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The Economist

Hyperinflation...
Apr 12th 2007
From The Economist print edition

A clever trick for valuing the diminishing Zimbabwe dollar

HOW much does one American dollar cost in Zimbabwe? The answer, according to
its central bank, is 250 Zimbabwe dollars (Z$), the official exchange rate
since last August. If this rate were an accurate reflection of the Zim
dollar's worth back then (which is doubtful), it is almost impossible to
believe that it is valid today. Annual inflation in Zimbabwe was more than
1,700% in February and since then statisticians appear to have lost count of
rising prices. On April 11th the government indefinitely postponed release
of March figures. What is clear is that a true exchange rate would have to
fall sharply to reflect such a huge loss of purchasing power.

In fact dollars are changing hands for far more than the official rate. This
week, one London-based company specialising in money transfers to Zimbabwe
posted on the internet a tariff of Z$40,000 to the British pound (Z$20,250
to the greenback).

But without a reliable currency benchmark, it is hard to set accurate prices
or to value assets. WM/Reuters, a supplier of financial market data, is
offering an ingenious solution. It now provides a daily notional exchange
rate based on the relative price of shares in Old Mutual, an insurance
company, in the London and Harare stockmarkets.

The bulk of Old Mutual's shares are traded in Britain and South Africa, but
it has smaller listings in Sweden, Namibia, Malawi and Zimbabwe, where the
company also has half a million policyholders. Since each share's claim on
the assets and earnings of Old Mutual is the same, the ratio of its
Zimbabwean and British stock prices is a good proxy for the true Z$/sterling
exchange rate. A similar trick is used to calculate a notional exchange rate
for the Venezuelan bolivar, fixed by government since 2003. In this case,
the proxy is the relative price of shares in CANTV, a Venezuelan telecom
company, quoted in Caracas and New York.

Surrogate exchange rates have their problems too. CANTV is set to be
renationalised, which will scupper the bolivar benchmark. And the Old Mutual
implied rate to the American dollar, at Z$19,634 early this month, may
overstate the weakness of Zimbabwe's currency. The Harare shares offer a
rare opportunity for domestic investors to diversify into foreign earnings
and that should mean they trade at a premium to London shares. Still, while
it is not perfect, the proxy rate is at least in touch with reality. Which
is more than can be said for Zimbabwe's monetary authorities.

Mugabe suspected of supressing inflation figure

The Telegraph

By Byron Dziva in Harare
Last Updated: 2:14am BST 13/04/2007

President Robert Mugabe's regime raised suspicions yesterday that
Zimbabwe's inflation rate will no longer be disclosed after the latest
official figures failed to appear.

Last month, inflation rose to 1,730 per cent, the highest in the
world. Moffat Nyoni, the acting director of the Central Statistics Office,
had promised that year-on-year inflation figures would be made available on
the 10th or 11th day of every month. The newest figures were due on
Wednesday at the latest. So far, nothing has emerged.

"The figures would certainly cause some embarrassment for the
government," said John Robertson, an independent economist in Harare. He
said that every time inflation rose, civil servants demanded pay increases.

"The government is the largest employer and it can't afford 100 per
cent salary increments given the sky-high inflation," said Mr Robertson. He
believed that inflation could now have risen as high as 2,500 per cent. Mr
Mugabe's bankrupt regime has resorted to printing money to cover routine
expenses, adding further fuel to inflation.

The International Monetary Fund forecasts that price rises will exceed
6,400 per cent next year.

Economic meltdown pushes masses to the edge

Mbeki rolls out Zim plan

Zim Independent

Vincent Kahiya

PRESIDENT Thabo Mbeki has started to roll out Sadc's plan for
mediation between President Mugabe's government and the opposition Movement
for Democratic Change in a development which once again tests his ability to
bring the two warring parties to the negotiating table.

Zanu PF has embarked on a campaign to subdue the MDC and civil society
through arrests and torture of opponents.

Diplomatic sources yesterday said Mbeki had started the mediation
process. They said he has written to President Mugabe and the MDC setting
out the scope of the work to be accomplished. As part of the same effort,
staff from the Sadc secretariat arrived in the country on Wednesday to study
the country's economic situation, especially the large grain deficit.

Sources this week said there were Sadc leaders keen to use aid as a
bait to entice Mugabe towards the negotiating table.

The Mbeki project - contained in a four-page letter to MDC leaders
Morgan Tsvangirai and Arthur Mutambara and copied to Mugabe - is a roadmap
to achieving a negotiated settlement that would ensure the holding of free
and fair elections next year.

In an SABC interview at the weekend, Mbeki said: "In reality, we don't
have much time ... the Zimbabweans have got 11 months to do everything that
is necessary to ensure those elections are free and fair and that the
outcome of those elections is not contested by anybody."

The plan, largely based on ensuring that Zimbabwe conforms to the Sadc
norms and guidelines on the holding of free and fair elections, challenges
Zanu PF's desire to hold elections under the current legal framework. The
party has endorsed the harmonisation of the presidential and parliamentary
polls and is planning to amend the constitution to increase the number of
seats in both Houses.

The opposition and civic groups want the elections to be held under a
new constitutional dispensation. They are also calling for the repealing of
oppressive laws such as the Public Order and Security Act (Posa) and the
Access to Information and Protection of Privacy Act (Aippa).

Mugabe last year said the current Lancaster House document was
"sacrosanct" because people had fought for it. His government has also said
there was nothing draconian about Posa or Aippa.

The Mbeki letter states that there should not be issues that are
non-negotiable in the envisaged dialogue. The Sadc position is that parties
to the negotiations should not put forward conditionalities.

"If the parties have issues, they can raise these as part of the
negotiations," said a Sadc diplomat.

The levelling of the electoral paying field is also high among
opposition demands. Tsvangirai told a press conference yesterday that he
would negotiate with President Robert Mugabe's ruling party to try to end a
crisis he says has seen 600 political activists abducted and tortured this
year.

He was confident the crisis that erupted after the government's
violent crackdown on the opposition last month could be sorted out in direct
talks.

"This crisis is going to be resolved through negotiation, and (the
ruling) Zanu PF and MDC will sit down and negotiate," said Tsvangirai, who
was among dozens of anti-Mugabe activists who were arrested at an aborted
March 11 prayer rally in Harare.

He said the Mbeki initiative was not an extension of his "quiet
diplomacy" but a Sadc project agreed at the Dar es Salaam summit last month.

Tsvangirai told journalists that Mbeki's focus was on how to make
Zimbabwe carry out an election whose result is not disputed.

"The Sadc mandate entrusted to Mbeki includes levelling the political
playing field and ensuring that the outcome of elections is not disputed,"
Tsvangirai said.

"We have told President Mbeki that we don't want another election
under the current constitution and electoral laws because they will produce
predetermined results."

Contacted for comment yesterday, Mutambara said he could not discuss
the contents of the Mbeki letters saying it was important to "protect the
integrity of the mediation process and to allow the facilitation to be
effective".

He however confirmed that the MDC had since the Sadc summit in
Tanzania two weeks ago been working for a negotiated settlement to resolve
the country's simmering crisis.

He said the respective secretary-generals of the two factions, Tendai
Biti and Welshman Ncube, had already held two meetings with Mbeki's office
to discuss the preliminaries of the mediation plan.

Mbeki's plan is in line with calls to hold a presidential election
next year as opposed to Mugabe's original proposal to extend his term to
2010.

Sources however said the MDC was uncomfortable with holding the
election in March next year. The party wants a "transitional arrangement"
that will allow for the adoption of a new constitution, the repeal of
oppressive laws and the setting up of new institutions to run
internationally-supervised elections.

The MDC has already written to Mbeki acknowledging his mediation
efforts but expressing concern over the holding of the election in the next
11 months.

A follow-up meeting between Mbeki's office and the MDC leaders is
scheduled for Monday.

At the meeting, MDC officials are expected to update Mbeki's office on
the continued crackdown on opposition supporters by state agents in the name
of fighting terrorism.

CSO defers 2 200% inflation figure

Zim Independent

Shakeman Mugari

THE Central Statistical Office (CSO) this week deferred the
announcement of the latest inflation figures to avoid creating panic and
fuelling the black market.

The figures were due to come out on Wednesday but sources said the
government instructed the CSO to postpone the announcement indefinitely.

The Zimbabwe Independent understands that the inflation rate for March
hit a new high of 2 200,2%, up from 1 729,9% in February. Yesterday
officials from the CSO were stuck in marathon meetings at the Ministry of
Finance to discuss the ballooning inflation figures.

The postponement in the release of inflation figures coincides with
the visit by Sadc executive secretary, Tomaz Augosto Salamao, who is in the
country to assess Zimbabwe's economic condition.

Salamao is part of a team appointed by Sadc leaders at the
extraordinary summit in Tanzania a fortnight ago to examine the ailing
economy. He arrived in the country on Wednesday.

Sources said government feared that announcing the inflation figures
would take the lid off black market rates which appeared subdued over  the
past two weeks. The declining parallel market rates pulled down with them
the price of fuel.

Government evidently feared that the new figures would portray it in
bad light ahead of the Sadc economic assessment team, observers said.

The figures for March were scheduled to be announced at 10 am on
Wednesday but were called off after CSO defers inflation figurea directive
from the Ministry of Finance. The Independent is in possession of a Consumer
Price Index document and a press statement prepared by CSO acting director
Moffat Nyoni before they were withdrawn at the last minute.

According to the original statement: "The year-on-year inflation rate
for the month of March 2007 as measured by the all items Consumer Price
Index (CPI) stood at 2 200,2%, gaining 470 percentage points on the February
rate of 1729,9 %."

This means that on average goods and services normally purchased by a
household for final use in Zimbabwe were about 23 times as expensive last
month as they had been 12 months before. The same basket of goods and
services that cost $100 000 last March now costs $2 300 200.

The figures show that month on month inflation rate in March was 50,5%
gaining 12,7 percentage on the February rate of 37,8%.

The major driver of month on month inflation were passenger transport
(3,49%), vegetables (3,20%) and furniture and furnishings (2,87%).
Year-on-year inflation was driven mainly by mineral water, soft drinks,
fruit juices, passenger transport and vegetables. Nyoni denied that he had
been directed by government to withhold the figures.

"I cannot comment on something that I don't know," Nyoni said. He said
his office had planned to release the figures on Wednesday but suspended the
announcement "to do more checks on the figures".

"We want to do more checks on the rural and urban inflation figures
because we believe this is important. I had told other people to check on
Friday but now I have realised that the checks would not have been concluded
by then."

He said the figures were expected on Monday. The International
Monetary Fund (IMF) has said inflation will end the year at 4 000% but
independent economists believe it could be as high as 5 000%.

Zim cancels visas for US delegation

Zim Independent

Itai Mushekwe

IN what is likely to be seen as a bid to cover its trail of violence
against opposition political activists last month, government last week
revoked visas for a Congressional staff delegation from the United States
without disclosing reasons for the move, the Zimbabwe Independent has
learnt.

This comes as government yesterday terminated parliament's
relationship with the State University of New York (Suny) in a move that
will have adverse effects on parliament's operations.

Suny's relationship with parliament goes back to the late 1990s when
the NGO became involved in parliament's reform processes and capacity
building activities. Suny assisted parliament in analysing legislation and
in improving operations, especially in various committee activities. The
organisation was also involved in initiatives to improve the relationship
between parliament and the public.

The five-member Congressional staff delegation, which was set to meet
government officials and opposition and civic leaders to assess the
political crisis in the country, was led by Pearl-Alice Marsh and comprised
professional staff members of the US House of Representatives International
Relations Committee (HIRC). Marsh is responsible for advising HIRC and
members of the US Congress on all issues related to Africa.

The US Embassy's public affairs officer, Paul Engelstad, yesterday
confirmed the development and described the decision by government as
regrettable.

"We very much regret the government's self-defeating decision which
only further isolates them internationally," said Engelstad. "The staff
delegation had visas. They were revoked while en route by the government,"
he said.

