FinGaz
Dumisani Ndlela and Clemence Manyukwe Staff
Report
President to quit after poll
PRESIDENT Robert Mugabe succeeded in
suppressing debate over his candidacy
for the presidential race scheduled
for early 2008 during a tense central
committee meeting held last Friday,
railroading a cocktail of proposals
perceived to give him the edge over his
adversaries with regard to the
appointment of his successor.
The
fresh proposals, to be discussed in Cabinet this month before being
fast-tracked through the ZANU PF-dominated parliament, will afford the
veteran politician a firmer grip on the legislature, which will be expanded
and granted powers to act as an electoral college that can elect a successor
in the event that a sitting president dies in office or resigns before the
completion of a current term.
Currently, the Constitution provides for an
election to be held within 90
days of the office of President becoming
vacant.
Diplomatic sources said the raft of proposals presented last Friday
are
meant to pave the way for President Mugabe's eventual resignation after
he
is re-elected into power next year.
They said the ruling party's first
secretary, whose inner cabal pulled the
rug at Friday's central committee
meeting from underneath the feet of ZANU
PF bigwigs that were determined to
stop him from standing on the party
ticket in next year's poll, is planning
to retire soon after the election
but wants to ensure that a candidate of
his choice succeeds him.
Sources indicated that President Mugabe's campaign
machinery, led by
political commissar Elliot Manyika, was already in full
force and stamped
its authority during the central committee indaba when it
ensured the
83-year-old former guerilla leader's nomination was not
debated.
Manyika angrily declined comment on his reported role in the
developments
when reached yesterday.
There is a likelihood of a purge of
those known to have been opposed to
President Mugabe standing again in the
2008 polls, with sources saying a
strategy was already in place to ensure
that he would front-load the
expanded parliament with loyalists.
"The
purge is definitely coming although it could be delayed for two
reasons; the
first being that the party needs to go into the elections
united," said the
source. "The fact that our congress is only coming in 2009
makes it
extremely difficult to root out unwanted elements and the only way
to do it
would be to wait for a Cabinet reshuffle or to look at the past of
those
targeted to see whether they are clean," said the source.
In 2004, President
Mugabe purged ruling party structures of perceived
dissenters after crushing
opposition to his backing for Joice Mujuru as
Vice-President. Six party
provincial chairmen were sacked.
President Mugabe is expected to appoint 10
members of the House of Assembly,
and will have a controlling influence on
all senators, as there will no
longer be a direct election for
senators.
The House of Assembly will be expanded from the current 150 to 210
members
and the senate from 66 to 84 members, with an amendment of the
Electoral Law
and the Constitution to allow for a system of proportional
representation
for the election of senators.
Traditional chiefs will have
10 representatives in the senate, which will
accommodate 10 ZANU PF
provincial governors directly appointed by the
President, and six senators
per province elected in line with the present
constituency-based system.
There are 10 provinces in the country.
The President will elect four
othersenators to represent special interest
groups. The proposals were
passed without amendment by the central
committee, the party's policy-making
organ.
The two factions of the Movement for Demcratic Change (MDC) yesterday
literally came out with their guns blazing. They argued that the proposed
constitutional changes were designed to give President Mugabe a safe exit
from active politics while entrenching his party's rule.
Nelson Chamisa,
the spokesman for the anti-senate faction of the MDC, said
the tinkering
with the constitution for the umpteenth time showed the ruling
party is no
longer in sync with the aspirations of long-suffering
Zimbabweans.
"The
so-called proposals are not part of the solution to Zimbabwe's
political
crisis. These are self-serving measures, short of what's expected
by the
generality of Zimbabweans," he said. "Zimbabweans want a prosperous
country,
free and just society. These ZANU PF piece-meal proposals do not
address
fundamental issues," he added.
Chamisa said the main opposition party has put
a comprehensive plan together
to end the Zimbabwean crisis premised on the
need for a holistic and
sweeping transformation of the country's
constitution and issues of
governance.
Gabriel Chaibva, the spokesman for
the pro-senate camp of the MDC,
concurred.
"ZANU PF wants to increase
seats in rural areas at the expense of urban
areas. This is criminal, the
proposals are not a solution to the country's
crisis," said Chaibva.
ZANU
PF insiders said the ruling party might emerge with more seats in its
rural
stronghold depending on the outcome of the delimitation process that
will
look at the geographical boundaries of each of the existng 120
constituencies.
In the past, the ZANU PF government has rarely tampered
with its numerical
advantage in rural communities but has curtailed the
opposition parties'
influence in urban areas where the MDC enjoys
overwhelming support.
"We are obviously working on reducing the geographical
size of rural
constituencies so that the people are well represented. As it
is, it is not
possible for rural Members of Parliament to visit every part
of their
constituencies because they lack the resources," said a ZANU PF
insider. "By
reducing them (rural constituencies), they become much more
manageable. The
Delimitation Commission is going to do its work taking into
account the
voter population," added the source.
The Delimitation
Commission, whose officials are appointed by President
Mugabe and report
directly to him, will be responsible for drawing up new
constituency
boundaries to increase the number of contested House of
Assembly seats to
200.
Sources revealed this week that protagonists in the race for the top
party
job had prepared to push for President Mugabe's resignation during the
central committee meeting on the basis of pledges he had made earlier that
he would pass on the mantle in 2008, although the issue had not been on the
agenda of the central committee meeting.
There had been intense lobbying
in the provinces, particularly for
Vice-President Mujuru, to take over from
President Mugabe next year as the
party's presidential candidate.
The
Financial Gazette learnt from sources that factional leaders who had
clandestinely secured the backing of seven provinces were stunned when
Manyika indicated, soon after all party resolutions on the agenda were
passed, that they had to deal with the issue of a presidential candidate for
the 2008 election and then declared: "Fortunately the party has one
candidate, His Excellency Cde Robert Mugabe".
Although there was a round
of applause from the floor, sources indicated
that a sombre mood had
overtaken some of the delegates at the high table,
mostly politburo members
understood to be sympathetic to the Mujuru camp,
reportedly led by her
husband retired army general Solomon Mujuru.
