Assault on judiciary

FinGaz

Njabulo Ncube

THE independence of the judiciary has once again come under the microscope,
following the refusal by Manicaland magistrates to try Justice Minister
Patrick Chinamasa, citing alleged intimidation by State Security Minister
Didymus Mutasa.

Chief magistrate Herbert Mandeya on Tuesday withdrew before plea charges of
obstructing the course of justice that had been levelled against Chinamasa
after the state indicated that not a single magistrate in the eastern
province was prepared to hear the case involving the head of their parent
ministry.
In declining to hear Chinamasa's case, the magistrates told an open court
that Mutasa had intimidated them by accusing the court officials of being
Movement for Democratic Change (MDC) members. This development, described by
the legal fraternity as disconcerting, will bring into sharper focus what is
widely seen as Zimbabwe's scant regard for the rule of law and government's
failure to curb the abuse of political power.
The charges against Chinamasa, who spearheaded a purge of the country's
judiciary at the height of the controversial land redistribution exercise,
stemmed from an incident in which he allegedly tried to influence key
witnesses to withdraw charges arising from incidents of violence that rocked
Mutasa's Makoni North constituency in the run-up to the 2005 parliamentary
elections. Although Mutasa was later exonerated, several of his supporters
were implicated in the violence.
Sources told The Financial Gazette yesterday that officials in the
Attorney-General's office were disconcerted by this latest debacle in the
justice system, less than three months after prosecutors clashed with state
security agents in Manicaland over the discovery of an arms cache. Officials
from the AG's office declined to prosecute suspects in the case, citing
undue pressure and interference by state security agents. Two senior law
officers had to beat a hasty retreat from Mutare last March as the state's
case against those implicated in the arms case crumbled in acrimonious
circumstances.
The AG, Sobusa Gula-Ndebele, who is reported to have an icy relationship
with Chinamasa, did not return calls from this newspaper to comment on
developments pertaining to Chinamasa's trial. However, his lead prosecutor
in Manicaland, Levyson Chikafu, this week signalled his department's
eagerness to prosecute.
Mutasa, who is central to the intriguing case, which is widely considered a
sideshow to the complex succession battles in ZANU PF, this week denied
intimidating the magistrates.
"It is all total lies," said the state security minister.
"I have never spoken to any of them (magistrates). They are lying about me
and I don't even know that person saying those things at all," said Mutasa.
"When I appeared before the court in Rusape, it was before a man and not
this woman saying these things. I never said anything intimidating or
threatening. It's all lies, lies," he added.
Chinamasa said he was not at liberty to discuss the issue. "Talk to my
lawyer," he said.
Chinamasa's lawyer, James Mutizwa had urged the court to give his client his
day in court.
The legal fraternity has expressed outrage at the development, saying it was
evidence of the selective application of justice in Zimbabwe.
"It is disconcerting that magistrates feel they can't preside over a matter
that involves a government minister," said Law Society of Zimbabwe president
Joseph James said.
"What this emphasises is the fact that the judiciary here, including the
magistrates, should be independent of the Minister of Justice. Yes, I can
understand the dilemma of the magistrates but all this does really is to
bring the administration of justice in this country into disrepute in the
eyes of the ordinary man in the street," he said.
Jacob Mafume, the coordinator of Crisis in Zimbabwe, a pro-democracy
pressure group, said the magistrate's decision reflected badly on the state
of the law in the country.
"It all goes to the heart of the problem, the breakdown of the rule of law
in this country," said Mafume. "The judiciary is being held at ransom by a
few individuals. It suggests that there are Zimbabweans above the law,
better citizens than others."

Hundreds of billions confiscated in blitz

FinGaz

Nelson Banya

MORE than $100 billion ($100 million under the new currency system) has been
confiscated in the Reserve Bank of Zimbabwe's on-going blitz on businesses
and individuals holding huge stashes of cash, sparking a stampede to buy
cars, cattle and various other assets.

The frenzy went a gear up yesterday as RBZ governor Gideon Gono threatened
to shorten the 21-day window after which the old bearer cheques will cease
to be legal tender.
Gono, however, said the grace period would remain in place for now.
Under the new rules, companies are restricted to $5 billion cash deposits,
while individuals can bank up to $100 million. Deposits exceeding these
stipulated amounts are subject to a tax clearance, with the holder standing
to lose out as the funds are converted into two-year, non-interest earning
anti-money laundering bonds upon failure to justify the cash holding.
Although Gono said the measures were designed to return the local currency
to the formal banking system - 90 percent of the old currency in circulation
was outside the system - it has been suggested that the central bank could
be mopping up the old bearer cheques ahead of the introduction of a new
currency altogether. Unveiling the new family of bearer cheques on Monday,
Gono said this was only the first phase of currency reforms, with the second
phase set to roll out a new currency.
Gono said that by Tuesday, teams made up of the police, Zimbabwe Revenue
Authority (ZIMRA) officers, RBZ officials and the notorious 'Border Gezi'
youth brigade, which are scouring the country's borders and airports for
cash, had confiscated over $100 billion, a tenth of which was 'recovered' in
the premier resort town of Victoria Falls. Significant amounts of cash were
also impounded at the busy Beitbridge border post, where the assault teams
pounced on cross-border traders returning from South Africa. An RBZ team
also raided prominent wholesaler Mohamed Mussa and discovered a $43.4
billion cash-pile.
The teams have mounted an extensive network of roadblocks across the country
for the purpose of searching vehicles and drivers.
Speaking in Bulawayo during a breakfast meeting hosted by the Confederation
of Zimbabwe Industries (CZI), Gono said he was aware of the stampede to
convert cash holdings into assets as a way of evading the central bank's
cash deposit restrictions.
He specifically mentioned a Belgravia car dealership, which he said normally
averaged $2 billion sales per day, but which had reported brisk business in
the aftermath of the policy pronouncement and had $100 billion to bank on
Tuesday.
"The sooner that car dealer takes that money and uses it for manure in his
backyard, the better for him," Gono said.

Soldier in trouble over Mutare arms

FinGaz

Nelson Banya

A CAPTAIN in the Zimbabwe National Army (ZNA), Alfred Chiukira, is being
held in military detention almost four months after being accused of
supplying some of the weapons "discovered" in a mysterious arms cache in
Mutare last February.

ZNA director of public relations, Simon Tsatsi, confirmed Chiukira's
detention, saying the officer was due to appear before a military court to
answer charges of involvement in "subversive activities".
"Captain Alfred Chiukira was arrested on 20 April 2006 on allegations of
participating in subversive activities.
"The officer is presently restricted to barracks until his case has been
finalised by the court," Tsatsi said.
Although he declined to give further details, saying doing so would
prejudice "the course of justice", Tsatsi confirmed that Chiukira's arrest
was connected to the Mutare arms case.
Chiukira is accused of involvement in the arms saga in which the state,
whose case crumbled in spectacular fashion amid charges of interference by
state security agents, has accused the Movement for Democratic Change of
plotting to topple the government. At the time, Mutare South legislator
Giles Mutsekwa, several opposition party activists and former army reservist
Peter Hitschmann were arrested in connection with the case. Former
Chimanimani MP Roy Bennett, who was also implicated in the case, was forced
to flee the country and has since made an unsuccessful bid for political
asylum in South Africa.
While charges against Mutsekwa and the other MDC activists failed to stick,
Hitschmann is still in custody.
Military sources told The Financial Gazette this week that Chiukira is being
held incommunicado at the army's KG6 headquarters in Harare.
"Captain Alfred Chiukira is being accused of involvement in the Mutare arms
cache, a case that was brought before a magistrate were he was acquitted but
his boss, Colonel Mzilikazi has kept him locked up and makes sure he has no
access to the outside world including relatives and friends. His main charge
is that of purportedly supporting the opposition," the source revealed

MDC's Whitehead deported

FinGaz

Kumbirai Mafunda

IMMIGRATION authorities have deported Movement for Democratic Change (MDC)
election expert Topper Whitehead in what critics say could be a
well-calculated crackdown on opposition figures. A computer expert who has
previously prepared a dossier on alleged ghost voters and other electoral
irregularities, Whitehead had his travel documents confiscated before being
bundled out of the country last month on the orders of Kembo Mohadi, the
Home Affairs Minister.