"The delegation had hoped to get a first-hand look at what has been
happening in Zimbabwe. They had requested meetings with a variety of
Zimbabweans, including senior government of Zimbabwe officials to hear
directly from the government their side of events."

Tensions between Harare and Washington have intensified after US
Ambassador Christopher Dell recently denounced President Robert Mugabe for
sanctioning the wanton beating of Movement for Democratic Change leader
Morgan Tsvangirai whose injuries drew international outrage.

Dell in an interview with the BBC dismissed government's claims that
the West was responsible for political mayhem in the country. He said
government itself was running unprovoked street battles against its people
as evidenced by the dreadful clash between armed riot police and opposition
supporters in Highfield last month.

Marsh has visited Zimbabwe on several occasions.

The latest development comes in the wake of a State Department report
suggesting Washington would support organisations critical of the regime.
Suny is mentioned in the report as one such group. But observers have said
there was nothing particularly new in the report.

Last September, immigration officials denied entry to a delegation of
the Coalition of Black Trade Unions (CBTU) from the United States.

The CBTU issued a statement on March 16 condemning the continuing
brutality of the Zimbabwe government.

Govt, opposition still mum on the 'Zim We Want'document

Zim Independent

Lucia Makamure

THE architects of the Zimbabwe We Want document, proposed as a
solution to the country's intractable political stalemate, have expressed
disappointment at stakeholders' response to the initiative.

Ecumenical Peace Initiative Zimbabwe (EPIZ) spokesman, Father
Fradereck Chiromba, said both the government and opposition parties were yet
to submit their responses.

In an interview with the Zimbabwe Independent on Wednesday, Chiromba
said there had been a lot of misconceptions about the document which has
resulted in very little debate taking place.

"Discussions around the document have not been exhaustive as
stakeholders are more worried about the origins of the document than its
content," said Chiromba. "What we launched was a discussion document calling
for dialogue and only the Reserve Bank has submitted its response in
writing," he said.

The Zimbabwe We Want: Towards A National Vision For Zimbabwe document
was launched in September last year as a basis for discussion of the country's
crisis and the future.

Chiromba added: "We have been doing a lot of work since last year
behind closed doors because of the polarisation in the media. We have had
talks with other countries through their ambassadors and their response has
been encouraging."

He said they were holding talks with stakeholders at provincial,
district and ward level to come up with "the actual National Vision which we
wish to launch by the end of the year".

"All political parties, the business community, and civic
organisations' contributions will be incorporated in the final draft of the
National Vision," he said.

He said the current political developments in the country were a cause
for concern as they do not help the church in mapping the way forward.

"Such incidents (March 11 beatings of opposition leaders and their
supporters) do not help what we are doing. As the church our role is to make
sure that such events are minimised and that the nation has a vision," said
Father Chiromba. "Once Independence was achieved the church failed to come
up with a national vision and without a vision we will perish," he said.

Chiromba dismissed reports that there were divisions among the three
church bodies which drafted the document: the Zimbabwe Catholic Bishops
Conference, the Evangelical Fellowship of Zimbabwe and the Zimbabwe Council
of Churches.

"There are no divisions among the church bodies," he said. "As
churches we work together and we are free to respond to events separately.
As EPIZ we are fully behind the stance taken by the Zimbabwe Catholic
Bishops Conference in speaking out against human rights abuses and
corruption in their lent pastoral letter."

Chiromba also said although the document was received with scepticism,
this has not prevented it from achieving some of its goals.

"The National Vision has achieved a lot in terms of initiating
dialogue," he said. "We have enabled people to freely address topics which
used to be taboo like the economic meltdown, constitutional reforms and
leadership failures."

Zimra in Aids levy scam

Zim Independent

THE Zimbabwe Revenue Authority (Zimra), the statutory institution
mandated to collect individual and corporate taxes for treasury, has over
the past few years been under-remitting the Aids levy collected from
corporates and workers, prejudicing the National Aids Fund of $3 billion,
the Zimbabwe Independent can reveal.

This comes at a time when over 3 000 people are dying of HIV and Aids
every week after failing to access life-prolonging anti-retroviral drugs
whose cost is way beyond the reach of the majority of citizens.

Government in 1998 declared HIV and Aids a national disaster,
resulting in the setting up of the National Aids Fund through an Act of
Parliament towards which individuals and corporate bodies contribute 3% tax.

The fund is administered by the National Aids Council (NAC) which
co-ordinates a national multi-sectoral response to the pandemic through
various programmes.

NAC executive director, Tapuwa Magure confirmed the non-remittance of
the funds by Zimra in a telephone interview on Wednesday.

"It's true that there was under-remittance of the Aids levy funds
collected from corporates over the years and this was only discovered some
time last year," said Magure. "This has prejudiced NAC of over $3 billion
and this has obviously negatively affected the implementation of various
programmes.

"However, the problem is being rectified by the responsible
authorities. They are paying installments. I don't have the exact figures
off hand but there was over $3 billion prejudice."

He added: "As for why this was happening and whether the settlement
will include interest accrued, I can only refer you to Zimra officials. I
cannot comment on that," he said.

Contacted for comment on the issue, an official in the Zimra corporate
communications division on Wednesday asked the Independent to put questions
in writing to corporate legal services manager, Florence Jambwa. - Staff
Writer.

Gono to float currency

Zim Independent

Shakeman Mugari

RESERVE Bank of Zimbabwe (RBZ) governor, Gideon Gono, will allow the
dollar to float on the market and announce a package to fund next year's
elections in a new monetary policy that has been moved forward to this month
instead of the traditional July to deal with the worsening economic crisis.

Central bank sources said Gono was already working on the monetary
policy document that he is expected to bring to the market later this month.
The tentative date for the policy is April 26 but close sources said it
could come as early as April 19. The decision to present the policy three
months before schedule has been necessitated by the economic conditions that
have deteriorated faster than Gono had anticipated in the his last policy on
January 31.

Gono could neither confirm nor deny that he was going to announce the
monetary policy this month. He however said events over the past two months
had moved "so fast that something has do be done soon".

"I can't say with absolute certainty that there is such a plan at the
moment but we are obviously aware of the fact that events have moved much
faster than we had anticipated," Gono said.

The inflation rate has gone haywire over the past three months while
the parallel market has been galloping over the past eight weeks.
Businessdigest understands that Gono had a meeting with President Robert
Mugabe this week to discuss the new measures which will come under Road Map
2.

"That policy will give details and allocate funds for next year's
elections," said an official close to Gono.

The policy, the official said, will also announce a shift towards
floating the currency instead of fixing it. According to preliminary figures
seen by businessdigest, the RBZ is expecting that the current slowdown on
the parallel market rate will continue until the United States dollar
reaches about $12 000 - a figure which they are targeting as the starting
rate of the floating rate. Gono has also come under pressure from tobacco
farmers who have vowed to hold onto their crop until they get a better rate
of between $10 000 and $12 000.

The monetary policy will also address issues in the mining industry
especially the gold sector where most mines face imminent closure because of
the over-valued exchange rate and unviable gold prices.

Apart from dealing with the traditional issues on interest rates and
inflation, the policy is also expected to give indications on the state of
government coffers amid revelations that a supplementary budget is in the
offing after most ministries have exhausted their allocations.

Troubled Zim seeks to amend Botswana trade agreement

Zim Independent

Pindai Dube

ZIMBABWE which is fast losing its market niche in the Southern Africa
Development Community (Sadc) is seeking amendments to the Bilateral
Preferential Trade Agreement (BPTA of 1988) with Botswana in a bid to access
markets in the neighbouring nation.

The Botswana-Zimbabwe 1988 BPTA calls for reciprocal duty-free trade
on all products grown, wholly produced, or manufactured wholly or partly
from imported inputs subject to 25% local content requirements

Zimbabwe wanted the amendment of BPTA of 1988 so that it can trade
under the auspices of the Southern African Customs Union (Sacu) and enjoy
all the business done under the trade board.

Sacu comprises five countries - Botswana, Namibia, Lesotho, Swaziland
and South Africa. The union formed in 1969 aims to maintain the free
interchange of goods between member countries.

Confidential minutes of a meeting held in Botswana last month between
Zimbabwe Trade and Industry ministry senior officials and their Botswana
counterparts show that Zimbabwe failed to railroad its proposals for the
amendment of BPTA.

The meeting was held in Gaborone on March 29 and the minutes were
compiled by Botswana's Ministry of Trade and Industry.

Zimbabwe was represented by Industry and International Trade
peremanent secretary Christian Katsande, while a Martha Masisi represented
Botswana.

Zimbabwe's ambassador to Botswana, Thomas Mandigora, also attended the
meeting.

Katsande reportedly pleaded for amendments to the BPTA to allow
Zimbabwe's products into Botswana. He said access to that market will help
Zimbabwe's bleeding economy.

Ambassador Mandigora on the other hand emphasised the need for a
speedy conclusion to the negotiations for the mutual trade benefits for the
two countries.

"There is need to finalise the amendments to the BPTA 1988 without any
further delays to allow respective business communities an opportunity and
also to help our country's economy which is in bleeding state," Katsande
said.

However, Botswana said it was not in any position to help Zimbabwe by
further amending the 1988 agreement.

They argued that Article 31 of the October 2002 Agreement between Sacu
union members prohibited any member of the union from entering into
agreement with any state outside the union.

"It should also be noted that if Zimbabwe needs any amendments to the
April 1988 BPTA Botswana would need to obtain the consent of other Sacu
member states, in terms of the Article 31 Paragraph 3 of the October 2002
Sacu Agreement," read the minutes.

".since it was observed that Paragraph 3 of Article 31 prohibits any
Sacu member states from entering into new preferential trade agreements with
the third parties or the existing agreements without the consent of the
other member states".

Importers cry foul on new duty law

Zim Independent

Shame Makoshori

THE Zimbabwe Revenue Authority (Zimra) has tightened its revenue
collection systems as rampaging inflation - now at 2 200,2% - continues to
erode its tax revenues, pushing government into a serious financial squeeze.

The new policy demanding foreign currency for duty on imported cars
and other luxurious goods is one of government's desperate measures to
cushion part of its tax revenues from inflation and the weakening local
currency.

Some car importers were by yesterday working on a comprehensive plan
to sue the government to compel it to accept the duty in the local currency
because the law states that the Zimbabwe dollar is the only legal tender in
Zimbabwe.

Analysts said government was not going to relent on the policy and
chances are high that more imported goods would be included on the list that
will pay duty in foreign currency.

They said the new policy will only intensify activity on the parallel
market instead of the expected slow down.

Economic commentators said the decision by government recognises that
the exchange rate is grossly out of line with reality.

"Government is penalising people for its failure to manage and come up
with a working exchange rate policy. I think the government is tired of
penalising itself and they have realised that they can save themselves from
the pain by demanding duty in foreign currency," economist John Robertson
said.

He said as companies continue to shut down government has realised
that it cannot rely on the traditional revenues from VAT and PAYE.

"It shows you how desperate the times are. They can print the
Zimbabwean dollar but they have to earn United states dollars. This is
another way they want to earn it," he said.

The policy changes come after last year's phasing out of a system of
paying corporate tax in arrears, which was replaced by the advance or
provisional corporate taxation system requiring companies to pay corporate
tax during the financial year in which the profits are generated.

Companies pay 30% of their pre-tax profits as corporate tax.

"The corporate payment system was shifted from the arrears to a
provisional taxation system where companies give Zimra their earnings
projections during the budgeting stage and pay corporate taxes according to
the earnings estimates," a tax analyst said this week.

Companies are required to pay 10% of corporate tax in March, 25% in
June, 30% in September and 35% by December 20 of the same year.

This system is used in other countries like Botswana and South Africa.

"This shift was necessitated by the high inflation because under the
arrears payment system government was getting less value by the time
corporate tax was paid the following year," the consultant said.

"This enables government to use its revenues before its buying power
is eroded. But the problem is that while government is cushioning itself
through policy adjustments, income tax bands are stagnant and the taxes are
too high. The tax bands must be moved in line with inflation," he said.

