The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

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Zim Independent

Fuel crisis spreads . . .
Vincent Kahiya
ZIMBABWE'S fuel is grossly underpriced and government has been paying
billions of dollars weekly in subsidies in a bid to suppress price increases
of the commodity. A rise in the price of fuel is considered inflationary and
could negate government's illusory economic turnaround.

This comes as government, which is sounding increasingly desperate over the
latest bout of shortages, has commissioned a consortium of local
businesspeople to carry out a feasibility study to revive the ancient Feruka
oil refinery in Mutare.

The Zimbabwe Independent can reveal that government has plans to revive the
plant this year, funds permitting. But petro-chemical engineers this week
said the plan was "pie in the sky" as it would be more cost-effective to
build a new plant.

The government price for petrol and diesel is currently $3 600 a litre while
in South Africa, the forecourt price of both petrol and diesel is around R5
a litre. This translates to $5 000 at the official rate and more than $15
000 a litre at the parallel market rate. The wholesale price of petrol in
South Africa is R4,61 ($4 610 at the official rate).

Fuel merchants this week said after factoring in transport costs, fuel can
be landed in Zimbabwe at around $5 000 (if forex secured at the official
rate is used).

The government is therefore paying almost $1 500 to subsidise every litre of
fuel sold at service stations. Zimbabwe normally consumes two million litres
of fuel daily.

So skewed is the pricing structure in the country that a litre of fuel is
cheaper than a bottle of mineral water ($9 000), a fizzy drink ($8 000) or a
500 ml sachet of milk ($5 000).

Touts selling fuel in front of Noczim House in the city centre charge as
much as $75 000 for a five-litre can of petrol instead of the official $18
000.

Fuel marketers interviewed yesterday said the price of fuel should be
reviewed immediately.

"What the depressed price has done is to make our margins small and
forecourt business unviable," one marketer said.

Government believes reviving the Feruka refinery will be a panacea for the
current problems the country is facing. President Mugabe last week sought
assistance from Indonesia to bring life to the plant which was built in the
early 1960s and was converted into a storage facility in 1981.

This week, Speaker of Parliament John Nkomo was in Luanda, Angola, as
President Mugabe's special envoy. Diplomatic sources said Nkomo's mission to
Angola included the possibility of Angola supplying crude oil to Zimbabwe
and technical assistance on running a refinery.

Meanwhile, shortages continued this week with few service stations receiving
petrol in the capital. There was virtually no petrol at service stations
outside Harare.

Sources in the sector said there was no petrol in reserve at Noczim's
holding tanks. The sources said there was no foreign currency to import fuel
and the situation was degenerating fast.

"Between October and March, there was about US$4 million a week for fuel
imports which was distributed between Noczim and the Petroleum Marketers
Association of Zimbabwe (PMAZ)," said a source at Noczim.

"That money has disappeared and there is as little as US$1,2 million a week
available these days."

Because of the country's poor credit rating Zimbabwe has in the last five
years failed to secure lasting lines of credit to pay for fuel imports.
Currently, the country is doing "spot purchases" from ships anchored off the
Mozambican coast.

The Independent also heard this week that the centralised procurement of
fuel through PMAZ and the strict surveillance of import licence holders
meant that individuals could not organise their own forex and bring in fuel.

"In the past one could go onto the parallel market, buy forex and then
import fuel," said a garage owner. "That explains why last year fuel was
available but at different prices. That is no longer possible. If importers
were given the go-ahead to import as individuals, fuel would become readily
available again," he said.
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Zim Independent

as Zim faces more power-cuts
Staff Writer

ZIMBABWE is set to face more power blackouts in the coming weeks after
a second power unit that supplies the country with over 220 megawatts broke
down this week at Hwange Power Station, the Zimbabwe Independent has heard.

This comes hard on the heels of a crippling power shortage that has
been affecting the country over the last three weeks. The power utility Zesa
has already started to ration electricity in residential, industrial and
farming areas.

There are fears that the power cuts will adversely affect the
production of winter wheat which requires electricity to drive irrigation
units.

The breakdown comes a week after the first unit which supplies the
country with about 100 megawatts (MW) also packed in due to shortages of
spare parts to repair generators.

Zesa corporate affairs manager, Obert Nyatanga, confirmed that the
second unit at Hwange had broken down but said the problem would be
rectified after spares are acquired in the coming six weeks.

He said the first unit at Hwange was expected to be operational
tomorrow while the second unit that supplies more power to the country would
be ready in the coming six weeks.

He said the unit that had a problem in Kariba was now rectified and
the generators powering the unit were now operational.

"We have had problems with the units at Hwange Power Station and in
Kariba but the units in Kariba have been fixed and are now operational,"
Nyatanga said.

Zimbabwe gets electricity from Snel in the Democratic Republic of
Congo (DRC) and from Eskom in South Africa.

As a result of the breakdown of the unit in Kariba, the country has
not been getting adequate electricity supplies from the DRC.

"At the moment we have both units in Hwange down but we have managed
to have the unit in Kariba back in operation. We are trying by all means to
procure parts for the units in Hwange," Nyatanga said.

Meanwhile Nyatanga said Zesa was owed a total of $178 billion by
consumers.

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Zim Independent

US lawmakers rap setbacks in Zimbabwe

UNITED States lawmakers on Capitol Hill have criticised President Robert
Mugabe's government as they examined the situation in Zimbabwe during a
congressional hearing.

Zimbabwe's political and economic crisis, as well as setbacks to civil
liberties and human rights, have been the subject of intense concern in
Congress.

Last Thursday's hearing provided another opportunity for lawmakers to

voice their views about what many believe to be a worsening situation.

Congressman Chris Smith, chairman of the House Subcommittee on Africa and
Global Human Rights, began with this observation about Zimbabwe's
long-serving president: "Robert Mugabe was a hero to his people and his
fellow Africans for successfully standing up to racism and oppression.

"More than two decades later, however, he has so tarnished his image that it
now must resemble the fictional portrait of Dorian Gray showing an
increasingly repugnant picture of a hero who has gone astray."

Donald Payne, ranking Democrat on the sub-committee, said developments in
Zimbabwe have gone from great potential for good governance and rule of law
in the years following Independence to today's conditions of autocratic
rule.

He questioned whether an approach of isolating Zimbabwe through sanctions
and other steps has produced results.

"I think our policy and the policy of international communities to isolate
the

government of Zimbabwe, as we can see, has not worked," he noted. "President
Mugabe's behaviour over the past few years has been deplorable."

Payne said the United States with help from members of the African Union
should continue to engage and press Mugabe to change direction.

Constance Berry Newman, Assistant Secretary of State for African Affairs,
repeated the US view that the March parliamentary election in Zimbabwe was
neither free nor fair, and listed the likely effects.

"The result is a parliament that will continue to do the bidding of Robert
Mugabe and will not speak for all of the people of Zimbabwe," she explained.
"This means the challenges of unemployment, food prices, refugees, limited
investment, failure to address HIV and Aids will continue.

Worst of all, Zimbabwe through this period may be on the brink of another
food emergency."

Greg Mills, former head of the South African Institute of International
Affairs, believes Mugabe aims to create a facade of stability while moving
to further strengthen his hold.

Among steps the international community could take, Mills says, strategic
engagement by the United States, South Africa and other African Union
members, has the best chance of having some impact.

"This will crucially have to involve placing on the table an attractive
recovery package for Zimbabwe, including on (the issue of) land, and be
conditional on political reform, as well as an exit strategy for Mugabe," he
said. "This may usefully involve also the appointment of a US special envoy
for Zimbabwe."

Mugabe rejected recent criticisms of the election results, saying his
government does not need what he called Anglo-American validation and
indicating Zimbabwe would look to China and other countries for help. - VOA.
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Zim Independent

Zimbabwe broadens hunt for grain

ZIMBABWE has turned to Zambia, Uganda and Tanzania for grain imports as the
state Grain Marketing Board (GMB) attempts to restock the country's
dwindling maize and wheat stocks.

Public Service, Labour and Social Welfare minister Nicholas Goche confirmed
to Irin that Zimbabwe had expanded its grain sources to include these three
countries, in addition to South Africa, the major supplier.

"We have been looking for more and more sources of grain," said Goche.
"There are contracts that have been in existence but not in force. We are
reactivating those, and signing up new ones, to ensure that food keeps
coming.

"We received about 150 000 tonnes from South Africa over the past month and
we are expecting more deliveries from East Africa."

Goche, formerly the State Security minister, assumed his new portfolio
following a cabinet reshuffle last week.

The government's admission came as economists said the country needed to
import at least 1,2 million tonnes of maize, 200 000 tonnes of wheat, and
unspecified tonnages of barley and sorghum to meet the country's immediate
food requirements.

Minister Goche said the country was expecting to feed about 1,5 million
people in seven mostly rural provinces, but could not say whether there was
a parallel relief programme for urban areas. Although there were no
responses from the embassies of the three source countries, an official at
the GMB procurement division told Irin that the Zimbabwe-Uganda maize import
deal was signed during President Yoweri Museveni's visit to Zimbabwe last
year.

Didymus Mutasa, Zimbabwe's newly appointed State Security minister, said he
could not divulge any details beyond what Goche had said, as food was a
national security issue. His ministry, which is responsible for the Central
Intelligence Organisation, has taken charge of the importation and
distribution of food.

"Why do you want to know where we get our food?" said Mutasa. "I cannot tell
you anything more than what you already know because these are security
issues. Besides, I am new in this ministry, so I do not know much."

Zanu PF spokesman Nathan Shamuyarira said the country needed at least $5
trillion (about US$818 million) for the immediate importation of grains and
cereals, and the government would divert money from infrastructure
development programmes to import food.

"We have been forced to divert resources from other projects to deal with
the immediate hunger situation. We are in a predicament. Food importation is
our priority at the moment," Shamuyarira told Irin.

Economists Eric Bloch and John Robertson warned that the high cost of
importing food would drive up inflation and lead to a thriving alternative
market for scarce foodstuffs and foreign currency.

"The expanded government and (the proposed new) Senate will both be a huge
drain on the national fiscus, which does not have foreign currency at
present," said Bloch.

"It means spending on the bureaucracy would compete with food importation
for resources, but government simply does not have such money - food
importation alone will cost the country tremendous sums of foreign currency
between now and April next year when the next harvest comes".

"The result will be a resilient black market for scarce foodstuffs in both
rural and urban areas; there will also be a more stubborn foreign currency
black market to fill up where government is failing. The cost will be too
high for our ailing economy," he said.

He added that there was no hope that the country's winter wheat-growing
season, due to begin in late April, would improve the food security
situation until the next harvest.

Robertson said the diversion of foreign currency into importing food would
stall other capital projects, costing the country heavily in terms of
development; the government needed to design long-term policies to counter
the overall economic meltdown, to solve the problem of food insecurity.

"Steps must be taken to deal with the shortage of foreign currency," said
Robertson.

"The causes of food insecurity can be traced back to the collapse of the
farming sector - the collapse of the tobacco, cotton, timber and beef export
industries. All attempts at ensuring food security without addressing these
problems will fail," he said.

The GMB noted in a recent report to the National Taskforce on Food Security
that rather than government's harvest estimate of 2,4 million tonnes, only
600 000 tonnes of grain had been delivered to its silos after the 2004
harvest. The country needs 1,8 million tonnes of grain annually to meet
domestic consumption needs.

Contrary to government estimates that 1,5 million people would need some
kind of food assistance, the Famine Early Warning Systems Network last month
warned that up to 4,5 million were in need of immediate food aid. - Irin.
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Zim Independent

Constitution still 'colonial'
Ray Matikinye
ZIMBABWE has gone through a raft of homegrown initiatives meant to unshackle
it from the vestiges of colonialism. It has engaged in political hard slogs
"never to be a colony again".

