard, and to trade in a narrow band with other gold-backed currencies. To accomplish this end, central banks as part of the gold standard began setting the interest rates that they charged, both their own borrowers, and other banks who required liquidity. The maintenance of a gold standard required almost monthly adjustments of interest rates.

During the 1870–1920 periods, the industrialized nations set up central banking systems, with one of the last being the Federal Reserve in 1913. By this point the role of the central bank as the “lender of last resort” was understood. It was also increasingly understood that interest rates had an effect on the entire economy, in no small part because of the marginal revolution in economics, which demonstrated how people would change a decision based on a change in the economic trade-offs.

Monetary policy is the process by which the government, central bank, or monetary authority of a country controls the supply of money, availability of money, and cost of money or rate of interest to attain a set of objectives oriented towards the growth and stability of the economy. Monetary theory provides insight into how to craft optimal monetary policy.

Monetary policy rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate (to achieve policy goals).

It is important for policymakers to make credible announcements. If private agents (consumers and firms) believe that policymakers are committed to lowering inflation, they will anticipate future prices to be lower than otherwise (how those expectations which are formed is an entirely different matter; compare for instance rational expectations with adaptive expectations). If an employee expects prices to be high in the future, he or she will draw up a wage contract with a high wage to match these prices. Hence, the expectation of lower wages is reflected in wage-setting behaviour between employees and employers (lower wages since prices are expected to be lower) and since wages are in fact lower there is no demand pull inflation because employees are receiving a smaller wage and there is no cost push inflation because employers are paying out less in wages.

Monetary policy, to a great extent, is the management of expectations. Monetary policy rests on the relationship between the rates of interest in an economy, that is, the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate (to achieve policy goals). The beginning of monetary policy as such comes from the late 19th century, where it was used to maintain the gold standard.

A policy is referred to as contractionary if it reduces the size of the money supply or increases it only slowly, or if it raises the interest rate. An expansionary policy increases the size of the money supply more rapidly, or decreases the interest rate. Furthermore, monetary policies are described as follows: accommodative, if the interest rate set by the central monetary authority is intended to create economic growth; neutral, if it is intended neither to create growth nor combat inflation; or tight if intended to reduce inflation.

There are several monetary policy tools available to achieve these ends: increasing interest rates by fiat; reducing the monetary base; and increasing reserve requirements. All have the effect of contracting the money supply; and, if reversed, expand the money supply. Since the 1970s, monetary policy has generally been formed separately from fiscal policy. Even prior to the 1970s, the Bretton Woods system still ensured that most nations would form the two policies separately.

Within the vast majority of modern nations, special institutions (such as the Federal Reserve System in the United States, the Bank of England, the European Central Bank, the People’s Bank of China, the Reserve Bank of New Zealand, the Reserve Bank of India, and the Bank of Japan) exist which have the task of executing the monetary policy and often independently of the executive. In general, these institutions are called central banks and often have other responsibilities such as supervising the smooth operation of the financial system.

The primary tool of monetary policy is open market operations. This entails managing the quantity of money in circulation through the buying and selling of various financial instruments, such as treasury bills, company bonds, or foreign currencies. All of these purchases or sales result in more or less base currency entering or leaving market circulation.

Usually, the short-term goal of open market operations is to achieve a specific short-term interest rate target. In other instances, monetary policy might instead entail the targeting of a specific exchange rate relative to some foreign currency or else relative to gold. For example, in the case of the USA the Federal Reserve targets the federal funds rate, the rate at which member banks lend to one another overnight; however, the monetary policy of China is to target the exchange rate between the Chinese renminbi and a basket of foreign currencies.

Zimbabvwe: Full text of Supreme Court judgment on termination with notice

There has been much talked about and little said over the recent Supreme Court ruling on termination with notice. Below is the full text of the judgment.