Sources said the declaration of
President Mugabe's candidature had afforded
welcome relief for Emmerson
Mnangagwa, a key contender to the presidency, as
Mujuru had appeared poised
to win the bid to succeed President Mugabe if
this had been tabled at the
central committee meeting.
It is understood the majority of provinces were
prepared to back Mujuru for
the presidency if they had been given the
opportunity to make their
nominations.
FinGaz
THE drawn-out impasse over the
pricing of bread has claimed its second
casualty in two weeks, after Proton
Bakers closed down this week.
A fortnight after another major bakery,
Superbake, shut down half its
bakeries and cut 1 500 jobs, Proton succumbed
to the government-imposed
price controls, which made it impossible for the
company to offset
escalating production costs.
The Marondera bakery chain
said the decision to shut down had been forced by
serious viability problems
arising mainly from the ever-escalating cost of
inputs.
Spiros Tselentis,
the technical director at Proton, said the bakery could no
longer afford to
buy fuel from private importers.
The bakery said several attempts to source
fuel at the controlled price from
the state-run National Oil Company of
Zimbabwe had failed.
- Business Reporter
FinGaz
Charles Rukuni Bureau
Chief
BULAWAYO - Inflation itself is now the biggest driver of inflation,
which
has gone rampant, exceeding 1 700 percent in February, management
consultant
Eric Bloch told a meeting of Bulawayo industrialists last
week.
Charles Rukuni
Bureau Chief
Addressing the annual general
meeting of the Matabeleland Chamber of
Industries, the local affiliate of
the Confederation of Zimbabwe Industries,
Bloch said inflation had been the
biggest driver of inflation in the past
six weeks because everyone was using
it either to calculate wages or
increase prices.
It was therefore,
essential to address inflation in order to curb it and the
signing of the
social contract, which binds government, employers and labour
was a step in
the right direction.
Prices rocketed at the end of February amid fears that
they would be frozen
at the beginning of March. This is likely to have
fuelled inflation for
March whose figure should be released next
week.
Bloch said 17 countries had gone through
the same experience that
Zimbabwe was currently going through but they had
all recovered after
entering into social contracts.
It was therefore, quite significant that all
three parties concerned, the
government, employers and labour, had signed
the social contract more than a
week ago and had agreed to adopt the Kadoma
Declaration, which was crafted
by the labour movement nearly six years
ago.
The Kadoma Declaration calls for, among other things, the tripartite
negotiating forum to address the country risk factor under which the world
thinks Zimbabwe is an unsafe country to invest in or even to visit.
The
declaration also calls on the parties to address politicisation and
failure
of the institutions of governance; the mismatch between policy and
action;
delays in policy implementation; and the overall spread of wealth.
It also
calls on the parties to address corruption in the public and private
sectors, as well as in transfer pricing, black market activities, customs,
immigration, awarding of tenders, police, issuing of licences, allocation of
public resources, price monitoring, privatisation, education and
tourism.
Asked by one of the industrialists whether the Kadoma Declaration
was not
outdated, Bloch said it probably was in some areas but it was a
foundation
and a good starting point.
"I would like to call upon all
those who are despondent, depressed and
filled with gloom and doom not to
give up. The Kadoma Declaration is like a
key to start an engine. You can
start the engine but you may not be able to
move. You will need to engage
into gear and then press the accelerator
before you are able to
move."
The Kadoma Declaration was therefore, the platform from which the
three
parties could seek other reforms to propel the economy
forward.
Bloch said that the economy had failed to recover so far because of
political meddling. He said government had refused to devalue the local
currency because to politicians devaluation meant an admission of failure.
The government was also afraid of devaluation because it was the biggest
user of foreign currency, so any devaluation meant that its debt would
balloon in local currency terms.
Asked how industry could tell whether
the government was genuine about
abiding by the terms of the social contract
this time, Bloch said, some of
the things people had to watch was whether
the government would grant the
central bank full independence.
Industry
also had to watch whether the government was going to align
monetary policy
to the fiscal policy and would fully accept deregulation.
It also had to
reform the land redistribution exercise to make sure only
productive farmers
remained on the farms. It should stimulate exports
because right now
industry was only operating at 20 percent capacity. This
was highly
inflationary because industry had to pay 100 percent of its fixed
costs from
a 20 percent base.
"An increase in exports would mean that exporters would
reduce their
dependence on foreign currency from the black-market. If we
increase
capacity by 60 percent or more we reduce the unit cost of our
products and
thus also reduce inflation," he said.
"But we have to accept
that we cannot go it alone," he added. "We have to
join the international
community. We don't have to kow-tow to the
international community but we
have to work with them. Insulting the western
community only hurts us. How
do you expect a British investor to invest in
Zimbabwe when you are calling
his Prime Minister a toilet?"
FinGaz
Njabulo Ncube
Chief Political Reporter
TWO senior officials of rival factions of the
opposition Movement for
Democratic Change (MDC) are in South Africa to
present reports they believe
are key to beginning talks with ZANU
PF.
Tendai Biti and Welshman Ncube, the secretaries general of the Morgan
Tsvangirai and Arthur Mutambara factions of the MDC, travelled this week to
South Africa, just a week after they held what South African President Thabo
Mbeki called lengthy discussions on possible talks with his
officials.
President Mbeki was last Friday appointed mediator in the
Zimbabwean
political crisis at a Southern Africa Development Community
summit in
Tanzania. Mbeki said in a weekend press interview that his
officials had
held talks last Friday with both factions as he began the
difficult task of
brokering talks between ZANU PF and the
opposition.
Mbeki said in the interview he expected the factions to return
with a
combined report this week. Opposition officials said Biti and Ncube
had now
finished the document and left for South Africa yesterday to submit
it to
Mbeki.
Nelson Chamisa, spokesman for the Tsvangirai camp, confirmed
Biti was in
South Africa but declined to give details. The Mutambara faction
spokesman
Gabriel Chaibva said he was not aware Ncube was in South
Africa.
Ncube and Biti, sources say, will present the document, "Road Map to
establish a new Zimbabwe and a New Beginning", whose key demands are a new
constitution before next year's elections and the repeal of repressive media
and security laws.