But one colonial trace has stuck out stubbornly like a sore thumb and stands
a good chance of becoming a source of renewed internal conflict soon.

The absent item in the "homegrown" cult is a constitution entirely crafted
by Zimbabweans themselves.

An indigenous constitution is widely regarded as the missing link between
political and economic progress needed to lessen current crises the country
faces. Using a shredded constitution whose numerous holes have been plugged
by expedient piecemeal amendments does not bode well for a country trying to
hold its own in the world.

The only time Zimbabweans were given an opportunity to craft their
constitution was after nearly 20 years of Independence, during the first
half of which the country was burdened with entrenched - or "sunset" -
clauses inserted to end hostilities at Lancaster House.

The 1999 draft was rejected by a sceptical electorate.

Constitutional expert, Professor Welshman Ncube of the opposition MDC, says
the draft was a fundamental departure from what people had wanted.

Ncube, the MP for Bulawayo East, said the constitution-making process was
exclusive and inordinately weighed down by inadequate consultation. One
political party had sole control of the whole process.

"The Constitutional Commission went against the will of the people by taking

what it wanted from consultations with them and leaving out people's inputs
it thought would offend government. As a result the content of the final
document differed fundamentally from what the people had demanded," Ncube
said.

And what the referendum mainly served to do was to unleash retributive
measures by the ruling party driven on by a government fearful of losing its
grip on power.

Although President Mugabe sounded magnanimous in accepting the people's
verdict in the 2000 referendum, Mugabe was stunned and stung to the core by
the unexpected rejection.

The outcome of the referendum triggered a political and social catastrophe.
Restrictive laws that impinged on democratic practices such as Posa and its
bedfellow Aippa were railroaded through parliament, whittling down personal
liberties.

Since the 2000 referendum Zimbabwe has plunged into chaos that has bred a
long-standing political and human disaster. The referendum fallout has
spawned rampant inflation, intermittent shortages and widespread
unemployment as businesses closed down.

Chairman of the National Constitutional Assembly (NCA), Lovemore Madhuku,
predicts a new phase in economic development and progress once a new
constitution is in place. All forces, he says, should be geared towards a
new democratic constitution to enable the country to prosper if one
acceptable to all stakeholders is crafted. "There is goodwill to get the
economy back on its feet."

"We have long appealed for people who have influence on Mugabe to convince
him and open avenues for the crafting of a new constitution. At times we don't
understand why Zanu PF seems not to appreciate the urgency of the matter and
its immense socio-economic benefits," says Madhuku who believes a more
democratic constitution opens the way for better governance and immeasurable
economic opportunities.

But in the aftermath of a third disputed election the likely solution to the
political impasse appears to be agreement among the opposition MDC, the
single-issue lobby group and the government for a new, homegrown
constitution.

The governing Zanu PF has been surreptitiously pushing through
constitutional amendments, reinforcing the idea that a homegrown
constitution is essential to Zimbabwe's future democratic progress.

Justice minister, Patrick Chinamasa, last week said he was consulting with
the colleagues in Zanu PF party on areas that they want amended.

President Mugabe hinted his government would re-introduce portions of the
Chidyausiku draft, which he said the opposition MDC had agreed to "until
they were persuaded not to accept the document by their financiers".

But the NCA says it will not stand idle while the Zanu PF central committee
engages in groupthink to craft a constitution on behalf of Zimbabweans. "In
Zanu PF the only organ that matters is the presidium. We do not want another
constitution crafted exclusively by the presidium," Madhuku says.

Unlike the ruling party's approach of using its two-thirds parliamentary
majority to cull "friendly" sections of the rejected Chidyausiku draft, the
NCA's stated approach is to blend sections of its own draft and the
Chidyausiku draft into a new constitution sanctioned by the people.

"Any caring government must pay heed to what the people want. We firmly
believe the making of a constitution should involve the majority of the
people," says NCA spokesperson, Jessie Majome.

Majome says her organisation believes in a constitutional culture where the
end product comes from the people themselves.

"It will be a cruel tragedy if the constitution is made elsewhere without
giving the people the right to choose. The South Africans own their
constitution and Zimbabweans deserve an opportunity to determine their
destiny as well," Majome added.

The opposition MDC has belatedly realized that without a democratic
constitution it would be almost impossible to participate in future polls on
an equal footing with the ruling party, no matter what efforts it makes to
bolster its popularity and membership. It has realised that the Sadc
Protocol on the conduct of free and fair elections is no panacea to
undemocratic electoral practices.
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Zim Independent

Health for all call an illusion for Harare
Augustine Mukaro/Grace Kombora
"THE flatulence of an angry god," is how one resident described the
overpowering smell that was blasted into the atmosphere by the
malfunctioning Union Carbide pesticide plant in the Indian city of Bhopal in
1984.

Thousands of people died in the disaster and many continued to succumb
months after the incident. One would be forgiven for believing that the
offended god of Bhopal had relocated to the environs of Lake Chivero.

This is not an angry deity but a collective effort of commissioners running
the city of Harare and councillors in Chitungwiza.

The sewerage treatment in Harare does not work while the city's
infrastructure continues to crumble as the commission running the city has
failed to turn around the fortunes of the politically manipulated Town
House.

Raw sewage is flowing unchecked into the city's sources of drinking water.

The dark sludge cascading towards the lake every day is spreading to form
green algae which are poisonous to fish which are dying in their thousands
daily.

The situation has been exacerbated by Chitungwiza town council which has
equally failed to deal with sewerage problems. In Zengeza 3 and St Mary's,
sewage flows in streams which empty into Nyatsime and Manyame rivers and
eventually into Lake Chivero.

The same water is pumped into treatment plants in Norton where it is
supposed to be cleaned with chemicals to make it potable. The chemicals are
in short supply and the cleaning process is compromised. City fathers and
their mother at Town House contend that the water is safe, perhaps because
there are no tadpoles coming out of faucets but scientists say dangerous
microbes have taken shelter in the water. There are also harmful heavy
metals like lead in the water. It is dangerous to drink.

A visit to Lake Chivero last week revealed that a health crisis looms in
Harare as pollution continues unabated. Chivero and Darwendale supply water
to the city of Harare.

Residents who live in the vicinity of the lake said the Harare City Council
was disposing of raw sewage into Marimba River. Marimba feeds into Lake
Chivero.

"We have been living here for the past seven years and have experienced the
stench from the lake in the last two years," said one resident.

"The city council is dumping sewerage into Marimba every day."

Environmentalists and health experts warn that Harare is sitting on a time
bomb. "Harare residents are drinking contaminated water and a health hazard
is looming," said John Rodrigues, chairman of the Zimbabwe Conservation
Taskforce.

He said the rising levels of pollution in Lake Chivero were continuing as
incompetent people were running the affairs of the city.

Harare is being run by a commission handpicked by Local Government minister
Ignatious Chombo. The commission has been overseeing the day-to-day running
of the city since the dismissal of elected mayor Elias Mudzuri last year.

Mudzuri was elected mayor on a Movement for Democratic Change ticket in
2002. Since Mudzuri's ouster service delivery in the city has been in
free-fall.

Ghastly sights of garbage piling on street corners are common in both high
and low-density areas with residents saying rubbish had not been collected
for months.

The lame excuse from council was the shortage of fuel and the expiry of
contracts signed with private garbage collectors.

"Council has not collected refuse here for two months," a visibly angry
Mbare Residents Association chairman, Israel Mabhou, said.

"Our last option would be to carry these bins and the rotting rubbish and
dump them at Town House. We are sick and tired of their excuses," he said,
pointing to a smelly mountain of rubbish between Matapi Flats and OK
Zimbabwe supermarket behind Mbare-Musika.

Mabhou blamed the Makwavarara-led commission for the collapse of the city's
infrastructure.

Rodrigues said the city was overpopulated and this was impacting on the
sewerage treatment works.

Health experts say the prevalence of contaminated water is a boon for water
borne diseases.

The chairperson of Combined Harare Residents Association (CHRA) Mike Davies
said there was a need for a democratically-elected commission, accountable
to Harare residents.

"People need to democratically select a commission for themselves," he said.

Davies went on: "The issue of clean water is not a question of technically
purifying the water but a need to examine the whole process."

Most residents blamed the city council for the dirty water which spurts
through their taps.

"The commission running the city council is insensitive to the health of
Harare residents," said one resident.

One analyst echoed the same sentiments when he said: "Health for all by the
year 2010 does not apply to Harare residents."

Arcadia Residents Association representative, Angus Martens, said residents
and companies had turned Mukuvisi River banks into dumping sites.

"There are no council services to talk of," Martens said. "Homeowners and
companies in this neighbourhood have resorted to dumping rubbish along the
Mukuvisi River and the open space behind the National Railways of Zimbabwe
main station."

He blamed the crumbling council service delivery system on political
interference by central government.

The Zimbabwe Independent crew discovered that it was only a matter of time
before an outbreak of disease hits Tafara-Mabvuku as residents have resorted
to drinking unclean water from streams in the suburbs. The streams' main
sources of water have been sewers and water from burst pipes.

Leslie Gwindi, the city council spokesperson, denied allegations that the
water was dirty saying the city provides treated water. Government recently
said it was taking over the sewerage and water provision tasks in the two
urban centres but the situation has not improved. It is actually getting
worse.

In Harare, suburbs in the east of the city have been without water for more
than two weeks.
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Zim Independent

'Government has no mandate for change'
Conrad Dube
GOVERNMENT does not have a popular mandate needed to change the
constitution, says MDC secretary-general, Welshman Ncube.

Ncube said Zanu PF lacked a popular mandate as it failed to garner an
elected two-thirds majority from the hotly disputed results of the March
general election.

He also said without popular local co-operation and international support,
it would be impossible for the Zanu PF government to repair the dilapidated
infrastructure and crumbling economy.

Ncube said Zimbabwe's problems would be compounded if Zanu PF opted to
unilaterally change the constitution. He said this would widen political
divisions in the country, which was detrimental to all.

"Zanu PF has no mandate to change the constitution because it failed to get
a two-thirds elected majority in the election," Ncube said. "The party only
enjoys a numerical two-thirds but lacks popular support.

"Unilateral constitutional changes by Zanu PF will only widen the political
rift in the country. It is therefore not in their best interests to do so,"
he said.

The ruling party has indicated that it will institute several amendments to
the constitution. Some quarters have said the party may attempt to bring
some of the changes that were in the draft constitution rejected in a
referendum in 2000.

But Ncube said "it will be folly of the highest order for Zanu PF to bring
the amendments to parliament".

He said there was urgent need to restore democracy to allow all

Zimbabweans to contribute towards the resuscitation of the ailing economy.
Ncube said the much-talked about economic turnaround appeared only in the
public media and nowhere else.

Zanu PF, which enjoys a numerical majority thanks to a constitutional
provision that allows President Robert Mugabe to appoint 30 non-constituency
MPs, failed to get the elected two-thirds majority it needed to constitute a
popular mandate, Ncube said.

"We need to resolve the political crisis by restoring democracy through the
conduct of democratic elections. Zanu PF will not succeed in resuscitating
the economy as they lack a popular mandate," he said.

Ncube spoke as fuel queues returned and the black market on basic food
commodities took hold as shops emptied. Retailers have started reporting
slow traffic into the shops as the black market takes its toll.

Electricity blackouts have become routine while the ruling elite
concentrates on consolidating the largely invisible "gains of 25 years of
Independence".

Ncube also said people must ensure that food is not distributed along party
lines, otherwise politicisation of food would persist.