Whitehead was one of the experts in the main opposition party's legal team
that mounted a court challenge against President Robert Mugabe's disputed
2002 presidential election victory.
In an order recommending Whitehead's deportation seen by The Financial
Gazette this week, Mohadi said the human rights activist was declared a
persona non-grata because he was an undesirable inhabitant or visitor.
"It is not in the public interest for me to disclose the reasons why I
deemed Roland Whitehead to be an undesirable inhabitant or visitor to
Zimbabwe," Mohadi said in response to a challenge by Whitehead.
Ellasto Mugwadi, the chief immigration officer, confirmed the confiscation
of Whitehead's travel documents saying he had surrendered his passport
voluntarily to the Registrar General (RG)'s offices.
"He had taken South African citizenship and as we speak he is in South
Africa," claimed Mugwadi.
Documents seen by this reporter however show that Whitehead renounced his
South African citizenship in the 80's after he was appointed managing
director of the defunct Mhangura Copper Mines.
His problems started last year when he attempted to apply for a new passport
to replace an old one that was nearly full although it was expiring in
August 2008. On June 9, he was summoned to the RG's office for interrogation
in the presence of an immigration official and a CID agent.
"Mudede stated categorically that he is not Zimbabwean," said sources.
From Tobaiwa Mudede's office Whitehead was handed over to immigration
officials who escorted him to their headquarters at Linquenda House where he
was ordered to advise the authorities of his movements in the country.
Upon trying to obtain an exit visa from the immigration offices to visit
South Africa to get a travel document, Whitehead was deported through the
Beitbridge border post on June 13.
Whitehead has had brushes with the authorities since being roped into MDC
leader, Morgan Tsvangirai's legal team.
Last year, police raided his home at night and confiscated materials that
could have provided evidence showing how the presidential election was
allegedly rigged.
He is not the first to be shown the exits on flimsy grounds. In May 2003,
the government deported veteran journalist Andrew Meldrum under unclear
circumstances. Meldrum had worked in Zimbabwe for 23 years as a
correspondent for the Guardian and the Observer.
President Mugabe's ruling ZANU PF party also passed a controversial law
earlier this year allowing the government to bar travel by people deemed to
be working against national interests.
Since then the
government has been confiscating passports belonging to
opposition officials and legislators, civic society leaders and government
critics.
Critics say the legislation is part of a broader push to entrench ZANU PF
rule.

Gata bows out of Zesa

FinGaz

Kumbirai Mafunda

THE embattled former executive chairman of ZESA Holdings, Sydney Gata, has
finally bowed out of the troubled power parastatal two months after the
Energy Ministry clipped his wings by abolishing his influential post.

Energy and Power Development Minister Mike Nyambuya served Gata with a
letter advising him to stop reporting for duty soon after the former
executive chairman returned from a business trip to China in June.
Gata had accompanied Vice President Joice Mujuru on a weeklong investment
promotion drive that sought to attract fresh capital from the east in the
wake of biting economic sanctions imposed on Zimbabwe's ruling elite.
Highly placed sources said Gata - President Robert Mugabe's brother in law -
has complied with Nyambuya's directive while his exit package is being
worked out.
Christopher Chetsanga, who was formerly the deputy chairman of the board,
has since been appointed acting chairman.
Following the departure of Gata, who at one time single-handedly managed the
power utility after President Mugabe sacked the entire board, sources said
Nyambuya appointed Ben Rafemoyo to the newly created post of group chief
executive officer in an acting capacity.
Prior to his elevation Rafemoyo was the managing director of the Zimbabwe
Electricity Distribution Company (ZEDC), which was collapsed to form the
Zimbabwe Electricity Transmission and Distribution Company (ZETDC).
Nyambuya also appointed Edward Rugoyi, the acting managing director of the
newly formed ZETDC. Prior to the appointment Rugoyi was the managing
director of the Zimbabwe Electricity Transmission Company (ZETC).
In sweeping reforms unveiled in June, Nyambuya abolished the executive
chairman's post and merged two subsidiary companies that came into existence
when the power utility was unbundled a few years ago.
ZESA now comprises four subsidiaries, which in addition to ZETDC include,
Powertel, Zimbabwe Power Company (ZPC) and Zesa Enterprises.
Although Gata had initially settled for the less powerful post of
non-executive chairman the sources said it was unlikely that he could remain
on the board after an apparent revolt by other non-executive directors
opposed to his management.
The sources also revealed that Gata is claiming entitlement to eight
vehicles. However, an upset Gata who threatened to sue this reporter,
yesterday vehemently denied demanding vehicles as part of his package.
"Chimbosiyaivo nyaya dzaGata. Kana ndakabva chisiyanayi neni," said an angry
Gata. "I can also take action dzakasiyana nekusuwa," he added.
(Give me a break. I can also take action other than suing you).
Gata was appointed executive chairman in 2000, for his second stint at the
parastatal.
He had previously served as the power utility's general manager for eight
years when it was still known as the Zimbabwe Electricity Supply Commission
(ZESC).

Few incidents as currency switch takes effect

FinGaz

Tawanda Karombo

THE financial market yesterday appeared to be trading itself out of initial
operational glitches occasioned by the change-over into the rebased currency
this week, with the bulk of cash transactions being carried out without
incident. Zimbabwe this week lopped off three zeros from its currency
through the introduction of a new set of bearer cheques as the central bank
moved to restore convenience following representations from banks, whose
systems were stretched by the multiple zeros.

The old bearer cheques will remain legal tender until August 21 2006. The
new bearers' cheques come in 1cent, 5 cent, 10 cent, 50 cent, $1, $10, $20,
$50, $100, $500, $1 000, $10 000 and $100 000 denominations.
As a consequence of the rebasing of the currency, prices and service fees
were automatically adjusted to reflect the new dispensation, a development
which initially caused confusion in the market.
Supermarkets surveyed since the policy change have, however, reported that
cash transactions have largely been smooth.
There were, however, problems with cheques, with banks having problems with
those drawn before the August 1 change-over date, while several automated
teller machines and electronic fund transfer point of sale (EFTPOS) were
virtually grounded as systems were reconfigured to suit the rebased
currency.
Although the governing statutory instrument provides that cheques drawn
prior to August 1 would be honoured in terms of the old currency values as
"cheques in transit," problems arose this week when banks were confronted
with cheques issued earlier. Some cheques, the bulk of them made out to
utilities and municipalities, drawn before August 1 only made their way into
the banking system this week and were not honoured.
"There are problems with cheques issued prior to the 31st of July, in many
instances, people have been told to re-issue them under the new system," a
bank executive told The Financial Gazette yesterday.
Another bank official said a good number of City of Harare cheques, issued
late last month, were posing problems.
"We are simply not honouring them," he said.
However, a senior official in the City Treasurer's department said the
statutory instrument made provisions for cheques delayed in the post.
"From my understanding of the statutory instrument, cheques issued in terms
of the old system will be accepted until the end of August. We do not think
it is fair to return the cheques to the drawer when the framework is clear
on the procedure, but we will just have to see what happens," the official,
who requested anonymity, said.
Between August 1 and August 31, all cheques will have to be endorsed and
marked "revalued" in the top right or the bottom left corner, to reflect
they were issued under the new system. Thereafter, all cheques will be
deemed issued in terms of the new currency system.
Supermarkets surveyed by this paper were accepting cash only; with staffers
busy replacing old price tags to reflect the new system.
Meanwhile, the currency reforms have combined with the drastic reduction in
interest rates to spark an asset accumulation frenzy. The Zimbabwe Stock
Exchange immediately responded to the policy interventions by surging 10.27
percent higher on Monday and 18 percent at the close of trade on Tuesday.
Motor vehicle traders also reported brisk business as foreign currency
barons, wary of being caught out with huge stacks of the old bearers'
cheques, simply converted their cash into corporeal assets.
The central bank has imposed a $100 million limit on individual deposits and
$5 billion on corporate deposits, above which the sources of funds would be
investigated and possible penalties imposed.

Dual listed firms under probe for 'externalisation'

FinGaz

Rangarirai Mberi

BULAWAYO - The Reserve Bank of Zimbabwe (RBZ) has opened investigations into
possible "externalisation" of foreign currency through dual listed
companies, central bank governor Gideon Gono said yesterday.

Gono, who accuses the dual-listed counters of being used as "avenues of
externalisation", said a team has already been sent in to investigate the
extent to which exchange laws have been violated.
"We have ignored dual listed companies for a long time, but our silence
should not be taken as approval of what is going on. We can't ignore that
avenue of externalisation any more," Gono said.
Although he did not specify what action he would take, his threats could
hurt stocks such as Old Mutual, which is also listed on the London Stock
Exchange and the Johannesburg Securities Exchange.
Stock in Old Mutual is fungible, meaning a Zimbabwe dollar buyer on the
Zimbabwe Stock Exchange (ZSE) can sell in London for sterling. Market
conditions permitting, the investor can then repatriate his or her earnings
to Zimbabwe for a profit.
Critics say while this is arbitrage, it is not illegal if all trade is done
on the official market.
Shares such as Old Mutual and PPC are used by the market to gauge the real
value of the Zimbabwe dollar, a fact that apparently angers the RBZ, which
has always frowned upon the stock market and sees it as a playground for
speculators.
The ZSE had jumped 19 percent by Tuesday after Gono's policy statement.

Businesspeople act like battered wives

FinGaz

Rangarirai Mberi

BULAWAYO - Like battered wives, Zimbabwean businesspeople still refuse to
throw it all out in the open.