Tax free thresholds have been pegged at $100 000 since January but the
Poverty Datum Line (PDL) has shot up from $375 000 to $1 million during the
same period.

Workers earning $100 001 per month have to pay 25% PAYE while a
monthly income of $200 001 attracts 30% PAYE.

Zimbabwe has the second highest taxed citizens in the world after
Israel.

Tax consultants say a more reasonable tax- free threshold should be
$500 000.

They however said government is worried it would lose on critical
revenue to pay restive civil servants if tax-free thresholds are adjusted
frequently.

Government has also moved a step further to tax all forms of
allowances paid by companies to workers.

Gross income was redefined to include anything including allowances
that employees receive.

This has empowered Zimra to tax food, transport, entertainment,
accommodation and other allowances.

Workers driving company cars are also taxed according to engine
capacity.

But companies, facing rapid discontent among their workers have
started exploring ways of avoiding the taxman.

Transport, food, groceries, accommodation and other allowances for
workers are now reflected in accounts as operational costs and loans.

Several companies are buying groceries for their workers.

A mobile phone company has been giving recharge cards to workers which
are later resold while some industries have demanded and awarded a salary
system based on monthly inflation figures.

"(We agreed that) salaries and wages be increased monthly based on the
published rate of inflation produced by the Central Statistical Office," a
notice circulated to members of the National Employment Council for the
Clothing Industry said.

CSC fails Hong Kong partner, set to lose deal

Zim Independent

Pindai Dube

THE struggling Cold Storage Company (CSC) risks losing a multi-billion
dollar beef export deal to Hong Kong after it failed to supply the first
consignment of 15 tonnes of beef as part of the deal signed last year.

The Hong-Kong deal came five years after CSC's main foreign customer
the European Union banned beef imports from Zimbabwe in 2001 following an
outbreak of foot and mouth disease.

Zimbabwe was supposed to supply Hong Kong with 5 000 tonnes of beef
every year and the first batch of 15 tonnes was due to be shipped in
January.

CSC chief executive officer, Ngoni Chinogaramombe, told businessdigest
this week that the first batch of 15 tonnes has not been shipped.

Chinogaramombe said the packed beef containers are in Chinhoyi where
CSC has an export processing plant.

"The 15 tonnes, which is the first lot of our export to Hong Kong, has
not been shipped as yet," Chinogaramombe said.

"We are still waiting for our shipping agency but I hope in the next
three to four weeks something will materialise."

Asked about the failure to agree to payment terms with the shipping
agency, Chinogaramombe said: "The problem is that we are not operating at
full capacity and we hope with proceeds from our new export market our
foreign currency reserves will improve."

CSC has been on a slide since 1996 when its monopoly as the only
processor of beef was lifted by government. Since then the parastatal's
market share has plummeted from about 90% to about 20% due to competition
from other abattoirs.

Last year president Robert Mugabe declared that CSC's abattoir should
be opened immediately. The abattoir was opened a few months later after
frantic efforts from government ministers but sources in Marondera said the
abattoir is already threatened with closure.

The parastatal requires at least $82 billion to recapitalise and
revive its operations mainly for buying cattle and restocking its farms. The
former Minister of Finance, Herbert Murerwa allocated a paltry $10 billion
in the 2007 budget.

International tobacco buyers jump over Zim, land in Malawi

Zim Independent

Paul Nyakazeya

ZIMBABWE stands to lose millions of dollars in potential earnings from
tobacco as international buyers are flocking to Malawi, shunning the local
auction floors where a dispute over prices and the exchange rate have
delayed the selling season.

This comes as it also emerged that local farmers are smuggling their
tobacco out of the country to get better prices. The farmers say they will
hold on to their crop until the central bank agrees to their demands for a
special exchange rate.

Farmers who spoke to businessdigest this week said merchants who had
arrived a week after the scheduled opening of auction floors on March 14
left the country for Malawi a fortnight ago where auction floors opened last
week. Some former commercial white farmers displaced by the land reform
programme are now based in Malawi.

The Zimbabwe Tobacco Growers Association (ZTGA) confirmed that
international buyers had become impatient with the prolonged deadlock and
are seeking better deals in Malawi.

"Zimbabwe stand to lose millions of dollars to Malawi if the stalemate
continues. The country's traditional international buyers are flocking to
Malawi whose crop production has been increasing over the years," ZTGA said.

ZTGA said farmers are also smuggling tobacco to Malawi to seek better
returns to remain in business and to prepare for the next season.

Farmers who had harvested their crop in January and early February
said they now feared that their crop's grade would decline.

"By the time international buyers return to Zimbabwe, prices might
have gone down which is a loss to both government and the farmer," a farmer
said.

China is also reducing tobacco imports from the country.

According to Tobacco China Online China is planning to increase
production of its import-substitute leaf tobacco to about 55 500 tonnes this
year.

That will reduce its reliance on tobacco imported from Zimbabwe.

Zimbabwe has lost its place among the world's top five tobacco
exporters due to dwindling output largely caused by disturbances on farms,
lack of critical inputs and a fixed exchange rate.

According to January's global production figures from the US
Department of Agriculture, the top five exporters are now listed as Brazil,
the United States, India, Malawi and China.

Zim dollar sliding again

Zim Independent

ZIMBABWE'S vulnerable currency which atypically firmed against major
currencies on the parallel market last week, has started sliding again with
analysts saying it could fall further due to increasing demand.

Analysts said the dollar would tumble due to higher demand for foreign
currency by car dealers and the Reserve Bank. The RBZ has over the past two
months become the major dealer on the parallel market to meet national
obligations.

Last month the RBZ was on the black market looking for US$400 million
for fuel, electricity and grain imports.

Analysts say the central bank will come back for more foreign currency
to import grain and election materials.

The dollar was trading just above $11 000 and $1 900 against the US
dollar and South African rand last week.

The dollar was trading above $16 000 and $2 300 against the greenback
and rand respectively yesterday.

It was the first time that the US dollar had taken a step back at the
parallel market this year.

At the beginning of the year, the US dollar, British pound and rand
were trading at $3 000, $4 500 and $800 respectively.

Inflation has surged to an all-time high of 2 200,2% year-on-year in
March on the back of huge price hikes stoked by commodity prices trailing
parallel market rates.

David Mupamhadzi, Zimbabwe Allied Banking Group (ZABG) group
economist, said the firming of the Zimbabwe dollar on the parallel market
against most major currencies last week showed that the market, if left
alone can correct itself.

"It was a clear testimony of the forces of demand and supply at work.
The movement of the rate was due to reduced demand from the big buyers in
the market," Mupamhadzi said.

"The fact that importers of cars and other luxuries are now required
to pay duty in foreign currency could result in an increase in the demand
for foreign currency. This could exert further pressure on the parallel
market exchange rate," said Mupamhadzi.

Independent economists project Zimbabwe's embattled currency's fair
value to end the year at $16 588 to the US dollar on the back of surging
inflation. They expect year-on-year inflation to breach 5 000% by December.

Genesis Bank economist, Brains Muchemwa said it will be difficult to
protect the value of the dollar because of high broad money supply growth,
struggling exporters and insignificant overseas assistance and waning
foreign direct investment.

"As long as inflation remains as high as it is now even the basic
approach of using the purchasing power parity to forecast exchange rate will
tell you that the exchange rate will continue depreciating." Muchemwa said.

Muchemwa said the rate of depreciation will depend on the excess of
domestic broad money growth net of foreign currency inflows.

"The current rate is definitely linked to supply and demand, but
because of uncertainty and varying contingent risks facing the big consumers
of foreign currency we cannot rule out pronounced volatility of the exchange
rate," said Muchemwa. - Staff Writer.

Zim: best performing stock market in 2007?

Zim Independent

By John Paul Koning

CNBC and other stock market tabloids are notorious for making
simplistic linkages between the stock market and gross domestic product
(GDP). They tell us that any event that stimulates GDP growth inevitably
drives stock prices up, and any event that hurts GDP growth pushes stocks
down.

Since the largest share of GDP is consumption, consumer demand becomes
the all-important figure driving growth. When the consumer gets too excited,
the Fed must step in to cool them down with interest-rate hikes. When the
consumer isn't spending, Fed interest-rate cuts stimulate demand.

The tragedy currently occurring in Zimbabwe completely contradicts
this sort of logic. Zimbabwe is in the middle of an economic disintegration,
with GDP declining for the seventh consecutive year - half what it was in
2000.

Ever since President Mugabe's disastrous land reform campaign, the
country's farming, tourism, and gold sectors have collapsed. Unemployment is
said to be near 80%.

Yet something odd is happening.

The Zimbabwe Stock Exchange (the ZSE) is the best performing stock
exchange in the world, the key Zimbabwe Industrials Index up some 595% since
the beginning of the year and 12 000% over 12 months. This jump in share
prices is far in excess of increases in consumer prices. While the country
is crumbling, the Zimbabwean share speculator is keeping up much better than
the typical Zimbabwean on the street.

CNBC logic fails to explain the coincidence of a rising ZSE and
collapsing GDP because it entirely ignores the monetary side of the economy.

At this point Austrian economics makes its contribution to our story.
According to Austrian Business Cycle Theory (ABCT), the peak-trough-peak
pattern that economies demonstrate is not their natural state, but one
created by excess growth in money supply and credit.

New money is not simply parachuted to everyone equally and at the same
time - it is sluiced into the economy at certain initial "entry points".
From these entry points, a number of initial goods are bought by recipients
of new money causing a rise in price for these initial goods relative to
other goods.

Because entrepreneurs react to this observed but unjustified change in
the structure of prices by investing their capital, misallocation occurs. As
money-supply growth continues and prices become more contorted, more and
more ventures are undertaken that would not be undertaken in a regime
without money-supply growth. When, for whatever the reason, money supply
finally contracts, the artificial strength in prices that encouraged
unprofitable ventures is removed, prices collapse, and large numbers of
ventures go bankrupt. Thus we have the recession part of the business cycle,
the simultaneous failure of many firms at the same time.

If, as the Austrian theory states, money enters the economy at certain
points, it is likely that a nation's stock market will become a prime
beneficiary of any monetary expansion. Fresh money enters the economy first
through banks and other financial entities who may invest it in shares, or
lend it to others who buy shares. Thus stock prices rise relative to prices
of things like food and clothes and will outperform as long as this monetary
process is allowed to continue.

This is what we are seeing in Zimbabwe. With the country suffering
from Mugabe's catastrophic policies, increasingly the only means for the
government to fund itself has been money-supply growth. This has only
exacerbated the economy's problems. The flood of new money that authorities
have created has caused the existing value of money in circulation to
plummet, that is, the prices of all sorts of goods to explode, some rising
more than others.

As prices become more misaligned, basic decision-making abilities of
normal Zimbabweans are impaired and the day-to-day functioning of the
economy deteriorates. Perversely, all of this has forced the government to
issue even more currency to make up for budget shortfalls and to buy
support. At last measure, the country's consumer price index was rising
(that is, the purchasing power of currency declining), at a rate of 1 729% a
year.

The ZSE is growing some three times faster than consumer prices. This
relative outperformance versus general prices is a result of stocks being a
chief entry point for the flood of newly created money. Keep Zimbabwean
dollars in your pocket, and they've already lost a chunk of their value by
the next day. Putting money in the bank, where rates are pithy, is not much
better. Investing in government bonds is the equivalent of financial
suicide. Converting wealth into foreign currency is difficult; hard currency
is scarce, and strict rules limit exchangeability.

As for capital improvements, there is little incentive on the part of
companies to invest in their already-losing enterprises since economic
prospects look so bleak. Very few havens exist for people to hide their
wealth from the evils created by Mugabe's policies. Like compressed air
looking for an exit, money is pouring into shares of ZSE-listed firms like
banker Old Mutual, hotel group Meikles Africa, and mobile phone firm Econet
Wireless. It is the only place to go. Thus the 12 000% year over year
increase in the Zimbabwe industrials.

