ZIMBABWE - Zimbabweans find it nearly impossible to
stand up against President Robert Mugabe's oppression as they have lost all
sense of having any rights.
This is according to Zimbabwe opposition
MP Roy Bennett who addressed the Johannesburg Press Club.
"It is very
difficult to stand up as people and fight it when there is no assistance,"
he said.
Bennett was en route home from Britain where he spent eight
weeks recovering from eight months in Zimbabwean prisons.
He said
people in Zimbabwe lived in fear of victimisation for having anything to do
with opposition politics.
"I witnessed treatment of guards and prisoners
by their own government. If they were suspected of having opposition links
or showing sympathy, they would be victimised.
"Guards would be
doused with water, have to roll on the floor, carry logs and roll tractor
tyres in front of other guards.
He described the system in Zimbabwe as
"communist" and "dehumanising".
Beatings of prisoners were a daily
occurrence and poverty in the country made it near impossible for the vast
majority of prisoners to get what they most wanted - a visit from
outside.
He said that on his return to Zimbabwe he would work towards
helping people have access to visiting prisoners.
"The people I met
in prison represent a microcosm of the rest of the country and they deserve
a fair chance. Their average age was 25 years and all that they wanted one
day was a job." Most were there in the first place because petty theft was
their only survival.
Bennett was sentenced to a year by the country's
parliament for pushing justice minister Patrick Chinamasa to the floor,
after the minister accused Bennett's ancestors of being
thieves.
SA SHOULD not pay Harare's arrears to the International
Monetary Fund (IMF), says Roy Bennett, a former MP from the opposition
Movement for Democratic Change (MDC).
"No amount of money will
turn the economy around," Bennett told the Johannesburg Press Club
yesterday.
"It will carry on melting down," he said.
If SA had
stepped in five years ago, it could have altered the course of events in
Zimbabwe, but nothing could prevent a complete failure of the economy and
other systems, Bennett said.
Providing money now would only prop up
President Robert Mugabe and extend the suffering in a country that could be
on the verge of famine, he said.
A loan made sense only if the money
would assist people who were suffering, he said.
No announcement
has yet been made about a loan by SA to help Zimbabwe pay the $295m it owes
to the IMF, which it must do to prevent its membership being
terminated.
South African Reserve Bank governor Tito Mboweni this week
denied that any loan had been discussed.
Bennett was speaking
after a two-month stay in the UK that followed his release from prison in
June. He was sentenced to an eight-month term after shoving Justice Minister
Patrick Chinamasa to the floor in parliament.
After his release
Bennett charged that the MDC been hijacked by corrupt opportunists and was
not showing sufficient leadership in confronting the ruling Zanu
(PF).
"My personal
view is that the MDC must stop buying into Mugabe's agenda and start calling
the shots," he said yesterday.
"We need not attend parliament, nor
Zanu (PF) functions. We do not need to legitimise the
government."
Bennett, who is no longer an MP, said he
intended to take an active role in the MDC and would also form a committee
to help prisoners. With Sapa
Telecel battle hots up Dumisani Muleya THE battle
for the control of one Zimbabwe's three cellular telephony companies,
Telecel Zimbabwe, is heating up as government steps up efforts to oust
tycoon James Makamba from the firm.
Sources said the authorities were
determined to push out Makamaba, currently facing further allegations of
breaching the Foreign Exchange Control Act by trading on the black market.
He is due to appear in court on August 31.
The sources said the
Telecel issue was the subject of a cabinet debate on Tuesday. It was said
while most ministers felt it would be difficult to shut down the company on
legal grounds, others said it could be done. Sources said the
Attorney-General - an ex-officio member of cabinet - has been tasked to
investigate "legal" ways of dealing with the issue.
Sources said the
escalating campaign to seize Makamba's properties now epitomises a
coordinated effort to confiscate assets of entrepreneurs out favour of with
Zanu PF.
Businessmen who fled the country in terror as government
cracked the whip on companies accused of engagement in unethical deals have
forfeited their assets. Business magnate Mutumwa Mawere has had his mines
and other properties seized and nationalised.
Mawere has
condemned the seizures and nationalisation. He is currently fighting in the
courts to retain ownership and control of his confiscated
companies.
Makamba is a major shareholder in Telecel and its
non-executive chairman. Telecel is owned 60% by Telecel International and
40% by the Empowerment Corporation of Zimbabwe, a local business
consortium.
Telecel International is in turn 100% owned by Orascom
Telecom, an Egyptian conglomerate listed on the Cairo and London stock
exchanges.
Sources said there were "political, business, and
personal" issues at play in the Makamba saga. The personal "hot potato" was
said to have attracted the wrath of the political
authorities.
President Robert Mugabe's nephew, Leo Mugabe, was said
to be trying to muscle into Telecel to get more equity with the support of
Transport minister Chris Mushowe and the Post and Telecommunications
Regulatory Authority of Zimbabwe (Potraz).
Makamba was understood
to be trying to play close to Leo in the hope of getting political
protection.
But sources said Makamba -currently in Johannesburg,
South Africa - was under pressure to quit Telecel.
A Zimbabwe
Independent journalist bumped into Makamba at Rosebank and Sandton City in
Johannesburg last weekend. Makamba was first seen with a group of Zimbabwean
businessmen at Park Hyatt hotel in Rosebank and then at Michaelangelo hotel
in Sandton.
Sources said Mushowe and Potraz officials have held a
number of meetings on the Telecel issue since last year on ways to gain
control of the firm.
Mushowe and Potraz have gone to extent of writing to
Telecel International in Egypt, threatening to withdraw the licence unless
Makamba was removed. The Egyptians have so far resisted the
blackmail.
Sources said Mushowe and Potraz officials travelled to
Cairo in June in a bid to sort out the crisis. No solution was found and
hence authorities' renewed effort to allow its favoured investors to take
over or to close the company down.
Sources said Leo and his
business partners were closing in on Telecel but the problem was that
government wants a new shareholding structure without
Makamba.
The siege on Telecel last year in August forced Telecel
International CEO Jim Bailey to fly to Harare with his lawyers to meet
Potraz. After that meeting a compromise deal was struck which was to see 11%
of Telecel Zimbabwe shares offered to Leo and his Empowerment
Corporation.
Leo was said to have convened another meeting after
Bailey's trip where he allegedly claimed President Mugabe had issued a
directive that ownership of Telecel be restored to his IEG company and
indigenous empowerment lobby groups.
Makamba's shareholding in
Empowerment Corporation would be reduced from 98% to 24% and in Telecel from
37% to a mere 14%. Jane Mutasa, a Telecel director and shareholder, demanded
through her lawyers to see the President Mugabe's directives in writing but
they were never produced, sources said.
Leo said the crisis at
Telecel has been resolved. "The problems ended sometime this year. As far as
we are concerned, its all over. We no longer have any problem with Makamba,"
he said. Efforts to contact Mushowe were unsuccessful. His deputy Hubert
Nyanhongo said the minister was in Victoria Falls.
Makamba, who
last year spent six months in remand prison, has already lost Joy TV, which
was switched off air by authorities, Maryvale Farm in Mazowe, a plot along
Mutoko road, and his Blue Ridge Mazowe supermarket was closed on
Wednesday.
Makamba said he was removed from Maryvale Farm by three
employees in President Mugabe's Office. He said a war veteran named
Chingwena seized his 32-hectare plot at Poultry Farm which he bought for $14
million several years ago.
Makamba blamed state security agents
for closing his Blue Ridge Mazowe Supermaket which he valued at $9,5
billion.
"I think this is one of the failures of the human race:
unnecessary hatred," sad Makamba. "This is pure and simple naked hatred.
Zimbabweans know my track record, from being a radio presenter, to an
insurance broker, to a councillor, to a Zanu PF MP and provincial chairman
and businessman," Makamba said in an interview yesterday.
"I
worked for all the properties I have. People know my assets and God knows
they are mine. Even if they take them they will remain mine. What have I
done?"
Mugabe tightens control on ministries Godfrey
Marawanyika IN a desperate bid to stamp his authority in the running of the
economy and to further centralise power, President Mugabe is taking a
greater immediate role in the running of government business, with key
decisions having to come from his office.
Military and intelligence
personnel have assumed a larger presence in virtually all ministries to
monitor compliance with presidential directives.
The Office of the
President now embraces two state ministries of Policy Implementation and
Interactive Affairs. It also includes the Central Intelligence Organisation
and the Department of Planning.
The extended roles of the Office of
the President were spelt out last week in Finance minister Herbert Murerwa's
mid-term fiscal policy statement.
This, economic analysts say, will
add to red tape as decision-making gets more centralised.
The
Office of the President has taken over the role of approving foreign
currency allocation for imports of vehicles and other requirements by public
institutions "to reduce unnecessary forex outlays".
Mugabe's
office will now assume the responsibility of project monitoring together
with the Public Service Commission (PSC) and the Audit Inspectorate. The
team is currently visiting all provinces to check on progress on
projects.
The President's Office will also work with the
Auditor-General's office and the PSC to audit the public service which is
believed to be full of ghost workers. The audit will also probe government's
pensions bill which, according to Murerwa, has been experiencing "phenomenal
growth".
The office will also take measures to curb abuse of
government assets such as housing, phones, motor vehicles, domestic and
foreign travel and subsistence allowances.
The pairing of the
Office of the President and the Auditor-General's office, analysts say,
raises ethical concerns. The Auditor-General's role is to audit government
departments and parastatals, hence it should work
independently.
Murerwa's statement also says Mugabe's office will
consult with treasury and the State Procurement Board to expedite public
procurement. They will "review the whole public sector tendering system with
a view to making appropriate recommendations to cabinet, in order to address
the many challenges in the tendering process".
Economist, Dr
Daniel Ndlela, warned that the concentration of decision-making in Mugabe's
office would lead to red tape, consolidate political hegemony and
patronage.
"They are destroying the economic space for economic
actors," he said.
Blitz exposes flawed state welfare system Ray
Matikinye A GOVERNMENT slum clearance campaign launched in May has blown the
lid off a flawed state welfare programme often kept out of public scrutiny
until disaster strikes.
Operation Murambatsvina dre-dged up
weaknesses in state welfare programme to deal with the economic and social
dislocations triggered by the campaign that left an estimated 700 000 people
roofless and many more without sources of livelihood.
Squatter
camps that dotted the towns and cities countrywide illustrate the lack of
affordable housing for the urban poor.
The shortage of employment
opportunities in impoverished rural areas fed the rural-urban drift despite
government having acquired vast tracts of land that could be redistributed
for housing and farming.
Victims of the government blitz have
contrived methods to counter the ever-present spectre of official desire to
intrude on vendors' new trading places.
Elegantly dressed in what
could be her Sunday best, 19-year old Abibi Phiri saunters out of a bus
shelter with a bulging leather satchel slung on her shoulder. She could
easily pass for a traveller who has missed one of the regular buses plying
inter-city routes and trying to catch the next one.
Only when she
pulls out two plastic bottles of popular beverages or rattles a packet of
potato munchies from her bag does she momentarily blow her cover. Abibi is
one of the scores of confectionery and fruit vendors who have devised shrewd
tricks to avoid detection by police prowling bus termini between major
cities and towns to enforce anti-vending laws.
"Twenty each," Abibi
says quietly and making sure passengers can lip-read what she is
saying.
Constant harassment by municipal police since the
government's onslaught on informal traders as part of its Operation
Murambatsvina has compelled hawkers along major highways to invent smart
ways to camouflage their activities.
They either carry empty
suitcases or stuffed knapsacks to bus stations so as to pass off as
intending travellers. Others wear knee-length jackets from which they pull
various items that they tout in loud whispers to commuters.
"Don't
travel hungry or thirsty," is one of the popular sales lines often recited
by the vendors.
Women put on facial make-up and men rove around in
suave elegance competing for customers among travellers, cautiously aware
that they might be arrested.
Police used to haunt and harass any
sloppily dressed men and women in regular swoops at bus termini along the
highways until hawkers came up with novel ideas to avoid
arrest.
Police have been snapping on the heels of vendors, hawkers,
touts, the blind, beggars and streets kids who are constantly on the move to
avoid arrest. The blind no longer rattle begging bowls at street corners,
nor sing hymns along pavements to capture public attention and arouse their
benevolence.