Full text of Supreme Court judgment on termination with notice
Jul 24, 2015

This is the full text of the Supreme Court Judgment No 43-15 which found that employers have a common law right to dismiss employees on notice.
L Madhuku, with him C Mucheche, for the appellants
T Mpofu, for the respondent
CHIDYAUSIKU CJ:This is an appeal from a judgment of the Labour Court delivered on 28 March 2014 allowing termination of the appellant’s employment contracts on notice.
Chief Justice Godfrey Chidyausiku

The facts of this case are common cause. They are as follows. The appellants were employed by BP Shell as supply and logistics manager and finance manager. BP Shell sold its services as a going concern to Zuva Petroleum, the respondent. A transfer of undertaking was done in terms of s 16 of the Labour Act (chapter 28:01) (hereinafter referred to as “the Act”) and an agreement of sale concluded. The appellants were transferred to the new undertaking without derogation from the terms and conditions of employment that they enjoyed when they were under BP Shell.
On 21 November 2011 the respondent offered its employees, who included the appellants, a voluntary retrenchment package which was declined. On 15 December 2011 the respondent served each of its employees, including the appellants, with a compulsory notice of intention to retrench. The appellants and the respondent could not agree on the retrenchment terms. Having failed to agree on the terms of retrenchment, the parties referred the dispute to the Retrenchment Board. On 16 May 2012 the Ministry of Labour and Social Services directed the parties to carry out further retrenchment negotiations for another twenty-one days. On 18 May 2012, and before the expiry of the twenty-one days, the respondent wrote letters to the appellants, terminating their contracts of employment on notice, as was provided for in the contracts of employment signed by both parties, with effect from 1 June 2012.
The respondent paid the appellants cash in lieu of notice and thus terminated the employment relationship. The appellants approached a labour officer, contending that their employment contracts had been unlawfully terminated. The labour officer failed to resolve the matter and referred it to compulsory arbitration. The arbitrator concluded that the termination of the contracts of employment was unlawful because the appellants had not been dismissed in terms of a code of conduct.
The respondent appealed to the Labour Court. The Labour Court allowed the appeal. In its judgment the Labour Court had this to say:
“In my view, therefore, the submission that section 12B came to do away with the possibility of terminating a contract of employment on notice is a misunderstanding of the law as it stands. In any event, the provisions of section 12(4) of the Act are clear and allow no ambiguity as also the provisions of section 12B. None of the sections have the effect of doing away with the termination of a contract of employment on notice.”
In essence, the Labour Court came to the conclusion that neither s 12B nor s 12(4) of the Act abolished the employer’s right to terminate employment on notice. I respectfully agree with this conclusion.
The appellants were aggrieved by the judgment of the Labour Court and now appeal to this court on the following grounds:
“The Labour Court erred and seriously misdirected itself on a question of law by upholding the termination of the appellants’ contracts of employment on notice and failing to find such termination to be unfair dismissal.
The Labour Court erred and seriously misdirected itself on a question of law in failing to realise as it should have done that section 12(4) of the Labour Act (Chapter 28:01) does not provide for the termination of a contract of employment on notice and that any such purported termination is contrary to section 12B of the Labour Act (Chapter 28:01).
The Labour Court erred at law in allowing termination on notice as that amounts to allowing an employer to terminate employment for no justifiable and valid cause”
The appellants seek the setting aside of the Labour Court judgment and its substitution with that of the arbitrator.
It would appear on the papers that the bone of contention between the parties is the legal status of the employer’s common law right to terminate an employment relationship on notice. Counsel are agreed that once upon a time both the employer and the employee had a common law right to terminate an employment relationship on notice. The point of departure appears to be that the appellants, while acknowledging that the employer’s right once existed, argue that it has since been abolished. The respondent contends that the employer’s right has not been abolished and still subsists.
It was contended for the appellants that s 12B of the Act abolished the employer’s common law right to dismiss an employee on notice.
On the other hand, the respondent argued that common law right to dismiss an employee on notice has not been abolished by s 12B of the Act and is extant. The respondent further argued that s 12(4) of the Act reinforces its contention that right exists, and that section regulates the exercise of the right.