Our Zimbabwe example, though extreme, demonstrates how changes in
stock prices can be driven by monetary conditions, and not changes in GDP.
New money gets spent or invested. In Zimbabwe's case, because there are no
alternatives, it is stocks that are benefiting.

This sort of thinking can be applied to the stock markets in the
Western world too. Though Western central banks have not been printing
nearly as fast as their Zimbabwe counterpart, they do have a long history of
increasing money supply. It forces one to ask how much of the growth in
Western stock markets over the preceding 25 years has been created by a
vastly increasing money supply, and how much is due to actual wealth
creation.

Perhaps stock prices have increased faster than goods prices for the
last 25 years because, as in Zimbabwe, Western stock markets have become one
of the principal entry points for newly printed currency.

* Koning is a stock market researcher at Pollitt & Co, a brokerage
based in Toronto, Canada. email jpkoning@hotmail.com

Reclaiming legacy of the liberation war

Zim Independent

By Arthur Mutambara

FELLOW Zimbabweans, April 18 is an important day that marks the end of
colonial rule in our country. As we observe this great day in our national
calendar, let us take this as an opportunity to reflect on the state of our
nation and the challenges we face. It is imperative that we proffer
redemptive solutions as we seek to build our nation. At 27 years of age our
country could do with some innovative and robust state crafting.

The starting point of any effective reflective process is clarity
about the past. A page of history is worth 10 volumes of logic. The people
of Zimbabwe freed themselves from the yoke of colonialism. Zimbabwean sons
and daughters constituted the gallant Zipra and Zanla fighters who, together
with ordinary citizens, ushered in our Independence on April 18 1980. It was
a revolution that bound worker and peasant, young and old, guerilla and
collaborator, and urban and rural folks in the fight for national
self-determination.

No single individual delivered us from bondage. It was a collective
effort.

For the record, yes Robert Mugabe was part of the liberation war
effort. He was involved in the nationalist struggle. However, in that war he
was a coward who could not even fire a pistol. To this day he does not even
know how to return a soldier's salute. Those who fought in that war can
attest to this characterisation.

What becomes problematic is when such people appropriate the entire
liberation war legacy as theirs, to the exclusion of the people who actually
fought in that struggle. That is what offends us as Zimbabweans. We fought
for our country as a people and freed ourselves as a united collective. We
want to put it on record, today on our Independence Day, that the people of
Zimbabwe are masters of their own destiny.

Furthermore, let us reflect on the basis and foundation of the
liberation struggle. The war of liberation was an all-inclusive,
anti-imperialist and anti-colonialist struggle. The principles and values of
that struggle included democracy, freedom, liberty, equality, universal
suffrage, justice and prosperity. When we look at the state of our nation
today, the question is: Have we achieved these aspirations? The unequivocal
response is NO.

Twenty-seven years after Independence, the people of Zimbabwe are not
experiencing freedom, liberation or independence. Instead, starvation,
unemployment, deplorable working conditions, unmitigated suffering, and
unprecedented hopelessness now define our national psyche. We live in an
undeclared state of emergency where our basic freedoms and liberties of
assembly, speech, movement, and association are heavily curtailed by
repressive legislation. Political rallies, marches and demonstrations are
banned. Political activists and ordinary citizens are abducted, tortured and
killed with impunity.

As we reflect on the meaning of our Independence Day, Gift Tandare,
Itai Manyeruke and Edward Chikomba join the list of courageous freedom
fighters murdered by this evil regime. The transformation of the police into
a sadistic force is worse than anything we ever saw under the Smith regime.
Zimbabweans live in a state of collective fear of violence, hunger,
destitution, disease and arrest. Essential commodities are either
unavailable or unaffordable. School fees, property rates, rentals and
agricultural inputs are beyond their reach. The crippling fuel crisis,
erratic and inadequate power supplies, destruction of commercial
agriculture, food shortages, and lack of housing are devastating the
population.

Inflation has soared to record levels of over 2 000%, unemployment is
above 85% while poverty levels are above 90%. Life expectancy is 34 years
for women and 37 years for men. This cannot be the liberation, freedom or
Independence that our people died for.

The conclusion is pure and simple. Robert Mugabe has failed the people
of Zimbabwe. He has become a negation of the principles and values of the
liberation war. The people of Zimbabwe are fed up. Mugabe is now no longer a
champion of African rights. He now stands against everything that Herbert
Chitepo, Jason Moyo, Josiah Tongogara, Nikita Mangena, Sheiba Tavarwisa and
Jane Lungile Ngwenya stood for. Our true heroes have been betrayed. However,
their spirits are with us as we collectively seek to regain our freedom. We
are following in the tradition of the great freedom fighters of our
liberation war.

We are the Zipra and Zanla fighters!

When all is said and done, Zimbabwe's future will be determined by
Zimbabweans. External players can assist and facilitate, but the buck stops
with us. We cannot outsource our emancipation to foreigners. We shall be our
own liberators. We shall be masters of our own destiny and complete the
unfinished business of the liberation struggle.

All the democratic forces in the country must close ranks in pursuit
of the collective national interest. Let us spurn Zanu PF's divide and rule
tactics. A united front inspired by a single candidate principle is a
categorical imperative in every election. Every vote must count against Zanu
PF.

While this framework will energise the generality of our people, it
will also have strategic national appeal to multitudes of progressive Zanu
PF members and supporters. Let us continue with the spirit of cooperation in
pursuit of a new constitutional and electoral framework to ensure that our
next elections are measurably free and fair.

  Arthur Mutambara is MDC leader.

Mbeki has moral obligation to help ease out Mugabe

Zim Independent

By Peter Godwin

EVER since Zimbabwe began imploding in 2000, the conventional punditry
about President Robert Mugabe has largely been of the good-leader-turns-bad
variety.

Now, as the country's economy enters its death throes - hyperinflation
at 1 700% and expected to exceed 4 000% by year-end; unemployment at 80%;
the average person's purchasing power at 1953 levels; life expectancy the
lowest in the world; and an exodus of Africa's most-educated population - it
would seem a good time to re-examine that orthodoxy and decide what the West
can do to ease the dictator's departure.

In fact, Mugabe has been a completely consistent leader. It's the West
that changed. During the Cold War, it was so grateful that this militant
Marxist had instantly become a benign capitalist that it ignored Mugabe's
history of political violence within his own party and intimidation in the
1980 elections that brought him to power upon Zimbabwe's Independence. The
West supported him in the same way it supported venal leaders like Mobutu
Sese Seko of Zaire - the West's friends simply because they were not Moscow's.

The other parapet behind which Mugabe found convenient shelter was
apartheid, which persisted in his southern neighbour for the first 13 years
of his rule. As the leader of the so-called frontline states facing a
hostile white government in South Africa, he deserved Western support, and
it gave him the benefit of the doubt even after his hands were bloodied in
the southern province of Matabeleland - where his North Korean-trained Fifth
Brigade killed as many as 25 000 civilians in 1983 and 1984.

It was a massacre that I saw and reported on, but not a big story in
news terms, and there was barely a peep out of the international community.
Somehow, to attack Mugabe was to appear to be giving succour to white South
Africa, and Zimbabwe's strongman was a master at spinning it that way. When
I wrote about the massacres, he immediately claimed I was a South African
spy and had me declared an enemy of the state.

Then things went quiet - but only because he had bludgeoned the
opposition into quiescence and established a one-party system. The next time
Zimbabweans had the temerity to question Mugabe's absolute rule was in 2000,
when they voted against him in a referendum to extend his presidential term
limits, a vote that in his complacency he hadn't even bothered to rig. He
reacted to his defeat with violence and intimidation: his thugs began
killing opposition supporters, evicting white commercial farmers (whom he
had invited to stay on and contribute to the new Zimbabwe) and intimidating
voters in subsequent rigged elections.

In recent months, Mugabe has stepped up the violence against
opposition members and leaders in Zimbabwe, with the chilling development of
Latin American-style hit squads that abduct and torture opposition
supporters. Two weeks ago, he quashed a challenge to his rule from within
his own party. What can outside powers do to help ease out an 83-year-old
leader who, after 27 years in power, would rather destroy his country than
step down voluntarily?

Zimbabwe lacks the two exports necessary to interest the United States
in direct intervention: oil and terrorism. International sanctions on
Zimbabwe are now minuscule. The West could ramp up "smart sanctions" against
Mugabe and his coterie, for example by freezing their ill-gotten external
assets, but any wider sanctions would probably only hurt those at the bottom
of the food chain and not the elite kleptocracy. Megaphone diplomacy tends
to feed Mugabe's portrayal of Western powers as shrill, hectoring,
imperialist bullies.

The real key to the Zimbabwe stalemate is to be found in South Africa,
which has an economic choke-hold on its landlocked northern neighbour. But
thus far, South African President Thabo Mbeki has refused to do anything
about Mugabe. His policy of "quiet diplomacy" has, in truth, been a silent
one. And he has paid a high price for such tacit support of Mugabe, whose
embarrassing exploits ensured that Mbeki's much-vaunted African Renaissance
was stillborn.

It has long been a political parlour game to figure out why Mbeki hasn't
done more about Zimbabwe. He sometimes pays lip service to the principle of
non-interference in the internal affairs of another sovereign state, but
South Africa quickly sent its army into Lesotho in 1998 after a rigged
election there.

Part of Mbeki's reluctance to act may have to do with Mugabe's
residual status as a liberation hero. But mostly, I believe, it stems from
Mbeki's distaste for the Zimbabwean opposition, the Movement for Democratic
Change (MDC) and its main leader, Morgan Tsvangirai, who used to head up the
Zimbabwean trade union movement.

Therein lies the problem: Mbeki's ruling African National Congress
(ANC) party is actually a troika, and one of its parts is the Congress of
South African Trade Unions, which is becoming increasingly fractious. The
group has strongly backed the MDC, and if Tsvangirai were to come to power
in Zimbabwe, it would greatly embolden the South African union
confederation, encouraging it to secede from the ANC and pose a challenge to
Mbeki. Thus has Zimbabwe become a function of South African domestic
politics.

In so far as diplomacy is the art of the possible, Pretoria still
provides the main fulcrum for change. South Africa controls and has the
power to obstruct transportation links, lines of credit and electricity
supplies, and it alone has the power and regional clout to face down Mugabe.

Mbeki may soon be in a position to do more. In a woeful display of the
inadequacies of pan-African institutions, the 14 members of the Southern
African Development Community two weeks ago came out in support of Mugabe's
rule. But they nominated Mbeki to facilitate dialogue between Mugabe and his
opposition.

The international community should make it clear to Mbeki that he, and
the new South Africa, have a special moral obligation to help a nearby
people who are oppressed and disenfranchised, having been assisted in its
own struggle by just such pressure. And that "quiet diplomacy" is nothing
less than the appeasement of a violent dictatorship. If Mbeki continues it,
South Africa will squander the goodwill of the world.

Peter Godwin is the author of a recently published memoir, When a
Crocodile Eats the Sun.

Poor preparations dog winter wheat farmers . . . again

Zim Independent

Augustine Mukaro

CONFUSION continues to dog the winter wheat cropping season as
government has failed to address pricing distortions or offer attractive
incentives to farmers, raising fears of another serious wheat shortfall this
year.

Analysts said the stalemate over tobacco auction prices could spill
into negotiations for wheat pricing and result in reduced hectarage for the
winter crop. The cropping area has been shrinking over the past six years.
Tobacco farmers often rotate their irrigated tobacco with winter wheat.

The tobacco selling season which should have opened two weeks ago has
failed with farmers demanding a "realistic" exchange rate for their crop to
remain in business.

In the current season, only 30% of the 85 000 hectares that are
normally put under irrigated winter wheat are likely to be planted
considering the unavailability of chemicals, fertilisers, tillage facilities
and the low levels of water for irrigation.

Information to hand shows that the remaining white commercial farmers
in the country are likely to plant around 10 000 hectares while the other 15
000 hectares would be taken up by newly-resettled farmers.

Zimbabwe Commercial Farmers Union (ZCFU) past-president, Thomas
Nherera, said although farmers and other factors like water could support
around 60 000 hectares this year, production costs militate against that
quantity.