Critics say Zimbabwean businessmen are like that cowardly yellow-belly that
prefers to cry silently into his beer, refusing to confront that bully that
has just pushed him off his barstool.
But the businessmen themselves deny this, saying in today's Zimbabwe, it
makes better business sense to cosy up to government and stay away from any
criticism that can easily be construed as a challenge to the country's
sovereignty.
Which is why, perhaps, it was necessary that the Confederation of Zimbabwe
Industries' (CZI) prepared response to the monetary policy statement sounded
as if it were coming from a government spokesman.
The CZI 2006 Congress opened yesterday with debate between business and
Finance Minister Herbert Murerwa and Reserve Bank of Zimbabwe chief Gideon
Gono.
But after three hours of talk, it was still unclear who the Zimbabwean
businessman wants to be seen as - the cowardly yellow belly crying into his
beer, or the pacifier diplomat that believes that cosying up to government
is the answer.
"I think the greatest problem we have in Zimbabwe," said one delegate, "is
that we are creating a culture of fear instead of one of frankness".
Ever the suave diplomat himself, Murerwa asked for that frankness to show, a
challenge that was only barely responded to by the businessmen.
"What are the issues? You should tell us. What is the economy? It is your
factory," Murerwa asked. "Fear is the same as risk. We should share that
risk. Nothing is gained by doing nothing."
There are many that believe that business is lame in its criticism of
government, whose policies are perceived to be at the core of the crisis.
However, one "diplomat" summed it up when telling The Financial Gazette
yesterday: "What if I come here and say what I really think, and the next
thing, my government contract is scrapped? Where would I be with my
criticism then?"
Government, in the absence of any real growth in new private sector
investment, is easily the biggest buyer for business. In fact, one
businessman has told of how government patronage accounts for nearly 70
percent of his business. So, which sane businessman - whose whole business
is leaning solely on government contracts - is going to tell-it-like-it-is
in public?
So while poor government policy has crippled the private sector, the same
private sector has come to depend on it for survival.
Which means, at least for a while, that meetings such as the CZI congress
will continue to be nothing more than an opportunity for businesspeople to
escape office stress and find somebody worse off than they are to cry
together with.

Rate cut sparks ZSE orgy

FinGaz

Staff Reporter

THE Zimbabwe Stock Exchange (ZSE) raced to new peaks this week on the back
of Monday's huge interest rate cut and easier liquidity conditions. The ZSE's
benchmark industrial index closed at a rebased 137 266.79 points yesterday,
up 15.91 percent on the previous day and an astonishing 56 percent since
Friday as investors predictably sought sanctuary from a raft of monetary
measures announced by central bank governor Gideon Gono on Monday.

Gono's move on interests rates, which saw the key policy rate reduced by 550
percentage points to 300 percent, also proved a fillip for equities, as
money market rates continue to plummet.
Heavyweight counters, such as PPC, which has almost doubled its value in two
trading days to $55 000 per share, BAT, up $500 to $1700, Meikles, up $200
to $700, Econet $260 firmer at $860 and foreign currency hedge stock Old
Mutual, whose stock rose 84 percent since last Friday to $3 500 yesterday,
drove the industrial index.
Financial counters were also among the money, with CFX gaining 233 percent
to close at $2 from a week-opening 60 cents. Barclays moved from $5.50 to
$9, CBZ was up $9 at $24, while Kingdom doubled to $18. The banks should
benefit from loosened statutory reserve requirements and the lower overnight
accommodation rate, which significantly reduces the cost of funds.
The resources index also firmed on the back of gains in gold stocks Rio, up
$300 to $1 300, Halogen $400 firmer at $1 300 and Falgold, which rose from
$6 to $15, all since Monday.
The mining index has gained 36 percent since last Friday and closed at 45
581.1 points yesterday.

Kenya acts to curb govt officials' greed

FinGaz

Mavis Makuni

WITH millions of Africans today enduring the austerity of their existence
against a backdrop of the opulent lifestyles of the ruling elites in their
countries, the government of Kenya is reported to be taking steps to tackle
the incongruity.

Press reports indicate that the government of Mwai Kibaki is to focus on an
aspect of obscene conspicuous consumption that is prevalent in many poor
countries - inordinate numbers of luxury vehicles for government officials.
The Kenyan government has issued a directive instructing senior officials to
surrender state-issued luxury vehicles so as to reduce costs. The move is in
response to a public outcry against the number and abuse of luxury vehicles
issued to ministers and other officials.
The Kenya National Commission on Human Rights (KNCHR) and the local chapter
of Transparency International are reported to have issued a joint report
condemning the wasteful abuse of tax revenues at the beginning of this year.
The report, entitled, "Living Large: Counting the Cost of official
Extravagance in Kenya", exposed the excesses of the Kibaki administration
since it came into power at the end of 20002. "Between January 2003 and
September 2004, the new government spent at least 878 million Kenya
shillings (about US$12 million) on the purchase of luxury cars that were
largely for personal use of senior government officials such as ministers,
assistant ministers and permanent secretaries", said the report.
The civic organisations pointed out that the funds spent on luxury vehicles
would have been enough to see 25 000 children through primary school and
enable 147 000 living with AIDS to access treatment for a year. Kenya has
about two million people living with AIDS and only 40 000 are receiving
treatment although 270 000 are in urgent need of anti-retrovirals.
The Kenyan government consists of 30 cabinet ministers, 39 deputy ministers
and 33 permanent secretaries. According to press reports, top government
officials have at their disposal 11 000 vehicles and about 4 000 drivers.
Most of the vehicles are top of the range Volvos, Mercedes Benz, Land
Cruisers, Range Rovers, Nissan Patrols and Toyota Prados. All this luxury is
funded with taxpayers' money in a country where 56 percent of the population
lives on less than one dollar a day. Reports indicate that the response to
the new directive has been poor, with only 100 vehicles having been
surrendered.
The impoverished Kingdom of Swaziland has one of the highest HIV/AIDS
infection rates in Southern Africa but that has not stopped the country's
youthful absolute monarch, King Mswati III, from indulging his taste for
expensive modes of transport. He sparked an outcry a few years ago when he
announced plans to buy a private luxury jet for US$45 million. His
extravangance was forestalled only when the country's parliament vetoed the
purchase of the jet. However, there has been no shortage of excuses for him
to splurge scarce economic resources on personal indulgencies. In 2004
Mswati ordered the construction at a cost US$14 million of royal palaces to
house some of his 12 wives.
Former Namibian leader Sam Nujoma's plans to acquire a presidential jet were
similarly thwarted in 2003 but he was back in the news the following year.
This was after details surfaced about plans to build a grand presidential
palace for him in an up-market Windhoek suburb at a cost of 500 million rand
His eastern neighbour and friend, President Robert Mugabe who goes
everywhere in a multiple-vehicle motorcade, was reported to have a similar
edifice under construction.
A recent issue of the South African newspaper, the Sunday Times, has a
screaming headline above its lead story, "ZIM EXODUS OVERWHELMS SA", which
details how President Thabo Mbeki's government is fighting an increasingly
losing battle against a tidal wave of Zimbabweans flooding the country. The
paper reports that South Africa deports an average of 265 Zimbabwean illegal
immigrants per day. South African authorities estimate that between three
million and five million Zimbabweans are living in the country illegally.
These and millions more Zimbabweans living in countries such as Britain, the
United States, Canada, Australia and New Zealand have left home to escape
hardships and poverty occasioned by the meltdown of the country's economy.
However, a visitor to Harare, the capital city, would never guess that the
masses faced a relentless and gruelling economic struggle to survive judging
by the fleets of luxury vehicles cruising along the incongruously pot-holed
streets. Most of the posh cars and twin cabs belong to government officials
and big fish working for parastatals and other quasi-government
institutions. In may, the government announced plans to splash $600 billion
on new vehicles for senators and Members of Parliament.
The vehicles include top-of-the-range Mitsubishi, Toyota, Isuzu and Nissan
models. As is the case in Kenya this no-expense-spared buying spree is being
undertaken against a backdrop of widespread deprivation for the masses. More
than 80 percent of the people in Zimbabwe live below the breadline and have
to survive on one frugal meal per day. Some go to bed hungry every night
either because of shortages of basic foodstuffs or because they have been
priced out of reach. Zimbabwe's inflation of over 1 000 percent is the
highest in the world. In addition to chronic shortages of essential
commodities, many public institutions such as schools and health centres are
in an appalling condition but the cash-strapped ordinary folks are still
expected to pay through the nose for services.
French President, Jacques Chirac has warned in a televised speech that
unless something is done to address Africa's economic and development
problems, immigrants from the continent would soon flood the world. African
leaders are usually fond of attributing the continent's problems to
colonialism which ended decades ago for most countries. The leaders are
unwilling to accept culpability for the fact that they have failed to
maintain the infrastructure and even the standard of living their people
enjoyed before independence.
Human rights groups in Kenya say the success of the government's attempts to
fight greed and avarice through a new transport policy for government
officials will depend on how transparently the exercise will be conducted.
They have called for the dismissal of those who fail to comply with the new
code of conduct. Said Kennedy Masime of the Nairobi-based Centre for
Governance and Development as quoted in press reports, "We are a poor
country and it is wrong for people in government to exercise this kind of
opulence. It undermines the government's fight against poverty. It is in bad
taste for senior government officers to move around in expensive machines
which consume a lot of fuel purchased with taxpayers' money." That statement
applies to countless other African countries but it is doubtful that any
will follow Kenya's example.