The critical issue that falls for determination in this matter is therefore what meaning should be ascribed to ss 12B and 12(4) of the Act. In particular whether s 12B of the Act, on a proper reading of that section, abolishes the employer’s common law right to terminate employment on notice.
The appellants, in paragraph 2 of their heads of argument, made the following submission:
“2. In enshrining the concept of unfair dismissal in section 12B, the Labour Act (Chapter 28:01)is outlawing any termination of employment for no reason. Accordingly, the purported termination of the appellant’s contracts of employment was unlawful on account of being a contravention of section 12B of the Labour Act (Chapter 28:01).”
Section 12B of the Act, the subject of the contested interpretation, provides as follows:
12B Dismissal
(1) Every employee has the right not to be unfairly dismissed.
(2) An employee is unfairly dismissed –
(a) If, subject to subsection (3), the employer fails to show that he dismissed the employee in terms of an employment code; or
(b) In the absence of an employment code, the employer shall comply with the model code made in terms of section 101(9).
(3) An employee is deemed to have been unfairly dismissed –
(a) if the employee terminated the contract of employment with or without notice because the employer deliberately made continued employment intolerable for the employee;
(b) if, on termination of an employment contract of fixed duration, the employee-
(i) had a legitimate expectation of being re-engaged; and
(ii) another person was engaged instead of the employee.
(4) In any proceedings before a labour officer, designated agent or the Labour Court where the fairness of the dismissal of an employee is in issue, the adjudicating authority shall, in addition to considering the nature or gravity of any misconduct on the part of the dismissed employee, consider whether any mitigation of the misconduct avails to an extent that would have justified action other than dismissal, including the length of the employee’ service, the employee’s previous disciplinary record, the nature of the employment and any special personal circumstances of the employee.”
As I have already stated, it is common cause that once upon a time both the employer and the employee had a common law right to terminate an employment relationship on notice. That common law right in respect of both the employer and the employee can only be limited, abolished or regulated by an Act of Parliament or a statutory instrument that is clearly intra vires an Act of Parliament.
I am satisfied that s 12B of the Act does not abolish the employer’s common law right to terminate employment on notice in terms of an employment contract for a number of reasons.
The time-honoured and golden rule of statutory interpretation is that you give the words of a statute their primary meaning. See National Railways of Zimbabwe Contributory Pension Fund v Edy S-141-88; Madoda v Tanganda Tea Company Ltd 1999 (1) ZLR 374 (S); S v Masivira 1990 (1) ZLR 373 (HC); Maxwell on The Interpretation of Statutes 12 ed at p 28; Nyemba and Watunga v R 1961 R & N 688 (SR) at 691 C-D; Mike Campbell (Pvt) Ltd v Minister of Lands and Anor 2008 (1) ZLR 17 (S) at 33-35; and Mawarire v Mugabe NO and Ors CCZ-01-2013.
Applying this golden rule of statutory interpretation, I see no words in s 12B of the Act that either expressly or by necessary implication abolish the employer’s common law right to terminate an employment relationship by way of notice.
It is also a well-established principle of statutory interpretation that a statute cannot effect an alteration of the common law without saying so explicitly.
This principle finds authority in the case of Phiri and Ors v Industrial Steel Pipe (Pvt) Ltd 1996 (12) ZLR 45 (S) at 49, wherein the following was stated:
“There is a presumption, in the interpretation of statutes, that Parliament does not intend a change in the common law, unless it expresses its intention with irresistible clearness or it follows by necessary implication from the language of the statute in question that it intended to effect such alteration in the common law; for ‘construing the statute by adding to it words which are neither found therein nor for which authority could be found in the language of the statute itself, is to sin against one of the most familiar rules of construction …’: per LORD HALSBURY LC in Bank of England v Vagliano [1891] C AC 107 at 120.”
See also PTC v Mahachi 1997 (2) ZLR 71 (H); Mushaishi v Lifeline Syndicate and Anor 1990 (1) ZLR 284 (H) at 287D; and Johannesburg Municipality v Cohen’s Trustees 1909 TS 811.
Section 12B of the Act, as the main heading of that section reveals, deals with dismissal and the procedures to be followed in those instances where an employment relationship is to be terminated by way of dismissal following misconduct proceedings. The section also sets out in some detail what constitutes unfair labour practice which it outlaws. Termination of employment on notice is not among the conduct that s 12B of the Act outlaws as unfair labour practice.
The Section that deals with termination of a contract of employment on notice is S 12 (4) of the Act. I shall revert to this section later in this judgment.