"The basic formula for calculating the price of any commodity is
production cost," Nherera said. "Though farmers are showing zeal to plant
over 75 000 hectares this season, farmers are pushing for realistic prices.
A technical report from the Ministry of Water and Natural Resources shows
that current dam levels in the country can support up to 75 000 hectares."

Tobacco farmers - the majority of whom also happen to be wheat
farmers - are demanding that government should offer them an exchange rate
of between $10 000 and $15 000 to the United States dollar to cushion them
against the steep rise in prices of inputs. They are arguing that over 50%
of their inputs have a foreign currency component.

"The major contributing factor to agricultural inputs shortages is
foreign currency scarcity," one farmer said. "Many domestic inputs
manufacturers require imported raw materials such as potash for processing
into fertiliser compounds. Inputs supplying companies often source foreign
currency on the parallel market at premiums that drive up input costs to
levels that threaten viability."

Farmers said despite numerous promises that government would support
new farmers with inputs and tillage, this had not been done in the past six
farming seasons.

Zimbabwe has a wheat annual consumption of 400 000 tonnes excluding 80
000 tonnes of hard wheat to mix with the local product. The hard wheat -
commonly referred to as gristing wheat - has always been imported.

Agricultural experts warned that wheat production this year could
slump to an all-time low because of lack of funds to finance the crop. On
the ground very minimal land preparation can be seen.

"Farming activities require proper financing, planning and expertise,
which have been conspicuously absent over the past six years," one expert
said. "Farmers who wanted to genuinely work on the land had difficulties
obtaining bank loans without the necessary collateral."

Farmers said obtaining credit has been a major problem for many of
them - both newly resettled or established - with banks being warned by
government not to extend loan facilities to farmers who don't have offer
letters for farms.

"Without offer letters, farmers have no long-term security and cannot
tender any collateral other than when they own non-farm property," the
farmers said. "In the majority of cases banks have requested farmers to
provide some form of security to cover the loans advanced."

Commercial Farmers Union spokesperson Emily Crooks said although the
price factor could play a major role in encouraging farmers to go back to
the land, commercial farmers were still worried about continued uncertainty
in the sector.

"Government has not been forthcoming with offer letters to commercial
farmers making their future uncertain," Crooks said. "Farmers are more than
keen to embark on winter wheat production but the absence of security of
tenure makes them sceptical of the venture. They end up working on very
small hectarages."

Crooks said water could be another limiting factor because there had
been very little rainfall this year.

Analysts however said the price standoff was just one of the
dimensions in an array of developments that militate against efforts to
boost production. Legislative changes, uncertainty surrounding the tenure
system, threats of power blackouts and continued farm invasions make it
impossible for investors to commit their money in any agricultural venture.

"Agricultural output has declined over the years," one analyst said.
"The major constraint to increased productivity is the uncertainty of tenure
in the agricultural sector where farmers are evicted on a daily basis.
Continued acquisition notices, disruptions, acts of violence on farms and
lack of land-based collateral are some of the problems farmers face."

The expert said policy contradictions and discrepancies had shown that
even amendments to the Land Acquisition Act and the appointment of a
succession of audit committees or taskforces had done nothing to improve
production.

Government measures to redress the situation through amendments to the
principal Act since 2000 have not improved production.

From the inception of the fast-track land reform, white commercial
farmers remaining on the land were branded the primary obstacles to the
success of the exercise.

In 2000, the government through a presidential decree began to
compulsorily acquire farms. The decree was then confirmed by the passing of
the Land Acquisition (Amendment) Bill in November 2000.

In September 2002, another amendment to facilitate the forcible
eviction of defiant farmers was passed. Farmers had resisted eviction on the
grounds that lending banks, which held their bonds, had not been informed of
pending evictions, as required by law.

This meant the government had to notify the banks of farmers affected
in this way, then reissue eviction notices. The amendment removed this
impediment, resulting in mass evictions towards the end of 2002 and
beginning of last year.

Government even promulgated Constitution Amendment Act (No 17) 2005,
which nationalised all farmland and prevented court challenges by evicted
farmers.

As if that was not enough, government also came up with the Gazetted
Land (Consequential Provisions) Act, 2006, repealing the Rural Land
Occupiers (Protection from Eviction) Act 2001, declaring that an owner shall
cease to occupy, hold or use that land 45 days after the fixed date, unless
the owner or occupier is lawfully authorised to occupy, hold or use that
land.

If a former owner or occupier of gazetted land who is not lawfully
authorised to occupy that land does not cease to use that land after the
expiry of the appropriate period, he or she shall be guilty of an offence
and liable to a fine or to imprisonment for a period not exceeding two
years.

The expert said there was lack of irrigation facilities following the
vandalisation of equipment over the past six years of the chaotic land
reform programme.

"Winter is an all-out irrigation crop, so under the prevailing
conditions it's not likely to yield much," he said.

Under optimum conditions with the use of modern irrigation facilities,
a maximum six tonnes of wheat can be produced per hectare.

Experts said Zimbabwe was currently estimated to have irrigation
equipment covering only 30 000 hectares, down from 85 000 hectares that
could be irrigated before the inception of the land reform programme.

Mbeki's mediation should be beyond reproach

Zim Independent

Comment

Democratic forces in Zimbabwe have an onerous task ahead. The
confirmation by President Mugabe that the elections will be held next year
is one. That he will be the ruling party's candidate is another especially
daunting one given a divided opposition party.

As things stand, Zanu PF, beyond enjoying the advantage of incumbency,
also has at it disposal the state machinery to push through its agenda. It
is against this background that we would urge all democratic forces to put
the national interest ahead of personal ambitions.

In this regard, President Thabo Mbeki, as the broker of dialogue
between the main opposition Movement for Democratic Change and Zanu PF,
indicated at the weekend that the people of Zimbabwe only have 11 months
left to do everything necessary to ensure that next year's elections are
free and fair for all contestants.

It is our hope that all those fighting for democratic change and a
transition from the current dictatorship are fully aware of what needs to be
done. That is to say, there has to be complete change of culture in the
administration of law and order - a new ethos of fairness among all the
stakeholders.

Some issues may be difficult to accomplish in the time left. If the
MDC insists on a new, people-driven constitution before next year's
election, it must be prepared for a delayed election. It might not be
possible to repeal offensive laws such as the Public Order and Security Act
and the Access to Information and Protection of Privacy Act. But it should
be possible to secure guarantees that these laws will be struck off our
statute books as soon as possible after the election.

Other urgent requirements are the opening up and equal access of all
interested parties to the public media to ensure fair and balanced coverage
for the contestants so that people make informed decisions about who they
are voting for. These may look like minor demands but could prove hard to
extract from Zanu PF. It is a party used to manipulating information and
churning out propaganda which the opposition is not able to counter
immediately.

The point is that if government is not ready to make concessions on
issues such as the media, then it is not committed to any serious
negotiations or to free and fair elections. Mbeki's primary task in seeking
to broker talks between Zanu PF and the MDC should be to build trust.

The perception in the past has been that he is partial towards Zanu PF
as a liberation movement and President Mugabe as the hero of that movement.
Wrongly or rightly, that perception has created suspicions in the opposition
and civic society that Mbeki might not be an impartial arbiter in the
current political stalemate. Both sides will need to be assured that the
bargaining process is fair and the outcome of the election unpredictable. At
least ideally that is what a free and fair election should be despite
academic speculation.

It is not just Sadc that is watching. The people of Zimbabwe are
watching with an even keener interest, and so is the international community
which has been advocating a tougher stance by Mbeki. In short, Mbeki's
mediation should be beyond reproach.

Mbeki knows fully well the Sadc guidelines governing the holding of
free and fair elections. It is obviously against these benchmarks that his
success or failure will be measured. If he is short of time but feels he is
making some headway, we have no doubt that those involved in the
negotiations will oblige his wish. But there should be no more naïve
suggestions that past elections have been free and fair.

What Zimbabweans are fighting for is rule by democratic consensus in
which all major stakeholders and other interested parties feel that they are
part of the process towards a new Zimbabwe. The reason there has been so
much bloodshed and polarisation between the rulers and the ruled is that the
latter have been excluded for a long time from decisions that affect their
lives. The proposed talks are seen as the beginning of a process that will
lead to an all-inclusive watershed election towards democratic
accountability and rule by consent.

While the MDC's demands for a new constitution, international election
observers and electoral reforms are pressing and legitimate, they cannot
substitute for diligent work on the ground to ensure that its supporters are
ready to vote, that its policies are clearly understood and that it seeks to
do better than Zanu PF has performed thus far. It has the goodwill of the
international community and only Zanu PF to defeat if it fights well. We
also believe this time around Mbeki wants to do better than he has done in
the past when it was a personal initiative. This was evidenced by his speedy
response to Mugabe's suggestion that Sadc supported his brutal repression.
Heads of state were shocked by the pictures they saw of injured opposition
leaders, he replied.

Mbeki has been active in addressing the structural problems of Burundi
and the DRC. The people of Zimbabwe expect the same energy and statesmanship
from him. They deserve no less.

Govt ashamed of own currency

Zim Independent

Candid Comment

IT'S not so long ago that we had government officials going
threatening landlords who were demanding rentals in foreign currency. It was
illegal because the legal tender is the Zimbabwe dollar, they said. They
were dead right. The law is clear.

The question now is what has changed for government to charge duty for
imported vehicles and other "luxurious" goods in foreign currency?

The answer is not hard to find. The government is hard-pressed for
money and ideas to bring the economy it has vandalised back on track.

With no civil means to achieve the so-called "turnaround", the regime
has been forced not only to bend its laws but also to punish the people with
the most reactionary of fundraising measures.

Government has for the umpteenth time flagrantly displayed its
propensity to bend laws for self-serving purposes by demanding duty, surtax
and VAT on imported cars in foreign currency.

Such vindictiveness, however, did not shock many who still have vivid
memories of what government achieved under Operation Murambatsvina in the
name of cleaning urban areas.

Apart from revealing the massive dearth of ideas to breathe life into
the tottering economy, the new import duty obligation is a serious
indictment of President Robert Mugabe's government.

Here is a government brazenly admitting that its currency has become
so worthless that it cannot accept it as legal tender.

Here is a government frankly telling its people that while they toil
every day to earn Zimbabwe dollars, duty to government can only be paid in
United States dollars, sterling pound and the South African rand.

What has happened to Mugabe's sovereignty mantra that government now
wants its citizens to pay duty using currencies from other countries,
especially "enemy ones who are busy trying to recolonise us"?

We are slowly but surely witnessing probably one of the most
embarrassing economic revival strategies in the world today: a government
disowning its own currency after pillaging its value.

Is it not embarrassing enough that we have the highest inflation in
the world - fast approaching 2 000%?

It appears the authors of the new import duty policy believe
Zimbabweans have so much foreign currency which they simply don't want to
channel into the official market.

They believe if poor Zimbabweans can afford to purchase vehicles from
Japan, Singapore and other countries with forex obtained from the black
market, so too can they afford to fund President Mugabe's absolutism from
the same source.

What a callous way to bolster foreign currency receipts!

This is simply a wanton assault on innocent people whose only crime is
to aspire to have a convenient mode of transport.

Unless government is also worried that an influx of cars might worsen
the fuel crisis and trigger a feared uprising by an oppressed populace.

Instead government has decided to rise up against the people!

The argument is that charging duty in foreign currency might help stop
the thriving exchange black market and bung up "selfishness" by people
importing "trinkets" instead of boosting the official forex reserves.

True, the black market is flourishing, but charging duty in foreign
currency when there is none in the banks will make it worse. There is
everything wrong with such a choice of a solution.

First, the government wants to stop the parallel market by making
itself the major beneficiary of such "ill-gotten" monies.

Second, by doing that the state is admitting that most of the money
used to import cars is from the black market but it will do nothing as long
as it gets its share of the loot disguised as duty, surtax and VAT.

It is illogical for a government to think that it can destroy the
parallel market by making itself the major beneficiary of the foreign
currency from that market.