ZANU PF shaken by 'Unity Accord'

FinGaz

Njabulo Ncube

OVERTURES made by the country's opposition political parties to form a broad
alliance to force the ruling party to the negotiating table have shaken ZANU
PF, which is under intense pressure to address a deepening political and
economic crisis.

ZANU PF insiders said although the ruling party was acting as though nothing
had happened, last weekend's show of unity by opposition parties had caused
panic within its ranks. However, ruling party spokesman Nathan Shamuyarira
dismissed the development as a non-event.
Analysts said ZANU PF has been the biggest beneficiary of fragmentation
among opposition political parties in Zimbabwe and could use state machinery
to scuttle the alliance before it gathers momentum.
"It (unity) is not good for our ears although we know how to deal with it,"
said a senior ZANU PF official, speaking anonymously.
On Saturday, MDC leader Morgan Tsvangirai led a coalition of opposition
parties, including Arthur Mutambara's rival MDC faction, that pledged to
work together in a new bid to cajole President Robert Mugabe and his ruling
party to the negotiating table.
Other opposition figures who embraced the "Unity Accord" in Harare included
Paul Siwela of ZAPU, Daniel Shumba of the United People's Party, Wurayayi
Zembe of the Democratic Party and Jethro Mpofu of the United People's
Movement.
President Mugabe has refused to enter into dialogue with the opposition,
especially the MDC, insisting on talking to its "principals", a reference to
British Prime Tony Blair, who he accuses of working with the main opposition
party to effect regime change.
Shamuyarira said ZANU PF was not bothered by the opposition parties' plans.
"We are not concerned at all about the opposition's activities," he said. "I
think it is something that does not scare us and I don't think it will help
us to comment on what the opposition is doing or not doing. I don't think
ZANU PF should be bothered to comment about the opposition."
Analysts, however, said ZANU PF can only ignore the latest initiative at its
own peril.
"It should really be a cause for concern for the ruling party because they
know that a united opposition can pack a powerful punch," commented Ernest
Mudzengi, a political analyst.
Mudzengi added: "If the leaders of these camps choose to elevate personal
egos at the expense of pragmatism, then they will be casting themselves into
the realm of political irrelevance. I am sure none of them would want to
become irrelevant. The fact that the leaders embraced and talked at the
convention and on its sidelines, is an indication that the church initiative
might help propel Zimbabweans from the vagaries of the Kenyan syndrome," he
said.

Project Sunset: the $2.5billion myth

FinGaz

MONDAY'S monetary policy review statement is best described as one of the
worst three hours I have ever spent. Good thing I decided not to go to the
briefing else, like as number of invitees present, I would have dozed off.

Nonetheless the governor, visibly in a tight corner (his body language
showed it), managed to declare a few carrots to industry. In what might best
described as a starting point to sanity he has eliminated multiple exchange
rates for exporting companies, meaning all companies can now operate on the
same platform. It is high time one realizes that covering up non-performance
of sectors by subsidizing them (like in he case of parastatals and ASEPF)
only goes the extra mile to damage the country's competitiveness in the long
run.
Aside from the export incentives the statement lacked both depth and detail.
It was just mentioned in passing that the currency would be devalued to
$250,000 to the greenback pending the formation of some mortal-constituting
body to be chaired by the governor. The transparency relating the
determination of the movement in currency was left for all to guess.
And instead of addressing the real issues of subsidies and foreign currency,
the governor laboured on a number of non-consequential factors like
discipline, and incoherent references to Christian scripture. So long there
are subsidies and currency price fixing, parallel markets will remain a
creation of the RBZ

Dog
Oxymorons
The three hour speech also had a handful of contradicting statements. On
what we listened to we picked out the following:

Oxymoron 1: Banking Standards
"We vow to attain international banking standards before
2008. . ."
Yet . . .
Individuals will not be able to access their deposits on demand if deemed
too much (i.e. more than $100,000,000 or US$166 per day)

Oxymoron 2: Project Sunrise (Sunset?)
Replacing currency is not a panacea to inflation.
Yet.
We are replacing currency largely to counter speculative activities that
drove prices high (inflation)

Oxymoron 3: US$2.5 billion
Parastatals should finish off their asset valuation so that we sell them in
order to get the much needed foreign currency for economic stabilization
Yet.
If your concern is whether we have reached the US$2,5 billion for FDI and
cash by June 2005, the short answer is a . . . yes.

Zim move would set Econet back 10 years'

FinGaz

Staff Reporter

SENIOR Econet Wireless Group executive Zachary Wazara says if the company
and its founder Strive Masiyiwa were to relocate to Zimbabwe today, Econet
would have set itself back 10 years on its positioning within the global
telecoms industry. Masiyiwa reportedly turned down an invitation to lead a
faction of Zimbabwe's divided opposition Movement for Democratic Change
(MDC), and Wazara says "it could be a very long time before (Masiyiwa)
returns" to Zimbabwe.

The Econet founder relocated to South Africa in 2000 to spearhead the group's
expansion following a decision taken in 1997 to expand the company globally.
In an interview, Wazara said Econet had grown to such a large scale and was
expanding so rapidly on the global telecoms market that it now needed
instant access to capital and skills that Zimbabwe could not provide.
"If we tried to move Econet to Zimbabwe we would be taking the company back
10 years in terms of its strategic positioning within the global
telecommunications industry. Our funding and support structures are
predicated on us being based in South Africa, and Masiyiwa being at the helm
of the company," he said.
Zimbabwean businessmen seeking a global reach have been moving out of
Zimbabwe in recent years. ABC, headed by Doug Munatsi, has a primary listing
in Gaborone, Botswana, where the merchant bank sees better potential to
launch into Africa.
Although Zimbabwean businesspeople admit to homesickness, this evidently
weighs much less than the advantages to business.
"We need access to capital on a large scale, and we also need skills that
Zimbabwe is not able to provide. Currently in Africa, only South Africa has
the capital and skills base to support a global business. This has nothing
to do with the current economic climate in Zimbabwe. If we need to raise
US$100 million in a few days we can do it from South Africa and nowhere else
in Africa at the moment. If Nigeria continues on its current reform track it
will be able to support global businesses within the next 10 years," said
Wazara.
Wazara who, as executive director responsible for international operations
was involved in securing a US$20 million loan to expand the Zimbabwean
network, said the Econet Group would continue to invest in Zimbabwe. But he
says Zimbabwe will not be able to support a business operating on a global
basis for a long time, even after the crisis ends.
"A global company needs access to capital that can move around with minimal
hindrance. You need to be able to hire people from anywhere in the world
without the red tape you have in Zimbabwe, and those people have to be paid
in foreign currency. The people we hire from other countries are not
expatriates but full time employees whom we want to keep permanently. In
Zimbabwe they would not allow us to do that. As a result we would not be
competitive in the global environment. There would have to be very
fundamental business climate reforms over a very long time before you can
attract multinational companies to use Zimbabwe as their base. Sadly it
applies to almost all the African countries except South Africa and
Botswana," he said.
Before moving house, Econet had operations in just two countries. Now it has
offices in more than 10 countries in Africa, Europe and the East Asia
Pacific rim, operating in the core areas of mobile cellular and fixed
telephony, Internet and satellite services.
On Masiyiwa, Wazara said: "He is a businessman, and he is not interested in
politics. The current vision and potential around the Econet Group presents
very exciting challenges and opportunities that are transcontinental and he
is passionately engaged in these. This makes his current job very demanding
and he finds very little time to even think about all these political
intrigues that come out of Harare," Wazara said. "All I can say is that all
those people who talk about him going back to Zimbabwe soon should not hold
their breath because it could be a very long time before he returns. In
Zimbabwe people now see politics in everything, and that is very sad,
because some of us want to be able to help without being dragged into
politics."

Dunlop to get lifeline from distress fund

FinGaz

Staff Reporter

DUNLOP Zimbabwe, the country's largest tyre manufacturer, is set to receive
a boost from the government under the $5 trillion Distressed Companies Fund.

Industry and International Trade Minister Obert Mpofu revealed this week
that the company was one of over 300 companies that applied for assistance
from the fund.
He said: "Dunlop is a very strategic company that we, as government, will
not watch to the time it folds. On the part of government, we have resolved
to make it one of the companies that will benefit from the $5 trillion
facility that we unveiled for distressed companies".
Mpofu expressed optimism that with the restructuring that was underway at
the company, Dunlop would emerge from its financial quagmire a better
company.
Dunlop slipped into crisis last year after it failed to secure foreign
currency to finance its operations, a development that saw it downsizing
operations and sending more than 500 employees home.
Its working week was cut down to three days and the company had to operate
with less than 150 employees. At the time, the company required over US$350
000 for its operations and for the acquisition of raw materials.
The closure had a negative impact on the operations of a number of
government arms that depended on tyres from Dunlop while the private sector
also felt the effects of the closure.
Mpofu said Dunlop is currently restructuring to improve operations.
"We hope they will come back into business a vibrant company that will not
fall into the same trap as soon as they start operations," he said. "We are
aware that in the meantime, they are into production that enables them to be
able to pay some of their expenses," Mpofu said.
The new managing director at the company, Eugene Turikwa, this week refused
to discuss the company's revival with The Financial Gazette saying that he
was still new at the company.