It is also instructive to note that s8 of the Act sets out in some detail conduct that is outlawed as unfair labour practice.
Section 8 of the Act provide as follows:
“ 8 Unfair labour practices by employer
An employer or, for the purpose of the paragraphs (g) and (h), an employer or any other person, commits an unfair labour practice if, by act or omission, he-
(a) Prevents, hinders or obstructs any employee in the exercise of any right conferred upon him in terms of Part 11; or
(b) contravenes any provision of Part 11 or of the section eighteen; or
(c) refuses to negotiate in good faith with a workers committee or a trade union which has been duly formed and which is authorized in terms of this Act to represent any of his employees in relation to such negotiation; or
(d) refuses to cooperate in good faith with an employment council on which the interests of any of his employees are represented ; or
(e) fails to comply with or to implement-
i. a collective bargaining agreement; or
ii. a decision or finding of an employment council on which any of his employees are represented; or
iii. a decision or finding made under Part XII; or
iv. any determination or direction which is binding upon him in terms of this Act; or
(f) bargains collectively or otherwise deals with another trade union, where a registered trade union representing his employees exists; or
(g) demands from any employee or prospective employee any sexual favour as a condition of-
(i) the recruitment for employment; or
(ii) the creation, classification or abolition of jobs or posts; or
(iii) the improvement of the remuneration or other conditions of employment of the employee; or
(iv) the choice of persons for jobs or posts, training, advancement, apprenticeships, transfer, promotion or retrenchment; or
(v) the provision of facilities related to or connected with employment; or
(vi) any other matter related to employment; or
(h) engages in unwelcome sexually — determined behaviour towards any employee, whether verbal or otherwise, such as making physical contact or advances, sexually coloured remarks, or displaying pornographic material in the workplace”
It is apparent from the above section that termination of employment on notice is not among the conduct outlawed by s8 of the Act.
It is also very clear that, on a proper reading of s12B of the Act, it deals with the method of termination of the employment known as “dismissal”. While dismissal is one method of termination of employment, it is not the only method of terminating an employment relationship. It is only of several methods of terminating employment. In this regard, s 12C of the Act provides for the method of termination of employment known as “retrenchment”. Termination of employment by the way of retrenchment is not a dismissal.
This court has held that termination of the employment can be effected in other ways than dismissal. In the case of Commercial Careers College (1980) (Pvt ) v Jarvis 1989 (1) ZLR 344 (S) at 349E- G, this court made the following observation:
“It is easy to conceive of a situation in which, albeit, no blame whatsoever attaches to the employee, the inescapable inference is that the personal relationship between him and the employer has broken down to the extent that trust in one another has been lost. For a court to order reinstatement against such a backdrop of animosity and ill-will, solely because an employee unreasonably and out of wounded pride seeks it, would be to permit the continuation of an intolerable personal relationship — once which would make it impossible for the employee to perform his duties either to his own satisfaction or to that of his employer.”
In the Commercial Career College case supra it was common cause that the personal relationship between the applicants and the respondent was totally destroyed.
The applicants’ stance was simply that the respondent, the employer, cannot terminate their employment contracts on notice at law, but they can resign from employment willy nilly. That proposition was rejected.
The same proposition that where the relationship between the employer and the employee has deteriorated to untenable levels through no fault of either party the relationship can be terminated was accepted in Winterton, Holmes & Hill v Paterson 1995 (2) ZLR 68 (S).
Quite clearly, the appellants’ case is predicated on the proposition that dismissal means all forms of termination of employment. Put differently, all terminations of employment are dismissals. This proposition is not tenable on the authority of the above cases. That proposition is clearly erroneous.
The proposition that there are other methods or forms of terminating employment apart from dismissal was clearly articulated in the case of Samuriwo v Zimbabwe United Passenger Company 1999 (1) ZLR 385, (H), wherein GARWE J (as he then was ) had this to say at 388E:
“ The code, in compliance with s101 of the Act, steers clear of the matters that have nothing to do with misconduct, such as termination for other reasons. Whilst it must be accepted that the code makes no provision for the managing director himself to the subject of disciplinary proceedings, it seems to me that this is irrelevant as the termination in the present case is not sought on the basis of the code but in terms of the contract of employment “ (the emphasis is mine) .