"People must stop Zanu PF from expropriating national resources for
political gain," he said.

The MDC is currently engaged in consultations with its members on the way
forward after the election which it alleges was stolen by Zanu PF. Almost
all the provinces will have been consulted by month end and the executive
committee will meet either in the first week or second week of May to
consider the outcome of the consultative process, Ncube revealed.

"The MDC will not sit back on mobilisation of the people but we have
realised that we cannot put one million people on the streets to demonstrate
against government and the ruling party. We need to take this struggle as a
long-haul effort to push for the re-democratisation of Zimbabwe," Ncube
added.

The MDC, according to Ncube, was not pushing for talks with Zanu PF. "There
is no chance for talks with Zanu PF although we know that some people want
comfort without a struggle. Such people mistake the purpose of struggle for
dialogue and yet dialogue must be born out of a struggle.

"A stalemate in the struggle will then lead to dialogue. This is where we
differ with the South Africans who want us to substitute the struggle for
dialogue. We will engage in a struggle which will make the Zimbabwe
government see that there is no future without dialogue," Ncube said.

He however refused to shed light on what form the struggle would take and
when it will take place, preferring to say "we will not forewarn them. We
reserve the right to choose the manner and timing of the struggle."
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Zim Independent

Bid to oust ZCTU leaders fails
Loughty Dube
AN ATTEMPT by state security agents to remove the Zimbabwe Congress of Trade
Unions (ZCTU) leadership and replace it with one that is pro-government
failed after the majority of its members refused to fall for the
machinations of a rowdy group of youths bussed down from Harare.

Chaos ensued at a Bulawayo hotel last Saturday after about 50 youths,
allegedly led by a senior intelligence officer, manhandled three ZCTU senior
officials and ordered them out of the venue of the general council meeting.

ZCTU president Lovemore Matombo, first vice-president Lucia Matibenga and
secretary-general Wellington Chibebe were assaulted by the youths who were
allegedly bussed to Bulawayo to disrupt the meeting.

Sources this week said government was funding some of the affiliates and
using them in a plan to oust the ZCTU leadership ahead of the International
Labour Organisation (ILO) conference in Geneva.

The ILO conference will be held at the beginning of June and government
fears that the current ZCTU leadership will present a damning report on
trade union rights abuses and human rights violations in the country.

After the chaos in Bulawayo last week, a faction of four affiliates
announced that the Matombo leadership had been suspended and a committee was
set up to run the affairs of the union until the ZCTU leadership had been
investigated for corruption. But Chibebe this week said his executive had
the support of the majority of unions and was therefore still in charge.
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Zim Independent

MDC unable to import grain
Augustine Mukaro
THE opposition Movement for Democratic Change (MDC) says it has secured
funding to purchase maize but cannot import the commodity because of
restrictive government laws on grain handling.

MDC Agriculture spokesman Renson Gasela said his party had identified the
grain in South Africa and secured funds to purchase it but could not bring
the maize into the country because of the Grain Marketing Board (GMB)
monopoly to import and trade in grain and other grain products.

"We want to import more than 200 000 tonnes of maize to help food-insecure
people throughout the country," Gasela said.

"We put up a fund to which people have willingly donated but now we cannot
import the maize before government gives us a go ahead."

The government-controlled GMB has a monopoly to import or trade in grain and
other grain products.

"In the interest of the nation, the MDC has resolved to engage government so
that maize can be availed to the people according to their requirements," he
said.

In 2002, government confiscated MDC imported grain at the Beitbridge border
post after the government declared that the import was illegal. Food has
become a serious political issue in Zimbabwe with the opposition accusing
the government of politicising relief aid. The government on the other hand
has now said there is a food deficit after almost six months of denying the
need to import maize.
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Zim Independent

Zesn report stings ZEC
Godfrey Marawanyika
THE Zimbabwe Election Support Network (Zesn) has produced a damming report
on the outcome of the disputed parliamentary poll saying its findings
reflect a variation of results in five constituencies.

Zesn's comprehensive final report, titled "Statistical pattern analysis and
hypothesis testing of the 2005 parliamentary election in Zimbabwe" (April
22), said although the ruling party won against the MDC, the results do not
tally.

"The major findings in this report using Zesn data at polling station level
only in which the organisation had a high number of observers show that the
ZEC results which indicated that Zanu PF won, vary with the Zesn pattern in
five constituencies - Chipinge South, Buhera South, Makoni East, Mutasa
South and Gwanda," the report said.

"The other three constituencies - Gweru Rural, Harare South and Zhombe -
also show some inconsistencies between ZEC results and Zesn data although
Zesn had few observers in those places."

The disputed election results gave Zanu PF 78 seats, the MDC 41 and an
independent candidate 1.

Other disputed constituencies "of interest" cited in the Zesn report are
Chipinge North, Chimanimani, Kariba, Chegutu, Bikita East, Matobo East,
Hwange East, Gutu South, Masvingo Central, Kwekwe and Mutasa South "where
the results show a close contest between the MDC and Zanu PF".

The MDC is already contesting 13 seats and has submitted its complaints to
the Electoral Court.

In its preliminary findings, Zesn raised concerns about the location of some
polling stations in not-so-neutral areas.

"Even though Zanu PF and MDC won with huge margins in some constituencies,
the ZEC results and Zesn data show inconsistencies," it said.

During the election, Zesn deployed 6 000 observers countrywide but not all
witnessed counting.

The report said statistically, it was an accepted fact that any percentage
differences between any two numbers of 5% or greater was significant.

"Usually in most cases, the count observed by independent bodies tallies
perfectly with announced results," the report said.

"However, the Zimbabwe 2005 election results prevents this due to the
following reasons: the major one is the non-availability of data regarding
postal votes, (and) limited access and transparency in tabulation of results
at constituency and national level," the report said.
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Zim Independent

Mahoso/ANZ meeting cancelled
Roadwin Chirara
THE Media and Information Commission (MIC) has postponed indefinitely a
meeting with the Associated Newspapers of Zimbabwe (ANZ) management
originally scheduled for today.

The meeting had been called by the media regulatory body to discuss the
application for a licence lodged by the publishers of the Daily News and the
Daily News on Sunday.

ANZ chief executive officer, Sam Nkomo, confirmed the company had received a
communication from the MIC on the meeting but said he had not received the
letter about the cancellation as he was out of the country.

"I am currently in Jo'burg and I am not aware if any other letter was sent
to us besides the one talking about the meeting tomorrow," said Nkomo.

He said the letter the company had received raised concerns over the

company's application to the MIC, especially its ability to meet the
commission's requirements for registration.

"The letter we have received raises a lot of issues and new requirements
that we have to meet before we are registered, but it is silent on the
meeting," said Nkomo. "If any other letter has come I will find out when I
get back home," said Nkomo.

MIC chairman Tafataona Mahoso could not be reached for comment yesterday as
he was said to be in a board meeting.

The latest twist in the Daily News saga comes after President Robert Mugabe
said that no paper would be denied a licence if it met the requirements of
the regulatory authorities.
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Zim Independent

Mugabe mortgages economy - analysts
Shakeman Mugari
ZIMBABWE'S "Look East" policy will not rescue the country from its current
economic crisis so long as it is seen as an alternative to Western aid and
trade or geared towards importing substandard goods.
Zimbabwe adopted the Look East policy two years ago to spite the West after
a series of diplomatic stand-offs with traditional European trading partners
over human rights abuses and the breakdown of the rule of law.
European Union countries imposed selective sanctions on President Robert
Mugabe, his ministers and cronies in protest at a stolen election in 2002.
Mugabe turned to the East to source lines of credit and to help him revive
an ailing economy.
But analysts are sceptical that the Look East drive will pay dividends as it
is founded on an uneven trading field heavily tilted in favour of China and
other Asian countries.
Local manufacturers say Zimbabwe-China relations resemble that of a rider
and a horse. They say Mugabe is blindly mortgaging key sectors of the
economy to the Chinese who by virtue of their emerging economic muscle will
swamp the Zimbabwean economy. Eventually the Chinese will hold Zimbabwe
hostage because they are not in the business of charity - or even
solidarity - but profits, experts warn.
There are fears Zimbabwe could soon turn into a dumping ground for China's
substandard exports in the textiles, electronics, telecoms and avionics
sectors. Chinese companies are set to tighten their grip on Zimbabwe's
military supplies sector as the country cracks under an arms embargo from
European countries. Their buses are already falling apart on urban routes.
The retail sector is reeling under a barrage of inferior goods from China.
The Chinese imports have also rendered the fragile local manufacturing
sector unviable with their cheap commodities that have not led to any
meaningful impact on the country's 70% unemployment rate.
Apart from the larger imports, other Chinese products being pushed onto the
local market include footware, kitchen utensils, clothing and bicycles.
Zimbabwe now imports products which are manufactured locally like matches,
cooking oil and washing powder.
Chinese companies have moved into the market aggressively as they take
advantage of Zimbabwe's desperate situation. In a rush to be seen to be
reaping benefits from the new policy, Zimbabwe has marginalised local
producers who are already struggling under the unbalanced economies of
scale, analysts say.
This wholesale embracing of Chinese products has irked industrial players
who accuse government of engaging in political calculations at the expense
of the economy. Zimbabwe National Chamber of Commerce (ZNCC) president Luxon
Zembe said Zimbabwe was destroying its manufacturing sector because of its
blinkered approach to the Chinese.
"Zimbabwean manufactures cannot be expected to compete against the Chinese.
China has big economies of scale which we don't have. We must not be
parochial in our approach," Zembe said.
He said the government's political approach to the issue over-exposed the
economy.
"The textile and retail sectors are in trouble because of those (Chinese)
products. We risk destroying our own economy," he said.
Retail companies have borne the brunt of the Chinese products.
Bigger companies like Edgars, Truworths and Bata have also come under
pressure from the substandard footware and fashion that has been dumped on
Zimbabwe. A snap survey shows that almost one in every two shops in Harare's
CBD is selling Chinese products at 40% lower than the conventional outlets.
"The problem with our leaders is that they don't look at the economy
strategically," Zembe said. "They must not allow Zimbabwe to be a
free-for-all economy where inferior products just flood the market to the
detriment of our manufacturers."
The troubled Zimbabwe United Passenger Company (Zupco) recently bought 50
buses from a Chinese company, FAW. The purchase was made despite the
existence of other local bus manufacturers that had tendered for the supply.
The imported buses, which experts say are not suitable for Zimbabwe's roads,
have already started breaking down. They have also proven to be a heavy
financial burden, as they require Zupco to import experts to train local
mechanics. About 10 of the buses broke down within a week of their arrival
in the country, indicating that there was no due diligence before Zupco
bought the buses.
The "zhing-zhong" boom has also gripped the state security forces. The Air
Force of Zimbabwe last week bought six K-8 jet trainers from China. The K-8
is a less expensive replica of the British-made Hawk, which originally
formed the core of Zimbabwe's airfleet before the arms embargo, which led to
Britain refusing to supply the country with spare parts.
The army also received armoured personnel carriers while the
police acquired anti-riot gear, mobile water cannons and other equipment.
Crisis-ridden parastatals are also feeding at the Chinese trough barter
deals whose benefits are yet to be seen.
Hwange Colliery Company recently signed a barter deal with China North
Industries Corporation (Norinco). Hwange will supply coke and coal to the
company in exchange for earth-moving equipment and trucks.
Tel*One is also on the verge of acquiring mobile phone network equipment
from China's Huawei Technologies.
National Railways of Zimbabwe is said to be in the process of finalising a
deal to buy wagons from China. The power utility, Zesa, also has a fleet of
vehicles from China in addition to the pending deal to rehabilitate the
Hwange power station.
Air Zimbabwe will soon be flying "zhing-zhong" planes on domestic and
regional routes after the acquisition of two 60-seater MA60 aircraft.
Zimbabwe is the first country to fly the planes since they were placed on
the international market. Their durability has not been put to practical
test elsewhere in the world.
The Chinese have also done little toward development of big business that
creates employment. They are content with going into established business
especially the parastatals where they are guaranteed political protection by
the government. They are also content with cash businesses without a
long-term approach to set up permanent structures that contribute to the
infrastructure.
First vice secretary-general of the Zimbabwe Congress of Trade Unions
(ZCTU), Collen Gwiyo, said the influx of Chinese entrepreneurs would lead to
an unregulated industry, which becomes accountable to politicians instead of
proper government structures.
"An unregulated industry does not pay tax and it is a recipe for cheap
labour - that is dangerous for the welfare of the workers," Gwiyo said.
"Already there is a problem where these guys are paying starvation
salaries - that is because they are not regulated."
It is not clear whether the Chinese businesses dotted around the city are
paying tax. Chinese industry is notorious for low wages and the same trend
is now encroaching into Zimbabwe.
Analysts said the government's Look East programme was a fallacy because it
was not based on proper strategies designed to maximize benefits from the
deals. He said in turning to the East the government has neglected key
European market trading partners that still consume the bulk of the country's
projects.
Business in Zimbabwe still relies on European and North American markets for
survival. Even listed companies are still battling to push their commodities
into Europe instead of China.
"Europe remains the biggest consumer of our horticulture products, while
regional countries also take products from our industry. It's all
political," said an economics lecturer from the University of Zimbabwe.
Perhaps the irony of the Look East approach is that same Asian countries
that Zimbabwe befriends are desperately knocking on the doors of European
and North American countries to be let into their markets. Despite its
political differences with the US, China has aggressively pushed its
products into that market.
Unlike the South African government that works closely with business in
foreign ventures, Mugabe normally sidelines business leaders when he signs
foreign investment deals. South Africa has moved aggressively into Angola
and Mozambique because of the proper structures of cooperation between
government and business.
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Zim Independent