Last week more than 300 people were arrested in the
capital's city centre for crimes ranging from vending, touting, loitering to
begging and gambling. City officials try to keep a tight rein on their
initial clean-up campaign's success in their bid to maintain the city
precincts pristine.
But all these efforts are coming undone as the
urban poor drift back into the CBD to eke out a
livelihood.
Finance minister Herbert Murerwa last week said
government had noted a widespread resurgence of rent-seeking trading and
parallel market activities in foreign currency and other basic commodities
that the operation has failed to suppress as people strive to eke out a
living.
But the campaign-driven poverty has jolted government to the
stark realities that its social safety nets like health insurance,
retirement pensions and welfare payments to cushion the elderly, the
orphaned and the disabled fall woefully short of the demands of an economic
environment characterised by hyper-inflation.
Murerwa has
realised the inadequacy of state social security by reviewing some benefits
provided for under the scheme. Although major reviews concern public
servants and the armed forces, a pension reform programme he proposed during
his mid-term fiscal policy last week concedes that the state welfare scheme
is outdated.
Government now wants to ensure sustainability of state
pension payments by converting to a defined contribution pension scheme to
be managed through a pension fund. It also intends to reduce employee
contributions to health insurance by 20% while limiting the number of
beneficiaries to four.
The new system will operate outside the
budget. It has defined benefits, unrelated to contributions and dependent on
the economy's capacity to sustain such expenditures.
"Experience
has demonstrated that such systems are unsustainable in the long-run,
especially as the number of workers supporting pensioners decline due to a
variety of reasons," Murerwa admitted.
Zimbabwe's economic meltdown
has thrown thousands out of formal jobs, shrinking the revenue base for
retirement and health insurance schemes.
Government's about-turn
regarding these poverty-alleviation innovations is illustrative of how
Zimbabwe's welfare system is sagging precariously under the weight of
widespread poverty.
Hell on earth at Hopley Estate Grace Kombora FOR
ageing Machisi Kapesi (76) whose wobbly legs are badly scarred and barely
covered with a dirty pair of trousers, sleeping in the dust at Hopley has
become hell on earth.
Hopelessness written all over his face, he does not
know where he will be in the next two years with the mental torture he has
suffered in the past 16 years.
He does not know what the future
holds for him as he has been displaced four times since he moved from
Mozambique to Zimbabwe 39 years ago.
Initially, he resided in Mbare
suburb whilst working at Louis Construction. Later he relocated to Porta
Farm where he was recently evicted under Operation Murambatsvina and
relocated to Caledonia transit camp. He has since been moved to Hopley
Estate south of Harare where he lives in a plastic shack.
"I am
tired of this life and wish I could disappear from the face of the earth.
Just disappear out of this world because I have had enough," Kapesi
said.
The victims of government's poorly executed clean-up have been
turned into nomads. Those who have not been allocated stands at Hopley are
set to be moved again.
"We were told to vacate this place this
week and go where we came from," said Kapesi.
The plastic shacks
they call home are no higher than dog kennels. The shacks are without form
and shape yet they are the homes of Hopley Estate residents whom government
said it was accommodating in decent houses when their shacks were destroyed
in May.
Some sleep in the open on the ground bathed in dust
everyday.
With their goods lying in the open, they do not foresee a
better future ahead of them.
The living conditions at Hopley are
atrocious as the residents rarely take a bath.
They do not have
proper places for bathing themselves.
Those who are conscious of
their cleanliness bath in Mukuvisi River or even in the open without their
dignity in mind.
"We even bath in the open because we do not have an
option," said a confident Morris Matutu.
Despite the temporary
toilets that were built by Unicef, Hopley is replete with human waste which
creates a bad odour at the camp.
The Zimbabwe Independent visited the
camp this week and witnessed young children relieving themselves in the open
not far from cooking fires.
"We fear an outbreak of diarrhoea at this
place," said Virginia Tselo.
Tselo, a pregnant woman with four
children, is finding the life at the camp bizarre. She says no living
creature deserves such terrible living.
"What crime have we committed
to the government that we are treated like this?" she added.
She
thought the government would allocate them proper housing after they were
evicted from Porta Farm.
Her children were deprived their right to
education. They now roam the camp aimlessly with little hope of returning to
school. The situation for them has been compounded by the sharp rise in
school fees.
Tselo's daughter who was set to write her final 'O'
Level examinations in October will not sit for the exams due to continuous
displacements.
To earn a little money Hopley farm residents are
resorting to selling tomatoes and vegetables in the transit camp and mending
shoes. This week, those who did not meet the criteria to be allocated stands
were contemplating where to go if the government carries out its
threat.
They cannot go back to Porta Farm which was demolished in
June.
If they resist eviction, residents say, government has threatened
to unleash the army and the police to force them out.
"Government
officials notified us that police and soldiers will beat us up if we do not
move," Kapesi said.
Hollow tales full of sound and fury Dumisani
Muleya THAT'S the week that was! After breaking the media scandal that the
state security agency, the Central Intelligence Organisation (CIO), had
taken over three private newspapers, there were angry reactions and
denials.
Our reports said the CIO had a buy-out at the Financial Gazette
and the Mirror group's two titles, the Daily Mirror and Sunday Mirror. For
about a week there were no denials. In fact, there has not been any official
denial except remarks by Ibbo Mandaza, editor-in-chief of the Mirror group,
and his Financial Gazette counterpart, Sunsleey Chamunorwa.
First
it was Mandaza who made denials in foreign radio stations in South Africa
and United States. He later made similar denials in the Daily Mirror on
Friday.
On Thursday last week Chamunorwa weighed in with an
opinion-editorial piece, which he tried to pass for a company
statement.
Then on Monday we had a cynical comment from former
Financial Gazette editor-in-chief Francis Mdlongwa.
On Tuesday
the Financial Gazette's board member Supa Mandiwanzira organised another
whitewash effort on Zimbabwe's state television in which he brought Mandaza
and Media and Information Commission chair Tafataona Mahoso.
It was a
dismal shot at obfuscation.
It was difficult to miss the fingerprints
of desperation in all these efforts. The denials by Chamunorwa and Mdlongwa
showed the anxiety of a cat on a hot tin roof.
Mandaza claimed he
was the "100% owner" of the Mirror group, but his company profile shows the
newspapers were since August 2003 owned by "various Zimbabwean business
people".
The political economy of the media in Zimbabwe would make it
difficult for Mandaza to run those papers alone, especially given their weak
advertising and poor sales. The papers have a weak economic base to survive
without an injection of huge funds, not just bank overdrafts but a massive
capital outlay.
Chamunorwa ducked key issues using diversionary
tactics. He failed to come up with a credible response on the main issue:
Who owns the Financial Gazette? The vague suggestion was that it was owned
by central bank governor Gideon Gono who in the past made it clear he was
not the owner.
Chamunorwa himself, when he was still Gono's
spokesperson at the CBZ, said Gono was not the owner. But he went all over
the place constructing a great smokescreen to cover up the scandal. He even
tried to clutch at the straw of tribalism but it did not work. Hence the
story won't go away.
Chamunorwa and Mdlongwa claimed they were not
contacted for comment.
To answer Chamunorwa first, we phoned Gono as the
supposed owner.
Mdlongwa's claim that he was not contacted for a comment
was not just misleading but malicious.
Ideally it would be better
not to react to Mdlongwa's false claims. However, given the gravity of his
allegations, it would be a dereliction of duty not to.
It was open
season for Mdlongwa to attack the Zimbabwe Independent and its sister paper,
the Mail & Guardian, via a long tirade - over 1 000 words - for
allegedly not contacting him. He was even abusive, claiming the papers used
"Gestapo-style activities to shut out the voices of those who are being
vilified".
It is not clear what Mdlongwa's problems with the two
papers are. But we would hate to think he is so small-minded as to reduce
his failed attempt to buy into the Financial Gazette or to become editor of
the Independent and the Mail & Guardian - which he wanted by the way -
to this level.
For Mdlongwa to insinuate that the Independent and the
Mail & Guardian are "the greatest threat to press freedom and democracy"
shows his malice knows no bounds.The truth is we tried last week and the
week before to get comment from him. It must be recorded that we sought to
get the truth about Mdlongwa's own side of the story way back in 2002 when
the saga started but he blocked us as he scrambled to cover
up.
Instead of giving us straight answers he resorted to antics like
claiming there was "no story" or it was "beerhall talk". We also contacted
him three months ago when we were still investigating the story but he was
hostile.
This week was a classic example of how unhelpful he can be.
We phoned him but instead of allowing a civilised conversation, he went
ballistic. We called his bluff and let him go.
He then sent an
e-mail to the Independent editor complaining that we were rude to him and we
should not communicate with him on any issue again. Why should we
communicate with someone who wants to suppress news under a sludge of angry
rhetoric?
It is surprising for him to turn around and pontificate
about ethical journalism when he sought to defeat the same thing by avoiding
constructive engagement, only to issue a malicious statement which, to
borrow Shakespeare's words, read like a "tale told by an idiot full of
sound
and fury signifying nothing!"
It is instructive that
Mdlongwa makes a big fuss about the whole story when he only had this to say
on the central issue: "Whether the Financial Gazette today is, as is
claimed, owned by Zimbabwe's secret service, I do not know because I have no
such facts and I have had no such evidence."
In other words, he is
angry that he was not contacted to say nothing! Is this what he meant by
getting "critical comment from me"?
While we respect his democratic
entitlement to indulge in mumbo jumbo, we expected from him an account told
with an insider's authority, not misdirected polemics.
Mdlongwa
had the temerity to sign himself a moral cheque at once open and blank to
accuse the newspapers of trying to rehabilitate people who allegedly
committed "crimes against humanity". He also claimed we had launched "a
coordinated campaign of disinformation".
We reject his preposterous
claims. We also dismiss his baseless allegations that the publisher of the
Independent and Mail & Guardian "found it necessary to mobilise
connected reporters in South Africa into picking up the Independent story so
as to give it 'wider and maximum' publicity in their own news organisations
in South Africa and abroad".
Mdlongwa insinuated we were "driven by a
blind pursuit of bigger media audiences and super-profits or other agendas"
and that this reduced "an otherwise noble profession into an instrument of
systematic harassment and torture of all who are unfortunate not to own a
media outlet of their own".
Mdlongwa tried to hold forth on his
pretensions of being the custodian of "accurate, impartial and balanced"
reporting. His professional record carries a moral hazard. Has he forgotten
stories he published as Financial Gazette editor such as the
"earth-shattering scoop" in 2002 which claimed President Robert Mugabe had
dug Al Qaeda-like bunkers at State House to hide if he lost the presidential
election?
Now where are the bunkers? Did Mdlongwa see them or he just
published an urban legend as news? Is that Mdlongwa's version of "accurate,
impartial, and balanced" reporting?
'Failure of talks a disaster for economy' Dumisani
Muleya/Conrad Dube THE collapse of the African Union (AU) initiative to
broker talks between Zanu PF and the MDC will stick a knife in the heart of
Zimbabwe's ailing economy, MDC leader, Morgan Tsvangirai, has
warned.
Tsvangirai said the failure of AU attempts to mediate in the
political impasse stemming from disputed election results would be
disastrous for Zimbabwe's haemorrhaging economy.
In an interview
with the Zimbabwe Independent this week, Tsvangirai said President Robert
Mugabe's rejection of AU envoy, former Mozambican president Joachim Chissano
as mediator, showed he had crossed the line of rational political
engagement.
"The AU mission was stillborn and has been aborted,"
Tsvangirai said. "For sometime President (Thabo) Mbeki (of South Africa) and
his Nigerian counterpart, President (Olusegun) Obasanjo have been searching
for a solution, but they have been frustrated by Mugabe. Most African
leaders now understand that the problem is not us, but
Mugabe."
Tsvangirai said Obasanjo's initiative was an attempt by
African leaders to deal with a long-running problem on their
doorstep.
"When I met President Obasanjo (in Abuja in June) he
suggested he was thinking of approaching Chissano to be the mediator but he
needed Mbeki's backing," Tsvangirai said.