One would understand if the latest import policy was meant to protect
the local motor industry, but if the truth be told there is no such industry
in this country. Willowvale Mazda Motor Industries can't even supply the
police and other government departments with vehicles.

And when the common man is lucky to get a car from Willowvale, the
price is vulgar and far more than what is charged for used cars in Japan and
other countries.

Estimates in the state media say Zimbabweans use US$400 000 to import
about 80 cars every day (It's for argument's sake, not that I believe them).
That makes it US$146 million a year and if we factor in duty, VAT and surtax
people will pay almost a similar amount to government.

It's worrying that a whole government cannot only kick, cry and scream
for US$146 million but it is also prepared to rob it from its poor citizens.

The reason we have been reduced to such a sick joke as a country is
because we have a government that has spent almost a decade destroying key
economic sectors such as agriculture and creating a hostile environment that
scares away investors as well as isolating the country from the world.

People change their money on the black market not to fix government
but because the official exchange rate is ridiculous. Even President Mugabe
knows that.

Unless we address these issues, no amount of duty or surtax paid in
foreign currency will solve the crisis. By the way, what happened to
Homelink?

Dialogue won't be a stroll in the park

Zim Independent

Editor's Memo

IN reality, we don't have much time ... the Zimbabweans have got 11
months to do everything that is necessary to ensure those elections are free
and fair and that the outcome of those elections is not contested by
anybody," South African president Thabo Mbeki said on SABC radio on
Saturday.

An analysis of Mbeki's statement presents an apt image of the task to
hand for all forces keen to achieve normalcy in Zimbabwe. President Mbeki's
admission that time is running out betrays a sense of desperation. He wants
to see a solution in Zimbabwe, sooner rather than later, as the 2010 Soccer
World Cup beckons. His new mediation mandate under Sadc thrusts him to the
centre of negotiations between Mugabe and opposition forces.

Mbeki is well aware that the crisis in Zimbabwe stems largely from the
issue of Mugabe's legitimacy as leader. Past elections - whose results were
contested by the opposition - have continued to haunt the country. Mbeki
therefore sees the need for free and fair elections as an essential
prescription to solving Zimbabwe's current malaise.

But he has his own limitations hence he believes that "Zimbabweans
have got 11 months to do everything that is necessary to ensure those
elections are free and fair and that the outcome of those elections is not
contested by anybody".

After the Sadc summit last month and even before then, the opposition
and the international community had looked to Mbeki to solve our problem. To
those expecting the Mbeki miracle, the South African leader has been a huge
disappointment but he is not the only problem. The failure of oppositional
forces to come up with a strategy to confront tyranny has played a large
role in our predicament. The approach has been confusing. There has been
talk of confronting President Mugabe's government head-on and a mellower
stratagem of negotiation. Both have witnessed the same result - failure.

Winding back to 2003, MDC leader Morgan Tsvangirai promised to create
a "broad alliance" with other pro-democracy organisations that he said would
in a year force President Mugabe's government to negotiate a settlement to
the country's crisis. At the same time the MDC said in an official report to
the party's annual conference in Harare that informal talks with Zanu PF had
so far "yielded nothing" and that the two parties "are as far apart as the
North and South poles are". The same can be said today of the two parties.

As gestures of willingness to compromise with the ruling party,
Tsvangirai attended Mugabe's annual opening of parliament in July 2003 and
MDC leaders attended the funeral of Vice-President Simon Muzenda in
September.

"To date there has been no reciprocal action by Zanu PF and no
evidence that the party is interested in principled dialogue to bring about
a speedy resolution to the crisis in Zimbabwe. The impasse continues," the
MDC complained at the time. Zanu PF information secretary Nathan Shamuyarira
then ruled out any chances of accommodation with the MDC saying "perhaps at
some stage" the two parties could hold formal talks.

The status quo has remained and Mbeki's wish to have a free and affair
election in Zimbabwe is still dependent on a negotiated settlement, be it
one in which Mugabe is dragged to the table kicking and screaming or if he
graciously accepts dialogue. Any negotiated settlement is a give and take
scenario. The opposition's current thrust to achieve a negotiated settlement
and past efforts thereof presuppose that President Mugabe is so mortally
wounded that he will be forced to negotiate from a position of weakness - a
fatal error.

Certain elements in opposition cherish this dream of sitting Mugabe on
a chair and extracting concessions from him with ease. Their resolve has
been emboldened by what they see as international pressure on Mugabe and the
faltering economy. Whatever the situation, it will not be a walk in the park
because there are still too many points of disagreement between the MDC and
Mugabe. To the MDC Mugabe is the face of an illegitimate regime and equally
the MDC is a puppet construct of the West. Mugabe believes the economic
meltdown is due to sanctions while the other cites misrule.

Mugabe sees nothing wrong with Aippa and Posa which oppositional
forces regard as twin evils used to stifle dissent. Mugabe will claim that
the current electoral system conforms to Sadc norms and principles while the
opposition says the Zimbabwe Electoral Commission is a suborned institution
mandated to rig polls.

The opposition has said elections should be held under a new
constitutional dispensation while Mugabe believes the papered-over Lancaster
House document is sacrosanct because Zimbabweans fought for it.

There are also disagreements on who should observe elections. But the
biggest sticking point is Mugabe recognising the MDC as a Zimbabwean
opposition party. All these differences to be ironed out in 11 months by a
divided opposition and an obdurate Mugabe? It's not likely.

Ndlovu must stop talking nonsense

Zim Independent

Muckraker

A FEW weeks ago Muckraker expressed the hope that Herald columnist Obi
Egbuna would receive an appropriate response from presidential hopeful
Senator Barack Obama whom the US-based media mercenary was trying to rope
into his bid to resurrect President Mugabe's plummeting reputation among
African Americans.

He now has his reply. On March 29 Barack led the Senate in tabling a
resolution, concurrently with the House of Representatives, condemning "the
recent violent actions of the government of Zimbabwe against peaceful
opposition activists and members of civil society".

Among those sponsoring the resolution in the House of Representatives
were seven prominent members of the Congressional Black Caucus.

Egbuna says some will try to find a silver lining to this dark cloud
by hoping that if Obama gets into the White House "he will be in a position
of power and with his love for his African heritage he will do what is in
the best interest of Zimbabwe".

But Egbuna knows, as we do, that that won't happen. One of the most
encouraging developments for Zimbabwe's civil society over the past seven
years has been the wholesale desertion of African-American opinion from
President Mugabe's cause. With the exception of a lunatic fringe of the sort
associated with Coltrane Chimurenga and Pan-Africanist mercenaries like
Egbuna who are sponsored by this regime to attack the MDC, African-Americans
have largely lent their support to Zimbabwe's post-2000 struggle for freedom
and democracy. Few of them have any liking for President Bush. But they like
Mugabe even less! Egbuna, having been spurned by Obama, now fatuously claims
the Illinois senator will, despite his African blood, allow Zimbabweans to
"starve, suffer or even die".

"The Congressional Black Caucus, because of the influence of (Donald)
Payne (chair of the CBC's Africa Brains Trust) appears 100% committed to
attacking Bush on his policies on Iraq but giving him unconditional support
in his quest to overthrow the government of President Mugabe and the ruling
Zanu PF," Egbuna admits.

So another defeat for the regime's propagandists. What is particularly
criminal about the likes of Egbuna has been their willingness to disregard
state brutality. How do they justify kidnappings and killings of the regime's
critics? How do they justify the attack on Nelson Chamisa with a metal bar
at Harare Airport? How do they justify the abduction and murder of cameraman
Edward Chikomba? We want to hear from Egbuna, masquerading as a journalist
but in reality a blind apologist for a discredited regime.

Which brings us to Information minister Sikhanyiso Ndlovu who doesn't
seem to mind how foolish he looks mouthing the lies the regime feeds him
about the MDC.

Morgan Tsvangirai and his senior officers had been to "the United
Kingdom and European Union calling for illegal sanctions against Zimbabwe",
he claimed in remarks made to the Herald this week.

But he supplies no evidence for his charge.

"It all started when we were repossessing land from the white
farmers," he said. Violence by the MDC "reared its ugly head" after the
split in the party's ranks, he claimed, as seen by the attack on Trudy
Stevenson.

We thought it "all started" when EU observer mission head Pierre
Schori was booted out ahead of the 2002 presidential poll. The sanctions
that followed were a direct result of the refusal by the regime to be
transparent about its electoral process. Unsurprisingly, the EU refused to
indulge political violence and institutional manipulation.

And it was useful to have Ndlovu's remarks about the attack on
Stevenson following disclosures in the Mail & Guardian that Green Bombers
were involved in the assault on the MDC MP. A defector on Thursday gave his
account to the newspaper of the various missions National Youth Service
trainees had been sent on to test their reliability. It is a shocking
indictment of the way state funds are used to get even with political
enemies.

The defector said he had been involved in sabotaging the
Harare-Bulawayo railway line, disrupting an MDC rally at which Stevenson's
arm was broken, and petrol-bombing certain offices and homes.

It won't be difficult for Ndlovu to dismiss the M&G story as the work
of Zimbabwe's enemies. But we would be interested to hear from the minister,
who owes his parliamentary seat to political patronage, how he explains the
failure of the state to bring the killers of Cain Nkala and Patrick
Nabanyama to trial. We raised this issue last week. And it needs to be
raised again and again every time ministers and Zanu PF apologists accuse
the MDC of terrorism.

resident Mugabe had hoped he could use Nkala's case to pin terrorism
charges on the MDC. Instead the whole conspiracy backfired when the charges
against MDC officials accused of Nkala's murder were thrown out of court as
a tissue of lies. This was after they had been detained for over a year by a
judge who declined to afford them the freedom to which they were entitled.

We all recall the phoney assassination charges brought against
Ndabaningi Sithole and more recently Giles Mutseyekwa in the Mutare case.
Now we learn that several of the MDC officials accused of involvement in the
recent bombing campaign were in police cells at the time!

Exactly how they sneaked out to commit the crimes has not been
revealed.

But Ndlovu must stop talking nonsense. Every single charge of
terrorism or conspiracy brought against the MDC in the past has fallen flat
on its face. The Herald has on at least one occasion been
forced to apologise for carrying invented stories about the bombing of
high-rise buildings and anthrax attacks.

As for the US funding the MDC, which Ndlovu makes a meal of, it now
transpires that US ambassador Christopher Dell was in Bulawayo on the day in
February when the Herald "revealed" he had handed over a briefcase full of
cash at a Harare hotel to Tsvangirai.

Dell points out that if the Herald had bothered to check the National
Museum's visitors' book it would have found that he was down there on the
day in question.

"They must realise," he said, "that to get the big lie right they have
to get the little ones right first."

Ndlovu should take note before he discredits himself any further.

Meanwhile, we would be pleased to hear what progress the police have
made in their investigation into Chamisa's assault.

Reports that the state is using hit squads to kidnap, beat and even
kill suspected members of the opposition will ensure Zimbabwe is blacklisted
for the 2010 World Cup, something any Minister of Information should worry
about.

How serious are the authorities about the much-touted social contract?
Last week the Herald ran a story headed "state to take action against firms
for turning away workers". It contained threats made by Obert Mpofu against
companies alleged to have closed down during last week's stayaway.

"We want to identify those abetting the stayaway so that we can
confront them and find what their motives and agenda are," Mpofu said. He
threatened to invoke "certain measures" against them. They were
"sympathising with our detractors," he claimed.

Anybody approached by this malevolent minister for an explanation
should read him the riot act about the state's systematic sabotage of the
economy. They need to tell him that there is no question of industry or
commerce sitting down with ministers who seek to penalise companies who
identify with the plight of their workers.

"We want to identify those abetting national collapse," Mpofu should
be told. And he needs to be confronted with the truth about his own role in
all this.

Did readers of the Sunday Mail have a good chuckle over the newspaper's
April Fools Day hoax? Somehow we don't think so. The paper ran two stories
in its Entertainment section, one inviting readers to Africa Unity Square to
witness an "eye-opening confession" by Makanaka Wakatama about her life,
pregnancy and marriage, the other inviting aspiring models to go to Les
Brown
pool to audition for a beauty contest.