Fiscal, monetary policy implemantation challenges

FinGaz

ON July 31, the governor of the Reserve Bank of Zimbabwe revalued the
currency. This has significant and far-reaching implications on business and
its related activities which executive management and key decision makers
should be aware of.

The impact of the revalued currency on businesses should not be viewed as
simplistic; its far reaching consequences and impact will be felt on all
components of the business. In response to this, each business entity
requires a structured approach to managing the change process. There is a
misconception that the revalued currency affects only the financial
management of a business. In addition to the impact on financial management,
revaluing currency also has an impact on the following:
lInformation Technology
lFinance
lOperations
lCompliance & Legal
lStrategy
Information Technology
Most businesses in Zimbabwe are IT (Information Technology) driven and
therefore the impact of the changeover on the business will be significant.
Companies should not underestimate the issues that need to be addressed
during this changeover process. IT systems should be able to operate under
the revalued currency. One of the IT challenges is to manage the transition
of relevant business systems from 31 July to 1 August 2006 using the
revalued currency. Clearly, managing this process requires the business to
run a period end at 31 July including a full system backup to ensure that
historical data is stored. From 1 August 2006, the IT systems should reflect
transactions and account balances with the revalued currency. The process of
transition 31 July to 1 August 2006 will differ vastly from business to
business and it is advisable that relevant internal and external
stakeholders are consulted which may include system vendors, internal
auditors, finance department, customers and financial advisors.
Another challenge is IT availability during this transition time and this
may have a varied impact on normal trading operations. Key decision makers
need to keep this in mind as they plan the change process to ensure trading
activities continue. The use of manual systems as an alternative may create
additional risks e.g. fraud and error that need to be managed.
Finance
The impact on finance of this transition affects financial reporting,
internal controls, accounting and annual reporting. The challenges arising
in this area should include appropriate controls to manage the financial
process to ensure the integrity of financial data. The impact on the
invoicing and debtors ledger, stock valuation, purchases and creditors,
payments and receipting cycle, bank reconciliation process among others, all
need to be considered. The relative impact of any of these issues will vary
depending on the nature and size of the business.
For instance, the aging of the stock ledger may be distorted depending on
the method of transition from old to revalued currency. The valuation of
stock may be distorted depending on the valuation method that is in place
and the method of transition of the records from the old to revalued
currency systems. For example if the valuation method is FIFO and the
transition occurs on a brought forward balance rather than a transaction
method, this may distort stock valuation going forward. A similar challenge
arises on the debtors system. If the debtors ledger is maintained on an open
item basis and on transition to revalued currency the records are brought
forward on a balance basis rather than a transaction basis the aging of the
brought forward ledger may be distorted as receipts will not be matched to
transactions. A similar challenge may arise on the creditors' ledger. As far
as the bank reconciliation is concerned, the challenge may occur where bank
reconciliations are automated with downloaded bank records.
The internal controls and procedures over the transition to the new currency
must be clearly specified and documented; it is advisable that businesses
solicit the assistance of internal audit departments to confirm all due
processes have been followed to ensure the integrity and accuracy of
financial data before and after transition. We draw your attention to the
nature of risks that may be prevalent in the transition process. For
example, on transition of the debtors ledger balances from the old currency
to the revalued currency a debtor's balance may fraudulently be adjusted by
10 000 instead of 1000 units and a corresponding journal adjustment put
through the control account. In this case the adjusted debtors' ledger will
reconcile to the adjusted control account. The control should therefore be a
focus on journal entries in control accounts immediately before and after
transition. We cannot sufficiently emphasise the risk of IT generated
journal entries in this transition process. These also have to be carefully
managed.
Financial statements should be prepared for the period to 31 July 2006 in
terms of the old currency. Another financial statement should be prepared
for the period 1 August 2006 to the end of the financial year. For purposes
of annual financial reporting the statements for the year end will be stated
in the revalued currency. Challenges in respect of earnings per share,
headline earnings, disclosure of share capital will need to be considered as
these all need to be stated in terms of the revalued currency.
Operations
The method of transition from old currency to new currency could have a
major impact on certain aspects of operations depending on the extent to
which IT systems drive the operations. For example, an organisation that has
fully computerised and integrated procurement, production, inventory,
distribution, sales (ERP systems) needs to consider the implications of
offline transactions. If in the transition period the historical record
cannot be brought forward, this may impair the functionality of the system
to support the business.
Consideration must be given to the nature and content of the reporting
system to continue to produce information that is accurate and reliable. For
example, are the reorder quantities of inventory still correct or has
transition distorted the information?
For those organisations with market and competitor information, the
financial information will need to be rebased to the new currency for proper
comparison and analysis. Pricing lists and price displays will need to be
updated to reflect the revalued currency as well.
Compliance & Legal
The revalued currency has an impact on the payroll applications. Zimra have
indicated that old currency values must be used up to 31 August 2006 being
in line with the "first" year of assessment. Issues may arise due to payment
being made in revalued currency as well as systems adjustments.
It is necessary to consider the potential legal implications of the
introduction of the revalued currency. For instance the impact on
contractual arrangements with third parties, employees etc. It may be
necessary to consult legal counsel on this matter.
Strategy
As part of managing the transition from old to revalued currency the
business needs to assess the impact of the transition on the business
objectives and on the overall business strategy. Can the business continue
to operate post 1 August as it did pre 1 August 2006?
The impact assessment is entity wide and should be part of the close process
of managing the transition.
Implementation
To drive the effective management of the change we recommend that a project
team be established, the size and constitution of the team will depend on
the complexity of the transition process as assessed by management. The team
should comprise identified key management from all key areas of the business
e.g. finance personnel, IT personnel, internal audit, procurement, sales and
distribution, manufacturing , human resources as well as key service
providers.
The team needs to document its approach to the transition process, to
identify key responsibilities, critical activities and timelines. The
process should be driven by the highest levels of the executive team. We
expect that in terms of effective corporate governance procedures that the
audit committee will receive a report on the transition process and this
will be communicated to the board. A structured and managed approach to the
transition of the revalued currency will ensure the changeover is effective,
efficient and least disruptive to the business activities.
Disclaimer: This publication contains information in summary form and is
therefore intended for general guidance only. It is not intended to be a
substitute for detailed research or the exercise of professional judgement.
Neither Ernst & Young Zimbabwe nor any other member of the global Ernst &
Young organisation can accept any responsibility for loss occasioned to any
person acting or refraining from action as a result of any material in this
publication. On any specific matter, reference should be made to the
appropriate advisor.

WFP forks out US$31.4m for Zim food aid

FinGaz

Staff Reporter

THE World Food Programme (WFP) has pumped US$31.4 million into crisis-torn
Zimbabwe to help close a food deficit in the country. Of the total US$37.7
million the WFP received as a donation from the European Commission last
Wednesday, the larger chunk of the donation has been channelled to Zimbabwe
while Malawi and Zambia, which recorded improved crop harvests in the
just-ended agricultural season, were allocated US$3.8 million and US$2.5
million, respectively.

The WFP said the food assistance will benefit 800 000 of the most vulnerable
people in Zimbabwe, including children threatened with malnourishment and
patients receiving anti-retroviral therapy.
Thomas Yanga, the WFP acting regional director for southern Africa said the
food gift comes at an opportune time for most Zimbabwean families as they
have already sold their grain harvests and are in deficit.
"For example, Zimbabwe's high inflation rate makes it increasingly difficult
for the poorest to buy any food at all, even when it is available on the
market. Many people have already sold everything they have," Yanga said in a
statement.
The WFP gesture comes at a time when the Zimbabwean government claims to
have harvested 1.8 million tonnes of grain - enough to avoid further grain
imports. But food agencies put this years' harvest at between 900 000 tonnes
and 1.1 million tonnes.
Zimbabwe plunged into a food crisis in 2000 after veterans of the liberation
war forcibly seized productive farmland belonging to white commercial
farmers. Since the collapse of commercial agriculture in 2000, western
countries through the WFP and other donors provided food for up to 5.5
million people in 2005.

New farmers benefit from $7bln ReNaissance grant

FinGaz

Stanley Kwenda

NEWLY resettled farmers who have for long been struggling to get loans from
banks due to lack of collateral might have found a way around the problem.

A group of soya bean farmers have this year benefited from a $7 billion
grant made available by ReNaissance Merchant Bank, through the Agricultural
Research Council (ARC) whose logistics are funded by W.K Kellogg Foundation.
Through the programme, newly resettled farmers formed a National Soya Bean
Association (NSBA), which they have used to bargain for loans and farming
inputs using the ARC as a guarantor.
"The programme targets communal farmers with the aim of helping them
commercialise the production and use of soya beans," said Elizabeth Musimwa,
ARC national programme coordinator.
The programme was started in 2002 and now draws some of its members from
both A1 and A2 commercial farmers.
"The objective is to link these farmers with the stakeholders in the
commodity chain, people such as the banks and buyers of their produce. Apart
from helping them access funding from banks and other institutions, the
programme also helps them bargain for better prices and offer advice on when
to sell or hold on to their product because they can not donate their
produce," said Musimwa.
She added that the programme helps the new farmers to try and influence
policy making in anything that has to do with their welfare as soya beans
farmers.
Soya bean is a highly nutritious and strategic crop which attracts high
prices on the commodity market.