"I didn't have problems
with that, knowing fully well that Chissano had established his democratic
credentials. He negotiated with Mozambique's opposition Renamo, handed over
power to his successor smoothly, and on that basis I endorsed
it."
He said Mugabe's close friendship with Chissano was also taken
into account. Chissano was Mugabe's best man at his wedding to Grace in
1996.
"President Mbeki agreed because he wants to be part of the
solution to the Zimbabwe crisis," he said. "We want Mbeki to be part of the
solution but he should realise that this issue is now beyond South Africa's
capacity. It is now a United Nations, an AU, a Sadc (Southern African
Development Community), in fact an international issue. We must engage
within that framework."
Tsvangirai said Mbeki was sticking to
"quiet diplomacy" because "he sees Mugabe as a man who is not easily
influenced by others".
"Mugabe is intransigent, defiant and
mistrustful," he said. "His rejection of Chissano's involvement is
consistent with his policy of shooting down other people's proposals without
an alternative."
What then is the way forward? "There will be no way
forward with regards to talks between the MDC and Zanu PF, but a continued
stalemate is not sustainable," Tsvangirai said. "The MDC can do without
talks, but Zanu PF cannot in the end do without talks. Zanu PF will destruct
if it remains on its current path."
Asked why the MDC seems
desperate for talks with a party which is not interested, Tsvangirai said:
"We are not begging for talks, but we realise that that's the only
alternative at the moment."
Tsvangirai said he was "committed to
democratic resistance to the Zanu PF dictatorship" and would not "act in an
irresponsible manner".
"Over the past five years we have tried
elections, court action, diplomacy, mass action and dialogue, but this
hasn't worked."
Has the MDC failed then? "No, we haven't failed. I
believe experience is the best teacher," he said. "There is need for new
strategies and tactics but we won't take people to the streets so that they
are killed by the military," he said.
Tsvangirai went further:
"Let's be realistic, if Zanu PF is prepared to beat up four women on a
protest in the streets, what more a group of people? What is needed is a
critical mass of people to confront this regime but it's easier said than
done."
Tsvangirai said the MDC, which he described as a
"post-liberation political formation", had done its best under difficult
conditions. "We have been constrained by resources, the environment,
publicity and propaganda," he said.
Asked if the MDC had not been
its own worst enemy by failing to situate itself strategically across the
political spectrum, he said: "Our credentials are clear, we are a local
post-liberation party. It doesn't matter what Zanu PF says because we can't
be defined by them."
Has the MDC made a compelling ideological case
against Zanu PF to mount a credible challenge for power? "We have been
explaining our policies and what we represent. Our economic paradigm and
policy is that we want a market economy with a social conscience," he
said.
"People must first read our policy documents and criticise us
on that basis. The problem is we debate on the basis of personalities," he
said.
He denied there was infighting and dismissed allegations of
tribalism in the party. "There is no infighting. There is no leadership or
power struggle in the party. When parties go for events like congresses
there is always a contest for positions," he said.
"But it's not
like in Zanu PF where you have a (Emmerson) Mnangagwa faction and a
(Solomon) Mujuru camp. We have processes for leadership and organisational
renewal in the MDC and if there are incompetent leaders people will say
so."
Tsvangirai said there was no tribalism in the MDC. "We know Zanu
PF is trying to foment tribalism in the MDC. Zanu PF has a lot of regional
tendencies and tribalism," he said.
"But let me say this clearly,
tribal politics and ethnic barbarism have no future in this country. There
are leaders who want to defend their positions and power through tribalism.
The politics of tribalism is primitive and we must all of us as a nation
destroy ethnic mindsets and get on with modern politics," he said.
Greedy Zanu PF chefs draw dam water
illegally Augustine Mukaro CORRUPTION in the land reform process has taken
a new dimension, with Zanu PF chefs allegedly illegally drawing water from
dams at the expense of other farmers.
This resulted in farmers
failing to irrigate their wheat crop for the whole of last week when their
pumps were left exposed by falling water levels.
Zimbabwe's fourth
largest dam, Mazvikadei in Banket, the main reservoir for the fertile
Mashonaland West province where the majority of Zanu PF chefs grabbed farms,
has been overdrawn to record lows.
Sources allege that senior party
officials with farms downstream of Mkwadzi River on which the dam is sited,
ordered the opening of valves to allow water to flow into their smaller
reservoirs.
They said the government-run Agricultural and Rural
Development Authority was operating a number of farms in the area on behalf
of Zanu PF chefs.
A visit to the area by the Zimbabwe Independent
last weekend revealed that for a week farmers drawing water from the dam's
south bank were forced to move their pumps nine metres into the dam to reach
the fast dropping water level.
"The dam is losing water faster
than normal and so far it has dropped to the lowest level ever," one wheat
farmer said. "Traditional syndicate farmers, including Bantebury, Pindi
Park, Fenemere and Fish Farm had to move their pumps nine metres into the
dam to reach the water."
Workers at Pindi Park and Fish Farm
confirmed that the dam water had drastically dropped, forcing the syndicate
farmers to move pumps into the dam.
"Last week the syndicate
farmers had to employ four tractors to pull out one of their tractors that
got stuck in mud as it was moving the pumps into the dam," a foreman at one
of the farms said. "Wheat crop at Fish Farm had gone for almost a week
without water."
The farm draws water directly from Mazvikadei to
irrigate an estimated 54 hectares of wheat.
The workers said the
small reservoirs which draw water from Mazvikadei through canals were very
low due to alleged theft of water.
Water experts in the area said the
land reform programme had disrupted water management systems, exposing them
to abuse by powerful individuals.
"Previously the water was
controlled by a river board that would allocate water to syndicates in
accordance with the budgets presented to it," the experts said. "Water has a
primary right where everyone has access to it and an extraction right
whereby water can be drawn for commercial use," he said.
Parliament to investigate Mediagate Dumisani
Muleya PARLIAMENT has resolved to investigate the media scandal in which the
state security agency, the Central Intelligence Organisation (CIO), was said
to have taken over three private newspapers using public
funds.
Sources said the parliamentary portfolio committee on transport
and communications decided on Monday to probe the ownership structures of
the Financial Gazette, and the two Mirror Group titles, the Daily Mirror and
the Sunday Mirror.
The chairman of the 14-member Zanu
PF-dominated committee, Leo Mugabe, said his team would not "investigate"
Mediagate but "inquire" into it. Leo is President Mugabe's
nephew.
"We resolved that we want to know the true ownership of the
newspapers concerned. It's not an investigation but an inquiry," he said.
"We will make a decision of how to go about it. We will find out from the
Media and Information Commission."
However, sources said Mugabe
had attempted and failed to duck the issue by saying it should be referred
to the government-appointed MIC, chaired by state media columnist Tafataona
Mahoso. His committee members rejected his proposal.
"He (Mugabe)
was not comfortable with it. He tried to say we have a lot of other issues
to deal with and wanted the MIC to look into the issue but it was
rejected."
Mahoso said on a public television programme, Talking
Business, on Wednesday night the only information he had about the Mirror
group was the one given by Ibbo Mandaza, who also featured on the talkshow
organised by Financial Gazette board member, Supa
Mandiwanzira.
The Mirror group profile says the Daily Mirror was
founded in 2002 and was first published on September 9 the same year.
Together with a sister paper, the Sunday Mirror, the Daily Mirror is owned
by Southern Africa Publishing House (Sapho) Pvt Ltd.
The profile
reveals that since August 2003, Sapho was "owned by various Zimbabwean
business people, among them Dr Ibbo Mandaza" even though Mandaza has claimed
he owns the group "100%".
The Zimbabwe Mirror Newspapers Group (Pvt)
Ltd was initially registered in 2001 as High-Portfolio Enterprises (Pvt)
Ltd, registration number 8399/2001.
Its directors then were Ibbo Mandaza
and Joyce Kazembe, according to its CR 14 dated May 29 2002. On September 3
2002 High-Portfolio Enterprises changed its name through a special
resolution dated July 26 2002 to Sapho.
The Sapho directors were Mandaza,
Alexander Kanengoni, Thomas James Meke, Ambassador Buzwani Mothobi, John
Marangwanda, Charm Ndaba Mukuwane, Tendai Mangezi who resigned on March 22
2004.
A new director, Amy Tsanga, was appointed on May 17 2004. There
was also Musi Khumalo, who has since left, and Jonathan Kumbirai Kadzura. On
August 12 last year, Sapho changed its name to the Zimbabwe Mirror
Newspapers Group (Pvt) Ltd through a special resolution passed on June
22.
Meanwhile, sources said a slush fund with a local bank was used
by the CIO to buy into the Financial Gazette. "Funds had been withdrawn from
some of the slush funds, including a CBZ Sentry Investments account, to
purchase the Financial Gazette," a source said. "The operation involved a
web of financial engineering and a well-orchestrated board coup to seize
control of the newspaper."
Sources said the Mirror group's
overdraft facility at the Jewel Bank had been frozen, while the central bank
was taking steps to recall its billions advanced through the productive
sector facility. Almost all newspapers in the country got money from the
facility.
The crisis gripping the Mirror has worsened its financial
situation and fears are mounting that the papers - which have poor
advertising and very low circulation - might soon shut down short of a huge
capital outlay.
Sources said an audit was also going at the Mirror to
check the finances, while the CIO were said to be on a "financial trail" to
see if any money was siphoned from the company.
Mirror reporters
were said to have been interviewed to find out whether money could have been
diverted for personal use. The situation has stepped up pressure against
Mandaza who was fighting for his survival in the group, sources
said.
Journalists were said to be closely watching the touch-and-go
situation to see how it will pan out. Reporters have already started looking
for alternative jobs as uncertainty pervades Charter House's corridors.
THE cost of newspaper
publishing has gone up sharply following a 50% increase in the price of
newsprint by the country's sole suppliers, Mutare Board & Paper Mills
(MB&PM), this week.
The latest increase on Monday raised the landed
price of newsprint to $37,2 million a tonne including VAT and transport,
from $26,3 million.
This effectively raises the cost of printing a
copy of a newspaper, the Zimbabwe Independent for instance, to $23 000
excluding VAT, mark-up and distribution, said Zimind Publishers group chief
executive, Raphael Khumalo.
He said the newsprint and printing costs
now constitute 50% of the group's total production costs.
Khumalo
said the group's newsprint consumption per week would cost $685 million or
$3 billion a month. Printing costs, he added, would be about $2 billion a
month.
"For us to survive the paper should be selling for at least
$40 000 including VAT per copy," said Khumalo.
"The problem has
been compounded by the surcharge imposed on distribution costs by our agents
who have to source fuel at prices between $30 000 and $40 000 per litre," he
said.
Richard Zirobwa, chief executive of Art Corporation which owns
MB&PM, said the movement in the exchange rate had a significant impact
on the newsprint pricing structure since the company imports most of its
inputs.
The foreign currency rate at the auction market moved from $9
896 to the United States dollar in June to $17 701, a devaluation of 80%.
The exchange rate this month moved again to $24 108 to the US dollar, which
means on the import side, the exchange rate movement resulted in a 144%
devaluation over a two-month period, according to Zirobwa.
"We
import most our raw materials. We absorb what we can and what we cannot we
try to mitigate through price adjustments," he said. - Staff Writer.
THE quest to
come up with a democratic constitution for Zimbabwe took a new twist this
week when the opposition Movement for Democratic Change (MDC) submitted a
draft document to parliament to counter Zanu PF's piecemeal amendments to
the Lancaster House constitution.
The draft seeks to repeal draconian
pieces of legislation passed after 2000 such as Posa and Aippa. It
recognises the need for the state to acquire land in the national interest
but wants adequate compensation paid.
Provisions in the draft remove
the limits to freedom of choice by parents proposed under the Education
Amendment Bill, soon to be presented to parliament.
The draft
comes as President Robert Mugabe's ruling party is busy amending the
constitution to enable it to nationalise all acquired land and also abridge
people's movements "in the national interest".
On Tuesday, heated
debate on the proposed amendments lasted seven hours, with stay-the-course
Zanu PF MPs supporting the Bill against the MDC.