Nothing definitive about Mugabe's retirement
By John O Chakona
MOST people, especially in the media, have taken President Mugabe's recent
statement in Jakarta about the possibility of his retirement in 2008 as
definitive. I want to argue that there is nothing definitive in that
statement and Mugabe's intentions about retiring have remained as
non-committal as before.

First, it is important to note that in spite of widespread anticipation
among the public and the media that Mugabe will step down at the expiry of
his current term in 2008, he has never categorically said so. All he has
said in the past is that he will see his current term of office through, and
the closest he has come to say about not standing for re-election in 2008 is
that he will consider retiring.

Mugabe's position on the issue of retiring has been transient and he has so
far not clearly indicated that he will not stand for re-election in 2008.
Even in his Jakarta statement, it is important to note that Mugabe carefully
crafted his words. He said that it was "his intention to retire", suggesting
that he still has not made a decision on whether he will run for president
in 2008 or not. To quote him verbatim: "I have said it before that when my
term ends, I will retire. I still have to do three years and we will look at
that after the three years but it is my intention to retire."

In other words, what Mugabe is saying is that he still has not made up his
mind about retiring. If, by 2008, he still feels he has the energy to go on
or the "people urge him to continue", he can still stand for re-election.

On the important issue of succession, Mugabe also maintained that he will
not choose his successor. As he has indicated before, people should be
allowed to choose the leader who will succeed him. In principle, this is
noble since it is not Mugabe's right or that of any president to hand-pick a
successor. But in our case, Mugabe has not offered the people of Zimbabwe
any free opportunity to choose their own leaders. Within Zanu PF, he and his
inner circle have always vetoed any decisions and developments which he is
not comfortable with, including grassroots choices for representatives in
parliament and the party's central committee.

Mugabe has persistently blocked debate on his succession and those who have
spoken openly about it have been castigated and kicked out of the party. The
Zanu PF national congresses at which this matter should be deliberated have
been manipulated to ensure that delegates simply rubber-stamp what Mugabe
and his close associates decide.

In the December 2003 annual conference in Masvingo, when some of the
delegates tried to raise the issue of succession, Mugabe ruled that his
retirement was not open to debate, telling his supporters he would return to
tell them so when he wanted to leave office. "Have I come to you yet, no,"
said Mugabe then. He also argued that the issue of his retirement will only
be discussed when the people would have raised it. Ironically, the same
delegates to the conference were the very representatives of the "people"
Mugabe likes to refer to every time he has to justify his unpopular
decisions. The question which then begs to be answered is: what really
constitute the "people" in Mugabe's mind?

At the beginning of 2004, the issue of succession was briefly opened up for
debate in the party, but when it started to emerge that the favourite
candidates were not necessarily what Mugabe had in mind, he abruptly put a
lid on the issue. Justifying his unilateral decision, he argued that the
issue was causing power struggles which were dividing the party. "They are
fighting and some are even going to consult with witchdoctors. Even educated
people are seeking the consultation of N'angas (witchdoctors) expecting to
be possible candidates," said Mugabe in his interview with the Kenyan
newspaper, the East African Standard. But is it not inevitable that in any
open competition for any position there are bound to emerge competing
groups?

Those who have publicly declared their interest in succeeding him have all
been ruthlessly maligned, the latest casualty being Jonathan Moyo, who until
recently was Mugabe's spin-doctor but has been sent into political exile for
supporting Emmerson Mnangagwa's presidential ambitions. All those who
supported Mnangagwa in his attempt to position himself for the eventual
takeover, among them the six provincial chairpersons of Zanu PF, have been
dealt with ruthlessly.

The late Eddison Zvobgo was similarly sidelined from government and suffered
political ostracism following his remarks on the succession.

At the moment, the issue of Mugabe's retirement from active politics has
been effectively sidelined in the internal discourse of Zanu PF. What has
emerged, instead, is a new discourse aimed at ensuring Mugabe's "life
presidency". This discourse is being promoted by senior Zanu PF party
officials, significantly among them Vice President Joseph Msika and the
recently promoted Dydmus Mutasa, who is now in charge of the crucial
Ministry of State Security.

Speaking at the 2004 Zanu PF congress, Msika argued: "There are some people
that are saying it is time for President Mugabe to go. To go where? He
should rule even if it means he is walking with the aid of a walking stick.
He is the father of this nation; he is entitled to rule us forever. People
still want him to continue ruling, so who are we to ask him to go?"

The over 10 000 delegates to the Zanu PF congress reportedly responded to
Msika's statement by ululating and stamping their feet on the ground,
implying that they approved of the idea of making Mugabe life president.

The issue of life presidency was supported by Reverend Obediah Msindo, a
clergyman who heads Destiny of Africa Network, an obscure religious
organisation with close links to Zanu PF, who stated in his opening prayer
at the congress that President Mugabe should rule until kingdom come. "It's
my prayer that President Mugabe should live longer to deliver us to the
promised land. President Mugabe and Zanu PF should remain a permanent ruling
party for this country," he said.

The "life presidency agenda" has also been echoed among the liberation war
veterans and chiefs. The war veterans association has already said it wants
Mugabe to "be there until he dies" and that it will push for that agenda in
Zanu PF.

At their meeting with Mugabe at Great Zimbabwe towards the end of 2004, the
200 chiefs who turned up from all over the country reportedly endorsed his
candidature for the presidency in 2008. Explaining their decision, Mugabe
had this to say: "I know why the chiefs endorsed me. It is because they know
the consequences the country will face in terms of good and firm leadership
should I retire."

That some important constituencies and leading members of Zanu PF,
especially those who have benefited most from Mugabe's political patronage,
have been imploring him to continue as president for many more years to come
is not debatable. What can be debated is unanimity within Zanu PF on the
issue and the extent of Mugabe's hand in promoting that agenda.

*John O Chakona is a PhD candidate in political studies at the University of
Cape Town
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Zim Independent

The meltdown continues unabated
By Walter Hurley
IT is a matter of some tragic amusement when one reads or hears about the
planned or alleged economic recovery in Zimbabwe. Purported recuperation
think-tanks continue to talk rather than do the walk towards addressing the
main fundamental issues head-on.

Solving one major problem usually solves many other dependent and unresolved
issues thereafter. A political solution for Zimbabwe is mandatory to rescue
the nation. It urgently needs to qualify to re-join the international
community or else its fate is certain.

The typical conflicting messages often heard are that the International
Monetary Fund is either an idiot or a saviour; that the property market,
inflation rates, industry, the stock exchange, mining, food supply,
agriculture and tourism are declining or are actually alleged to be
improving.

What is consistent is that the national infrastructure, employment levels,
debt levels, international creditworthiness, fundamental rights, state
institutions, investor confidence, donor and aid support, forex
availability, the real economy and the Zimbabwe dollar are spiralling
inevitably towards the creation of social and economic collapse.

Nothing relevant is actually getting better other than for the deluded
elitists with their snouts still in the ransacking but blinding looting
troughs.

With the path that Zanu PF has consistently chosen, the reality is that the
party's downfall will not be via the ballot box - it will be as a
consequence of its self-serving policies that have inevitably crafted the
forthcoming economic implosion.

The regime is still living under a mushroom of dreamworld, desperation and
self-denial. It apparently still believes its own fiction and lies, as does
solidarity comrade Thabo Mbeki.

It is debatable how much more international lampooning Mbeki will take for
his blatant support of tyranny before the South African president actually
realises that he has put himself and his own nation at grave risk for
creditability and for potential investor flight. To expose Mbeki's "bright
intellectual capacity" further, he recently claimed he was right about his
earlier assessment on the scourge of Aids!

Reserve Bank governor Gideon Gono and his counsels appear to still believe
that his Homelink vision will alleviate the national forex availability
woes. Perhaps Gono has embarked on this mission where no other real forex
earning prospects were tangibly in sight. Homelink appears to have produced
hallucinatory or unproven statistics on the successes of this now failing
forex-earning venture.

When standards of rural living are established in the cities with donkey
carts as the means of public transport the possibility of reality may become
known to the imposed leadership that the nation and their own survival is at
grave risk. The stalwarts may eventually discover that candles were actually
a wicked non-indigenous colonialist creation.

What any residual economists need to quantify is the real dimensions of
Zimbabwe's problems, and conclude if there is any prospect of salvation
left, and what to expect thereafter. To be taken into account are the huge
and mounting international debts and loan accounts together with the
ever-growing domestic liability as augmented by on-going unbudgeted and
lavish expenditure.

Does anyone really expect debt forgiveness or any foreign investment from
the international community under the present insecure climate?

Clearly the time must come when no one or a country can survive on perpetual
credit without consequence.

The simple reality is that the proven re-introduction of proper and accepted
civilised norms would be enough to initiate a recovery programme that would
be self-starting based on deriving confidence factors.

Since Zanu PF has survived and prospered by violating all defined or
educated norms, the likelihood of the party engaging in a cultural reform
programme is effectively non-existent. The war of attrition against the
normal well-informed world will thus continue unabated.

Surely it must be understood by some that the national agenda to plunder and
strip any found or remaining assets to sustain the regime is not
unsustainable for much longer.

Mixed messages are continuously emitted by the hierarchy. They hate the West
and its values yet they typically extend their worn-out blame and begging
baskets in that direction. Hypocritically they enjoy the trappings of the
West for their children's education and their own luxurious lifestyles.

They know well that the gullible Western "do-gooders" like Tony Blair and
the Canadians will continue to sponsor their longevity on purported
humanitarian grounds. With abundant free food aid there has not yet been a
need to restart the agricultural sector.