Meanwhile, the High Court yesterday ordered police to
return computers and
other property they seized last Wednesday when they
raided MDC offices in
Harare.
The raid, whose purpose the police said was
to flush out the alleged
perpetrators of petrol bombings, resulted in the
arrest of 10 activists and
MDC leader Morgan Tsvangirai's brief
detention.
MDC lawyer Chris Mhike said yesterday that High Court judge
Lawrence Kamocha
granted an order for the return of the property.
"They
(police) were ordered to return all eleven computers, two laptops and
a
digital camera as well as files," he said.
FinGaz
Stanley Kwenda
Staff Reporter
A DETERMINED search by Paul Mangwana for a new political
home has finally
paid off as it emerged this week that the Indigenisation
Minister is on the
verge of landing the ZANU PF provincial chairmanship for
Masvingo.
Sources said the non-constituency Member of Parliament had
finally completed
a long journey that saw him hobnob from one province to
the other in search
of a constituency, thanks to the planned re-organisation
of the fractious
Masvingo provincial executive.
They said there has been
heavy lobbying for Mangwana ahead of the elections
following a directive by
the ZANU PF national commissar, Elliot Manyika, to
dissolve the Samuel
Mumbengegwi-led executive.
"If current efforts to place him at the apex of
our provincial structure
succeed, it would become easy for Mangwana to throw
his hat in either Chivi
North or Chivi South constituencies," said a
source.
Mangwana was last year forced out of Mashonaland West province
allegedly on
ethnic grounds and immediately set out to retrace his steps to
Masvingo.
He has recently featured prominently at various functions, giving
credence
to speculation that he was strategically positioning
himself.
Mangwana comes from Chivi, a district, regarded as a political
hotbed of
incessant and deep-seated factionalism.
His overtures have
reportedly incurred the wrath of other ZANU PF
heavyweights who are trying
to firmly establish themselves following the
downfall of former Masvingo
Governor Josiah Hungwe.
FinGaz
Clemence Manyukwe Staff
Reporter
40 000 soldiers owed cash in lieu of leave
THE government will
pay billions of dollars for accrued leave days for an
estimated 40 000
soldiers deployed during Zimbabwe's involvement in the
Democratic Republic
of the Congo (DRC) war, a senior Defence Ministry
official has
said.
Secretary for Defence, Trust Maphosa, said this week that the
entire force
that served at the time would receive outstanding payment in
lieu of leave,
a development likely to force the government to dig deeper
into its drying
coffers.
Responding to enquiries by The Financial
Gazette, Maphosa said: "It is true
that the government has set aside funds
to pay for leave days that were
accrued by the Zimbabwe Defence Forces (ZDF)
members during operations in
the DRC."
He would not say how much the
government would spend. In December last year,
however, army chiefs told the
Parliamentary Portfolio Committee on Defence
and Home Affairs that the
Ministry of Finance had indicated it was unable to
fund the payment.
At
that same hearing, the army chiefs described the outstanding payments as
"substantial amounts."
Although it was indicated that the bill stood at
$1.2 billion as at December
2006, Maphosa said the total amount would exceed
that figure at prevailing
rates.
"Since salaries get reviewed from time
to time, the figure of $1.2 billion,
which your informant gave you will
therefore, not remain static," he said.
The amount to be paid will be linked
to current salaries.
On Monday, Maphosa explained that in terms of section 38
(3) of the Defence
(Regular Force) (officers) regulations of 1988, as
amended, a member of the
Defence Forces who is on active service outside the
country's borders cannot
go on leave. The soldiers are required to accrue
leave days for which they
are paid on returning home.
"All the ZDF
members
serving then were not permitted to go on leave during the
DRC
campaign, which means that the entire force will be paid cash in lieu of
leave for the period of Operation Sovereign Legitimacy," Maphosa said,
referring to the campaign's code name.
"Each ZDF member will be paid
according to his/her rank. It therefore, is
not possible to give you quickly
the details of the money to be paid to each
member because of the magnitude
of the numbers involved and the varied
nature of their ranks."
On August
2, 1998, the army deployed 20 000 troops to
the DRC, half of the army
at
the time, to defend the regime
of slain Congolese leader Laurent Kabila
against a rebel incursion backed by
Uganda and Rwanda.
FinGaz
Staff
Reporter
SOUTH African President Thabo Mbeki has revealed that regional
leaders
attending last week's Southern African Development Community (SADC)
summit
expressed alarm over the Zimbabwean government's torturing of its
opponents,
despite Harare's claims that not a single country faulted its
actions.
In an interview with the Financial Times at the weekend, Mbeki
said SADC
leaders had "openly" expressed concern over the beatings to
President
Mugabe.
"The region believes there are political problems (in
Zimbabwe) and, in the
course of the meeting, people said quite openly that
they are very disturbed
to see these pictures of people beaten up," Mbeki
said.
SADC leaders, as expected, resisted Western pressure to publicly
criticise
the Zimbabwean government, whose recent acts of brutality have
sparked
worldwide condemnation.
Zimbabwe has predictably treated the
outcome of the SADC summit as a
diplomatic victory over its critics.
Last
Friday, President Mugabe told supporters, as he celebrated clinching a
fresh
mandate from his party to seek re-election next year, that he had
openly
told heads ostate that opposition leader Morgan Tsvangirai had indeed
been
"thrashed", and that none of the SADC leaders had challenged his
government's actions.
He said: "Not one SADC country can criticise us. We
have solidarity and
fully support one another."
But according to Mbeki,
the beatings of opponents were a "manifestation" of
deeper problems, such as
the perception that elections were not free and
fair.
He said discussions
and the summit's outcome had been "limited" by a meeting
of the ZANU PF
central committee, which was to be held only a day later.
Not knowing the
outcome of that meeting, said Mbeki, "was somewhat of a
limitation, because
if the summit knew the decision, (which) was then taken
on Friday that the
election was next year for both, (the summit) would have
been more
specific."
Mbeki said his biggest task in Zimbabwe would be to ensure that
the next
elections are "genuinely free and fair".