The opposition took
Zanu PF legislators by surprise on Wednesday when it presented a new
constitutional draft to parliament for consideration.The MDC said its draft
could be the basis for a newbeginning for Zimbabwe.
MDC Secretary for
economic affairs and lawyer Tendai Biti said the document presented to
parliament was a combination of the best of two draft constitutions, one
prepared by the Constitutional Commission in 2000 but rejected in the
referendum, and the other crafted by civil groups after years of nation-wide
consultations.Biti said the suggested constitution was similar to the most
progressive in the region, such those in force in South Africa and
Namibia.
The draft entrenches a welter of individual freedoms and
rights while abolishing arbitrary detentions, arrests and harassment from
law enforcement agencies.
The draft proposes to abolish the
executive presidency and instead vests executive power in a prime minister
elected by parliament for two terms. - Staff Writer.
Zimra demands duty on aid Grace Kombora THE
Zimbabwe Revenue Authority (Zimra) is demanding duty on goods imported into
the country to assist victims of Operation Murambatsvina, it has been
learnt.
The goods include 4 800 blankets and foodstuffs donated by
the South African Council of Churches after a fact-finding mission to
Zimbabwe last month.
Christian Care deputy director, Nyika
Musiyazviriyo, said the donated blankets were still to be distributed due to
protracted negotiations with Zimra.
"We are still negotiating
with Zimra since these are new blankets," he said.
"It's a matter of
interpretation of the law because under customs regulations new blankets are
supposed to pay customs excise duty. We would not want to say anything more
since we are still negotiating. This might jeorpadise
everything."
South African churches donated blankets and sent two
other trucks loaded with maize, beans, cooking oil and other food items to
Zimbabwe two weeks ago to help thousands of people left homeless and
destitute by the urban clean-up campaign.
The Zimbabwe government
destroyed homes, shacks, market stalls and businesses, leaving over 700 000
people homeless and without a source of livelihood.
The trucks
carrying the aid material were yesterday still stuck at Beitbridge border
post pending the outcome of the negotiations.
IS it not amazing that there are more Zimbabweans going to China
than Chinese tourists coming into the country to visit major tourist
attractions? Is it also not amusing that Air Zimbabwe now has weekly flights
to Dubai, carrying traders who bring in merchandise for resale
here?
For a country that is short of foreign currency, this is scary. The
Zimbabwe Tourism Authority, whose major brief is to market the country's
major attractions, can only watch in awe at these developments. ZTA chief
executive Karikoga Kaseke last week told this paper that those going to
China and Dubai were fuelling the black market. He is right.
There
was no trading on the stock exchange towards the end of last week and early
this week as brokers withdrew labour to protest the imposition of a 10%
withholding tax on the sale of tradable securities.
A stockbroker,
chatting to one of our staffers last week after Finance minister Herbert
Murerwa presented his mid-term fiscal policy review, suggested that the best
investment platform at the moment was the black market and not the bourse or
the money market. This is strange coming from a punter who makes a living
trading on the stock exchange. There are better returns on the streets than
in well-appointed boardrooms and office suites.
New farmers, notorious
for accessing cheap government funds and then diverting them into
speculative activities, have found another avenue of getting rich quickly
without putting seed into the ground - fuel. It is easy to access the scarce
commodity. The farmers only need to produce documents that they are "proud
owners" of a piece of land even if they do not have ox-drawn ploughs, let
alone tractors. This is the fuel that is sold on the black market. They have
become billionaires overnight without participating in the cumbersome
business of farming.
Teachers who are taking exam classes can afford to
laze around throughout the term so that they can entice students to attend
holiday classes to catch up. This is for a fee of course. The teacher can
make an extra dollar from this misfeasance.
The chairperson of the
Harare Commission Sekesai Makwavarara was on national television last week
to announce that the problem of street people can be solved by ensuring that
the city centre is "swarming" with municipal policemen.
This
inventory of negative practices bears the symptoms of an economy which is
failing very fast. There is desperation among workers, most of whom are
content with just keeping their jobs. Industrial psychologists say in such
instances workers' productivity is greatly compromised as they engage in
other activities to augment their meagre earnings. Corruption is also
another by-product of this desperation. In the past three weeks, at least 20
Zimbabwe Revenue Authority officers have been arrested on corruption
charges.
Magistrates have also been arraigned before the courts for
receiving gifts from felons while immigrations officers stand accused of
illegally facilitating the extended stay of illegal immigrants in the
country.
Bringing the economy on a recovery path in this environment of
despondency is the Achilles' heel of President Mugabe's government which is
increasingly running out of options. This was manifest in Murerwa's mid-term
fiscal policy review last week. The Finance minister acknowledged that the
economy was functioning in safe mode.
"The significant achievements
of 2004 notwithstanding, recovery has remained slow," he said. "Inflation
relative to that of our trading partners is unacceptably
high.
"Similarly, unemployment also remains a major challenge while
foreign exchange constraints continue to undermine the full recovery of
business activity.
"Furthermore, large-scale crop failure has
exacerbated the situation, particularly in view of the agro-based nature of
some of our major manufacturing industries," he said.
This is a sure
sign that the economy is decrepit. Murerwa decided to dump his desperate
measures on a writhing populace. The minister introduced a myriad new taxes
and levies and surtaxes across the board in a bid to raise revenue, the most
notorious being the increase in VAT from 15% to 17,5%.
He introduced a
22,5% tax on cellphone airtime, 10% withholding tax on tradable securities
and surtax on secondhand motor vehicles. He also introduced presumptive tax
on the informal and transport sectors.
Zimbabwe is now on its last legs
and Murerwa's plan is to tax the last man standing in order to finance
government's recurrent expenditure. There is no real attempt to expand the
tax base by attracting investment, expanding existing industries and
ultimately cutting back on the unemployment statistics.
The tax base
is shrinking as reflected in Murerwa's mid-term policy review. Workers'
contributions, Pay As You Earn amounted to $2,67 trillion against a target
of $3,54 trillion, while customs duty contributed $667,7 billion instead of
the targeted $846,4 billion. VAT and corporate tax were on target, raising
$2,34 trillion and $1,82 trillion against targets of $2,29 trillion and
$1,17 trillion respectively.
The revenue base will keep shrinking while
government's appetite to spend remains high. The financing gap of the budget
is widening but line ministries had requested Murerwa to dish out an
additional $31 trillion to buy vehicles, furniture, equipment and to fund
operations. And rightly so, he refused as this would have pushed the budget
deficit from the current 8% to 50% of GDP and with it the mercury in the
inflation gauge was set to breach the record of 622,8% achieved in January
2004.
This is the tragedy of the ruling elite in Zimbabwe. They want
government to spend what it does not have. The government has to raise the
required revenue most efficiently with the least waste in the collection
process. Murerwa said there was a "higher incidence of smuggling and corrupt
activities at ports of entry".
The process of tax collection should
be done with the least likelihood of political mischief. The tax on airtime
is political mischief. Very importantly though, the process should achieve
the least social cost and greatest social benefit. At the moment there is no
social benefit accruing from these onerous taxes. Murerwa dished out $50
billion to finance the staging of elections for the new Senate. On the other
hand, he gave the malaria control programme a mere $20 billion.
He
spoke of the need to restructure the public service in order to remove
"duplication, redundancy, overstaffing and abolishing all superfluous
posts". He did not mention unnecessary ministries of Interactive Affairs,
Policy Implementation and Rural Housing. He dished out $50 billion to the
new portfolios.
The despondency in the country can only get worse if
the government fails to create the correct environment for investment and
business. There is nothing wrong with government taxing income, wealth or
economic transactions. There is everything wrong with taxing poverty.
Zim to disclose terms of SA loan Godfrey
Marawanyika FINANCE minister Herbert Murerwa and Reserve Bank of Zimbabwe
governor Gideon Gono will today meet the International Monetary Fund (IMF)
delegation and perhaps explain the status of South Africa's R6,5 billion
loan to Zimbabwe.
The meeting comes ahead of a September 9 deadline
by the IMF executive board to consider Harare's continued membership of the
fund.
The three-member delegation, which came into the country this
week, comprises Sharmini Coorey (head of delegation), Sonia Munoz, an expert
on monetary and balance of payments, and Kevin Fletcher, a fiscal policy
expert.
Coorey and Munoz were in the country last month during
Article IV consultations, which found that Zimbabwe's financial position was
far from sound.
The trio is expected to head back to Washington
on Monday and make a formal report on their findings.
The
findings will be incorporated in the executive board's final decision on
Harare's continued status with the international financier.
On
Monday, the delegation met with Ministry of Finance and central bank
representatives to review the country's balance of payments and external
financing.
The R6,5 billion is part of external loans and Gono
and Murerwa have to disclose the terms to the IMF team.
The loan
is expected to be disbursed in phases, with the first tranche of US$160
million being used to settle just half of the country's US$295 million debt
to the international financier.
At least US$160 million will be
sufficient to save Harare from expulsion, but will not necessarily open
lines of credit with the IMF and the World Bank.
The country's
external arrears amount to US$4,5 billion.
Washington officials said
the Coorey delegation was expected to ask about the loan issue since part of
the money would be used to offset Zimbabwe's debt.
Since last
month, a Zimbabwean team of experts from the central bank and the Ministry
of Finance has been shuttling between Harare and Johannesburg to negotiate
the disbursement of the loan.
On Tuesday, the IMF met with central
bank officials to review the monetary, exchange rate regulations, forex
inflows, and the auction system.
However, while acknowledging
discussions between himself and the Zimbabwean team, on Wednesday South
African central bank governor Tito Mboweni disputed the reported $1 billion
loan, saying it was a media creation. "Yes, there have been discussions
about that, and the discussions are nowhere near a billion dollar
facility."
Loan discussions involving himself, Finance minister
Trevor Manuel and their Zimbabwean counterparts were not yet concluded,
Mboweni said.
"The discussion really has centred around what policies
need to be undertaken in Zimbabwe to help boost economic performance,
control inflation, bring about a more stable exchange rate and improve
the
Govt ignored ZSE advice on new tax Godfrey
Marawanyika/Thomas Mutswiti THE Ministry of Finance (MoF) and the Zimbabwe
Stock Exchange (ZSE) met on Friday last week in an effort to end the
standoff caused by the introduction of a 10% withholding tax on tradable
securities.
It is understood that during consultative meetings between
the ZSE and the MoF, government was advised against the withholding tax.
This was ignored, forcing the current stalemate where there has been no
trade on the bourse, causing a serious erosion of the nation's
wealth.
On a daily trading basis government rakes in at least $500
million in stamp duties.
ZSE chairman Bart Mswaka confirmed they
had met MoF officials to find a solution to the crisis sparked by the
introduction of the 10% withholding tax.
"It's not correct that they
ignored our advice because there is a difference between hinting at
something and policy implementation. But when you implement that policy it
becomes different altogether," he said
"We met the ministry on Friday,
but we write and talk to the ministry everyday. Consultations will always be
there but we made our own input and they (Minister Herbert Murerwa and
permanent secretary William Manungo) have their jobs to do."
The
ZSE crisis has been compounded by government's decision to force pension
funds to increase their minimum capital requirements as they are the key
players on the bourse.
Mswaka said the same reasons that led to
the non-implementation of the Capital Gains Tax in 2001 had again stalled
operations on the bourse, but said a solution should be found
soon.
The bourse failed to trade from Wednesday to early this
week.
There are 79 firms listed on the local bourse, but on Monday
only First Mutual Life traded.
Stockbrokers are clamouring for a
review of the tax rate which they say will drive them out of
business.
"Stockbrokers are realising a decrease in business as
volumes traded are minimal. Revenue levels have already started falling,"
said one stockbroker.
"Traditional buyers are the pension funds and
currently they are selling. Speculators are selling, investors are selling,
all creating a glut as no one is buying?"
Another stockbroker
said no communication had been received from the ministry on how the tax
would be collected.
"We don't know how the tax will function. We
might subsequently see the reintroduction of Capital Gains Tax at 15%," one
broker said.
"Investors will pay 10%, but when Capital Gains Tax is
introduced, and if they are found to have realised an assessed loss, they
will have to claim rebates. Given the red tape, by the time the investor
gets the rebate, he/she would have wasted money and
time."