However, the regime has recently been left with no alternative other than to
hopefully look East for sustenance. Typically, friendly eastern comrades are
deficient on moral and human value principles and are thus not likely to
promote examination of any human and democratic rights violations in
Zimbabwe.

China is a growing economic engine that expects to out-distance the West in
due time. This nation is becoming a de-facto economic colonialist state. In
Africa, China already has its eyes on Sudan's oil and on Zimbabwe's
platinum.

Historically China is famous for supplying weapons and moral support for
destabilising purposes, but not much else of significance. Has the country
now changed its agenda?

For Zimbabwe to survive, what now needs to be assessed is the real dimension
of genuine financial support that China and the likes of Malaysia and Iran
will give to Zimbabwe, and the conditions attached to that support. Do they
see comradeliness and moral support or investment opportunities, or do they
see the tangible Zimbabwe millstone that most sane others want to avoid at
all costs?

Gono has had mild successes which have been simply achieved by re-applying
normally established fiscal disciplines in the financial sector that should
never have been allowed to be prostituted and exploited by greedy
self-servers in the first place. Gono is seen to be one of a few in the
inner-orbits of influence that can show a semblance of identifying with
realness.

Clearly, to be truthful or intelligent in Zanu PF circles invites hazards as
historical records prove.

Gono, while clearly singing from a different hymn sheet from his masters,
has

actually advocated some core values that the government needs to apply to
turn the nation away from the graveyard that it is facing. To no avail so
far he has advocated state spending containment, respect of property rights
and compliance with international bilateral investment promotion protection
agreements.

One may wonder why Gono, out of belief aligned to his core values, has not
long since resigned from his position to retain his self-respect. On the
other hand, the question arises why he has not been fired for being too
diligent.

The overall result is that the meltdown will continue unabated. The residual
question remaining is when and how it will happen.

* Walter Hurley is a freelance writer based in Pretoria.
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Zim Independent

Comment

What legacy will Bob bequeath?

WHAT legacy will President Mugabe leave this nation when he finally exits in
2008? If we are to go by his announcement from Jakarta last week, Mugabe is
on the final leg of his rule. He is on the home stretch and has over the
years been quick to look over his shoulder to remind everyone of his
conquests and accomplishments. But when he reaches the finishing line there
won't be many to congratulate him if he leaves the country in the current
mess.
Mugabe would have loved to see economic recovery before his departure from
office. He would have liked to be feted as the man who not only liberated
the country but also extricated it from economic ruin caused by
international sanctions. This plan is in danger. Mugabe's worst nightmare is
that he is bequeathing to the nation a dead economy and that is how he will
be remembered.
The word "turnaround", a catch phrase from the pre-election period, has lost
its lustre as all around us there is the evidence of decay and poverty which
is not likely to go away soon. These phenomena - by-products of government's
failure to come up with forward-looking economic blueprints, or at least
implement its own plans - have been with us for the past five years.
The year 2008 when Mugabe has said he wants to leave office is only 30
months away. What can Mugabe deliver in the next two and a half years?
Today the country is faced with a myriad challenges which cannot be wished
away and coincide with a trade fair that is supposed to advertise Zimbabwe
as an investment destination. There is no petrol. Commuter transport has
become every worker's daily nightmare. There is no water in the capital.
Power cuts have played havoc in industry. Basic commodities have begun to
disappear from shop shelves. Not many still believe Zimbabwe is the place to
go and do business. Exhibitors from major economies have stayed away and the
number of participants continues to dwindle.
Government and Reserve Bank of Zimbabwe governor Gideon Gono want to peddle
the lie that the economy has turned the corner. Judging by the situation on
the ground there won't be any buyers.
With government finally admitting that there is a massive food deficit, the
country is now retreating into survival mode. We are waiting for the plan to
carry the country through this lean period and at the same time lay the
foundation for future growth.
Gono is soon expected to come up with a roadmap to guide the economy in the
post-election period. It needs discipline - which has been lacking - from
its implementers.
Mugabe's government has grown a penchant to either drop economic programmes
before completion or not to implement them at all.
And money is also required for the plan to work. Firstly, the government has
to find US$818 million to import food to feed 4,5 million people. This is no
small task considering that the country is expected to generate a measly
US$3,1 billion in foreign currency this year. A third of this is now going
towards food imports.
Last year Zimbabwe's foreign currency receipts amounted to US$1,96 billion.
From the remainder of the cake, the country needs US$408 million to import
fuel and $204 million for electricity. Foreign debt repayments should amount
to US$60 million this year. Already more than half the cake is gone.
The huge invoice for food imports means all major capital projects are now
in abeyance. That includes the Matabeleland Zambezi Water project, Tokwe
Mukosi Dam, widening of trunk roads, rehabilitation of schools and medical
centres and the provision of cheap housing. These projects, it now appears,
will not be achieved before 2008.
But this is the period when Mugabe and his government have to display
leadership. This means avoiding inviting more problems by forcing through
imprudent directives and regulations to industry.
Government should learn from the experience of 2002 that it can force
manufacturers and retailers to charge certain prices but it cannot force
them to continue producing at a loss.
But government appears bent on this route notwithstanding the
well-documented experience of 2002 when basic commodities were only
available on the informal market at exorbitant costs.
For Mugabe, the next three years could be his most frustrating, especially
if the country fails to lift itself out of the current quagmire.
City roads, some of them named after him, are riddled with potholes.
Streetlights and traffic lights have broken down. Sewerage systems in Harare
and Chitungwiza have collapsed. Agricultural production has plummeted by
more than half while manufacturing has plunged by more than 35% in the past
two years.
Does Mugabe dream of leaving Zimbabwe without a single functional sector?
This is hardly the happy ending he hoped for.
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Zim Independent

Eric Bloch Column

Catastrophic hike in domestic wages
THE New Testament states: "For the labourer is worthy of his hire," clearly
contending that any labourer is entitled to a fair wage, commensurate with
the nature and extent of the labour he undertakes. Only those very few who
still avow slavery, and those endowed with the evil trait of exploitation
would disagree.
In view thereof, the recently prevailing minimum wage for domestic workers
of $90 000 per month (albeit in addition to serviced accommodation and
specified supplies or, in the alternative, compensatory allowances) was
inhumane in the extreme, and required substantive adjustment.
However, the government went completely overboard when on March 24 it
gazetted new minimum wages. In Statutory Instrument 42 of 2005 it prescribed
a minimum wage for workers residing at the employer's premises of $850 000
per month for gardeners and like workers, $900 000 per month for cooks and
housekeepers and $950 000 per month for child, disabled and aged minders.
For workers not provided accommodation at their place of employment, the
minimum wage must be enhanced by allowances totalling $356 000, bringing the
aggregate minimum remuneration to $1 256 000.
Proponents for such minimum wages argue that they are more than justified in
the light of the poverty datum line (PDL) for a family of five approximating
$2 million but, in so doing, they disregard that in instances where the
employment is substantially on an "all found" basis, which includes
accommodation, electricity, water, refuse removal, sewage services and
provision of food, the bulk of the components of the PDL have been addressed
before bringing the cash wages to account. They also disregard that the
average family unit comprises at least two income earners and, therefore, it
is not incumbent upon one to earn equal to or above the PDL.
However, of even greater importance is that those proponents in general, and
the government in particular, fail to recognise that an inadequate
remuneration is better than none at all. The hard fact is that a very great
number of the employers of domestic workers cannot afford to pay the newly
gazetted wages, and therefore have little choice but to discontinue
employment, howsoever reluctant that they may be to do so.
When the combined income of a husband and wife is less than $3 million per
month, and over and above their basic living costs they have to fund
education for up to three children, they simply cannot afford to employ a
domestic worker at a cost of $1 256 000 per month, or more. So they have to
manage without.
But the discharged domestic worker has very little prospect, within the
prevailing Zimbabwean economy, of obtaining alternative employment, and is
therefore condemned to even greater poverty than would have been had
employment continued, although at a lesser wage level than now prescribed.
Although no reliable data is available, authoritative estimates foreshadow
that the consequence of the government's ill-considered action is that up to
half of the total number of domestic workers in Zimbabwe now face a very
real prospect of joining the ranks of the already more than three million
unemployed Zimbabweans.
With such a consequence, one must ponder why the government would have taken
such a catastrophic action as the gazetting of the new levels of domestic
worker wages. The charitable will suggest that the government did so solely
out of concern for the distressed circumstances of the domestic workers,
oblivious to the negative consequences.
However, many suspect that there were other motives. They query whether it
was wholly coincidental that the wage increases were gazetted exactly one
week before the parliamentary elections. After all, most domestic workers
reside in urban areas, and it was well-known that the greatest electoral
support for the opposition was located in those areas.
It could very well, therefore, have been in the government's interests to
try to motivate a major part of the domestic worker populace to vote for its
candidates, instead of the opposition candidates. The government could,
therefore, very well have dismissed cavalierly the adverse repercussions of
the wage increases, for these repercussions could only be experienced after
the elections.
In the alternative, the government may have been so tantalised by attaining
increased voter support that it did not even bother to consider whether
there could, or would, be any negative repercussions.
Whatsoever may have been the motives for promulgating the new wage levels,
the consequences are very far-reaching, and can potentially be yet another
nail in the coffin of a very ailing economy. Almost immediately after the
wage awards became known, there was a sharp reaction from unions
representing agricultural workers.
Understandably, they adopted a militant and demanding stance that as those
workers were engaged in the productive sector, as distinct from the domestic
workers in the consumptive sector, and as the minimum wage for agricultural
workers was, in some instances, as low as $90 000 per month, that minimum
wage should immediately rise to at least $1 million per month.
Prima facie, the demand is justified and not at all unreasonable.
Unfortunately, however, the reality is that there are very few, if any,
sectors of agriculture that can pay such wages and be viable.
Agriculture is already very severely decimated by the barrage of destructive
actions the government has directed against it over the last four to six
years. Although varying in extent between the tobacco, cotton, maize and
other grains, citrus, sugar, coffee and tea, livestock and other sectors of
agriculture, overall production has fallen by more than 60%.
Almost all that are still engaged in agriculture are struggling to break
even, let alone eke out a living. With a prospect that agricultural wages
will increase up to tenfold, most farmers now fear that insolvency is
looming ahead. And if the volume of agricultural production falls yet
further, the entire economy will suffer yet further, for agriculture has
always been the foundation and mainstay of Zimbabwe's economy.
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Zim Independent

Muckraker

Is the departure for real this time?

PRESIDENT Mugabe has set tongues wagging once again about his final
departure from State House. There are genuine questions and anxieties. Does
he really mean it this time or is he playing games again so that he can
smoke out ambitious fellows in his party?
The last time he talked about succession he said people were free to discuss
it openly. Then he came down like a ton of bricks on those who did!
Quite predictably, he said such an office needed somebody acceptable to the
people, one who understood the values of the liberation struggle.
There were no enthusiastic takers at first. In fact Mugabe himself smothered
the debate when he told a party congress in Masvingo in December 2003 that
he would personally return to tell his supporters when he was ready to go.
It's been alleged that the so-called Dinyane meeting in Tsholotsho towards
the end of last year sought to set the stage for Mugabe's successor by those
who didn't want Joice Mujuru elevated to the presidium of Zanu PF. But
whatever the case, the reaction it inspired demonstrated that there was no
room for a free debate within Zanu PF.
The talking point now is why Mugabe chose to announce his retirement plans
in Indonesia. Speculation is that he was irritated by newspaper reports
suggesting his supporters were plotting to have him stay on to 2010. It
could have been a petulant response to importunate reporters who wanted to
know when he was leaving office. This is possible since he has not yet gone
back to tell his supporters that he now wants to leave office. They are
getting the "news" from newspapers. Which makes it hard to believe.
Nor does Mugabe himself make the situation any easier by his ambivalence. "I
still have to do three years and we will look at that (retirement) after the
three years but it is my intention to retire," he was quoted as saying.
So it's merely an "intention"? What needs to be looked at about retiring?
And who is the "we" who are supposed to decide and nudge him to fulfil his
intention?