Those "fooled" by the paper faced disappointment. Neither event was
for real.

But did the paper have to inconvenience its "foolish" readers in that
way?

Even media houses that are considered serious about news like to "play
around with their readers", we were told. But that shouldn't involve wasted
bus fares.

The Sunday Mail should stick to its "plots". They provide readers with
enough amusement every week.

Muckraker came across an interesting posting on the Internet the other
day. It purported to come from an Anglican bishop in Zimbabwe and spoke
about the threat posed by neo-colonialism.

It was addressed to churches in the USA but it wasn't signed.

"Our dear Brethren in Christ," it read, "we write this letter in a
situation in which we find ourselves profoundly distressed, disturbed,
frustrated and in a state of utter disquietude about neo-colonialism and its
adverse effects on Zimbabwe.

"About twenty-six years after political Independence, it is sad to
note that the former colonisers have not given up."

It looked very much like something emanating from Zanu PF's propaganda
department.

Zimbabwe has over the past few years received considerable adverse
international media reports, as well as overt and covert alienation by some
countries, primarily because of the "inevitable" land reform programme, the
bishop claimed. "This was implemented in the country for the benefit of the
landless folks," we are told.

No mention of whether the mailer was a beneficiary or not!

Then there are the sanctions.

"It has become common sense (sic) among Zimbabweans, to realise that
sanctions against Zimbabwe are essentially tools of the imperialists,
functioning as punishment and retribution against the country," he wrote.
"Hence, the myth perpetuated by Western nations that the government of
Zimbabwe has solely inflicted endurable pain on its people remains a
political, economical and social fallacy."

He says he is ready to partake in interviews on radio stations. Also:
"We are now ready to meet the Cuban Ambassador to Zimbabwe in connection
with the planned visit to Cuba," he said.

"We therefore advise you to facilitate the said meeting and our visit
to Cuba."

So who is this not-so-mysterious bishop? Quite clearly he is an
apologist for the Zanu PF regime, mouthing their mantras but turning a blind
eye to the human suffering their policies have spawned. He is also evidently
a Zanu PF mouthpiece in demanding the lifting of sanctions and dishonestly
laying blame for the nation's suffering at their door.

He manifestly fails as a Christian witness because he appears
unconcerned with state torture and other forms of brutality.

And what role has the Cuban embassy played in encouraging this
delinquent bishop?

Let's hope his American audience is not as gullible as he thinks.

We are sure The Times correspondent Jan Raath was amused by the
incompetence of Herald caption writers who in a picture of March 22
purporting to show him "amid slogan-chanting MDC activists" outside the
Harare Magistrates' Court, labelled him "Young Rath" of Reuters.

In fact the person featured was Australian ambassador Jon Sheppard.
"Young Rath" was not even there! The accompanying article was written by the
paper's Features and Political Editor.

Labour stayaways counterproductive

Zim Independent

AS with most of the previous attempts of the Zimbabwe Congress
of Trade Unions (ZCTU) to stage a nationwide work-stoppage and stayaway from
places of employment, that scheduled for two days last week proved to be a
non-event.

Save for a few factories which, with unbridled over-reaction and
near-panic, resolved not to operate on those days - but instead either
required their workforces to take vacation leave, or to work on future
weekends in lieu of the two days of factory closure - almost all factories
were operational.

Most of them had near total numbers reporting for work, albeit
that some did so unavoidably late, due to inadequate availability of public
transport. Similarly, virtually all shops, offices, restaurants, hotels and
other enterprises were open for trade and were able to conduct their
operations in an almost "as normal" manner.

The only clear-cut evidence of the "stay-away" was that there
was a tremendous lack of commuter omnibus services for, based upon previous
experiences, their operators were fearful that they could be the victims of
intimidatory stoning of their vehicles.

From interactions with numerous workers, there is little doubt
that very great numbers were desirous of voicing their pronounced
dissatisfaction at government's gross mismanagement of the economy and at
the consequential very intensive hardships constantly confronting them and
their families. However, they had no will to express that dissatisfaction by
absenting themselves from their places of employment.

In most instances, the deterrent from so-doing was that they
simply could not afford to lose two days' wages. As it is, those wages are,
for almost all, highly inadequate to fund even the essential, basic needs of
the workers and their families, for the state's incompetent and destructive
economic policies, and other economically-negative actions, have fuelled
hyperinflation to such extent that it is the rare exception within Zimbabwe's
working class if anyone can "make ends meet".

Others were understandably fearful that if they failed to report
for work, they would be discharged, for the stayaway was not a lawful
strike-action in terms of Zimbabwe's labour legislation.

They were fully aware that the appalling economic conditions
prevailing in Zimbabwe were such that a very large number of enterprises
were pursuing any opportunities to "down-size" their operations, but were
constrained from terminating employment of workers because of
unaffordability of retrenchment packages.

Thus they would undoubtedly, and unhesitatingly, avail
themselves of any lawful opportunities of dismissal of workers and,
therefore, the workers could not take a chance by supporting the stay-away,
no matter how greatly sympathetic they were to the calls for the stay-away.

That the ZCTU was anxious to have a mass, nationwide protest at
the endlessly ongoing suffering and hardships of its members is unreservedly
understandable and, in principle, deserving of unmitigated support.

As evidenced in the 1980s, and again between 1994 and 1997, the
Zimbabwean economy has gargantuan potential and, properly managed and
developed, the economy could readily support, in reasonable comfort and
well-being, the majority of the population. But it is not only not properly
managed - it is assiduously mismanaged, year after year, by a government
only concerned with its own wellbeing and continuance in power.

Almost without exception, Zimbabwe's economic ills are
attributable to the policies, actions, and inactions, of government,
notwithstanding that government would have all believe that the economic
distress has been deliberately fomented by Britain, the USA, the European
Union and others that it perceives as its enemies.

The fact that there is irrefutable evidence that that is not the
case, and there is equally irrefutable evidence that government has caused
the near-demise of the economy, and has failed to take the constructive
measures available that could reverse that demise, is blandly and
contemptuously disregarded by government. As a result, the emaciated economy
continues to worsen continuously, ever intensifying the hardships and misery
afflicting workers, their families and their other dependents.

As the foremost representative body of the Zimbabwean workforce,
the ZCTU very rightly wishes to motivate change. It wishes to provoke
government into constructively addressing the economic ills with positive
actions instead of meaningless and destructive rhetoric which only causes
further economic deterioration.

Regrettably, however, the methodology of trying to motivate the
desired change is ill-conceived, ineffectual, and potentially disastrous. In
the first instance, work stoppages have very little significant impact upon
government.

In fact, they benefit government by providing it with another
alleged explanation for the adverse economic conditions, thereby diverting
attention from the real catalyst of those conditions, being government
itself. Therefore, the intended objectives of the stayaway cannot be
attained or, even if widely supported, the stayaway would not motivate
government to modify its stance in economic matters.

Moreover, while not achieving the declared objectives of the
stayaway, in the event that it had had the wide-ranging support that the
ZCTU had appealed for and anticipated, the only consequence would have been
yet further weakening of the economy.

The loss of production would have been a severe blow to many
industries whose ongoing operation and survival was already extremely frail,
and could well have been "the final straw that breaks the camel's back".
Thereby, the already horrendous levels of unemployment would have become
even greater, with yet more extensive suffering for the ZCTU's members and
their families.

Therefore, the ZCTU call for a mass protest action of staying
away from work was tantamount to the calls by middle-eastern religious
fanatics for their followers to be suicide bombers. Those fanatics do not
suffer by their adherents taking their own lives, and yet as long proven
over more than 40 years, their doing so has not gained any of the objectives
that the fanatics sought. So, too, voicing protest by work-stoppage cannot
and will not provoke government to abandon its destructive polices, and to
pursue constructive ones.

This should have been blatantly clear by the total
ineffectiveness of all previous work stayaways, but it appears that the ZCTU
cannot learn from experience, or is totally devoid of ideas of other ways of
motivating much needed change.

The ZCTU also needs to recognise that its repeated calls for
stayaways, such as its declared present intent to motivate a stayaway at
least once per month, only degrades itself, for it is achieving naught but
successive failures.

More and more the ZCTU is being seen as an ineffectual body rich
in talk, but devoid of ability to act effectively. This is tragic, for
workers need the protection that well-managed trade unions can accord them.
Instead, the ZCTU's failure to achieve a significant, affirmative response
to its protest measures plays fairly and squarely into government's hands.

The political hierarchy that constitutes the incompetent,
authoritarian, non-democratic, uncaring Zimbabwean government increasingly
believes in its omnipotence because of the repeated failures of any protests
by the populace to have widespread support. As a result, government sees
itself as invincible, and that it can ride roughshod over any and all
opposition, and against any and all protests.

The ZCTU needs to abandon its policy of stay-aways, which policy
has repeatedly proven itself to be ineffectual and contrary to national
interest, and totally counterproductive, and instead must seek other,
lawful, forms of protest. The labour body must not cease to voice protest,
when protest is necessary, but it must do so constructively.

Mr. President.Time to rescue Zimbabweans from Mr. Mugabe

Vanguard, Nigeria

By Olawale Fapohunda
      Posted to the Web: Friday, April 13, 2007

      The appalling beating inflicted recently on the Zimbabwean leader of
the opposition, Morgan  Tsvangirai, and other members of his Movement for
Democratic Change (MDC) and the continuous  downward spiralling of the
socio-economic and political situation in Zimbabwe places a  responsibility
on President Olusegun Obasanjo to intervene decisively in the situation in
Zimbabwe. Mr. Mugabe would want the rest of Africa to believe that the
situation in his  country is a result of his refusal to allow
neo-colonialist ambitions. Mr. Mugabe  undoubtedly deserves much credit for
the heroic liberation struggle in that country.

      However, if the truth is to be told the situation in Zimbabwe today is
the effect of Mr.  Mugabe's misrule and high-handedness. Mr. Mugabe has
pursued a catastrophic policy of self  and regime preservation. The effect
on ordinary Zimbabweans has been dreadful. Some three  million of them (out
of a population of thirteen million} have fled the poverty and chaos of
home, many to neighbouring South Africa.

      Once the bread-basket of Southern Africa and one of the continent's
wealthiest countries,  Zimbabwe is now a basket-case and suffers a severe
shortage of food. It is also the world's  fastest - shrinking peacetime
economy, with unemployment now standing at 80%. Its inflation  rate is the
world's highest: currently 1,730%. Regretfully, till date Zimbabwe's
Southern  African neighbours including South Africa have refused to take a
firm stance in support of  the suffering people of Zimbabwe insisting on the
continuation of its failed strategy of  non-interference and quiet
diplomacy.

      This has only in many ways served to strengthen Mr. Mugabe. If the
response of Southern  Africa has been disappointing, that of the African
Union {AU} has evoked memories of the  'see no evil, hear no evil' OAU of
old and made nonsense of its new commitment to good  governance.
Predictably, this has given a stronger voice to those in and out of the
continent who believe that the aspirations of the AU as expressed through
African heads of  state do not readily include democracy and the defence of
human rights.

       The situation in Zimbabwe casts an enormous shadow on the optimism
and enthusiasm which  greeted the adoption of NEPAD. Surely, the spirit and
intent of NEPAD frowns at brutal  suppression of the opposition, mass
arrests and detention and state sponsored violence all  which have became
identification marks of Mr. Mugabe's regime.

      Nigeria must intervene now. Mr. Mugabe must be told politely and
firmly that it is time to  go. Nigeria should use its enormous influence
within the AU and take the lead in making it  clear how Mr. Mugabe's misrule
is giving the African continent a bad name.
      Condemnation of what is happening in Zimbabwe by President Obasanjo
would go a long way in  restoring faith in the AU peer review mechanism
which has of late come desperately close to  being a snare and a delusion.
Most importantly it would provide a glimmer of support for the  millions of
Zimbabweans in their struggle to survive Mr. Mugabe's brutal regime.