Meanwhile, Jakaya
Kikwete, the Tanzanian president, has expressed optimism
that the decisions
taken on Zimbabwe in his country last week will lead to a
breakthrough by
next year.
Speaking ahead of the bilateral economic commission tomorrow,
Kikwete
admitted there are problems in Zimbabwe.
With President Mbeki as
facilitator, Kikwete believes a deal can be struck
in the coming
months.
Kikwete, told reporters: ". There are problems but I'm seeing the
Zimbabwean
problems as only a matter of time, it's not going to last
forever.
(President) Mbeki arrives later tonight, this time to talk
bilateral trade
and investment. The trade between us is still too low, but I
believe we
could do a lot more. South Africa is a huge market. If Tanzania
had the
goods and services to trade, there's a market to be utilised, but
the most
important thing is to increase investments on the Tanzanian side."
FinGaz
Staff
Reporter
BEITBRIDGE Rural District Council has put a $6 billion price tag
on nine
acres of land where the National Social Security Authority (NSSA)
plans to
build a 100-bed three star hotel ahead of the 2010 FIFA World Cup
raising
fears that its appetite for cash might scuttle potential investment
into the
border town.
After taking unnecessarily long to produce a
valuation report, the first
step in a series of processes needed to get the
project started, the
Beitbridge council finally handed the report to NSSA
last week.
Officials at the pay-as-you-go pension scheme were adamant this
week that
the price tag, which equates to nearly $160 000 per square metre
is
excessive given that council is selling state-land to an authority funded
by
the taxpayer. In any case, they say, some of the prime land in the
capital
is fetching nearly the same price if not much less.
Albert
Mbedzi, the chief executive officer of the council, could not be
reached for
comment at the time of going to print as he was said to be
attending a
workshop.
NSSA was expected to commence construction of the project by June
to
capitalise on the influx of tourists during the 2010 World Cup with
December
as the completion month.
The 2010 World Cup will bring about R17
billion into South Africa with half
of the tens of thousands of jobs created
as a result being permanent.
The Rainbow Tourism Group (RTG) has already
signed a Memorandum of
Understand with the cash-rich NSSA to manage the
hotel and has secured a
US$2 million loan from the PTA Bank to finance
acquisitions at the facility.
NSSA acting general manager Amod Takawira
confirmed receiving the valuation
report when contacted for comment this
week.
"We have dispatched our valuators to look at the property. We shall
proceed
with the project immediately if the figures correspond with ours but
if they
(figures) are well beyond ours, then we may have to negotiate with
the
Beitbridge council," he said.
Hoteliers said the hotel should be
operational at least one year before the
continent's largest sporting
extravaganza to give the Zimbabwe Stock
Exchange-listed RTG ample time to
market the facility.
"Once again, bureaucratic bungling could prove to be our
biggest undoing.
This project is of immense value to the nation and one
cannot figure out why
it should take over two months to complete a valuation
report," said a
source. "The delay will have a snowball effect on the entire
project since
costs are continually going up," added the source.
Takawira
was however, upbeat that NSSA, which is yet to draw up a budget for
the
hotel, would be able to complete the project in time for the 2010 World
Cup.
"We are going to start low, may be 30 to 40 beds under phase one,"
he said.
"We might start before the end of the year," he
added.
Beitbridge is the country's busiest entry point. Zimsun Leisure, the
country's
largest hotel group, is already present in Beitbridge via its
Holiday Inn
brand.
FinGaz
Staff Reporter
ZESA Holdings is
paying between US$7million and US$12million every month to
regional power
utilities for the supply of electricity to Zimbabwe.
Ben Rafemoyo, the
ZESA acting chief executive officer said the money was
mostly being paid to
Mozambique's Hydro Cahora-Bassa (HCB) and Electricity
De Mozambique (EdM),
two of the country's biggest power suppliers.
"As a utility, we have had to
import about 35 percent of our electricity
from neighbouring countries who
are part of the Southern African Power Pool.
We have entered into
partnerships with HCB and EdM and I can safely say that
we have so far
worked well with them.
"For the 35 percent that we are importing, we are
paying in the range of
about US$7 million and US$12 million on a monthly
basis to supplement the
electricity that we generate here in Zimbabwe," said
Rafemoyo.
He however, revealed that the cash-strapped parastatal depends
heavily on
the central bank for its foreign currency requirements.
"We
are indeed grateful to the Reserve Bank for its support, although at
times
we have been forced to settle our bills a bit late due to the
unavailability
of foreign currency."
FinGaz
Njabulo Ncube Chief Political
Reporter
PANIC has set in amongst ZANU PF and the Movement for Democratic
Change
(MDC) Members of Parliament (MP) who now fear that the curtailment of
their
terms by two years could rob them of their seats in next year's
polls.
At last week's ZANU PF central committee meeting held in the
capital,
legislators alarmed by the synchronisation of the presidential,
parliamentary and council elections unsuccessfully tried to convince their
leadership to circumvent primary elections and confirm them as automatic
candidates.
Parliamentary sources said a number of MDC legislators were
also quacking in
their boots fearing the dreaded primary elections that
often come with a lot
of surprises and their huge cost implications on their
pockets. While
political parties receive government funding, MPs supplement
the meagre
resources allocated for this purposes from their own
income.
MDC officials yesterday said it was too early to comment on the issue
in the
absence of a new people-driven constitution. "We can't talk of
candidates
now when certain fundamental issues have not been addressed,"
Nelson
Chamisa, the MDC spokesman for the Morgan Tsvangirai-led faction
said.
Both MDC factions have hinted of an election boycott unless the
electoral
playing field is level before 2008.
Ruling party insiders who
attended last week's central committee meeting
said that some of the
candidates openly asked President Robert Mugabe, who
is the party's first
secretary, to confirm them for the polls, but their
request was turned
down.
President Mugabe reportedly insisted that all aspiring candidates be
subjected to primaries.
"There is a general fear among MPs that some of
them, who have neglected
their constituencies, might actually not retain the
right to represent the
party in next year's elections as they are bound to
lose in the primaries,"
said one central committee member.
Another
central committee member, elected to parliament in 2005, said it
would be
"unfair" if he were to lose to a "Mafikizolo" (a
Johnny-come-lately) when he
still had two years left on his term. He said
MPs wanted primaries scrapped
as a trade-off for supporting a reduction of
their current terms.