New Information minister Tichaona Jokonya's "candid" meeting with editors
last Friday seems to have gone down well. There was a sense of a new
beginning after the depredations of the past five years and Jokonya's
suggestion that he was open to discussion over amending offensive aspects of
Aippa should be taken up immediately.
There was not, as the Herald disingenuously suggested, "general consensus on
some of the virtues of Aippa". It remains a defective law clumsily applied,
as the charges against Standard journalists last week demonstrated. But
deputy Minister Bright Matonga's statement that "We don't want to see
newspapers being closed or journalists being arrested by police or by
whoever as long as they are carrying out their duties", should be welcomed.
Those duties, we assume, include pointing out irregularities in the
electoral process. Asked about the role of the Media and Information
Commission, Jokonya made it clear that it was ministers who determine
policy.
But there are other matters we disagree profoundly with the minister about.
He expressed government's wish for the local media to be
development-oriented in line with President Mugabe's vision as set out in
the new cabinet and urged editors "not to vilify the land reform programme",
saying they should instead "strive to correct the distortions and falsehoods
peddled by the country's detractors who claimed that the agrarian reform had
only benefited chefs".
What is he asking here: that when the Minister of Lands claims a maize
harvest of 2,4 million tonnes and it is later ascertained by a parliamentary
portfolio committee that the figure is wildly inaccurate we should keep
quiet in the interests of some misguided patriotism? That where a parasitic
class of ruling-party supporters are the chief beneficiaries of A2
allocations we should pretend that this is a programme that benefits the
poor?
What sort of patriotism is that?
What about the Bhuka Report or the findings of Dr Charles Utete's committee
that chefs were multiple-farm owners and were refusing to give up their
ill-gotten gains? Should that have remained secret in the "national
interest"?
If the land reform programme is being "vilified" abroad it is probably
because it has been carried out in an arbitrary, lawless, and damaging way.
The state media may wish to disguise that obvious point but the minister
should not expect the independent press to do the same. We won't lie on
behalf of ministers. Nor will we accept that a bloated cabinet comprising
countless ministerial failures can by any stretch of the imagination be
described as "development-oriented".
As for his request that we should by all means criticise the government but
avoid "maligning" President Mugabe - which went unreported in the Herald
version - it is necessary to remind the minister that Mugabe is not only
head of state and government but is the leader of a political party at the
centre of national policy-making and public discourse. He is accountable for
the disasters that have befallen this country in recent years.

Dr Jokonya is to be congratulated for suggesting a break with past practice
and attempting to cultivate a good working relationship with the media. But
he must understand that we have different definitions of what is patriotic.
Ours revolves around accountability. What use is a press that is unable to
identify the manifest failures of its rulers who claim a popular mandate but
are too important to be criticised? Any media subscribing to that theory is
of no use to anybody including those it serves!
With regard to Jokonya's promise that the international press will be
readmitted to Zimbabwe because the government has nothing to hide, again we
welcome this development. But does that include those who were illegally or
unfairly deported to satisfy the spite of individuals working in the Office
of the President? That will be a good first test for the government's "new
look" media policy.

We were interested to read an article in the Sunday Mail Metro of the Harare
council commission appealing for government to put up a proper sewer
reticulation system at White Cliff squatter camp along the Bulawayo highway.
This was after the Zimbabwe National Water Authority fined the council $1
million for polluting the Manyame catchment area that supplies Harare with
much of its water.
Zinwa warned that the squatter camp at White Cliff posed a serious health
hazard to millions of honest, law-abiding, ratepayers. The farm was
illegally occupied by Zanu PF supporters during the party's free-for-all
land grab in 2000. The settlement has mushroomed into a huge field of
haphazard structures. The squatters use either the bush system or Blair
toilets.
Local Government minister Ignatious Chombo made some inaudible noises when
the mushrooms started spreading across the road but nobody took heed.
Instead there have been more such illegal settlements along High Glen road
and around Marimba police station. Far from Chombo banning the construction
of houses, we have more now where you find parked at weekends some of the
latest vehicle models in the capital, sufficient proof if it were
needed that these are not desperate people.
All that one needs to break the law with impunity is to carry a Zanu PF
card, hoist the Zimbabwean flag and give your group a suitable name from any
one of the many people buried at the Heroes Acre and you are home and dry.
It's a sign of the times that we have people using Blair toilets in the
capital. Small wonder that most sanitary lanes in the CBD have become
impassable because of human waste.

Some cynics are now doubting whether we have not taken the wrong turn in the
economic turnaround as the promised nirvana appears to be receding like a
mirage.
New Mashonaland East governor and resident minister Ray Kaukonde may be too
optimistic about improving productivity on newly-resettled farms, but at
least he has the right approach. He has undertaken to tour the whole
province "to see for himself the situation on the ground", reports the
Herald.
He said everyone who was allocated land must produce or forfeit the farm.
"Everyone who has land has to produce and we are going to scrutinise
everyone despite their status to see what they have been doing with the land
allocated to them," he said.
Despite lack of action, Mugabe knows part of the answer. The farms have been
turned into "weekend braai resorts". We wonder if Kaukonde will be given the
muscle to go beyond mere intention and rhetoric. At least as a starting
point he is not relying on a meteoric flypast to make his assessment of what
is happening on the farms like the dreamer who forecast 2,4 million tonnes
of maize from his office desk, or was it a bar stool?

We read an interesting article in the Herald on Tuesday in which President
Mugabe was praised for "outwitting his detractors" who wanted him out of
office so that they could install puppets in his place. There wasn't a
single detractor in the story.
The president's achievement was that he had defied "imperialist pressure"
for him to leave power. But the pressure did not start with imperialists.
Edgar Tekere was one of the first people to challenge Mugabe's leadership in
the early 1990s when he said democracy in Zimbabwe was "in the intensive
care unit". Then Eddison Zvobgo said Zimbabweans should know on the date a
president comes into office the date on which he would be leaving it.
Things have only gotten worse since then, with life expectancy tumbling to
38 years.
The famous call by Dzikamai Mavhaire for Mugabe to go only added to the
torrent of national discontent. The MDC and Tony Blair were not around then.
Nobody would agree with the lies peddled by one of the "analysts" quoted in
the article, Augustine Timbe, who claimed Mugabe had ensured the welfare of
Zimbabweans was better than before Independence, especially in health,
education and infrastructure.
Empirical surveys show that we have regressed to 1970s levels without any
immediate hope of recovery. Talk to anyone in the urban areas to find out
what they think about the quality of water, hospitals and clinics,
education, the sewerage system and general service delivery to get the
truth. Ask commuters whether they think they are being better served now
than they were at Independence. Or consumers what they think about the
provision of basic commodities since the land empowerment war began. The
state of national infrastructure is a sick joke. What planet is Timbe living
on? Let's hope it's not the Planet Payme (and I'll say anything)!

Having performed his role as a Zanu PF cheerleader in the recent election,
Gideon Gono was in the Sunday Mail last weekend refuting reports that he had
tendered his resignation to President Mugabe. He managed to use the word
"turnaround" six times in his interview with the paper.
There has been speculation that Gono would find it difficult to enforce his
monetary policy so long as Mugabe was intent on splashing out money on
ex-detainees and resurrecting a deadwood senate, not to mention funding a
gargantuan cabinet.
But what was of interest was the fact that the reports he was denying seemed
to have some basis.
For instance he conceded that there had been "consultations" last week that
had been "misconstrued" by those consulted. These same people had "betrayed"
the consultative process by "broadcasting what are essentially thought
processes", he said.
He was not going anywhere, he said. Farmers, miners, industrialists,
employers, labour, civil society, academia, parastatals and government
departments should "get on with their work in the full knowledge that, God
willing, the governor is still here until his term of office comes to an
end".
Just in case readers thought they could sleep more peacefully in their beds
at night with Gono at the helm, there was a picture of a fuel queue above
this reassuring statement.
Incidentally, how does Gono hope to achieve his so-called economic
turnaround when industry has no electricity or fuel? Hundreds of productive
manhours are lost daily as people spend half the day in fuel queues and
machines are down because there is no electricity. Who is the saboteur here
we wonder?

The Zimbabwe Tourism Authority, whose statements suggest a political
dimension, was this week celebrating a 30% rise in tourism. A ZTA official
was quoted in the Herald as saying "the figures were a sign that the
negative publicity mounted against the country
was being successfully counteracted".
This appeared on the same day as reports appeared in the international press
of elephants at Kariba being shot by the National Parks department for their
meat so locals could celebrate the Silver Jubilee and fuel queues
resurfacing all over the country.
We hear jumbos are migrating in large numbers to Zambia where they are safer
just as shoppers in Victoria Falls are finding there are more things to buy
in Livingstone. How times change!

Our friend Supa Mandiwanzira should do some homework before writing his next
"Look East" dispatch for the Herald. Pratt & Whitney was an American company
the last time we looked, not Canadian. Airbus Industrie is based in
Toulouse, not the UK. And exactly what "significant components" is CATIC
supplying to Airbus and Boeing? The claim that American and European
companies are outsourcing "the bulk" of their manufacturing to the Asian
giant is a tad far-fetched!
What Supa doesn't say in his story is that while China is selling Air
Zimbabwe its MA60 short-haul planes, it is busy buying its long-haul
aircraft from Boeing and Airbus - ie Looking West!
Meanwhile, Chinese press reports reflect official self-congratulation on
having at last found a customer for the M60s. They didn't actually use the
word "suckers". There was no need with Chris Mushowe in evidence!

For those fed up with being told how "pisserful" the recent election was by
people who have beaten and bullied the nation for 25 years, we had a SMS
message from a Mufakose reader who said the Silver Jubilee celebrated "25
years of peaceful hunger, peaceful poverty, peaceful economic decline, and
peaceful rigging".
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Zim Independent

Mine closures stir more woes
Eric Chiriga/Roadwin Chirara
ZIMBABWE'S economy is set to deteriorate further as more mining firms shut
down due to an unfavourable operating environment.

This comes after Falcon Gold (Falcon), one of the country's largest gold
producers after Metallon, last week announced that it was stopping gold
production as mining was no longer its core activity.

"The situation in Zimbabwe has changed significantly over the years and our
operations there have been affected by a number of factors beyond our
control - wages, power costs, inflation and the cost of borrowing," David
Marshall, the chairman of Falcon, said in a statement last week.

Marshall said they were looking for suitable investment opportunities in the
United Kingdom, but away from mining activities.

According to data released by the Chamber of Mines, since the year 2000 more
than 10 mines have shut down due to viability problems.

These include Camperdown, Motapa and Gaika who had an annual production of
about 76 260 and 125 kg respectively.

The mining sector accounts for 4,3% of the country's gross domestic product
(GDP).

According to a Platinum and Palladium 2005 survey report by GFMS, Zimbabwe
has become the most expensive mining area in the region because of high
operational costs.

Production costs of platinum shot up by 55% last year making the Zimbabwe
production one of the most expensive in the world.

David Murangari, the chief executive officer of the Chamber of Mines,
confirmed that Zimbabwe was now an expensive area to mine.

"The high inflation and the poor exchange rate have made the country less
competitive," Murangari said.

He said in gold mining one was paid on the basis of the international gold
price and mining costs in Zimbabwe were rising at a faster rate than the
gold price. This has resulted in the decline of revenues for miners.