Brokers said information technology preparedness was key as
they would have to customise their information systems to capture the tax
information.
They said Murerwa assumed that by forcing insurance
firms and pension funds to increase their holdings of government securities,
they would liquidate their shares and in the process pay the 10% withholding
tax, raising billions of dollars for a gluttonous
government.
"Unfortunately for him, no revenue is flowing to the
government. Hopefully, Murerwa will realise that he collects more money by
levying 2% stamp duty than by levying 10% withholding tax," a broker
said.
"What this effectively means is that investors venturing into
the stock market will now pay transaction costs amounting to 14%, that is
the new 10%, 2% stamp duty and 2% brokers commission," said a market
watcher.
Currently, the appetite for equities is at its lowest
ebb.
"The alternative would be to borrow from the money market. This
too is unsustainable given that minimum lending rates are in excess of 300%
due to rate hikes by the RBZ," one banker said.
"The greatest
impact will be on those institutions that will be floating rights issues to
conform with new capital requirements. There will be no takers for their
shares and some will be forced to pursue mergers or wind up."
The
banker said the downside was the added cost when a firm attempts to balance
its weighted average cost of capital, since any share buyback decision by
the company must take into account the potentially huge bill generated to
investors by having to pay 10% tax on shares sold.
"No modern economy
imposes such a burden on its wealth-generating companies," the banker
said.
"Zimbabwe is not a particularly rich country and needs
wealth-creating investment to become one. Zimbabwe has long suffered from
under-investment and is today significantly less capital-intensive than its
main competitors."
Because of increased transaction costs, a
shift by foreign investors out of Zimbabwean equities is more
likely.
Analysts also noted that high tax rates are a barrier to
foreign investment
"Investors will allocate less capital to Zimbabwean
registered securities than would otherwise be the case because of increased
transaction costs," an analyst said.
"The tax will fuel parallel
market activities as investors seek financial freedom. For wary investors
who are thinking twice about buying shares, a reduction in withholding tax
remains at the top of their wish-list."
Only change in politics can save economy -
Makoni Godfrey Marawanyika FORMER Finance minister Simba Makoni has said
unless there is a change in the political environment, the country should
not expect an end to the economic crisis. Makoni has also raised concerns
about a series of economic programmes which he said are not being fully
implemented.
Since 1991, Zimbabwe has come up with five economic
blue-prints which include the Economic Structural Adjustment Programme, the
Zimbabwe Programme for Economic and Social Transformation, the National
Economic Revival Programme, the Millennium Recovery Programme, and Towards
Sustained Economic Growth - Macro-Economic Framework 2004-2006 which was
launched last year.
However, the blueprints were never implemented
due to lack of political will.
In an interview published in the
Mail and Guardian of South Africa, Makoni, who fell out with Mugabe in 2003
over devaluation of the dollar, said for the country to recover from the
current economic mess, it has to implement some of the things he could not
do.
"You need a stable macroeconomic environment with stability in
policies you implement. You need to support the productive sector, and you
need to relate normally to the rest of the world," he said.
When
asked if any of that was possible without a change in the political
environment, Makoni replied "No", insisting that economics and "politics are
two-sides of the same coin".
Although Makoni has never publicly
commented on his dismissal from cabinet, speculation is rife that he clashed
with government over devaluation of the currency which Mugabe called an act
of economic sabotage.
Makoni said some economic policies, if
implemented fully, could result in a change of
fortunes.
Zimbabwe, once a vibrant and diversified economy, had been
a hope for the continent's future, but today it is in deep crisis and signs
of collapse are everywhere.
The economy has contracted in real
terms in the past five years, inflation is in triple digits, the currency
has lost 99% of its value since December, and almost half of the country
faces starvation.
Makoni said there was a basis for making the
country work normally, but said that basis is not the same as
action.
"We are not doing everything that needs to be done, or not
doing it simultaneously," he said.
"Action on interest rates, the
currency and support for the productive sector is being taken piecemeal.
What you need is a comprehensive programme for all three to be enacted
simultaneously."
Asked if he was interested in leading the recovery
process for Zimbabwe, he said: "I don't seek specific roles, but I will
remain engaged."
Commenting on the role of South Africa, and in
particular the R6,5 billion which is currently being negotiated, he said
Pretoria had a right to find a way to help Harare.
"There are
well intended things that we have done the wrong way, and people need to
take time to understand the drivers of that," he said.
"Glib
condemnation doesn't help. As much as we need Mugabe to understand why the
world takes the view it does of Zimbabwe, we need the world to understand
why we are doing what we are doing."
On constitutional reform, Makoni
said Zanu PF's defeat in 2000 was unfortunate.
He said people
campaigned against the constitutional reform on the basis of two or three
problematic clauses but said Zimbabwe would have been better off now if the
constitution had been approved.
"We would have had time to focus on
the offending clauses in a more inclusive way than is possible now," he
said.
"I think the party and government will continue to amend and
make better the constitution, but there is not going to be a constitutional
commission held by this government in the next two, three or five
years."
New Nssa asset ratio blow to pensioners
Eric Chiriga
THE National Social Security Authority (Nssa) is now
required to increase its prescribed asset ratio to 35%. Critics say the move
is another desperate decision by government to widen its revenue base to
fund its excessive expenditure at the expense of Zimbabwean
pensioners.
This means lower returns for the pension fund and will
adversely affect the lives of pensioners.
Currently Nssa's
investments in prescribed assets is below 15%.
Economic analysts
say the imposition of prescribed asset ratios on pension funds is
unfair.
They say instead of investing the money where there is
a higher interest return, pension funds are obliged to tender for government
bonds with zero return.
"The government borrows money not
for investment but to finance its recurrent expenditure and they end up
borrowing again to pay up the debts," economic analyst John Robertson
said.
He said pension funds have become victims of massive
redistribution of wealth and pensioners are failing to retain their
lifestyles.
Pension fund managers have also highlighted that
they are being robbed by requiring them to buy unattractive bonds as
prescribed assets.
They argue that the 35% requirement at
sub-optimal rates of return mean that the Zimbabwean pensioner would
ultimately be very poor yet the manager is supposed to invest where real
returns would be realised for the client.
As long as
pension funds comply with the prescribed asset ratios they will not
subscribe to new issues or buy treasury bills, which will be above
inflation.
"Consistent with the requirement of the pension
industry, the National Social Security Authority is now also required to
comply with the 35% prescribed asset ratio at market value," the Minister of
Finance Herbert Murerwa said.
Murerwa added that Nssa would
also be required to submit monthly investment portfolio returns to the
Commissioner of Insurance and Pension Funds with effect from the end of
October this year.
He said that the prescribed asset ratios
would remain unchanged at 25% for short-term insurance, 30% for long-term
insurance and 35% for pension funds.
The finance minister
also reviewed the minimum equity capital of insurers.
For
reinsurance business, the minimum equity capital was increased from $2
billion to $30 billion, from $800 million to $30 billion for reinsurance
business, $800 million to $10 billion for non-life insurance business and
from $750 million to $15 billion in the case of funeral
assurance.
In the case of life and non-life insurance
business, the capital was increased from $1,6 billion to $30 billion while
it was reviewed from $250 million to $5 billion for insurance
brokers.
Nssa is a corporate entity constituted in terms of the
National Social Security Authority Chapter 17:04.
Section 5
of the Act establishes the board, which has the responsibility of
controlling the operations of the Authority.
The board of
directors is appointed by the Minister of Public Service, Labour and Social
Welfare and its composition in terms of section 6 of the Act, should
comprise three members representing government, three representing
employers, three representing employees and the general manager who is an
ex-officio member.
However, Nssa has been without a substantive
general manager since the year 2000.
The board is supposed
to meet every two months and is responsible for the authority's strategy and
putting in place policies for directing, conrolling and monitoring the
afffairs of the authority.
Nssa last published its financial
results in 2003.
Tobacco seed sales decline 30% Itai Mushekwe/Grace
Kombora TOBACCO seed sales for the 2005/6 season are facing a 30% decrease
which is set to have a major bearing on the country's national output and
foreign currency earnings.
The decline in seed sales will result in
yields of 40 000 hectares at 6,25 grammes/hectare.
The sales for
the 2005/6 season were affected by dire shortages of critical
inputs.
The hectarage is being affected by the shortage of
seedbed chemicals, land preparation, chemicals, fertilisers, tractive power,
fuel and oils and the availability of cost-effective
coal.
Officials said the irrigated crop which is a key component of
quality and high-yielding tobacco might fall in the 2005/6 selling
season.
The decline is due to low dam water levels, re-allocated
resources to winter crops and delays in crop planting and financing. The
planting season for the irrigated crop for the 2005/6 begins on September 1
with the last date for seedbeds being the end of this
month.
"Timing is everything in tobacco. We are constantly too late:
exchange rate and price support mechanisms six weeks after floors open,
finance for seedbeds not yet practically available, loans repayable in June
are six weeks too early," an official said.
"At least 60% of the
national crop was sold at an exchange rate of $9000-10 800:U$1 and inputs
for the following season are being replaced at $18 000-40 000:US$1 or
100-300% of the inflation rate," said the official.
The 2005/6 season
is bound to be affected by a host of factors which include access to
concessionary funding for the duration of the season and access to 15% of US
dollar retention scheme to guarantee the timely imports of
inputs.
Once the biggest forex cash cow accounting for over 45% of
the total hard currency inflows into the country, tobacco has attracted
minuscule revenue at the auction floors, according to statistics from the
Zimbabwe Tobacco Association.
The revelations come hard on the
heels of African countries scrambling for Zimbabwean farmers in the wake of
government's proposed Land Amendment Bill which seeks to nationalise land
and erode property rights.
According to ZTA data, the crop has to
date earned US$97,6 milllion down from US$120,7 million during the same
period last year, reflecting a downfall of US$23,1
million.
Tobacco output has deteriorated over the last four years
from 285 million kg to plus or minus 60 million kg last year.
AS Zimbabwe continues on its rapid
descent into chaos and suffering, one wonders who to despise more - those
directly responsible for the chaos and suffering, or those who remain
silent.
What, for example, will our gutless "captains of industry" have
to say in their defence when this financially corrupt and economically
destructive regime is finally removed?
What will many of those
who claim to be religious leaders (and not just Christian leaders) who
remain silent in the face of so much human suffering say in their defence
when the day of reckoning finally comes?
We criticise (South African
president Thabo) Mbeki's "quiet diplomacy" but let there be no doubt that
the silence of so many supposed leaders within Zimbabwe has contributed
greatly to the survival of this regime.
Perhaps their silence is
because many of them are too far removed from the daily struggle for
survival that most Zimbabweans have to contend with.
Most likely, it is
also because their material affluence is more than offset by their moral
bankruptcy and personal cowardice.
Let all those who by their silence
have acquiesced in the destruction of Zimbabwe and the suffering of its
people hang their heads in shame.
IN the
developed world, there is a realisation that the so-called sin industries
generate enough revenue from consumers to deserve a tax. Sin industries
include trades like prostitution, glorified as the commercial sex work or
pornography, and gambling. Products of these industries are deemed by
moralists to cause the erosion of social capital and a rise in criminal
behaviour. Their products are, in short, evil itself. But those running the
industry do make money - sometimes more than those in white collar jobs.
This whets the appetites of governments to want to share in the
spoils.
With sex, countries in Scandinavia, and Germany set up red light
districts, health institutions to check and certify the sex-worthiness of
sex workers.
That has justified taxing the profession, but how do you do
it with no proper accounting by those involved?
Presumptive tax
was the answer. Finance minister Herbert Murerwa introduced it to many
Zimbabweans for the first time last week in his mid-tern fiscal policy
review. Commercial sex workers in Zimbabwe are still exempt but bus
operators and SMEs now have to pay this "sins" tax.
The
similarity between taxed prostitutes and bus operators and SMEs is that they
are considered hard to tax but must still be taxed. This is the hallmark of
presumptive tax. It is employed primarily in economies where the so-called
"hard-to-tax" entrepreneurs make up the majority of the population and
administrative resources are scarce on the part of the collector.
The
authorities presume that the targeted group lacks the financial transparency
that allows for effective taxation by government. This forces government to
estimate or presume the appropriate income on which taxes should be
levied.