      * Olawale Fapohunda, Managing Partner, Legal Resource Consortium

Will Mbeki succeed this time?

Mutambara questions Mugabe's war legacy

New Zimbabwe

By Lebo Nkatazo
Last updated: 04/13/2007 09:30:35
ZIMBABWEAN opposition leader Arthur Mutambara has used his Independence Day
message to urge President Robert Mugabe's opponents to embrace the country's
war of liberation.

The country's Independence Day is on April 18.

Mutambara urged his opposition Movement for Democratic Change (IMDC)
supporters to "reclaim the war legacy", the centre piece of President
Mugabe's political rhetoric.

Mugabe accuses his political opponents of being puppets of the West, and
Britain of seeking to recolonise Zimbabwe through financial and material
support for the MDC whose leaders are scarce on liberation war credentials.

Mutambara said: "As we observe this great day in our national calendar, let
us take this as an opportunity to reflect on the state of our nation and the
challenges we face. It is important that as Zimbabweans we come together and
find solutions that can build our country into a peaceful, democratic and
prosperous nation.

"We must proffer redemptive political and economic solutions in order to
improve the quality of life for all Zimbabweans on a sustained and
sustainable basis. At twenty seven years of age our country could do with
some innovative and robust state crafting."

He lashed out at Mugabe for monomoplising the liberation war stage, and
urged Zimbabweans to challenge te 83-year-old leader whom he described as a
"spineless coward who does not know how to return a soldier's salute".

"No single individual delivered us from bondage. It was a collective effort.
Across the length and breath of this country and in neighbouring countries
such as Zambia, Mozambique and Tanzania, our sons and daughters came
together, with a single purpose -- to free Zimbabwe. For the record; Yes,
Robert Mugabe was part of the liberation war effort."

Mutambara also insisted that Zimbabweans held the solution to the eight-year
economic recession sparked by an military adventure in the war torn
Democratic Republic of Congo, the payment of gratuities to war veterans and
a violent seizure of white commercial farmland.

Mutambara speech appeared time to support South African President Thabo
Mbeki's mission to bring Mugabe to the negotiating table with his political
opponents to agree on ground rules ahead of elections next year.

Mbeki got the mandate from leaders of SADC, the regional economic bloc
following an extra-ordinary summit in Tanzania two weeks ago.

"When all is said and done, Zimbabwe 's future will be determined by
Zimbabweans," said Mutambara. "External players can assist and facilitate,
but the buck stops with us.

"We cannot outsource our emancipation to foreigners. We shall be our own
liberators. We shall be masters of our own destiny and complete the
unfinished
business of the liberation struggle."

Mutambara also said all "democratic forces" must close ranks and field a
single presidential candidate next year. Mutambara was recently forced to
deny that Morgan Tsvangirai, leader of the other faction of the divided
party, would be the MDC's sole candidate to challenge Mugabe in elections
next year.

"A united front inspired by a single candidate principle is a categorical
imperative in every election," he said. "Every vote must count against Zanu
PF. While this framework will energise the generality of our people, it will
also have strategic national appeal to multitudes of progressive Zanu PF
members and supporters."

Mutambara appeared to support a new theory advanced by Mugabe's former right
hand man Jonathan Moyo, now an Independent MP. Writing on New Zimbabwe.com,
Moyo said democratic forces in the country should join up to support a
single candidate to be chosen.

Moyo warns that a winning strategy for the opposition should be formulated
with the acceptance that Mugabe still has nationwide appeal.

He said: "More particularly, it should be understood that a United Front
that does not have strategic national appeal to multitudes of Zanu PF
members, supporters or sympathisers and neutrals out there will not get
anywhere."

The 'Mugabe way'

New Zimbabwe

By Jonathan Moyo MP
Last updated: 04/13/2007 09:40:33
WILL the political machine of Zimbabwe's de facto one-party state enable
President Robert Mugabe yet again to outfox everyone as he fights his last
battle for power ahead of the watershed elections in 2008? Or will what he
himself calls the "Mugabe way" finally make way for a peaceful and
democratic solution?

These are the critical questions on the lips of desperate Zimbabweans, both
within and outside of Mugabe's increasingly divided government.

While there is now agreement among Zimbabweans across the political divide
that Mugabe must go -- and all indications are that he is indeed going -- 
the method of his exit remains anyone's guess.
Will it be through a humiliating defeat at the 2008 polls, or the graceful
resignation of a departing statesman? Will he be overthrown by a palace
coup, or shame his detractors by getting re-elected after all, to remain in
office for life?

Now 83, Mugabe is adept at using the little-understood mechanisms of his de
facto one-party state to play hardball -- under the cover of
anti-imperialist rhetoric -- against demands for leadership change by the
majority.

Surrounded by pliable ruling-party sycophants and rarely challenged by a
weakened opposition, he harbours a delusion of invincibility. His recent
decision to seek re-election next year is a telling expression of that
delusion.

In African politics, precedent suggests that a president who has remained in
power for the entire life of his country -- as Mugabe has done for 27
years -- invariably begins to see himself as indispensable. A notable
exception was the late Mwalimu Julius Nyerere of Tanzania, who was able to
see the direction of the winds of change. In 1986, Nyerere voluntarily
dismantled his one-party state to make way for today's multi-party
dispensation.

Mugabe has been asked on many occasions about his own plans. In response, he
has scorned the "Nyerere way" and vowed instead to follow the "Mugabe way".
Although he has never explained the difference, an informed grasp of the
"Mugabe way" is vital before Thabo Mbeki, in his new role as Southern
African Development Community mediator in Zimbabwe, can expect any chance of
success.

Every crisis has a history. In 1980, soon after replacing Ian Smith as prime
minister, Mugabe embarked on the creation of a legislated one-party state.
He disbanded the government of national unity and launched Gukurahundi, a
single-minded military campaign in the Matabeleland and Midlands provinces.
Up to 20 000 Ndebele people lost their lives.

The brutality was carried out by the notorious Fifth Brigade, a secretive
army regiment which reported directly to Mugabe in his then role as prime
minister. But its real objective was to eliminate PF-Zapu as a credible
challenge to Mugabe. In 1987, Zapu nationalists finally succumbed to the
carnage.

The party "merged" with Zanu, which became Zanu-PF, under a treacherous
Unity Accord. Its key tenet was the establishment of a legislated one-party
state, under an executive president -- a role in which Mugabe morphed from
prime minister into a lifelong head of state in the image of [former Malawi
president] Kamuzu Banda.

Mugabe's designs in this new role were premised on two hopes. First, he
hoped it would postpone succession politics by perishing the thought that
anyone else in his party could succeed him while he was alive. Second,
Mugabe hoped to get lifetime immunity from prosecution for any human rights
violations in Matabeleland.

These hopes began to fade in the 1990s in the wake of new national, regional
and international developments. In Zimbabwe, the adoption of an economic
structural adjustment programme, supervised by the World Bank, brought
unpopular austerity measures.

Further south, the Codesa negotiations in South Africa led ineluctably to
Nelson Mandela's release and election as the country's first democratic
president. And, with the end of the Cold War, pro-democracy and
anti-one-party state movements proliferated throughout Africa.

These developments made it impossible for Mugabe to legislate for a
one-party state. Nevertheless, the political and institutional foundations
had been laid. Zanu-PF was weakened as a political party with functional
grassroots structures, while control of state institutions was concentrated
in the hands of people reporting directly to Mugabe. This is the essence of
the "Mugabe way".

The crisis in Zimbabwe has made it possible for disillusioned factions to
contemplate challenges to Mugabe. But the courageous nationalists with
impeccable liberation credentials, who could have successfully sought the
Zanu-PF leadership, are now either dead or have been ousted from the ruling
party.

Once loyal or harmless factions, such as those represented by the retired
General Solomon Mujuru and Emmerson Mnangagwa, now have a clear opportunity.
But they are likely, if not certain, to squander the opportunity. Lacking
either the stature or the policies to better Mugabe, both fear the
consequences of breaking ranks. They are afraid of taking the bull by its
horns, knowing they would be crushed to oblivion.

Pretenders to Mugabe's throne can also not count on a fair chance in
elections. The "Mugabe way" does not necessarily mean rigging elections in
the ordinary sense of the term. Instead, a raft of institutional and
organisational tricks ensures opposition candidates cannot compete freely
against Mugabe's direct control and supervision of the political machine.

Take, for example, the presidential election in 2002. The military deployed
scores of personnel at every village across the country, with instructions
to ensure Mugabe's victory in the rural areas.

These military men and women became, in effect, Mugabe's political
commissars -- the political lifeblood of the Zanu-PF campaign. As serving
members of the army, they were able to command authority over village
headmen, chiefs, headmasters and heads of government departments.

All were issued instructions, in the form of "do's and don'ts", on how to
vote for Mugabe. Throughout the countryside, villagers were routinely told
to declare themselves illiterate at polling stations -- a signal for
"assistance" from polling officers, many also from the military, who would
"know what to do".

When the votes were counted, Mugabe won the 2002 election by a paltry 400
000 votes.

Given the huge margins of his previous victories in 1990 and 1995, it is not
hard to conceive that this result would have been possible without the
assistance of Zanu's military commissars in the rural areas. In the
circumstances, it is clear that the "Mugabe way" has become deeply
institutionalised. The devil is in the detail, and it will take far more
than the usual rhetoric to break the Zimbabwean logjam.

This is the stark reality which Mbeki confronts in his new role as a
mediator for the SADC region. Besides the military, police and intelligence
services, at least 14 government ministries do "commissariat" work to defend
Mugabe's political interests and survival.

This makes it difficult to challenge him from within his own party, and
harder still to mobilise popular opposition at national polls. Indeed,
without these mechanisms of a de facto one-party state, Mugabe has no chance
in heaven of winning in 2008.

Professor Moyo is independent MP for Tsholotsho. This article was originally
published in the Mail & Guardian. He can be contacted on: moyoz@mweb.co.zw

Tsvangirai vows defiance ahead of Mbeki talks

New Zimbabwe

By Lebo Nkatazo
Last updated: 04/13/2007 09:30:19
ZIMBABWEAN opposition leader Morgan Tsvangirai Thursday said the opposition
party's "defiance campaign" would run parallel with negotiations with Zanu
PF that are being spearheaded by South African president Thabo Mbeki.

Tsvangirai, leader of the fractious Movement for Democratic Change (MDC)
also rejected government and police charges that the party was behind a
spate of petrol bomb explosions which targeted police stations, two
passenger trains and a petrol tanker.

The MDC alongside several local churches and civil society groups have been
staging small street protests and calling for mass rallies under what it
calls a "defiance campaign".

Several senior leaders of the campaign under the banner of the Save Zimbabwe
Campaign have been arrested and tortured in police custody. But Tsvangirai
has vowed there will be no let, and accuses the judiciary of complicity in
the state-sanctioned repression.

He said: "Despite the violence and assaults, our resolve is not shaken and
we will pursue vigorously the quest for democratic change in Zimbabwe. It is
in this regard that we will continue with our defiance campaign within the
Save Zimbabwe Campaign coalition and at the same time pursue vigorously the
negotiations that have been opened up by SADC at its extraordinary Heads of
State meeting in Dar Es Salaam."

South African President Mbeki has been urging both Zanu PF and the MDC to
shy away from actions that could inflame the situation, and Tsvangirai's vow
to press on with confrontoing Mugabe's regime could threaten his mission.

Tsvangirai said over 600 MDC activists had been detained or tortured since
the start of the year, and accused the country's judges of taking the Zanu
PF line.

"It saddens us to note that many of our supporters are still incarcerated
and being denied bail by an increasingly complicit judiciary and a bench
staffed with a few subjects who have benefited from the patronage system of
land reform, including handouts and inputs generated by this government," he
said.

Tsvangirai maintains the MDC believes in peaceful and non-violent means of
achieving democracy in Zimbabwe.

He said that history has shown that government is behind the bombings, torture
and murder of innocent people.