Murangari said a number of investors keen to join Zimbabwe's mining sector
were waiting for an improvement in the economic and political environment.

Aaron Mudhuwiwa, group manager of human resources and external affairs of
RioZim, said the multiple effects of the current harsh economic environment
characterised by hyperinflation and turbulent industrial relations,
presented a huge challenge to miners.

"The perceived high country risk presents the biggest foreign challenge in
dealing with external suppliers of goods and services," Mudhuwiwa said.

Rio holds 22% in Murowa diamond mine outside Zvishavane.

Murowa diamond mine is the single largest mining investment in the country
after Hartley Platinum Project, which was taken over by Zimplats after it
was abandoned by its promoters, Broken Hill Proprietary of Australia in
1999.

US$60 million has been sunk into the mine since its inception, the company's
managing director, Phil Plaisted, confirmed.

Murowa has produced 66 767 carats of diamond in the first quarter of this
year, from 43 901 produced in the fourth quarter of 2004.

"The mine has a life expectancy of around 20 years.

Zimbabwe's gold output dropped 17,6% in the first quarter of this year.

Earlier this year industry officials had anticipated gold output to rise by
almost two thirds to a record 35 000 kg.

However, data released by the Chamber of Mines revealed that output fell to
4 200 kg between January and March, from 5 100kg in the same period last
year.

Last year the country's total gold production totalled 21 300 kg, which saw
foreign currency earnings of US$273,8 million from $152,3 million in 2003.

Chamber of Mines president Ian Saunders was quoted as saying "rising
production costs, lower Zimbabwe dollar prices and foreign currency
shortages had dragged output down from last year".

In January the Reserve Bank of Zimbabwe increased the Zimbabwe dollar gold
support price from $92 000 per gramme to $130 000 to spur production.

Producers are required to sell some of the metal to the central bank and
increased the amount of earnings they could retain in foreign currency.

The government has forecast 3-5% economic growth this year on the back of an
expected recovery in the mining sector, which earns a third of Zimbabwe's
exports.
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Zim Independent

Food pricing commission on cards
Godfrey Marawanyika
THE National Economic Consultative Forum (NECF), which is the government's
think-tank, has embarked on a study of pricing of basic food commodities
that will pave the way for the setting up of an independent regulatory
commission.

The commission is expected to, among other things, regulate the pricing
structures.

The idea to form the NECF was first mooted during the 1995-96 budget by now
Finance minister Herbert Murerwa and comprises representatives from
government, labour, business and civil society.

President Robert Mugabe subsequently launched the NECF in 1997 and is
current patron of the organisation.

The organisation is a voluntary coalition run by Nicholas Kitikiti, a former
full-time employee in the President's Office who serves as the executive
secretary.

The price commission will have representatives from labour, business and
employers. Kitikiti said they have already covered at least 13 products
under the study.

"We have done a study on price stabilisation and so far we have finished
with 13 products under the study. We might also be requested to do more work
on pricing. We will also do a report for the establishment of a price and
stabilisation commission, which will be set up soon," Kitikiti said.

"Whatever we are doing has endorsement of government, labour and business
leaders. We are also doing work for a definitive minimum wage structure,
which government, labour and business have endorsed."

The government has ordered manufacturers to reverse price increases made
soon after the March 31 election to pre-March levels, a decision which has
resulted in a shortage of most basic commodities which have now flooded the
black market.

The last time government imposed price controls in 2002, an acute shortage
of basic commodities ensued as manufacturers stopped producing the products,
while others opted to export.

Government claims the shortage of commodities is an act of sabotage by
business and manufacturers aligned to the MDC.

However, manufacturers argue that they cannot produce goods at sub-economic
prices and survive for long.

Zimbabwe Congress of Trade Unions secretary-general Wellington Chibebe said:
"The issue of prices has been problematic but the government has been
accusing us of working in cahoots with manufacturers to contribute to the
shortages of basic commodities."

Confederation of Zimbabwe Industries president Pattision Sithole, a
fortnight ago said they would take the issue of price controls and shortages
of commodities to government, but they are yet to meet Obert Mpofu, the new
Industry and Trade minister.

Industry and International Trade permanent secretary, Christian Katsande,
this week said a new pricing structure for all basic commodities would be
announced at the end of the month.
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Zim Independent

Maize imports to worsen Zim debt woes
Eric Chiriga
THE importation of maize will worsen the country's balance of payments
deficit and domestic debt, economic analysts say.

It will also mean the abandonment of capital projects like the Matabeleland
Zambezi Water Project and Tokwe Mukosi dam since the government is going to
divert the money earmarked for infrastructure development towards food
imports.

Government had initially earmarked $5 trillion for infrastructure
development.

Zanu PF spokesman, Nathan Shamuyarira, confirmed in an interview with the
Zimbabwe Independent a fortnight ago that government would divert resources
meant for infrastructure development towards food imports.

Economic analyst John Robertson said the importation of maize would have a
serious impact on the balance of payments considering that export revenues
are currently decreasing.

"Zimbabwe might have a stockpile of Zimbabwean dollars but will face serious
problems trying to raise the required foreign currency," he said.

Zimbabwe needs more than US$156 million for maize imports alone to see the
country through to the next season.

However, the government-controlled forex auction is failing to meet market
demand. Robertson said it was a curious reversal because the country used to
earn revenue from exports of surplus maize.

"We have been experiencing balance of payments deficits since 1997 and this
has been contributing to the increase in domestic debt."

Best Doroh, an economist with Finhold, said maize imports would put a huge
strain on the country's balance of payments and would worsen the foreign
currency shortage.

"We are already failing to raise enough foreign currency for basic imports
like fuel and electricity," Doroh said.

Last year, Zimbabwe's domestic debt hit $3 trillion from $590,5 billion in
December the previous year.

Analysts say the domestic debt will continue to soar because of the need to
fund various other imports such as electricity and fuel.

Balance of payments is a record of a country's receipts from and payments to
other countries. It includes international financial transactions of a
country from commodities, services and capital.

The balance of payments can be split into two: the current account which
deals with international trade in goods and services and transactions in
assets and liabilities which deals with overseas flows of money from
international investments and loans.

According to the 2005 national budget presented by Finance minister Herbert
Murerwa, the country's balance of payments stood at a deficit of US$523
million in 2004 from US$335 million in 2003.

The current account deficit, however, improved from US$581 million in 2003
to US$338 million in 2004.

The capital account recorded a deficit of US$185 million due to low foreign
direct investment while the 2005 national budget had a deficit of $4,5
trillion - 5% of gross domestic product.
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Zim Independent

A year on, 'forgotten' Kuruneri still held
Ndamu Sandu/Godfrey Marawanyika
"HE is nowhere nearer getting out than the day he was arrested," said a
prominent Harare lawyer in reference to detained former Finance minister
Christopher Kuruneri.

Kuruneri has spent more than a year in detention since his arrest on charges
of externalising foreign currency without central bank authority.

Kuruneri was detained on April 24 last year on charges of violating exchange
control regulations and has been battling with the courts for his freedom
without success. He has been to the magistrates' courts, the High Court and
the Supreme Court.

The former minister has since lost his seat as the MP for Mazowe West.

Kuruneri goes on trial next month on charges of externalising US$1 million,
37 000 and 30 000 euros. There is no specific jail term for the offence
although there is the option of a fine if convicted.

Kuruneri was also charged with breaching the Citizenship Act after he was
found in possession of two passports - one Zimbabwean and one Canadian -
without the permission of the Ministry of Home Affairs.

A bank statement uncovered by police last year revealed that Kuruneri had an
account with Absa Bank's Heerengracht branch in South Africa with a balance
of R1, 3 million.

As of May 6, 2004, Kuruneri's available balance was R1 294 102.

The transaction on the bank statement was for the period between May 1 2003
and May 6, 2004.

The state alleges that Kuruneri externalised the funds to South Africa where
he gave the money to Christopher Heyman, the director of Venture Projects
and Associates, a company contracted to manage his business in South Africa.
This included the reconstruction of one of his properties.

It is the state's case that part of the money was used to buy a Mercedes
Benz valued at R547 734, three residential properties - 38 Sunset Avenue,
Llandudno, Cape Town valued at R2,7 million, a house valued at R2,5 million
and a R2,5 million flat.

It is alleged that on March 6 2002, Kuruneri unlawfully made the Jewel Bank
of Zimbabwe transfer R5,2 million to CB Niland and Partners, his lawyers in
South Africa, as payment for the purchase of a property, 17 Apostle Road,
Llandudno also in Cape Town. All the properties were registered in the name
Choice Decisions 113 Pvt Ltd in which Kuruneri is the sole director.

Charges against Kuruneri arose between 2002 and 2004.

The state further alleges that Kuruneri externalised the funds to finance
the construction of a R30 million mansion in Cape Town. However, according
to press reports from South Africa, he might end up losing the mansion
because of failure to make rates payments on time.

Kuruneri's lawyer, George Chikumbirike, was this week again writing a letter
to the Supreme Court for a set down date.

"I last met him about two weeks ago and he is physically fine, but you can
imagine the level of stress he is going through," Chikumbirike said.

"Right now I am writing a letter to the Supreme Court for the matter to be
set down."

In his defence, Kuruneri said he got the foreign currency from doing
consultancy work for a Spanish company, Felipe Solano, and Mobile Systems
International of Britain.

Mobile Systems International was one of the losing bidders for a licence in
the mobile cellular network in Zimbabwe.

Legal experts this week said Kuruneri had been sacrificed for political

purposes.

"He is being sacrificed for political expediency so that Zanu PF is seen to
be dealing with corruption," said constitutional law expert, Lovemore
Madhuku.

Madhuku said the delay in bringing Kuruneri to trial was an infringement of
his constitutional right.

"He (Kuruneri) is entitled to a fair trial within a reasonable time and the
time he has been detained is no longer reasonable," Madhuku said.

Kuruneri's arrest last year made him the most senior politician to be caught
in President Robert Mugabe's anti-corruption dragnet.

The crackdown also led to the arrest of the then Zanu PF central committee
member, James Makamba, on charges of externalisation, but he was
subsequently freed by the courts after paying a fine.

Many bankers were forced to flee the country for fear of arbitrary arrest.

NMB Holdings bosses Julius Makoni, James Mushore, Otto Chekeche and Francis
Zimuto sneaked out of the country before the net closed in on them. There
were claims then that the arrests were at the instigation of RBZ governor
Gideon Gono or at least had his tacit approval.

The others who ran away were Intermarket Holdings founder and chief
executive officer Nicholas Vingirai, Barbican Holdings boss Mthuli Ncube and
Africa Resources Ltd chairman Mutumwa Mawere.

In denying Kuruneri bail, High Court judge Justice Ben Hlatshwayo last year
said he had substantial resources and properties outside the country which
he could easily mobilise to skip bail and to live well for the rest of his
life.

The former minister has had several of his bail applications turned down by
both the magistrates' courts and the High Court.

The former minister's hopes for bail were dashed by High Court judge Justice
Charles Hungwe in February who ruled that Kuruneri could "not be trusted".

His hopes for freedom will only be known on May 16 which has been set as the
date for his trial.

During his continued detention, he has lost his ministerial post and,
according to reports, he might also lose his villa in Cape Town as he has
failed to keep up payments in the past 12 months.
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Zim Independent

What is our optimal exchange rate?

FOLLOWING our discussion last week, it appears there are various arguments
being put forward with regards to management of the current situation -
where we seem to be stalling on the inflation front, the stock market
appears to be getting out of control, and the foreign currency shortage has
become critical.

The most popular solution being put forward is an interest rate hike,
because this would halt the stock market rally and discourage speculative
borrowing to fund foreign currency parallel market activity.