There is also another similarity. The industrialists have to
pay the tax for them to be given licences to operate. These are health
certificates in the case of commercial sex workers, road permits for bus
companies or shop licences for SMEs. The industrialists can however decide
not to pay the tax but still continue in business in the form of illegal
prostitution (in countries where it is legal), use of uncertified buses or
street vending.
I have no quarrel with transporters and SMEs paying
taxes so long as it is sustainable. But Murerwa targeted the wrong
sector.
The so-called new farmers must pay tax. Currently the bulk of
them are not paying any. They are not utilising the land allocated to them
for free under the disastrous land reform programme. They should contribute
to the fiscus because they are beneficiaries of government largesse in the
form of free land, soft loans and input support programmes.
In
March the Zimbabwe Revenue Authority (Zimra), responding to questions from
my desk on why new farmers were not being taxed, promised us something was
being done.
"Farmers have always been taxed much like any other
business entity," Zimra said then. "They contribute tax under the various
tax heads, including VAT, PAYE and Income Tax.
"In line with the
government's agrarian reform project, however, studies are currently taking
place which will look at the taxation of new farmers and how they can
contribute more positively to the fiscus."
When will Gershem Pasi
announce the results of his study if he has been studying anything since
March?
The World Bank says economists advocate a presumptive tax on
the potential use of land to encourage landowners to utilise it
productively.
In Zimbabwe agricultural output comprises 16% of GDP.
Yet, because there is little bookkeeping and a propensity to sub-lease, new
farmers can be difficult to trace. They fall in the hard-to-tax zone and
there is an urgent need for government to come up with a presumptive tax.
The level of taxation can take into account the geographical location of a
farm, soil type, potential output or crop yield, and levels of assistance by
government.
Reserve Bank of Zimbabwe governor Gideon Gono's ambitious
"command agriculture" pilot project can incorporate presumptive tax to
ensure the farmers also contribute to the national purse.
This
may not sound politically-correct because the new farmers have "to enjoy the
fruits of independence". But that is wrong because mere mortals like us
cannot be taxed to death for new farmer Bobo to get cheap money to grow
crops and pocket every penny.
While presumptive tax is meant to
eliminate bureaucracy and allow for smoother revenue collection, it can
still be problematic here. Zimra officers have become notorious for corrupt
activities and crude fastidiousness in the execution of duty. This includes
stripping women and subjecting them to humiliating body searches. A
combination of this crudeness and corruption can be used to estimate taxable
income, analyse the profitability of various economic activities and to
define the indices for calculating presumptive income. As a result, genuine
small businesses with no capacity to challenge the taxman's estimates could
be overtaxed while political prostitutes are exempt. How unfair can life
be?
Truth behind Tsholotsho declaration By Pearson
Mbalekwa IT is expected that after a very strong and devastating Eddy with a
trail of destruction and misery in its trail, victims would start to pick up
the pieces and begin to rebuild their lives when the dust has settled down
and losses counted.
But alas! The political hurricane which I shall
term "Hurricane Destruction" has continued to cause havoc and mayhem and
will not subside until every standing natural and man-made structure is
destroyed.
It is now nine months since the so-called plot to unseat
the senior leadership of Zanu PF by six provincial chairmen that included
some Young Turks and a few old guard politicians, were accused of
contravening party regulations and condemned to political banishment by
those who wield state power within Zanu PF.
It is a fact that
Hurricane Destruction has torn the threads of the party from the seams, no
matter what (secretary for administration Didymus) Mutasa or anyone
says.
Zanu PF will never be as coherent as in the past and certainly
the die is cast; the wheel of change is turning, the stage is set and the
countdown is about to begin towards an advent that will certainly change the
face of Zimbabwe politics forever and, initiate a collapse of a system that
had started very well but which has now suddenly abandoned its course and
has become afraid of its own shadow as it moves towards
oblivion.
Why have things gone wrong; who has destroyed Zanu PF and
for what? These are the questions millions of Zimbabweans are asking
themselves.
The story of Tsholotsho has been told albeit by the
beneficiaries of a political party that is fraught with hate, fear and a
tyrannical leadership.
According to the presidium of Zanu PF and indeed
those that are controlling state power, it is claimed that there was a
conspiracy to remove the senior leadership of Zanu PF by a group led by six
Zanu PF provincial chairmen, some members of the politburo, central
committee, MPs, veterans of the war of liberation and that this conspiracy
was hatched by former Information minister Jonathan Moyo.
It is
further alleged that the beneficiary would have been Emmerson Mnangagwa, the
current Minister for Rural Housing.
The actual coup détat against the
constitution was not by the so-called Tsholotsho conspirators but by the
politburo that sat at Zanu PF headquarters on November 18 2004 to undermine
the party constitution.
The constitution was illegally amended to
accommodate the preferred candidate of the political mandarins of Zanu PF
when it had become clear that Mnangagwa was heading for a clear victory if
the party procedure was followed to elect a new vice-president during the
next congress which was due in December 2004.
These political
mandarins felt Mnangagwa had to be stopped by every conceivable plot that
could be hatched. Those members of the politburo that gathered at the Zanu
PF headquarters on November 18 2004 totally and with no regard whatsoever to
the requirements of the guiding principles of the party, usurped the power
of the central committee which by its every nature is empowered to deal with
constitutional matters.
The powers of the politburo are:
*
to act as the administration organ of the central committee;
* implement
all decisions, directions, rules and regulations of the central committee on
all matters; and
* be answerable to the central committee on all
matters.
It was presumed that since in Zanu PF posts are through
patronage, this move by the politburo would put the matter to rest. The
status quo in the presidium would remain save for the inclusion of the new
princess of Zanu PF politics whose ascendancy, had been determined by the
coup détat against the constitution that morning.
Why was the
altering of the constitution by the politburo illegal and a coup against the
constitution?
The answer lies within the constitution of Zanu PF
which under Article 7 of section 34 (8) states: "the central committee being
the principle organ of congress and acting on behalf of congress which
congress is not sitting shall have full preliminary unfettered powers to
amend the constitution, if deemed necessary, subject to ratification by
congress".
It is therefore crystal clear that the politburo acted
ultra vires as it had no mandate nor authority to act in the manner it
did.
It usurped the authority of the central committee thereby
undermining the importance of the constitution to accommodate Joice Mujuru.
The appointment was unprocedural and unconstitutional and the whole
amendment of the constitution was equally illegal and whatever appointment
that came through this illegal amendment is null and
void.
According to Article 30 section 253 (6) of the constitution, if
a two-thirds majority of delegates of the central committee is present,
voting shall be required for the adoption of proposed amendments to the
constitution and in this particular case, neither was there an assembly of
the central committee nor the adoption of the amendment of the constitution
on that November day - a real mockery of democracy.
It is
therefore not difficult to see why the camp that usurped power has been very
vicious in its retributions. In every coup, those who would have usurped
power will use brutal force to purge their opponents and subdue any
resistance against them. They always live in fear as they know that only
brutal force and intimidation can ensure their survival.
It is
not surprising therefore to realise that one newspaper (which supported the
female candidate) is calling for forgiveness of the "Tsholotsho
conspirators". This is an act of desperation.
Vice-President Mujuru
is the one who must be forgiven for coming in through a blatant coup against
the Zanu PF constitution.
Those of us that attempted to introduce
some semblance of democracy in Zanu PF became villains of the vanguard
party, we had become unpatriotic to the senior leadership, we had to be
reoriented to the requirements and dictates of a revolutionary party.
Because we did not have (gwara) discipline we had to be sent to the party's
gulag archipelago to be reformed.
These Zanu PF gurus are experts in
the art of stick and carrot strategy, they are now frantically trying to
divide this formidable group by appointing some into ineffectual positions
in government just to keep the leash on their necks while others are
threatened to have their life-serving machines cut off. This is where the
importance of political patronage comes into play. This is political
blackmail which has worked so well in the past but the hold on this noose
will soon break.
So was there a putsch about to take place organised
by the so-called Tsholotsho conspirators?
The answer is an
equivocal no.
The truth of the matter is that only the vacancy left
by the colossal and unifier of the flock of Zanu PF, the late Simon Vengesai
Muzenda was being canvassed for by supporters of Mnangagwa. But, the events
of November 18 2004 changed the whole plan as the political mandarins of
Zanu PF had blocked this vacancy by the action already alluded to. This
therefore necessitated a change of game plan so the original idea had to be
revised and a total onslaught on the presidium had to be embarked upon with
the exception of the president and first secretary but the rest had to be
contested. All this had to be done within 48 hours. It was an elephant of a
task given the fact that the other group had the referee and all the state
machinery at its disposal. But yet, we put up a credible account of
ourselves, a feat we all pride ourselves in. Of course one has to be proud
to be associated with the so-called Tsholosho group, we were exercising our
right to make an informed decision, the right to choose a person of our own
desire. Is this not what thousands of our gallant heroes died
for?
They died so that we could participate in national debates
through universal suffrage. This is the right that I am ready to sacrifice
all in order to attain. It is better to die trying than never
try.
Time has now come for patriots to get together and contribute to
a truly democratic Zimbabwe, which is not only independent but free. We now
want independence with freedom. This is what the Tsholotsho group was aiming
at and that aim must now be achieved by patriotic Zimbabweans through the
unity and dedication towards this cause by all freedom-loving
people.
Did I hear someone say freedom is within our
sight?
A party that is incapable of upholding its own constitution
cannot be expected to respect any other constitution. A party that does not
believe in a free and fair election using its own constitutional guidelines
cannot, and will never freely accept any challenge to its hold on
power.
It is obvious that campaigning or canvassing for positions
within the structures of Zanu PF by the Tsholotsho group was legal and
constitutional.
There was no law nor regulations infringed by the
Tsholotsho group. It is within the sphere allowed by a democratic system.
May the political mandarins of Zanu PF be reminded that when there is
congress, all positions are open for challenge including that for the first
secretary of the party. That is what an election means.
Unless
there is democracy within the ruling party, people should never expect Zanu
PF to freely allow the political playing field to be even during any other
election.
Democracy can only be practised by democrats. For all those
that want to fulfill the aspirations of our fallen heroes, I dare them to
(sungai dzisimbe) brace themselves for a gruelling battle in
2008.
The population of this country should and must ensure that the
presidential election is held in 2008 and not further than that, as this
country has economically and socially bled enough.
* Pearson
Mbalekwa is a fomer Zanu PF legislator for Zvishavane.
Gonomics, alchemy or voodoo economics? By Tafirenyika
L Wekwa Makunike WHEN President Mugabe an-nounced that the time for bookish
economics was over with the appointment of Gideon Gono as governor at the
Reserve Bank, some thought perhaps we must give this government the benefit
of the doubt.
The confusion arising from the alchemy concoction of the
so-called "Gonomics" to date, has resulted in what Professor Tony Hawkins
once called voodoo economics.
For the Zanu PF government, it is
fire-fighting to the hilt without an inch of strategic thought in sight. My
fervent hope for the country is that if it cannot learn from its so-called
enemies then at least it should take a leaf from the so-called
friends.
On August 16, I had the pleasure of being invited to meet
the delegation from Nanning City at the Palazzio Hotel in Fourways,
Johannesburg.
On arrival I was showered with a nicely packaged
capitalist present.
Nanning is the capital city of China's Guangxi Zhuang
autonomous region of China which in 2004 won China's Most Competitive City
in Exhibition Industry.
The Vice-President of Nanning People's
Association, Huang Hanming in a characteristically capitalist, less than
10-minute speech, outlined their agenda.
He explained that they
had visited because South Africa comprises 30% of the entire GDP of Africa,
and the economy of Gauteng is 10% of the African economy and South Africa is
the biggest trading partner of China in Africa. So to develop a good
business relationship with Africa it was necessary to develop strong ties
with Gauteng in particular and South Africa in general.
With pumped
up music and nicely-animated slides they made a presentation which showed
big companies such as Walmart, Macdonald's and Phillips that have aided the
annual growth rates of as much as 9% in the last 10 years. After that he
then arrayed his team of Chinese capitalists.
Gosh! These guys are
communists right but they have mastered how the capitalist system functions.