Samuriwo’s case supra places beyond dispute the fact that there are other ways of termination of employment different from dismissal in terms of codes of conduct following disciplinary proceedings as provided for in the codes of conduct.
The proposition that an employer has a right to terminate an employment relationship on notice in circumstances other than dismissal for the misconduct finds further support in the case of Getrude Kwaramba V Bain Industries (Pvt) Ltd SC 39/01, where this court accepted the employer’s right to terminate the employment contract on notice in no fault situations.
This case was followed in Chirasasa and Ors V Nhamo NO and Anor 2003 (2) ZLR 206 (S) where this court held that:
“In this case , the appellants agreed that there was no act of misconduct alleged against them . The parties had failed to agree on the new terms and conditions of the employment proposed by the second respondent to meet the operational requirements of the business. The second respondent had a right to terminate the contracts of employment with appellants by giving them one calendar month’s notice and could exercise it without obtaining prior written approval of the Minister. The decision in Kwaramba’s case supra is, in my view, correct, whilst that in Masundire’s case supra is wrong.”
I am satisfied s12B of the Act does not deal with the general concept of termination of employment. It concerns itself with termination of employment by way of dismissal in terms of a code of conduct. It sets out that which must be followed or done in terms of either an employment code of conduct or a national code of conduct. It does not concern itself with termination of employment by ways other than dismissal.
Section 12(4) of the Act is the section that deals with the concept of termination of employment on notice in terms of a contract of employment. It regulates the period of notice.
It provide as follows:
“12 Duration, particulars and termination of employment contract”
(4) Except where a longer period of notice has been provided for under a contract of employment or in any relevant enactment, and subject to subsections (5), (6) and (7), notice of the termination of the contract of employment to be given by either party shall be-
(a) three months in the case of a contract without limit of time or a contract for a period of two years or more;
(b) two months in the case of a contract for a period of one year or more but less than two years.
(c) One month in the case of a contract for a period of six months or more but less than one year.
(d) two weeks in the case of a contact for a period of three months or more but less than six months;
(e) One day in the case of a contract for a period of less than three months or in the case of casual work or seasonal work”.
The wording of s12(4) of the Act is so clear that it leaves very little room, if any, for misinterpretation. It governs the time periods that apply when employment is being terminated on notice. It stands to reason that the notice periods do not apply when an employee is dismissed.
In instances of dismissal no notice is required. The periods of notice referred to in s 12 (4) of the Act can only apply where there is termination of employment in terms of a process involving the giving of notice provided for in a contract of employment.
I accept the appellants’ contention that s 12(4) of Act does not create a right to terminate employment on notice. Indeed, this contention appears to be accepted by the respondent.
The respondent’s case is that the right to terminate employment on notice is created by common law and not by statute or s 12 (4) of the Act. It contends that s12 (4) of the Act simply regulates the exercise of that right conferred on the employer by the common law.
Section 12 (4) of the Act explicitly applies to both the employer and the employee.
There is no possible explanation, and none has been advanced, why, despite the explicit language of the section, it should apply to the employee only and not to the employer; or why the section should exist to regulate a non- existent right. As Mr. Mpofu aptly submitted, providing “for a time period for a right that does not exist is a puerile exercise, one which could never have been engaged in by a sane legislator”. The presumption is that Parliament must be taken to have intended its enactments to have meaning.
Section 12 (4) of the Act can only have a meaning if there is a substantive right, in this case the common law right to terminate employment on notice, to which it pertains. This is especially so when one considers that all that s 12 (4) of the Act does is to facilitate the exercise of an existant common law right.
It is for these reasons that I agree with the conclusion of the Labour Court that the respondent was entitled at law to give notice terminating the employment of the appellants in terms of the contracts of employment between the parties.
According, the appeal fails and is hereby dismissed with costs.
GARWE JA: I agree
GUVAVA JA: I agree
Matsikidze & Mucheche, appellants’ legal practitioners
Atherstone & Cook, respondent’s legal practitioners