"What
these changes mean is that our current terms will be cut by two years,
greatly disadvantaging us. So what we want is a situation whereby we are
given preferential treatment."
ZANU PF commissar Elliot Manyika refused
to comment on the matter.
Manyika's failure to comment comes after President
Mugabe, according to
reliable reports, expressed anger over the alleged
leaking of details of
politburo and central committee discussions to The
Financial Gazette. This
was after this paper published details of last
Wednesday's politburo
meeting.
Meanwhile, the High Court yesterday
ordered police to return computers and
other property they seized last
Wednesday when they raided MDC offices in
Harare.
The raid, whose purpose
the police said was to flush out the alleged
perpetrators of petrol
bombings, resulted in the arrest of 10 activists and
Morgan Tsvangirai's
brief detention.
MDC lawyer Chris Mhike said yesterday that High Court judge
Lawrence Kamocha
granted an order for the return of the property.
"They
(police) were ordered to return all 11 computers, two laptops and a
digital
camera as well as files," he said.
FinGaz
Christella Langton Staff
Reporter
ZIMBABWE'S economic problems could soon earn its citizens
notoriety for body
odour, according to a survey on consumer
trends.
The Zimbabwe
All Media Products Survey (Zamps) says
Zimbabweans are foregoing personal
care products, such as soap and
toothpaste, as they focus on paying for
basic foodstuffs.
The use of
previously standard personal care products such as toilet soap,
deodorants,
lotions and dental products is in steep decline, according to
Zamps.
Deodorant usage declined to 19 percent in the last quarter of 2006
from 37
percent in the third quarter of the same year, while the use of soap
plummeted to 29 percent from 56 percent.
Only the use of petroleum
jellies increased from 76 percent to 77 percent.
Usage of toilet paper
dropped from 62 percent to 29 percent over the last
quarter as people resort
to using newspapers and used exercise books, the
survey noted.
FinGaz
Clemence
Manyukwe Staff Reporter
THE High Court has ordered Defence Minister
Sydney Sekeramayi to pay $4
million as compensation to a member of the
opposition Movement for
Democratic Change (MDC) for injuries sustained in
2003 after being assaulted
by soldiers.
Justice Charles Hungwe
delivered this judgment last week, in a case in which
the plaintiff, Eugenia
Teera of Glen View, originally asked for $7 million
in damages.
Teera
claimed she was attacked in June 2003 during the MDC's failed "final
push"
demonstrations that were meant to push for leadership change in
Zimbabwe.
In terms of the State Liabilities Act, Sekeramayi is to pay on
behalf of the
soldiers, whose actions the judge said had inflicted "pain,
suffering and
contumelia" on the opposition member.
Sekeramayi was
represented by Ernest Jena of the Civil Division of the
Attorney General's
Office. Human rights lawyer Harrison Nkomo, himself a
recent victim of
police assault, represented Teera.
Justice Hungwe's ruling sets a precedent
for a growing number of victims of
beatings by state security agents.
Recently, police shot dead two
protestors, while 50 opposition leaders were
assaulted in police custody.
Court papers in the Teera case indicate that the
soldiers assaulted the Glen
View resident because she did not know the
whereabouts of Paul Madzore, the
constituency Member of Parliament.
"Our
client advises that on the 4th of June 2003, at or about at 0200 hrs,
at
house No 293 23rd Crescent, Glen View 1, Harare, certain members of the
Zimbabwe national Army arrived at her house and demanded to see one Paul
Madzore. Our client advised them that she did not know his whereabouts," the
papers said.
"The soldiers then commenced assaulting our client using
batons, booted feet
and clenched fists. The names and ranks and other fuller
details of the
soldiers are unknown to our client."
Teera sustained
multiple injuries, including a sprained left arm and bodily
bruises.
"We
are further advised that
the perpetrators of this act of violence were acting
during the course and
scope of their employment with your ministry," Teera's
lawyers said.
FinGaz
Chris MuronziStaff Reporter
ZIMBABWE
is headed for major power cuts at the weekend when Zesa Holdings
shuts down
two of its main power stations to allow maintenance work at
Kariba.
Zesa says the shutdown has been slated for the weekend when
demand is
generally low.
"Zesa Holdings would like to inform its valued
customers that the two power
stations at Kariba Dam i.e. Kariba South Bank
(Zimbabwe) and Kariba North
Bank (Zambia) are scheduled to be shut down on
Sunday April the 8th to allow
international consultants engaged by the
Zambezi River Authority to carry
out inspection of the downstream side of
the dam wall (downstream toe and
concrete apron). The Zambezi River
Authority is responsible for the
operation and maintenance of the Kariba Dam
Complex," Zesa said in
statement.
"On the Zimbabwean side, this shutdown
implies that power supply to the
country will be curtailed by up to 700MW
(Kariba Power Station's generating
capacity). During this period, load
shedding will be carried out in order to
maintain a balance between supply
and demand," Zesa said.
The company, which has resorted to cutting power
supplies owing to foreign
currency shortages, appealed to customers to
voluntarily reduce power
consumption by 50 percent.
The shutdown will
also cut supplies by 600MW to Zambia, according to that
country's power
utility, Zesco.
Zimbabwe imports 60 percent of its power from Eskom in South
Africa, Cahora
Bassa in Mozambique and SNEL in the Democratic Republic of
the Congo.
Reduced power supplies from Cahora Bassa and breakdowns at SNEL
have
contributed to worsening power cuts in Zimbabwe.
FinGaz
Kumbirai
Mafunda Senior Business Reporter
THE harvesting of tobacco from dryland
farming areas has been delayed
because of a shortage of farm labourers and
this could affect the quality of
the crop, growers said this
week.
Tobacco is one of the country's largest foreign currency earners in
the
country.
Zimbabwe is this year set to make a modest rebound in
tobacco production to
70 million kilogrammes after suffering its worst
decline in 2006 to 55.5
million kg, its tiniest crop since
independence.