China's foreign currency reserves as stated in October of 2004 stood at
US$540 billion.
A country cannot generate that kind of level with a
head in the sand communist rhetoric but by systematic application of
economic principles. Whatever China and the USA may say to each other in the
political arena they are so steeped in each other's economies that they will
never do anything to damage that relationship.
China is up to its
neck in US bonds and US companies are up to their necks in the Chinese
economic frontier.
When I was still living in Harare and I had
foreign visitors, I would take them to the Mbare and Glen View crafts
people. The idea was not to parade our poverty but to show the resilience
and creativity of common people.
Even now that I am currently based
in South Africa, I sometimes take visitors to Soweto not just to show
visitors that Nelson Mandela used to live in a Rugare-like home but to get
them to feel the true story of the African people.
I am all for
cleanliness but I am not for the unbudgeted haphazard destruction of the
livelihood of people and the impairment of their dignity. If every
government was to behave like Zimbabwe, then the Korean traders one
encounters near the White House in Washington selling memorabilia, the
Zimbabwean street traders in Johannesburg or Gaborone or the traders in
London or Rome would not survive Operation Murambatsvina.
If we
are to buy the story that too much black market activity was taking place in
these areas then why punish only the poor foot soldiers while rewarding the
rich dealers?
I understand the rich can now import 2000 litres of
fuel, no question asked as to the source of funds and in case they are in a
hurry they can use their black market-sourced dollars in Harare. My
foot!
The basic laws of supply and demand cannot be violated. A call
I received from Harare tells me that the rand is pushing beyond $7 000 and
no-one can convince me this is good for the Zimbabwean economy. We are busy
confronting the effects of the economic melt-down but not the
causes.
The problem is that if a country persistently runs down its
economy then its own people begin to have trouble in affording assets in
their own country. Who is really working for the British: the MDC or Zanu
PF?
Who has systematically run down local banking institutions and
cast aspersions on the few surviving ones so that British-owned banks -
Barclays and Standard Chartered Bank - can consolidate their positions in
Zimbabwe?
Zanu PF decimated the middle class by various strategies to
the extent that now, Zimbabwe just has the poor and the rich.
For
the president to say he will not talk to the MDC is being disrespectful
to
the millions who voted for the party in urban areas just like it
would be disrespectful to the rural masses for Morgan Tsvangirai to refuse
to talk to the government.
It is colonial mentality for President
Mugabe to only want to talk to British premier Tony Blair but not the local
people. It is a rabid hatred of anyone with the same skin colour as oneself.
It was the same mentality that allowed one to forgive Ian Smith but refuse
to forgive Abel Muzorewa, the late Ndabaningi Sithole or Chief Kayisa
Ndiweni.
Perhaps the man in Beijing should talk to the man at Number
10 Downing Street together with the man from Tshwane and invite the MDC and
Zanu PF as observers?
Zanu PF has made Zimbabwe ripe for the
picking by economic vultures. I would be more comfortable with national
assets in the hands of Strive Masiyiwas, Mutumwa Maweres, William Nyembas,
Mthuli Ncubes, Julius Makonis, James Mushores, and Nicholas Vingirais of
this world than others from beyond.
Granted, some of them were
turning into crooks but what was required was to fine them for their
economic crimes and rehabilitate them. In any case, their dealings were all
a result of the voodoo economics of the day. With Gono's no-questions-asked
policy Zanu PF-aligned dealers are making killings in fuel deals at the
moment.
Apart from mortgaging the rest of the surviving national
assets to the Chinese, SA conglomerates own all the platinum reserves in
Zimbabwe.
SA empowerment companies own more than 60% of the gold
mined in Zimbabwe. The economy has been mothballed to the extent that most
locals cannot afford any of the assets judging by the comical slow uptake of
the 15% in Zimplats.
Zanu PF has pauperised the Zimbabwean people and
not empowered them. There seems to be a spontaneous hatred by Zanu PF for
any black-owned businesses partaking in the national cake unless they are
party folks. It was the Chinese who popularised the notion that the colour
of the cat whether black or white did not matter as long as it caught
mice.
* Tafirenyika L Wekwa Makunike is a Zimbabwean currently based
in South Africa.
WHEN the Minister of Finance, Herbert Murerwa, presented his
Mid-Term Fiscal Review and 2005 Supplementary Budget to Parliament last
week, he did so in an environment of desperate hopes that he would be
announcing substantive actions to aid the long-talked about, but as yet
mythical, economic turnaround.
The widespread poverty and economic
distress, closure of businesses, massive shortages of essential commodities,
hyperinflation and many other ills, have provoked a crisis of expectations.
Those expectations centred upon the minister announcing measures that would
be complementary to the monetary policies set out three weeks earlier by the
governor of the Reserve Bank. They centred upon deep-seated anxieties that
the fiscal policies, appropriately aligned with the monetary policies, would
vigorously attack the pronounced inflation afflicting Zimbabwe, would
dynamically incentivise investment, job creation and export growth, and
would demonstrate a belated determination of government to pursue good
economic governance.
At the commencement of his presentation, it appeared
that the hopes of the populace were about to be fulfilled. The minister's
introductory remarks evidenced awareness of the troubled state of the
Zimbabwean economy. He noted that: "Inflation, relative to that of our
trading partners, is unacceptably high. Similarly unemployment also remains
a major challenge, while foreign exchange constraints continue to undermine
the full recovery of business activity." Admittedly those words implied
some, albeit inadequate, economic recovery, whereas the reality is that the
economy is still in decline. Nevertheless, the minister at least recognised
some of the major economic ills, and that was reinforced by his statement
that economic turnaround "will require the consistent implementation of
policies and measures to achieve macro-economic stability, coupled with
concerted efforts in support of both domestic and foreign
investment".
Unfortunately, that reality of the troubled economic
circumstance, and some of the very necessary actions to be pursued,
dissipated almost immediately for, after his introductory comments, he then
tried to review the current state of the economy. However, he did so without
the realism of his opening comments. Acknowledging that the November, 2004
budget statements projection of economic growth of over 3,5% was not
attainable, he revised it to a growth of under 2%. In the private sector
almost all are agreed that the economy has been, and is continuously,
contracting. The 2005 agricultural outturn has been abysmal, allegedly due
to the drought but, in practice, due to inadequate planting as a result of
the replacement of many productive farmers with unproductive squatters, as a
result of insufficient availability of funding, as a result of widespread
vandalism of irrigation systems and other essential farming infrastructure,
and as a result of grossly belated availability of inputs.
Mining has
been severely retarded, mainly due to unrealistic exchange rates in the
first seven months of 2005, and manufacturing has been brought to its knees
by rampant escalation of operating costs, unmatched by exchange rate
movement. All those factors must result in negative growth of at least 2% in
2005, unless there is an almost immediate, massive economic
turnaround.
Regrettably, there is very little if anything, in the
enunciated fiscal policies, and the budgetary proposals, to inspire any hope
of that occurring. The minister very correctly noted the consequences of
unchecked governmental expenditure trends. Disclosing that government had a
deficit of $5,7 trillion in the first half of 2005, as against a budgeted
deficit of $4,5 trillion for the entire year, he noted that a continuing
higher than projected fiscal deficit would "not only undermine the inflation
target, but also the financial resources available in support of the
productive sectors and infrastructure development". He supplemented this by
claiming that: "Government has declared inflation as our number one enemy"
and that, therefore, the budget "has to play its central role of ensuring
that we fight and win the battle against inflation and support efforts being
made to stabilise the economy".
But despite this recognition of the
very necessary, he proceeded to table budgetary proposals diametrically
opposed to bringing down inflation and achieving economic stabilisation. The
highly prejudiced proposals include not only increasing the Value Added Tax
(VAT) rate by a sixth, from 15% to 17,5%, but also subjecting many products
previously not subject to VAT to tax at that rate, including tea, butter,
powdered and canned milk, fresh meat (other than beef), processed meats, and
diverse fresh vegetables.
VAT applies to all, including the estimated
then 9 million Zimbabweans who are already struggling to survive, at levels
below the poverty datum line. Driven only by the perceived need to generate
more revenues for the state, the minister intends to compound the
destitution of the majority of the population by a substantial increase in
the VAT rate, and a widening of the VAT net of products. So, not only are
economic factors impacting adversely upon inflation, but the state is
directly intensifying inflation with greater consumer taxation.
This
disastrous impact upon the poor is to be compounded further through the
imposition of a "presumptive tax" on commuter omnibuses. Those with a
carrying capacity of 15 to 24 passengers, and taxi cabs, are to pay $6
million per quarter, whilst those who can carry 25 to 36 passengers will pay
twice that amount, and those carrying greater numbers will pay $18 million
per quarter. It is inevitable that transport operators will recover such
taxes in the fares charged by them, resulting in yet another burden for the
struggling populace.
The minister also announced that: "Arrangements
are at an advanced stage to introduce tollgates on the country's major
highways, and in entries into the major cities, including the Harare-Gweru,
Harare-Masvingo, Masvingo-Beitbridge, Harare-Mutare, Gweru-Bulawayo,
Harare-Nyamapanda, Harare-Bin- dura and Bulawayo-Victoria Falls
Highways". While this intent is commendable to the extent that is stated
that the revenues will fund the "ongoing dualisation, road infrastructure
maintenance and development", it can only be acceptable if the toll payable
will not apply to heavy duty vehicles conveying goods within Zimbabwe (other
than those only transitting Zimbabwe to more distant
destinations).
If the toll does apply to such vehicles, that addition to
transportation costs will inevitably need to be recovered in the selling
prices of the goods, thereby causing yet further
inflation.
Expressing the incontrovertible fact that increased
governmental expenditure and consequential borrowings are catalysts for
inflation, the minister stated that "in view, of the limited financial
capacity of the economy, additional expenditures can only be financed
through rationalisation within the existing budget envelope" and that,
therefore, he proposes to finance "additional expenditures from reallocation
of funds from the various sub-heads of the 2005 budget", over and above
raising additional revenues. Notwithstanding that intent, he still expects
government's borrowings to increase by $1,6 trillion, which will be yet
another inflationary trigger.
Despite all his recognition of the ravages
of inflation, he has - with one minimal exception - "deferred review of tax
thresholds and brackets to the 2006 budget. That one exception is raising
the tax-free threshold for employed persons from $1 million to $1,5 million
per month. Bearing in mind that the PDL for a family of five is now in
excess of $5 million per month, this one concession is niggardly in the
extreme. Even if both spouses in a family are gainfully employed, their
combined tax thresholds will only be $3 million, which is very markedly less
than the PDL.
The famed, fictional Robin Hood was admired for his
redistribution from the rich to the poor, but the government of Zimbabwe's
fiscal policies and taxation measures result in the poor becoming
poorer.
Furthermore, at variance to expressed intents of increasing the
sources of revenues, the minister is motivating yet further "brain drain"
from Zimbabwe by introducing provisions that recipients of part of
remuneration in foreign currency will have to pay tax thereon in foreign
currency. Many of the highly skilled have remained in Zimbabwe, despite the
appalling economic environment, because of their receiving some foreign
currency-based income. If that is now diluted, they will depart for
environments more conducive to them. How is economic turnaround achieved
without the requisite skills base?
Economic turnaround also requires a
vibrant stock exchange to facilitate investment, but the taxation proposals
include reinstatement of Capital Gains Tax (in the form of a withholding
tax) on quoted securities. That, over and above inflation-driven economic
decline, can only result in a far less virile stock exchange than
heretofore.
So disastrous is the Supplementary Budget that
parliamentarians should, irrespective of party, unhesitatingly reject it.
With the constraints imposed upon him by the president and the cabinet,
Minister Murerwa must have had very little room to manoeuvre, and one must
sympathise with him for the impossible fiscal hurdles that confront him, but
the message must be sent to government as a whole - the Supplementary Budget
is an economic disaster.
IT appears Nathaniel Manheru is laughing the longest at the fall
from grace of his boss Jonathan Moyo. It is, though, a mirthless laughter,
full of bile from a clearly frustrated civil servant. If the claims are
true, Manheru is bitter that President Mugabe did not consider him
ministerial material.