New Concession mine produces world's second hardest mineral

FinGaz

Tawanda Karombo

A DEVELOPER has begun mining corundum in Concession, the second-hardest rock
known to mankind and whose two popular varieties are rubies and sapphires.

The hard mineral is used in the coating of jet engines and has a big market
in Europe, where there is huge demand from airplane makers.
Chris Mukanda, head of Corundum Mining, said the company is already
exporting 90 percent of its output.
Apart from jet engine coating, Corundum is also used in underground and
water construction.
"Because of its hard properties, Corundum is used in sea and water
construction as well as other underground constructions," Mukanda added.
Corundum is the second hardest stone after diamond, and it has been used for
making drills and grinders.
Apart from the extraction of corundum, the mining firm is also involved in
the extraction of Tantalite, a heavy black mineral, used in the coating of
cell phones.
About one hundred families are employed at the mine and several others,
drawn from around the Mazowe area, are set to get part-time employment in
the coming few months as the firm gets more contracts and expands.

Unity Accord, Leadership Code revisited

FinGaz

Geoff Nyarota
THE GEOFF NYAROTA COLUMN
MUCH has been written over the years about the Unity Agreement, which the
ruling ZANU PF party, led by its president Robert Mugabe and the then
opposition PF-Zapu party, led by the late Dr Joshua Mqabuko Nkomo, signed in
December 1987.

Judging from some of the views expressed, it appears that many who wax
lyrical about this historic document have obviously not had the privilege of
acquainting themselves with the contents of the 1987 Accord. I recently
unearthed a copy among some old papers. I was so amazed by some of the
document's contents that I am reproducing it here in its entirety for the
benefit of all those persons who have always had more than a passing
interest in the history of our beloved and beleaguered country.
It is stated in the preamble to the agreement that:
Conscious of the historical links between ZANU PF and PF-Zapu in the
struggle for national independence and democracy through the strategy of the
armed struggle and their alliance under the banner of the Patriotic Front;
Cognisant of the fact that the two parties jointly command the support of
the overwhelming majority of the people of Zimbabwe, as evidenced by the
general election results of 1980 and 1985 respectively;
Notwithstanding that ZANU PF commands a greater percentage of the said
overwhelming majority of the people of Zimbabwe;
Desirous to unite our nation; establish peace, law and order and to
guarantee social and economic development and political stability;
Determined to eliminate and end the insecurity and violence caused by
dissidents in Matabeleland;
Convinced that national unity, political stability, peace, law and order,
social and economic development can only be achieved to their fullest under
conditions of peace and the unity primarily of ZANU PF and PF-Zapu;
We, the two leaders of ZANU PF and PF-Zapu, that is to say Comrade Robert
Gabriel Mugabe, First Secretary and President of ZANU PF, and Comrade Joshua
Mqabuko Nkomo, President of PF-Zapu, assisted by a sub-committee of equal
members of ZANU PF and PF-Zapu, held 10 meetings to discuss the possible
unity of our two parties;
Consequent upon these meetings, and paying due regard to all the principal
issues raised thereat, we have agreed as follows:
lThat ZANU PF and PF-Zapu have irrevocably committed themselves to unite
under one political party;
lThat the unity of the two political parties shall be achieved under the
name Zimbabwe African National Union-Patriotic Front, in short ZANU PF;
lThat Comrade Robert Gabriel Mugabe shall be the First Secretary and
President of ZANU PF;
lThat ZANU PF shall have two Second Secretaries and Vice Presidents who
shall be appointed by the First Secretary and President of the party;
lThat ZANU PF shall seek to establish a socialist society in Zimbabwe on the
guidance of Marxist-Leninist principles;
lThat ZANU PF shall seek to establish a one-party state;
lThat the leadership of ZANU PF shall abide by the Leadership Code;
lThat the existing structures of ZANU PF and PF-Zapu be merged in accordance
with the letter and spirit of this agreement;
lThat both parties shall, in the interim, take immediate vigorous steps to
eliminate and end the insecurity and violence prevalent in Matabeleland;
lThat ZANU PF and PF-Zapu shall convene their respective congresses to give
effect to this agreement within the shortest possible time;
lThat, in the interim, Comrade Robert Gabriel Mugabe is vested with full
powers to prepare for the implementation of this agreement and to act in the
name and authority of ZANU PF.
Hawk-eyed readers will have noticed that the document signed by President
Mugabe and Dr Nkomo does not specify that one of the two Vice-President of
ZANU PF and, presumably, of Zimbabwe necessarily has to emerge from ranks of
the former PF-Zapu, as has generally been assumed by journalists, academics,
the public at large and even ZANU PF itself.
While it is largely accepted that the Unity Agreement brought to an end the
atrocities committed by the Five
Brigade against the people of Matabeleland and parts of the Midlands, the
document signed by the two rival politicians does not, ironically enough,
make any specific reference to the Gukurahundi atrocities. Rather, it,
expresses a commitment to "eliminate and end the insecurity and violence
caused by dissidents in Matabeleland". With the passage of time it is not
easy to determine whether this was a mere oversight on the part of the
PF-Zapu delegation or an act of cunning on the part of their Zanu-PF
counterparts.

While it was a prime objective of the agreement to transform Zimbabwe into a
de jure single-party state, after the merger of Zanu-PF and PF-Zapu, other
parties mushroomed. The most notable were Edgar Tekere's Zimbabwe Unity
Movement (ZUM) Enoch Dumbutshena's Forum Party and Margaret Dongo's Zimbabwe
Union of Democrats (ZUD). The emergence in September 1999 of the Movement
for Democratic Change under the leadership of former trade unionist, Morgan
Tsvangirai, effectively put paid to any aspirations on the part of Zanu-PF
to transform Zimbabwe into a single-party socialist state. In due course the
very survival of Zanu-PF itself was threatened by the burgeoning opposition
party.

The most ambitious clause of the Unity Agreement was the claim that
"ZANU(PF) shall abide by the Leadership Code". Next Thursday, August 10,
marks the 22nd anniversary of Zanu-PF's second anniversary. This rather
historic convention, the first to be held on Zimbabwean soil by the ruling
party, was held in the rather incongruous ambience of the Borrowdale Park
Racecourse in Harare on August 10, 1984. In the face of growing evidence of
self-enrichment and corruption among the leaders of the party, Mugabe
unveiled the much-acclaimed Leadership Code.

Targeted for enforced good behaviour in terms of the code were all
government ministers and provincial governors, members of the judiciary and
the public service commission, as well as military, police and prison
officers. Rather ambitiously, also roped in for exemplary behaviour were all
members of Zanu-PF's central committee and the party's provincial, district
and branch officials. Thousands of lesser civil servants, parastatal and
local authority officials were also covered by the code.

"It is necessary, desirable and expedient to impose on leaders a strict code
of behaviour to assure the advent of socialism," the drafters of the code
enthused to the amazement of observers who saw an abundance of evidence to
the contrary. The Leadership Code, long forgotten until The Herald recently
invoked its memory, sought to impose a minimum standard of behaviour and
conduct on the ruling elite. One of the code's fundamental canons was the
requirement that political leaders disclose their assets periodically. To my
knowledge, not a single politician has done so in the 22 years since the
second congress of Zanu-PF.

In fairness to its drafters or as an ingenious safety valve, the code did
concede that by virtue of their privileged position in society, politicians
enjoyed unequalled and unprecedented access to diverse sources of public
funds. As such, they could fall prey to temptation and pursue personal
enrichment at the expense of service to the people.

The code nevertheless pronounced rather ambitiously:

"Political leaders will not make collusive arrangements with other people or
secretly obtain consideration for themselves or other people or fail to
disclose the full nature of the transaction to the party or to the
government.

"They will not decline to disclose their personal financial affairs to a
properly constituted party or government body of officials investigating
corruption.

"In no circumstances will relatives be used as fronts for business ventures.
It will be the duty of a leader to defend the party and government at all
costs against enemies. Failure to do so will call for disciplinary action."

While the most successfully implemented provision of the code appears to
have been the duty of leaders to defend the party at all costs against
enemies, real or perceived, the first serious attempt by Zanu PF to enforce
accountability was effectively scuttled. The establishment of the David
Karimanzira Committee of Inquiry to investigate the affairs of the ruling
party's corporate octopus, comprising M&S Syndicate, Zidco Holdings and
Zidlee Enterprises, which had operated with little accountability for
decades under the stewardship of party strongman Emmerson Mnangagwa, was the
first such attempt to enforce accountability and transparency in the complex
business affairs of Zanu-PF.