History of The International Monetary Fund

During the early years of the 20th century, the world suffered through the Great Depression. This happened during the 1930s. In addition to this, there were also two world wars. Due to this, the global economic system collapsed quickly. This had a major impact on international trade. As a result, countries were witnessing the plummeting living standards caused by unemployment. During World War II, Anglo-American discussions focused on the increasing demand for an institution that could take care of international finances, cooperation, and even promote international trade.

The Bretton Woods Conference

From 1st July to 22nd July 1944, 730 delegates from 44 allied nations met at the Mount Washington Hotel. The hotel is located in Bretton Woods, State of New Hampshire, United States. The issue at hand was the regulation of post war global monetary, and restoring financial order. The primary debate was between the United Kingdom and the United States delegations. The debate was about the nature of the considered organization. The British delegation wanted a fund that could help all the member nations economically, but only during emergencies or times of crisis. On the other hand, the United States delegation wanted an institution that could function like a bank. It wanted permission for member countries to borrow money for all kinds of purposes. Ofcourse, the money would be borrowed as a loan, and would have to be repaid in a specified time frame. Finally, the United States motion was accepted.

Formation of the IMF

During the Bretton Woods Conference, a lot of agreements were signed to legally establish the General Agreement on Tariffs & Trade (GATT), the International Bank for Reconstruction & Development (World Bank or IBRD) and the International Monetary Fund (IMF). The International Monetary Fund was founded on 27th December, 1945. A treaty called the Articles of Agreement was signed by 29 member countries. The next year, the first meeting was convened by the Board of Governors in Savannah, State of Georgia, United States. The purpose of the meeting was to elect the executive directors, draft the bylaws, and decide the permanent location of the IMF’s headquarters. The Board of Directors selected Washington D.C as the headquarters of the International Monetary Fund. The financial operations of the IMF started on 1st March, 1947.

The primary purpose of the International Monetary Fund is to give technical and financial assistance, oversee exchange rates, and address global financial problems. Currently, the International Monetary Fund has 182 member countries. In order to be a member of the IMF, countries need to deposit a specific amount of money as subscription fee. The countries also need to comply with the terms and conditions of the organization. The other sources of steady income for the International Monetary Fund are gold reserves, loan repayments from debtors, and requested financial resources from shareholders. The money generated by the International Monetary Fund is used for providing monetary assistance to member countries.

In the year 1952, some of the founding policies of the IMF were changed. The concept of standard structural adjustment loans was introduced. These loans helped the borrowing country to adjust the financial or economic structure. Standard structural adjustment loans were again modified in 1956.
Since 1956, lending operations for member countries have been the primary function of the International Monetary Fund. Moreover, many different changes have been made to the drawing policies of the IMF. Since its establishment, the International Monetary Fund has offered financial assistance to numerous countries facing monetary or economic problems. The organization strongly believes in its objectives. It constantly tries to bring a positive change in the overall global financial scenario.

Mandate and Objectives

The primary purpose of the International Monetary Fund has already been discussed above. Here are some key pointers to how the IMF helps member countries, and what are its objectives. The IMF aims to:
● Promote global monetary cooperation
● Facilitate the balanced growth and expansion of global trade
● Promote exchange stability
● Assist member countries in the establishment of a standard multi lateral system of payments
● Make resources available combined with appropriate safeguards to member countries experiencing payment difficulties

Overview of Governing Bodies

The highest decision making body in the International Monetary Fund is the Board of Governors. It comprises of one Governor, and one Alternate Governor. They are appointed to the IMF by each member country. The Board of Governors meet once every year. The Interim Committee comprises of 24 Fund Governors. This committee reflects the composition of all Fund members and the Executive Board. The Interim Committee meets twice every year. It’s primary purpose is to report statistics, and advise the Board of Governors about the functioning and management of the IMF.

The Development Committee also has a similar composition. It maintains a detailed overview of the basic development process. The Development Committee reports directly to the Board of Governors of the IBRD or World Bank, and the International Monetary Fund. The Executive Board comprises of 24 Executive Directors from member countries. It’s responsible for conducting everyday business of the International Monetary Fund. The Executive Board is chaired by the Managing Director, and functions daily at the International Monetary Fund headquarters in Washington D.C. The voting power of the Executive Board depends on quotas. However, it’s very rare for the board to make certain decisions on the basis of voting. Its functions rely on the formation of agreement among all the members.

The Managing Director is chosen by the Executive Board. He is the Chairman of the Executive Board, and also serves as the Chief of operating conducts and staff. He acts under the direct supervision of the Executive Board. The Chairman also handles ordinary business of the International Monetary Fund.
The International staff at the International Monetary Fund comes from different member countries. It’s worth mentioning that Executive Directors represent their respective countries. However, staff members don’t represent their countries, but serve as international civil servants. They are responsible for carrying out and managing the IMF policies.