But what was most useful in his attack on Moyo this
week was biographical information he gave us, if it is true. While Manheru
and Zanu PF were engaged in a conspiracy of silence about Moyo's liberation
war record, it took the Zimbabwe Liberator's Platform to describe Moyo as
"the first successful war deserter". Now Manheru has added a footnote about
Moyo's "fake and fraudulent pretensions to war veteran status". Of course
Zanu PF was complicit in nurturing that false image. It also let him lord it
on the opposition and the private media while he pretended to be the
greatest patriot ever born in Zimbabwe.
Manheru also let it be known
that Moyo indulged in "quisling politics" alongside the late Ndabaningi
Sithole. We suspect he forgot to mention Zanu PF spokesperson Nathan
Shamuyarira and his Frolizi. Zanu PF invariably offers succour to all the
bad guys while it suits its agenda. That is how Moyo was able to "sell
himself to an embattled Zanu PF" before it regained balance and spate him
out like a rotten tooth.
Both were desperately looking for each other:
Zanu PF fleeing MDC hounds while Professor Moyo was under siege from Ford
Foundation and Wits University.
More revealing about Zanu PF's
criminal abuse of power than Moyo's paranoia is Manheru's disclosure that
Moyo invented death threats so he could be given 24-hour security. That was
how he landed at Sheraton Hotel during his inauspicious reunification with
Zanu PF as spokesperson for the ill-fated Constitutional Commission. Thus
wrote Manheru: "Put up in a suite (at Sheraton), guarded around the clock
and wafted from place to place in a ministerial convoy, his ego inevitably
puffed, and puffed and puffed."
Why was this gross abuse of public funds
never made public at the time? Or is this a case of sour grapes as it
becomes clearer that it's so near yet so far? Mugabe picks his cabinet from
some dark corners without appearing to notice the gaping mouths and lolling
tongues in the passageway!
Sadc predictably said nothing that would
offend President Mugabe at its summit in Gaborone, Botswana, last week. He
was allowed to sit next to the host, Festus Mogae, a man Mugabe would love
to hate for reputedly hosting American military bases.
But
appearances and form can be very deceiving.
The Sunday Times reports that
South African president Thabo Mbeki implored regional leaders to act
responsibly for a common destiny in his weekly online letter. He wrote that
it was important to "understand that what we do in any one of our countries
has an impact on the rest. It means, as countries, we sink or swim
together."
We wonder how many countries are prepared to sink with
Mugabe.
While there was deference to his age and contribution to freedom
in the region, temperatures are evidently getting cooler and there is
growing impatience with Mugabe's dogged refusal to put his shoulder to the
wheel in the cause of the African renaissance.
The Sunday Times
observes again: "With no one obviously keen to chat to Mugabe, he entered
(the meeting place) and left alone, flicking his fingers or crunching his
fists together until his knuckles audibly cracked."
At Mogae's banquet
for the regional leaders Mugabe reportedly "ate largely alone and in
silence".
How loud can quiet diplomacy get we wonder?
In a
dramatic sign of Libya's rehabilitation into the international fold, Muammar
Gaddafi has invited US president George Bush to visit Tripoli. This follows
a thawing of relations between the west and the Arab nation since Gaddafi
renounced a programme to develop weapons of mass destruction and pledged to
improve his country's human rights record.
Since then Libya has played
host to French president Jacques Chirac and British prime minister Tony
Blair, Mugabe's unyielding bogey.
Why is that of interest, you might
wonder? Because Zimbabwe is being left out of the loop. While a few years
back we could posture about Libya supporting Zimbabwe in its land reform and
emptying part of its fuel into our tanks, we can kiss goodbye to all that
now, forever. Gaddafi appears to have given up on trying to help a leader
who can't take advice and behaves as if the whole world owes him an apology
for colonialism. More than that, the gesture shows just how other countries
are able to move forward while we are tied to the millstone of history by a
leader who is afraid of the future.
And so it is that while other
countries are forging new friendships, we remain tied to Fidel Castro and
other international outcasts. It's not surprising that we have been set back
almost 50 years by geriatrics who will not accept that there is time for
everything under the sun.
Meanwhile, President Mugabe is waiting for an
invitation to No 10 Downing Street. It's all vanity, said the
Preacher.
Does the Sunday Mail have an editor? We seriously doubt it in
the light of preposterous fiction published on its front page as stories.
The story on a British bank seeking to scupper so-called "Zim, China deals"
takes pride of place in the league of the ridiculous.
Ignoring all
business sense and pretending the UK and China were at war, the writer
claimed that by buying a 10% stake in the Bank of China, the Royal Bank of
Scotland wanted to "shackle Zimbabwe's chances" of getting loans from China.
The tenuous evidence for the bank's insidious plot against Zimbabwe is that
it allegedly intensified efforts to buy into the Bank of China during
President Mugabe's recent visit to China!
Strenuously refusing to let
facts get in the way a sweet reverie, the writer saw no contradiction in his
conspiracy theory and the statement that the negotiation "follows a string
of other major deals clinched between Chinese lenders and Western financial
institutions".
Are we being told that before Zimbabwe's disastrous land
reform there was no business between the UK and China? And they want readers
to believe this baloney?
The cacophony against resolving Zimbabwe's
political impasse intensified last week with a frenzied campaign to
discredit Nigerian leader Olusegun Obasanjo's efforts. Newsnet went into
overdrive, telling ignoramuses on the streets of Harare that Obasanjo was a
"tool" of Tony Blair and therefore had no right to interfere in Zimbabwe's
internal affairs. It was risible seeing old women who probably can't afford
a radio licence commenting authoritatively about Obasanjo's double standards
and how he can't be an honest broker when he is a friend of devils in the
MDC.
You didn't need to be a rocket scientist to realise that most of the
people interviewed had become avid readers of The Other Side. Which is most
probably where the order for the anti-Obasanjo campaign came from. And
whoever conducted the interviews made no secret of his location: Zanu PF's
provincial headquarters along Fourth Street in Harare. Unless all those
women are getting subsidised commodities and food from the party, the truth
will soon out!
The master analyst was one Sylvester Mashingaidze who
said there was no crisis in Zimbabwe. Indeed, as he sat on the sofa, there
was enough evidence of opulence and surfeit protruding from under the
jacket.
Talking of food, the Consumer Council of Zimbabwe says the
consumer basket for a family of six has risen once again to over $6 million
per month. This is a basket of the most basic commodities before we factor
in Aeneas Chigwedere's backdated school fees. The shock increases expose the
mirage of Gideon Gono's economic turnaround and inflation figures running
riot at 254,8%.
Still the figure can only be as accurate as the
direction of the wind in an economy where altering the prices of goods
already on the shelves has become a daily preoccupation for major retail
shops. Why is Zanu PF not setting its sights on this very real national
crisis and leave Obasanjo and Joachim Chissano alone?
Zimbabwe has
marshalled all resources at its disposal to import enough grain for the
patriotic sons and daughters who have not escaped starvation to the
diaspora. This was revealed by GMB acting chief executive Samuel Muvuti.
Road, rail and sea routes had been opened to "bring maize to the ports and
into the country", the retired colonel said.
"A ship carries about 30
000 tonnes," he said helpfully, "making it easy for us to cover areas like
Mashonaland West and nearby areas. We are well-networked and we intend to
import grain at the rate 120 000 tonnes per month."
We should take
that with a fistful of salt seeing as this is the same colonel who claimed
in one Newsnet interview just before the March election that the country had
enough grain to last for 18 months. What happened to that, we
wonder?
Then this sea route into the hinterland, is it the same route the
Portuguese explorers, or was it David Livingstone or Henry Morton Stanley,
were looking for those centuries back? Now the colonel appears to have
"discovered" the route up the Zambazi River, perhaps with Lake Kariba as our
inland port! You can bet hunger in Zimbabwe will "soon be a thing of the
past".
There was another major discovery made in Victoria Falls at the
weekend. The Herald reports that the president of the Zimbabwe Medical
Association "discovered" that economic hardships were causing a huge brain
drain in the country. This was a result of "health costs and general
scarcities related to international sanctions", Dr Billy Rigava reportedly
told doctors attending the association's congress in the resort
town.
Apart from the propaganda bit about sanctions, did we really need a
stethoscope to diagnose the cause of the accelerated brain drain in the past
five years?
GONE are the days when President Mugabe would speak and the
continent would listen. Those days when auditoriums would resonate in
response to his bluster. In fact, he is losing the moral high ground to
speak on issues of governance and international relations because of his
saber-rattling and poor record at home.
This week at a reception to
welcome Namibian leader Hifikepunye Pohamba, Mugabe tried to set an agenda
for Africa at the United Nations General Assembly summit in New York next
month.
"It is important for us to use that forum to ensure that the voice
of Africa is clearly heard," Mugabe said. "It is also critical that the
United Nations carries out its mandated and comprehensive role in the
economic and social areas."
Mugabe sorely misses the big platform and
can only muse about the prospects of being the alpha leader on the
continent. He did not get that platform in Libya at the African Union Summit
in July, he didn't speak at the AU extraordinary summit on UN reform in
August and he was sidelined at the recent Sadc Summit in
Botswana.
While his counterparts in the region have refrained from
directly attacking him, they are increasingly feeling the effects of his
misrule and the economic meltdown in Zimbabwe.
New Sadc chair,
Botswana's President Festus Mogae, last week said the Zimbabwean crisis was
not placed on the agenda because it was not a regional issue, even though
problems here have weakened the economy of his country.
There are clear
indications that the failed Zimbabwean economy is pulling down the scoreline
in the region. The Sadc economy grew by 4,1% last year. Angola, Mozambique
and the DRC registered returns of 11%, 7,8% and 6,3% respectively. In
addition, Botswana and Malawi had average growth rates of 4,8% and 4,9%. On
the other hand Zimbabwe's economy last year declined by 28,4%, thereby
pulling down the overall index for regional growth.
With plans on the
table to grow the economy by 6% next year, South Africa is edgy about the
contagion effect of Mugabe's polices. It was therefore not surprising last
week when President Thabo Mbeki issued a veiled indictment of
Mugabe.
Writing in his official "Letter from the president" column on his
party's website, Mbeki said a stable Zimbabwe was critical to regional
integration and economic growth.
"Given the potential strength of the
Zimbabwe economy . it can and must play a central role in the struggle to
achieve the goals spelt out in the Sadc Treaty," he said. "All of us must
understand that what we do in any one of our countries has an impact on the
rest. It means that, as countries, we will sink or swim
together."
Zimbabwe has become the millstone around the neck of the
regional bloc retarding progress towards the shoreline. Mugabe does not mind
sinking with the rest of the region as long as it adds another feather in
his martyrdom cap.
Deputy foreign minister Aziz Pahad last week spoke
of the dangers of South Africa having a bad neighbour. "All our
interventions on the Zimbabwean issue have been to prevent a failed state on
our doorstep," he said. He called for "fundamental changes" in Mugabe's
economic policies.
But there are unlikely to be any fundamental changes
in Zimbabwe so long as Mugabe believes no one can rule this country better
than he is doing. The office of the President and Cabinet is assuming
greater responsibilities in the running of the economy and the results are
there for all to see in the shortages of virtually everything as a result of
poor policies.
Zimbabwe is a failed state and Mugabe's moral authority to
champion various causes for the continent, including UN reform, is slowly
losing the endorsement of a continent that once held him in high esteem. He
has eroded the reverence he once enjoyed because of his hostility toward
anyone who challenges his autocracy.
This has a bearing on Zimbabwe's
foreign policy. He has rejected an AU initiative to broker dialogue with the
opposition. Former Mozambican president Joaquim Chissano, appointed by AU
chair Olusegun Obasanjo to broker a deal, was told his services were not
needed.
Mugabe has rejected the report by the UN special envoy on
Operation Murambatsvina. He refused to sanction a probe on the operation by
the African Commission on Human and Peoples' Rights.
Unfortunately,
everyone on the continent appears to have seen through Mugabe's persecution
chicanery and they are not ready to be deceived again. Why should he want to
talk to Tony Blair of Britain but will not listen to fellow African leaders
who are most hurt by his damaging policies? Is this not a case of a former
slave wanting to sit side by side with his master as a mental assurance that
we are now equal? Obviously African leaders cannot fit that bill.