But the anticipated recovery in tobacco production, which has
been on the
downside in the last six years, could be jeopardised by a
deepening labour
shortage caused mainly by the gold and diamond rush and
informal market
dealers.
Lovegot Tendengu, the executive director of the
Farmers Development Trust
(FDT), an organisation which supports smallholder
tobacco farmers, said the
serious shortage of farm workers is crippling
harvesting operations in the
country's three main tobacco growing
regions.
"There will be no deliveries of tobacco because we are still
reaping. We
haven't started reaping because there is no labour. There is a
shortage of
labour because there are now too many farmers. The labour market
has not
expanded because gold and diamond mining pays more. Most people
prefer
mining and that has deprived farmers of labour," said
Tendengu.
Farmers say crops are staying too long in the fields and delays in
harvesting would ruin them.
Growers' associations say a perennial
conflict between farm labourers and
employers has forced an ever-increasing
number of workers to head for
neighbouring countries to look for alternative
employment.
According to the General Agriculture Plantation Workers Union of
Zimbabwe
the least paid worker in the agricultural sector earns around $16
000 per
month, which is not enough to cover basics.
The Consumer Council
of Zimbabwe says a family of six currently needs about
$650 000 to take care
of its monthly basic needs, in a country where
inflation recently galloped
past 1 700 percent.
Apart from the acute farm workers' shortage, growers are
also battling with
the critical shortage of raw materials such as wrapping
paper, hessian
sacks, diesel to transport the crop and coal to cure their
crop.
"How can we ship tobacco for auctioning when it is not wrapped? Even if
we
were to finish grading there is no fuel in areas like Mutare. We would
like
a revolutionary approach to tobacco marketing like they do in Uganda
where
merchants buy from the growing areas. The situation needs to change,"
Tendengu said.
Zimbabwe is experiencing fuel shortages, as a result of
lack of foreign
currency to import the commodity while the country's main
coal miner Hwange
Colliery Company is battling to supply adequate coal to
tobacco farmers and
industrialists.
Agricultural production in the
country collapsed six years ago when veterans
of the 1970's liberation war,
with the tacit backing of President Robert
Mugabe, began driving off white
farmers from their properties in a
controversial campaign the octogenarian
leader said was necessary to correct
a historical injustice in land
allocation that favoured whites. Since then
the tobacco yield, which used to
be around 232 million kg has declined to
about 55 million kg.
FinGaz
Kumbirai Mafunda Kumbirai
Mafunda Business Reporte
INDUSTRY, reeling from an eight-year-old
economic crisis, is stepping up its
challenge to price controls, which have
precipitated the collapse of many
companies in recent
months.
This comes amid industry fears of new and stricter controls
ahead of
elections next year.
As the country's economic crisis reaches
catastrophic levels, manufacturers
this week renewed the fight against price
controls, which they charge are
pushing them into bankruptcy.
Bakers led
the growing voice of disapproval by writing to Industry and
International
Trade Permanent Secretary Christian Katsande, saying the
scrapping of price
controls would enable them to operate viably, increase
capacity utilisation,
which has plunged to less than 40 percent, and would
create more jobs both
directly to their industry and in downstream
industries.
"The National
Bakers Association (NBA) views the removal of price controls
on bread as a
critical catalyst to the enhancement of viability to the
industry," read
part of the letter written by NBA acting chairman Vincent
Mangoma.
Government, resistant to free-market principles, imposed price
controls in
2001 to suppress a recurrence of the violent food riots of 1998.
Since then,
manufacturers have unsuccessfully fought against the
much-maligned controls.
The NBA says because of the serious viability
problems dogging the sector,
more than 400 bakeries that had sprung up in
major cities and towns have
closed shop since 1998.
Bakers say the
surviving bakeries, which are struggling to replace ageing
plant and
equipment on their shoestring budgets, might also go under unless
the
government lifts the lid on prices and improves fuel and wheat
supplies.
Confederation of Zimbabwe Industries (CZI) president Callisto
Jokonya
weighed in, saying price controls were damaging industry.
"As the
private sector, we don't want them (price controls). They kill
initiative,"
Jokonya said.
Bakers also contend that the removal of price controls would
improve the
quality of products, which is currently compromised, and at the
same time
release civil servants to concentrate on other more productive
work instead
of managing bakers.
Government, whose communist-style and
populist policy interventions
triggered the current economic crisis, has
stuck to price controls on bread
and a few other basic commodities such as
maize meal to make them
"affordable" to restive consumers.
Government has
always suspected an alliance between industry and opposition
political
parties, accusing them of raising prices to turn emotions against
government.
FinGaz
Comment
ON Friday
Zimbabwe woke up to disappointing news: After two days of
"intense"
closed-door discussions, Southern African Development Community
(SADC)
leaders emerged from their deliberations in Dar-es-Salaam, Tanzania,
convened at the taxpayer's expense, looking rather exhausted only to
announce what could pass for a horribly bad joke.
As it turned out, it
was all hot air. Nothing fruitful came out of the
gathering, giving credence
to the notion that the 14-nation SADC bloc lacks
the teeth to rein in errant
member-states.
It had been hoped before the much hyped "extraordinary summit"
that at long
last SADC would break with its long tradition of muted
diplomacy and move to
adopt a firmer position that could help quell the
tricky security/political
situation hogging the limelight in Zimbabwe in
particular and the Democratic
Republic of the Congo where renewed bloodshed
broke out recently.
To the contrary, the SADC heads of state conspired to dim
the glimmer of
hope that had been built around the special summit by doing
the most
outrageous of things: throwing their full weight behind Thabo Mbeki
as their
preferred broker on the Zimbabwean crisis.
In their eyes, the
South African head of state, who is seeing out his last
term of office,
could use his clout as leader of Africa's largest economy to
nudge the
tenaciously unwilling ruling ZANU PF and the main opposition party
back to
the negotiating table to hammer out a political settlement that
would defuse
the ticking time bomb that looks certain to explode in their
faces. What a
damp squib!
While we don't doubt Mbeki's credentials, it doesn't appear he
can do much
to save the situation, faulted on Zimbabwe's archaic
constitution that has
been tinkered with 17 times and issues of legitimacy
raised by the MDC after
previous elections, among other things.