Most staff members at the International Monetary Fund work at the IMF headquarters in Washington D.C. Some staff members are also assigned to regional offices located in New York, Tokyo and Paris. They may also represent the IMF on temporary basis in IMF member countries. Since its establishment, the International Monetary Fund has assisted numerous countries around the world. The Fund has been the lifeline of the global economy, and assists countries during financial emergencies. Certain changes are made on a frequent basis to the policies. These changes depend on the existing economic scenario, and world monetary situation.

Tanzania’s ruling party picks works minister for presidential race

DODOMA, July 12 (Reuters) – Tanzania’s ruling party on Sunday named Works Minister John Magufuli as its candidate for this year’s presidential race, a move that means he will most likely become the next president of the east African nation. The Chama Cha Mapinduzi (CCM) party has ruled Tanzania for five decades and its candidate is widely expected to win the Oct. 25 election, taking over from President Jakaya Kikwete, who has served a maximum two terms. The announcement followed a divisive party vote on a short list that had omitted Edward Lowassa, 61, a former prime minister who had been seen as leading the field. He resigned as premier in 2008 over corruption allegations in the energy sector, which he denies.

From a final list of three, Magufuli, 55, beat two female contenders: former senior U.N. official Asha-Rose Migiro and African Union ambassador to the United States Amina Salum Ali. “The result of voting from this conference is John Magufuli (87 percent), Ambassador Amina Ali (10 percent) and Dr. Asha Migiro (3 percent),” CCM said via Twitter, ahead of a formal declaration by the party. Party officials did not say why Lowassa had been left off a short list, that initially included five, that had been whittled down from 38 hopefuls by CCM’s central committee, chaired by the president.

Tanzania has been one of Africa’s most politically stable nations and has not been torn by the debate raging in parts of the continent, where some presidents have been eying third terms despite constitutional restrictions. Lowassa has yet to comment. But one aide had said that he if he was not picked he could still make a bid for the presidency as an opposition candidate. The main opposition parties promised last year to field a single candidate in the election, but experts say they may struggle to overcome years of mutual suspicion and infighting.

Renminbi or Yuan!

If you are like me you have had problems distinguishing between Renminbi and Yuan. Here’s some pain reliever from Wikipedia

The renminbi is the official currency of the People’s Republic of China. The name (simplified Chinese: 人民币; traditional Chinese: 人民幣; pinyin: rénmínbì) literally means “people’s currency.”

The yuan (元/圆) (sign: ¥) is the basic unit of the renminbi, but is also used to refer to the Chinese currency generally, especially in international contexts. The distinction between the terms “renminbi” and “yuan” is similar to that between sterling and pound, which respectively refer to the British currency and its primary unit.[citation needed] One yuan is subdivided into 10 jiǎo (角), and a jiǎo in turn is subdivided into 10 fēn (分).

The ISO code for renminbi (which may also be used for the yuan) is CNY (an abbreviation for “Chinese yuan”), or also CNH when traded in Hong Kong.[3] The currency is often abbreviated RMB, or indicated by the yuan sign ¥. The latter may be written CN¥ to distinguish it from other currencies with the same symbol (such as the Japanese yen).[citation needed] In Chinese texts the currency may also be indicated with the Chinese character for the yuan, 圆 (or 元 informally).

The renminbi is legal tender in mainland China, but not in Hong Kong or Macau. Renminbi is sometimes accepted in Hong Kong and Macau, and are easily exchanged in the two territories, with banks in Hong Kong allowing people to maintain accounts in RMB. The currency is issued by the People’s Bank of China, the monetary authority of China.[4]

Until 2005, the value of the renminbi was pegged to the US dollar. As China pursued its historical transition from central planning to a market economy, and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese industry. It has previously been claimed that the renminbi’s official exchange rate was undervalued by as much as 37.5% against its purchasing power parity (see below).[5] More recently, however, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the Federal Reserve and other major central banks, have caused the renminbi to be within as little as 8% of its equilibrium value by the second half of 2012.[6]

Since 2006, the renminbi exchange rate has been allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of world currencies. The Chinese government has announced that it will gradually increase the flexibility of the exchange rate. As a result of the rapid internationalization of the renminbi, it became the world’s 8th most traded currency in 2013.

Exchange rates