No sooner had Karimanzira and members of his committee descended on the
executive management than top executives, brothers Jayant and Manharlal
Chunibal Joshi, caught the next Harare to London flight, never to return to
our country.

Back at Borrowdale in 1984, Mugabe issued an ultimatum to the political
elite: forgo wealth or quit masquerading as leaders.

"You cannot have it both ways", he said to rapturous applause and the
ululation of members of the formidable Zanu-Pf Women's League.

The Zanu-PF leaders must have chuckled to themselves knowingly as they gave
their leader a standing ovation. They have had it both ways ever since.
Mugabe has also had it both ways; making sanctimonious anti-corruption
pronouncements while harbouring corrupt elements within the ranks of his
party. I deleted the first half of this paragraph when I read that deputy
information minister, Bright Matonga, had been arrested on charges of
corruption. I reinstated it when I read subsequently that the documents
pertaining to the investigation of the case had allegedly disappeared in the
office of Gideon Gono, the Governor of the Reserve Bank of Zimbabwe, Gideon
Gono.

Those who have been exposed by the press or condemned by the courts have in
the past been dutifully protected, while the gravy train has gathered
momentum.

Windfall for citizens of Kuwait

Meanwhile, the following is not a fairy tale. The citizens of oil rich
Kuwait are set to receive a grant of US$690 dollars each. The government of
the oil-rich Arab state announced that its financial assets had topped
US$166 billion dollars and the proposed disbursement was set to benefit all
the one million citizens.

"The cabinet decided to provide all Kuwaiti citizens with a grant of 200
dinars each," a minister announced after a cabinet meeting. It is utterances
such as these that have the potential to generate popularity for any
government, whatever British Premier, Tony Blair, or US President George
Bush, or their representatives in Harare may say.

A word of caution, however, before Kuwait becomes the next destination of
choice for Zimbabweans fleeing from grinding poverty, endless fuel
shortages, unemployment and almost 1 200 percent inflation, school fees so
high that even the President himself allegedly now refuses to pay for the
education of his offspring at Hartmann House. The two million foreign
workers already living in the oil-rich emirate were not included among the
beneficiaries of this generous largesse.
Finance Minister, Herbert Murerwa, and Reserve Bank Governor, Gideon Gono,
will be dismayed to learn that Kuwait has posted a surplus over the past
seven fiscal years, totalling more than US$50 billion. I suspect Gono's
Kuwaiti counterpart never resorts to rhetorical assurances such as, "Failure
is not an option," or "Failure is still not an option."

While a tiny percentage of enterprising Zimbabweans, some of them crooked,
live in the lap of luxury, driving fancy cars and living in stately
mansions, government policies currently assure the majority of citizens of
cradle-to-grave misery. Kuwait provides a magnificent welfare system to its
citizens. From birth to death they receive most public services at heavily
subsidized prices. Above all they pay no income tax.

Some 92 percent of Kuwait's 300,000-strong work-force is employed in civil
service jobs, with high wages and minimal work pressure and mental stress,
it is reported. Government raised the salaries of citizens by $170 monthly
last year, yes a whopping Z$76 million increase every month at the
semi-official black-market rate.

Back home our own genteel minister of finance announced last week a shocking
Z$327,2 trillion supplementary budget which will create a hefty deficit and
place government Z$253 trillion in the red.

Government is currently indebted to the tune of a staggering Z$46,1
trillion. In simple terms, every citizen of Zimbabwe owes Z$4 million on
behalf of government!

Saying of the Week

"We are amazed as to what would be going on in the minister's mind when he
says service delivery (in Harare) is improving." - Zanu-PF Harare province
spokesman William Nhara, referring to Local Government Minister, Ignatius
Chombo. (The Zimbabwe Independent, Friday July 28.)

Yes, that's what I call action Mr Governor

FinGaz

Bornwell Chakaodza
NATIONAL AGENDA
BY ALL accounts, it was a straight-talking Gideon Gono presenting his Mid
Term Monetary Policy Statement last Monday, giving out a lot for everyone to
digest and telling us a few home truths that we can only ignore at our
peril.

The talk on everyone's lips this week and for some time to come is of course
the chopping off of the three zeros which is a welcome respite from the
inconveniences associated with doing business and carrying large amounts of
cash in large bags, suitcases and car boots.
Naturally, there will be a lot of confusion and anxiety for weeks to come
among both the old and the young regarding the changeover to the new bearer
cheques but there is no denying the fact that the absolute chaos and
absolute mess that had been created by the old bearer cheques on IT systems
and the hazard of cash hoarding will become a thing of the past.
But the fundamental questions that naturally come to mind though are: Will
this change anything? Will there be tangible changes on the ground as far as
the debilitating crisis that we are currently undergoing is concerned? Or is
the slashing of the zeros a cosmetic and purely superficial exercise? There
can be no doubt that these are valid and legitimate questions that a largely
skeptical Zimbabwean population is asking.
Yes, the swords of the skeptics are already being sharpened - and rightly
so. Indeed, the challenges that we face particularly in the absence of both
political and economic reforms require that people be skeptical of anything
that is dished out to them. But we must equally avoid the journalistic
cynicism - as a pose, a sophomoric attitude.
I agree wholeheartedly with the author H G Wells who described cynicism as
humour in ill-health. Intelligent skepticism can and should be compatible
with a basic belief in progress and a faith in humanity's capacity for
common sense. And in us being skeptical, it is very important to give credit
where credit is due.
Governor Gono - of course with some gaps here and there - went some distance
in his zeal to meet challenges head-on. In addition to providing incentives
to the agriculture, mining and other economic sectors, he had a powerful
message not only for the political party in power but also for all
Zimbabweans.
"We owe it to ourselves, more than anybody else outside our borders, to get
back to work as a country, and to regain our confidence as a people . . .
let us get our politics right for those in politics, our economics of
production right for those in business, cement these two into economic
patriotism, get our social interactions and behaviours right and our
turnaround will not take us long to accomplish."
Indeed, in our quest to cure the Zimbabwean crisis, economic policies on
their own will not do the trick.
There are important policy changes that the ZANU (PF) government has to
introduce but is reluctant to do so.
If anything, the government continues to trample on human rights in this
country. In terms of democratic values and governance issues, Zimbabwe has
moved and is moving backwards.
This is a very unhealthy environment for an economic turnaround and for
economic growth.
What Gideon Gono failed to precisely articulate in his otherwise very
insightful, stylishly-written and solid presentation were the obvious
impediments to investor and consumer confidence in the form of obnoxious
laws that have been passed by the majority ZANU (PF) MP's in the Parliament
of Zimbabwe in recent years and other draconian Bills which are on the cards
as I write. The good Governor should have come clean on these matters if
nothing else but to clearly demonstrate the futility of what he is trying to
achieve in the face of such a repressive political environment.
The Constitutional Amendment (No. 17) Act is an albatross around the neck of
anyone wanting to invest and do business in Zimbabwe. This is an Act which
in reality is burning the bridges rather than building them. Why should
anyone pour money into a country when he knows that there is no recourse to
the courts when things go wrong? Indeed why? Only a sick mind will do that!!
Or a candidate for a mental institution!
Let us be frank and candid with each other. One of the greatest sources of
failure in our country at the moment is the lack of a rule of law which
upholds private property. The world has become a global village and in a
more open, global economy, investment goes to the best. It is just as simple
as that! The Governor has been saying just as much albeit in a generalized
manner.
With the proposed Interception of Communications Act and General Laws
Amendment Act, who would want to do business with Zimbabwe? Not to mention
the repressive Public Order and Security Act (POSA) and the Access to
Information and Protection of Privacy Act (AIPPA) spearheaded by the then
evil Minister of Information and Publicity Rasputin Moyo. These bad laws all
add up to a repressive legislation environment which will make very
difficult for Gideon Gono and his team to turn things around.
The Zimbabwean tragedy is that when the whole world is opening up in terms
of communication, political and economic freedoms as well as the rule of
law, Zimbabwe is closing in. Successful countries in both good times and bad
are those that combine not only complimentary fiscal and monetary policies
but also political and economic freedoms. This is sadly lacking in our
country.
It is to his credit that Governor Gono has added his weight to the urgent
need and necessity to bring closure to the Land Reform Programme by
'declaring a moratorium to new allocations, new invasions and new
disruptions effective 1 September 2006.' For me, this should have been done
yesterday. For how can productivity which is so critical for the generation
of the much-needed foreign currency be ensured when such terrible and
unpatriotic behaviours continue to happen and the perpetrators get away
literally with murder?
Any kindergarten child will tell you that printing money which is not backed
up by productivity whether in agriculture, mining and manufacturing causes
not only inflation but is a recipe for disaster for any country. With such a
scenario and the acute shortage of forex, how difficult it will be for the
Governor's on-going efforts to let the 'black' economy come into the
mainstream economy. The answer is of course increased productivity and the
fight against the vices that Gono forcefully described as the monsters
weighing down the Zimbabwean economy namely indiscipline, corruption and
speculation. These have to be fought with all the armory at the disposal of
government and not merely talked about.
In conclusion, it is important to emphasize the fact that every developed
country in this world of ours at one time or another went through periods of
turbulence of one kind or another. Rhodesia did and survived because as
Governor Gono pointed out in his Monetary Policy Review Statement, they were
a united lot, believed in what they stood for as a people and were
disciplined as economic actors and had law and order regulations which
people defied at their own peril.
Unfortunately, ZANU (PF) sees Zimbabwe as their personal fiefdom or
property. How can another Zimbabwean (black or white) be seen as enemy by
another Zimbabwean when this country is our only home and heritage? There is
nothing wrong with holding different points of view. We cannot all be
marching in one direction like boy scouts!
I can never say it often enough that what we are facing as Zimbabweans are
common challenges and we need to work together to meet them and to search
for solutions on a broad front. We need to get our political and economic
fundamentals right. Let us make friends with everybody nationally and
internationally, East or West.
The reason that evangelist Gideon Gono and his team at the RBZ keep trying
is that they have fundamental belief that they will eventually succeed. What
is now needed is for President Mugabe and ZANU (PF), the opposition parties,
the Church, the Civil Society and the generality of Zimbabweans to make a
quantum shift in their thinking and action and to seek a holistic solution
to our crisis.
And I do think that with the political will and commitment on the part of
President Mugabe and the ruling party, Zimbabweans can no doubt bring about
positive results we urgently need to save this, our once beautiful country.
Email borncha@mweb.co.zw