While MDC
leader Morgan Tsvangirai has kept his faith in Mbeki, we don't.
Unless it is
about allowing President Robert Mugabe's government to buy more
time, SADC
and its emissary on the Zimbabwe crisis are barking up the wrong
tree by
insisting on the lifting of targeted sanctions and pressing Britain
to
honour its colonial obligations on land.
SADC needs to properly identify
Zimbabwe's problem: It is about governance.
Mbeki has just missed a golden
opportunity to walk his colleagues through
his past experiences with Harare
as the basis for rallying them to act
forcefully on their wayward neighbour
whose ducking and diving at attempts
to engage the divided MDC and the
consequent economic ruin now loom large
among threats to South Africa's
hopes of hosting the 2010 World Cup.
For want of a better word, Mbeki's
previous attempts to thaw frosty
relations between the MDC and ZANU PF have
been a monumental failure no
matter how hard Pretoria may try to convince
the world to think otherwise.
Perhaps his face-saver has been that by
refusing to talk openly about his
mediation since 2002, Mbeki has denied
critics the yardstick against which
his performance can be measured. Be that
as it may, rising tensions,
evidenced by recent political skirmishes that
amplified the effects of the
full-blown political crisis taking its toll on
the tottering Zimbabwean
economy does not augur well for Mbeki's prospects
for success. His only
saving grace could be that he is not the only one to
fail on Harare.
Olusegun Obasanjo, leader of Africa's most populous state,
once reassured
the world that Harare was amenable to reason only to throw in
the towel amid
accusations of "wicked intentions" after he suggested the
lifting of
Zimbabwe's suspension from the Commonwealth. Harare eventually
withdrew her
membership from that body.
Then came the African Union whose
similar attempts to break the costly
political impasse between ZANU PF and
the MDC, this time using Joaquim
Chissano, also failed. Before going very
far, the former Mozambican
president was told straight to his face "there is
no need for such talks."
Kofi Annan, the former United Nations
secretary-general was also led down
the garden path. To this day, he must be
ruing abandoning his own
intervention plan involving a trade-off between an
aid package and President
Mugabe's exit timetable in favour of mediation by
Banjamin Mkapa. As we now
understand it, President Mugabe has asked Mkapa
"to leave things as they
are".
With ZANU PF endorsing President Mugabe's
candidature for the 2008 polls
last Friday, nothing can incentivise the
revolutionary party to come to the
negotiating table.
In light of the
ZANU PF central committee decision, the opposition should
brace for a tirade
of insults about their limitations, their lack of Cabinet
material and their
lack of patriotism.
If the opposition does not insist on free and fair
elections and
transparency in the delimitation process, ZANU PF will
bulldoze its way to
secure majority seats in the expanded House of Assembly
to give President
Mugabe a pliant electoral college that would enable him to
manage his
succession.
Without labouring the point, a decade of putting
up with chronic food
shortages, daily price hikes and repressive laws
invoked by the government
to suppress criticism of its policies and public
debate, is long enough to
suck out the little resilience and patience that
remain.
The intricacies of the social
contract
EDITOR - The crux of the latest attempt at the
recovery of the economy is
the introduction of the social contract. There is
much to learn about the
intricacies of social contracts and the economic
historical context within
which they have existed.
In the 1920's German
trade unions were destroyed and wage controls were
introduced. There were
limits to imports of consumer goods and a
considerable focus placed on
producing export goods. Currency controls only
led to the overvaluation of
the German currency. Selective nationalisation
resulted for those industries
that failed to comply with the social
contract. Full employment was achieved
in the 1930's but as a result of a
fall in real wages.
The main driving
force toward achieving full employment was the introduction
of major public
work schemes and government initiated projects creating
employment. This was
also a feature in the case of the United States under
Roosevelt's New Deal,
which mainly constituted the use of government to
stabilise and regulate the
economy.
Italy under Mussolini introduced tighter economic controls as part
of their
economic recovery programme. New Zealand in its economic recession
initiated
a cut in public sector wages; and again large government projects
were
introduced. This however, is not to say that the above mentioned
measures
are what the Zimbabwean economy needs. The observation of a lot of
the
population is that too much emphasis is based on theoretical assumption
and
historical basis for today's problems to be looked at with a practical
solution as a goal.
With this in mind the following is deduced. The
social contract that the
Reserve Bank has proposed for Zimbabwe includes a
freeze on prices. This is
meant to have the effect of stopping the rising
inflation. The first problem
here is that the social contract is based on
the assumption of goodwill. The
combination of the factors of production is
purely for it to ultimately
result in reward, which is quantified in
profit.
In a nutshell as far as business is concerned, 'if something doesn't
make
dollars then it doesn't make sense', excuse the pun. Profit making is
seldom
based on the goodwill of business. This only occurs if goodwill
results in
increased profits. What is clear however is that it takes only
one element
of the parties involved in the contract to fail in their
contribution and
the effect is 'knock on'.
Industry only adapts to the
changes in any economy. As firms compete the
result is lower prices for
consumers. If a monopoly exists then prices tend
to remain high as they are
dictated by limited supply. If the environment is
inflationary then firms
simply pass on to the consumer the increases in the
price of inputs.
The
flaw and one of the reasons the price freeze conditions of the social
contract may have limited effect is the clause that exempts producers, who
have imported inputs in the production of their goods. Seeing that we import
all the fuel in this country, which is a factor in the cost of production,
this arguably makes us all exempt to the bindings of the social contract in
real terms. If official prices are not allowed to rise along with the true
cost of production, this simply means the official availability of goods
will decline accordingly. Commodities will be available but only on the
parallel market with their prices reflecting the true cost of
production.
This is reminiscent of the petrol situation, which has resulted
in the
acceptance that it's a matter of supply being subject to price. Below
cost
price simply means no supply. The price of fuel being allowed to
fluctuate
with inflation has meant that it's available but expensive, as
opposed to
being cheap and not available at all. Most recently have been
reports of
some unions not consenting to the social contract, citing the
freeze on
wages despite increasing prices, as a major cause of concern. This
volte
face on fuel pricing if anything helps to confirm the observation that
the
majority of the economic policies formulated are not addressing the key
issues traditionally associated with runaway inflation.