While the stock market rally would indeed be slowed down by an interest rate
hike, this is not the simplest way to achieve this, as this would have
negative impacts on other economic activities such as slowing down aggregate
demand and accelerating the demise of an already weak industrial sector.

If the RBZ reverts to the 91-day ZTB OMO bills, and keeps them open to the
general public, investors could realise above-inflation returns from these.

At the current TB rate of 95% over a 91-day period, investors would realise
compounded returns of 135% per annum, which are above inflation. This would
instantly solve the "stock market problem".

As to whether or not there is speculative borrowing to fund parallel market
activity, simple arithmetic would suggest this is not the case.

At the current allocation rate of US$11 million per auction, over a year the
Reserve Bank would have allocated US$1,144 billion. According to the fourth
quarter monetary policy statement, in 1996 (which we shall take as the proxy
for a 'normal' year) the country's total foreign currency earnings were
US$3,878 billion. Yet in spite of this, the country still needed an
additional US$1,062 billion in "grants and other transfers" to balance off
the books.

It is thus reasonable to say that this year, given a larger population and
more adverse conditions (drought, reduced agricultural and industrial
activity etc), the country's foreign currency requirements would exceed US$5
billion.

That the amount of bids is currently standing at only just over US$200
million is thus actually quite surprising.

Raising the level of interest rates would not result in the country
requiring less foreign currency, and could be compared to over-inflating the
tyres on a car in the hope that this would re-start a stalled engine.

In any case, borrowing rates on average are currently at between 105 and
125%, which works out to between 174 and 228% on a compounded basis. Given
the effort and length of time it now takes to get a loan approved, and the
additional time needed to get funds from the auctions, it is hardly likely
that there are many people speculating on the foreign currency auction as a
means of livelihood.

Given that we do not, and are not likely to have a source of balance of
payments support in the short to medium-term, our only hope lies in boosting
exports and remittances from the diaspora. Currently, virtually all
exporting companies have cut down on export volumes (see this article on our
website www.adway.co.zw for details) citing an unviable exchange rate
regime.

Their actions are entirely reasonable, given that their export revenues
would have grown only about 32% over 2004 ceteris paribus, against input
cost increases averaging 132%. They are advocating that the exchange rate
should be determined by market forces, as opposed to the controlled auction
rate.

Allowing market forces to determine the exchange rate without balance of
payments support, and under the current situation where supply far exceeds
demand would result in extreme decline of the exchange rate, to such an
extent that our currency would become grossly undervalued, which would be an
equally undesirable situation.

Consider, on the other hand, pegging the exchange rate to month-on-month
inflation after effecting an appropriate devaluation. The exporters would
get reasonable value as their costs and revenues are growing in tandem. They
would actually benefit from increasing exports as they would be able to
retain more foreign currency to fund their operations; the auction system
would continue to have more bids than available currency, which would make
it the source of last resort.

People remitting from the diaspora would also get good value as their
remittances' purchasing power remains constant over time. Bids would
continue to outstrip supply on the auction, but as exports and remittances
increase, the gap would gradually decline. When bids and offers eventually
become matched, the exchange rate could then be left to the dictates of
market forces.

Defending the currency is only effective when done to counteract short-term
speculative attacks on the currency, or to smooth out seasonal effects on
demand and supply. It also requires foreign currency reserves. In our case,
pressure on the currency is emanating from fundamental weaknesses within our
economy. - Own Correspondent.
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Zim Independent

ZITF kicks off on low note
Loughty Dube
THE 46th edition of the Zimbabwe International Trade Fair (ZITF) kicked off
on a low note in Bulawayo this week with acres of space not filled as
exhibitors stayed at home during the first two days of the trade expo.

At least 604 local and international exhibitors confirmed participation at
the trade showcase but many had not yet displayed any goods by the end of
the first two business days.

ZITF general manager, Daniel Chigaru, however said the exhibitors had
expressed hope to arrive before the trade fair ends tomorrow.

"The first few days have been satisfactory even though some exhibitors from
out of Bulawayo have not turned up and they have not given reasons for not
turning up," Chigaru said. "We hope they will be here before the show ends."

Mozambican President Armando Guebuza will officially open the five-day trade
showcase today.

A total of 42 foreign companies are taking part at the trade exhibition
while 562 local exhibitors are participating.

The majority of local exhibitors are mainly small to medium enterprises
(SMEs) while the foreign exhibitors are mainly Chinese and from other Far
East countries.

A travel and tourism exhibition, A'Sambeni, which runs concurrently with the
ZITF, also kicked off on a very low note with a handful of exhibitors
showcasing their products.

An exhibitor with a tourism organisation said the low turnout was due to the
fact that most tour operators were preparing to attend a more lucrative
regional tourism showcase in South Africa at the beginning of May.

"In terms of business, attending the South African exhibition has more
returns that attending A'Sambeni where the returns are far much lower," the
tour operator said.

This year also saw the return of livestock at the trade fair after a long
absence due to the outbreak of foot and mouth disease and a boycott last
year by white commercial farmers.

However the number of livestock on display at the trade fair is quite low
with dairy and beef cattle dominating the livestock section.

A major international business conference organised by the ZITF and

sponsored by the corporate world was held over two days and was attended by
over 200 business people.

The business conference held under the theme "Resource Mobilisation for
Investment and Trade" was addressed by four foreign speakers.

The four foreign speakers are Ruel Khoza, the director of Eskom, Geoff
Rothschild, the director of the JSE Securities Exchange, Ken Small, a
regional consultant on tourism and spatial development from the Development
Bank of Southern Africa, and former Barclays Bank South Africa managing
director, Isaac Takawira.

Other local speakers who addressed the conference include Anthony
Mandiwanzira, Nicholas Kitikiti, Jonathan Kadzura, Davison Mugabe, Shingi
Munyeza and Sydney Gata among others.

Meanwhile the ZITF has made a provision to supply exhibitors with fuel as
the country is experiencing a crippling shortage of the commodity.

Chigaru said fuel was being provided to exhibitors through the use of
coupons at designated service stations.
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Zim Independent

Zimbabwe's enemy no 1

DURING the run-up to the 2005 parliamentary election, President Robert
Mugabe went around the country assuring the nation that no one would starve
as the government had procured enough maize to last until the next harvest
from South Africa.

The Zimbabwe Independent of April 22 did right to inform the nation of the
true situation regarding maize imports - that the country is experiencing
problems importing maize because of foreign currency constraints.

Why then did President Mugabe lie to the rural electorate that the country
had procured enough maize to last until the next harvest?

Opposition parties and all the progressive forces in the country should
expose him and Zanu PF for the lie, and remind the rural people, including
the chiefs, headmen and kraal heads about it .

The chiefs should ask where the maize that President Mugabe said had been
procured from South Africa is.

Where even little maize is made available through the Grain Marketing Board,
this is done along political lines, as is already happening in some parts of
the country.

The people in the affected areas should be organised in efforts to expose
such practices.

People in the rural areas should be taught to report cases where maize is
only sold to Zanu PF supporters, giving precise information that includes
the names of the culprits and their positions in society, Zanu PF or in
government, dates and the places when and where such incidents will have
taken place.

This information should be communicated to civic society organisations and
donors who are involved in assisting with food and to the media to ensure
that the Zimbabwean story is told properly.

A government that lies to its own people is an enemy of the people. The
world should therefore be informed that the Zanu PF government, under Robert
Mugabe, is the people of Zimbabwe's number one enemy.

Benjamin Chitate,

Harare.
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Zim Independent

Editor's Memo

New culture

MOST of us are familiar with the maxim that doing the same thing the same
way will get you the same results. This axiom is proverbial in politics
where a continuance of poor decisions and policies by governments will
invariably produce negative results in the form of poverty, privation,
oppression and so on.

A different approach to a problem may bring positive change and alter the
ingrained attitudes of critics and opponents. Politicians want to be seen to
be doing things differently and at the same time maintaining gwara, the
traditions and rituals of their political organisations.

It is also a truism that doing it differently doesn't necessarily mean doing
it better. In some instances it simply means removing certain negativities
and replacing them with fresh equally harmful ones. To do things differently
to achieve positive results, it is therefore important for a system to be
first disconnected to the energy source that provides fuel to negative
impulses and lifestyle.

Put simply, one cannot start talking or doing things differently to achieve
positive change unless they are inspired by a different form of energy and
in politics this can entail a serious policy shift by a party, a
revolutionary change in its leadership or both.

On Friday new Information minister Tichaona Jokonya and his deputy Bright
Matonga at a meeting with editors pledged to do things differently. That is
always sweet music to ears which had become inured to hateful and
anachronistic bluster by then Information sub-monarch Jonathan Moyo. The
inventory of promises include fair treatment of all media houses in
accessing government information and greater interaction between the
ministry and the media.

They do not want to see journalists arrested and harassed. They pledged to
look at the contentious clauses of Aippa. They believe Aippa is still a good
law but there could have been problems with its application. Foreign media
should not be barred from coming into the country. "We do not have anything
to hide," said Matonga.

The Herald last Friday also carried an important little piece on a meeting
Mashonaland East governor Ray Kaukonde had with traditional leaders in the
province. The new governor does not seem to share the tired party mantras
that the land reform exercise has been a huge success (even though he is
arguably the most successful black farmer in the country at the moment).
This is what happening in his province: "Those who are failing to reimburse
the loans should know that they will go to jail and those who are misusing
the land are saboteurs."

He also said: "We want to be accountable to the people who voted us into
power. We used to have a total of 156 dairy farms in the province but now I
hear there are only 10 dairy farms functioning. What is that? How do you
explain that? It is unacceptable."

Jokonya, Matonga and Kaukonde want to see positive change in government as a
result of their actions but they need positive energy to drive their new
plans. They are part of a government that has remained caught in a war of
Independence time-warp, where change is considered reactionary and a
negation of gwara remusangano. They are part of a government that has not
admitted failure but is quick to blame others for all the things that have
gone wrong in the past 25 years. They are part of a government built around
layers of patronage and resultantly a strict adherence to the values and
notions exuded by their infallible leader- something akin to the Papal Bull
of 1870.

This unfortunately is the power source the three - Jokonya, Matonga and
Kaukonde - are plugged into. It would be unfortunate - after displaying such
positive zeal - if they were to be reminded by their bosses that they are
still plugged into that power point and hence they have to proceed with
caution.

I believe Mugabe's government today is in great need of new positive energy
if it is to do things differently and ultimately influence change. Last week
our attempt to seek a comment from Grain Marketing Board boss Samuel Muvuti
on food imports provoked a curt and hostile response. He made all sorts of
silly and frankly childish accusations against this paper which were
inappropriate for the head of a public entity.

But sadly this is the script many government and parastatal bosses readily
use when asked important questions of national interest.

Jokonya and Matonga have the unenviable task of exorcising this ghost from
government. For a start, they need to tell their colleagues that it is not
clever to be rude. It is only a sign of the negative energy flowing in the
sclerotic arteries of government. The country is where it is today partly
because our rulers believe criticism of their actions must be met with a
militant counter-offensive. We are never wrong because we liberated this
country!

After the pronouncements by Jokonya, Matonga and Kaukonde many would like to
see these translate into positive action that will detoxify the government
tongue in its public relations drive here and abroad. We would like to see
real "saboteurs" of the land reform removed from the farms and productivity
restored.

We hope this positive line rubs off on the new (and old) ministers - some of
whom have already started to advertise their negativity. Did I hear
Education minister Aeneas Chigwedere threatening schools again and the
deputy minister of Industry and International Trade Phineas Chihota making
threatening noises to industry?

This is counter-productive. Tell them Bright.

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