All the above
mentioned examples have key elements in common. The role of
government is
pivotal due to its ability to be the authority over the other
partners in
the contract. The elements of the contract must fully take into
account the
realistic positions and actions of all partners prior to,
during, and after
its implementation. Cutting the supply of money is a
method of attempting to
reduce inflation. This is traditionally easiest by
either raising interest
rates to discourage borrowing to spend, or
increasing taxes in a bid to
reduce aggregate demand. The social contracts
assessed have all included
large scale projects undertaken by government in
a bid to stimulate the
economy. Allowing the currency to devalue to the
market rate has the
following positive consequences. 1) Zimbabwean exports
become cheaper to
foreign consumers, therefore stimulating demand. 2)
Foreigners' money
becomes able to buy them more when they visit Zimbabwe,
making it a more
attractive tourist destination. 3) Imports become more
expensive, making the
market conditions more favourable for local producers.
4) A fall of the
currency to the real market rate makes the black market
obsolete in that
foreign currency can be obtained at the revised market rate
and within the
bounds of the law.
Already the trade unions have objected to wage freezes in
the face of rising
inflation, an obvious reaction a social contract should
have been equipped
to address. This makes cutting money supply, and
facilitating the increase
in economic output even more important. What is
evident is the shortage of
funds available to the government to satisfy the
requirements of such basics
as healthcare, education and social
welfare.
In addition to the above mentioned measures the government owns a
variety of
enterprises in the form of nationalised industries. The sale of
these, with
predetermined conditions designed to achieve maximum benefit has
in many
countries facilitated considerable economic turnaround. The effect
of
privatisation is that the large government owned corporations begin to be
operated like profit orientated businesses that are subject to competition,
therefore inducing efficient management and quality of product as a result.
Taking all this into consideration, it becomes clear that the government
should fully utilise instruments such as the central bank's ability to
determine money supply, set currency exchange and interest
rates.
Keith Chiponda
Bulawayo
---------
Ghost of defeat haunts
Harvest House
EDITOR - It seems that the ghost of defeat is
already stalking the corridors
of Harvest House when Morgan Tsvangirai
"vows" to boycott the elections,
which he fears will not be free and fair.
Elections are uncertain in their
outcome, and high expectations of victory
can be disappointing - without any
fiddling in the counting.
In Zimbabwe,
where and when will the absolutely certain result which one
seeks come from?
If the MDC is defeated again - as certainly they will -
what basis is there
to suppose that a completely new electoral system-and
personnel will be
found to guarantee them the result which they want? And
what if they
(because the electoral system remains the same) win unfairly?
Whose turn
should it be to cry foul play?.Should the winners ( who would be
the MDC in
this instance) never question the justification of their success
under a
system that cannot be trusted?
Mordecai Mutiswa Betera
United
Kingdom
----------
It does not have to be that
lonely
EDITOR - One man is so intelligent, and so experienced
that he is way ahead
of the rest of SADC. He is far ahead of the next
echelon within his own
party, he is far ahead even of the opposition. He can
outmanoeuvre all of
them through highly efficient and effective
diplomacy.
But through channelling his prodigious talent into outmanoeuvring
his
detractrors and potential detractors, he is failing in one thing: his
energies are supposed to be channelled towards the development and
advancement of all the people of Zimbabwe. They are who he is supposed to
serve.
The fatal flaw in being exceptionally good at what you do lies in
the
ability to outmanouevre and race so far ahead that you are all alone. He
is
so far ahead that he has left us all behind.
In true train wreck
fashion, the driver and his carriage are no longer
connected to the rest of
the train. He is driving well, his carriage is safe
and stable and moving
fast. Please, slow down. Connect with the people. It
doesn't have to be that
lonely.
Criss Cross
Harare
------------
Mbeki must help
us
EDITOR - In many years of our political and socio-economic
discussions, I
have heard quite a number of people, particularly those from
South Africa
advising us that the problems of misgovernance that we face in
our country
can be solved by us Zimbabweans alone, and no one else.
A
similar view has been recently expressed by your correspondent, G
Armstrong
who wrote from Ireland (The Financial Gazette March 28). Armstrong
reckons
we are not doing or saying anything at all. Are these people not
being mean?
Clearly, they do not understand that as a nation, we have been
agonising for
a very long time. We began raising our concerns and expressed
our disquiet
since the early eighties.
This was made clear by our overwhelming rejection
of the draft constitution
on February 12 2000. Since then, our agony has
been aggravated by a myriad
factors. The creation of repressive laws such as
POSA, AIPPA, and the
Broadcasting Services Act boded ill for our future.
Further, we have been
subjected to consistent state orchestrated violence
which has, hitherto,
been visited upon us and the defenceless women and
children.
Violence and intimidation are commonplace in our country, despite
the extent
of our outcry. South Africans are aware of this because they have
been
observers of our elections since March of 1980.
I owe Morgan
Tsvangirai and his party profound respect and gratitude for his
bravery, but
he cannot go it alone. Neither can his supporters or us as
ordinary
citizens. We need the support of our comrades, from within and
around the
SADC region.
South Africa and other countries in our neighbourhood insist
that they are
our comrades, but why are they allowing us to sink deeper into
the current
political and socio-economic crisis? Clearly, we are not asking
for
marriage, but we are simply saying quiet diplomacy does not work.
Our
friends and/or genuine critics need to be told that our struggle is
against
those who wield not only power, but the entire state machinery. The
opposition does not control the army, not least the police. So they are like
democrats in a hostage situation. This manifested itself in recent attacks
on the leaders of the opposition, supporters and their sympathisers. The
situation is not so dissimilar to what happened during the Chimurenga war,
against Ian Douglas Smith. Clearly, we can learn from our colonial past. In
order to dislodge the Smith regime, the nationalist fighters did not go it
alone; they had to get support, both in cash and kind from their comrades in
the then Frontline states. Thabo Mbeki must have some sympathy for us and
depart from the antiquated role of big brother and clarify his position to
us and to the world.
Innocent Kadungure
Ottawa, Canada