Zimbabwe and the American Indian dance!

FinGaz

KEN MUFUKA
LETTER FROM AMERICA
I WAS surprised as I travelled throughout the country that our rulers had
learnt nothing from the past, and were engaged in an Indian dance, where
everybody returns to the same place after so many steps. It was 25 years
since independence. The July of 2006 was different. There was not much
laughing and argument. Instead there was a quiet realisation that if things
did not change soon, even those who had good jobs would soon lose them. The
great company, David Whitehead Textiles in Kadoma was operating under 15
percent capacity. The Chegutu plant was closed. The company itself was under
receivership. We are talking of a company that used to employ in excess of
15 000 workers. There were many others, household names like Lever Brothers.
They too were restructuring (a new name for shrinking) their operations in
Zimbabwe. Lever Brothers was the pride of Zimbabwe. They always provide good
jobs.

I stood outside Kadoma's David Whitehead and shouted. "I am looking for a
job." The security guard approached me. "You are not from here are you? I am
guarding an empty nest," he said poetically and looked at me as one would a
mad man.
But that is my point. The real mad men are the Vakuru and their acolytes.
These Vakuru, according to Bornwell Chakaodza in last week's Financial
Gazette, need a "quantum shift in their thinking and actions." But that is
the problem. After 25 years in power they are not capable of a quantum leap
in their thinking. Old dogs do not learn new tricks. They are messed up.
Dr Gideon Gono is our man, and his heart is in the right place. As a banker,
he knows there will be no investment until all things are equal. Before Dr
Gono has time to breathe, Deputy Minister of Information Bright Matonga goes
to a white guy, Mr John Beattie, grabs his farm, asks him to let him use his
workshop, displays a stupid letter saying that he can sell Mr Beattie's
products ($50 billion worth) and that he, Mr. Beattie must thank him for it.
I was going to say that the brother is not very bright, but that is a cheap
shot. It is the shamelessness that is so overwhelming. Cecil Rhodes could
get away with this kind of thing because it took a month for news to reach
the London Observer, a paper friendly to missionaries. But Rhodes had bought
shares in that paper and bribed some missionaries, like C.D. Helms in
Bulawayo. The issue here is that our brothers do stupid things and then
blame Mr Blair for bad publicity. Bad publicity is bad for business and
investment.
But that is not all. For the first time in our history, I think the police,
as a reaction to harsh living conditions, are becoming amenable to corrupt
methods. Travelling from Mutare to Harare, I was stopped four times. A
policeman wearing his traffic greenish-purple over-shirt stopped me. He and
his wife needed a free ride to Chikanga. I am told that sometimes they want
more than a free ride. Kombi drivers are stopped, delayed and harassed every
day and their passengers delayed. The roadblocks are a source of harassment
and contribute towards a corrupt atmosphere.
The whole country is pervaded by lawlessness. When Dr Gono talks of respect
for property rights, he is probably limiting his argument to white-owned
property. The issue is like a genie that has escaped from its bottle. It
cannot be put back in. I bought 400 baby chickens. They were all stolen, and
two of our dogs beaten to death with iron rods. I have now put an electric
fence round my chicken coop. When I went to see my friend Fabian Mabaya in
Masvingo, I had to leave my car with a private car protector. I paid him a
handsome "thank you." Then there is this issue of Brother Bright Matonga.
What is the point of arresting him if the documents that support the charges
are missing from the Bank Governor's Office? Have the police never heard of
"unlawful arrest and harassment." If the brother is as bright as he is
supposed to be, he should bring charges against the police. The issue is
that lawlessness has permeated every aspect of Zimbabwean life, including
the once impervious police.
Even their thinking has become corrupted. I have just been in conversation
with Professor John Gibbs from Guelph University in Canada, who has nothing
but very kind words for the scholarly veracity of Brother Dr Rugare Gumbo
and our own Dr Herbert Murerwa. A casual perusal of the National Economic
Development Priority Programme (NEDPP) shows that it is the work of
first-rate minds. In the first three months, US$2.5 billion will be sought
in cash and investments to revive the economy. It is now three months. Did
the government work together with Lever Brothers and David Whitehead
Textiles? I doubt it very much. Show me these private investors who have
made this contribution and I will shave my head in shame. A thoroughly good
piece of work (the NEDPP) becomes worse than useless.
The second issue is about good publicity abroad. Politicians are determined
to shoot AirZim from the air. On the 15th of May AirZim did not make a
touchdown at Gatwick at 6.00 pm as it was supposed to. It arrived the next
morning at 5.00 am. In another episode, Air-Zim passed through Kenya in
search of petrol. On its way from Gatwick, it was redirected to Bangui, West
Africa to pick up Vakuru. On arrival there, the brothers had to listen to
three hours of national anthems in honour of Vakuru. (Zim Observer 19 May).
After 25 years one would imagine that our brothers would let go their dirty
hands off AirZim. One would imagine that they would consult the great
companies that made Zimbabwe an industrial powerhouse before writing
brilliant economic thesis. No, not the brothers. Until these brothers are
thrown out, they have no reason to learn new tricks. Enough is enough.

Mugabe's musical chairs to blame

FinGaz

Gregory Gondo
NO HOLDS BARRED
IT has been reported but not yet denied that President Robert Mugabe was
seething with anger over the incompetence, cronyism, unbelievably shocking
and confounding corruption as well as the ever-shrinking accountability of
most his ministers at the last Cabinet meeting.

This is hardly surprising to the silent majority who wear the shoe and
therefore know how and where it pinches. He has behaved similarly publicly
over recent months. If the leaked reports that President Mugabe went off the
deep end at the Cabinet meeting and his public statements over the issues
are anything to go by, then the President must be really agonising over what
to do with the deadwood in his Cabinet. Dealing with the ZANU PF deadwood in
government has always been politically sticky for President Mugabe. Over the
last 26 years of independence he has not been able to overcome the inertia
of ZANU PF's encumbering liberation war or historical ties and the party's
politics of patronage.
After all, some of the ministers are his liberation war colleagues who
could, from a political point of view have helped him to exploit the power
of incumbency to remain in the catbird seat. From that point of view, his
situation is akin to that of someone who has malignant lung cancer. He knows
he needs the lung. But if it is not removed then its malignancy spells doom.
Thus the indissoluble political ties could be a chink in the President's
armour. But keeping the ministers would be ruinous and disastrous for an
economy already on its knees. And cutting to the chase, I would say there is
therefore only one option for President Mugabe, fire the deadwood because it
is his responsibility. Over the years he has, even though spoilt for choice,
perfected political musical chairs into an art form, thereby unwittingly
giving some of the incompetent ministers the erroneous impression that they
have permanent jobs in a temporary life. He has to, although I am not sure
whether he has the guts and political will to do it, throw these
mediocrities both ends of the rope so that they deservedly sink right down
to the bottom of the political deep blue sea.
That's right, they have outlived their usefulness, that is if ever they
added any value in the first place. President Mugabe has therefore to allow
them to fall by the wayside and let the chips fall where they may. Unless of
course it is true that politics has no soul! Otherwise Zimbabwe is on its
way to hell - that is if it is not already there.
I am not suggesting that the President should throw away the baby together
with the bath water. Far from it. But if he understands the abyss from which
Zimbabwe has to find a way out, then he has to act now to ensure the
long-yearned-for enhanced and effective public resource management -
conspicuous by its absence from Zimbabwe mainly because of the incompetence
and self-centredness of the some of the ministers which is aggravated by
ZANU PF's widely condemned parochial political interests.
Enter Didymus Mutasa, another key voice in the inner circle of the ruling
ZANU PF party who has always been disdainful of the people. Giving credence
to the observation that age does not always bring wisdom but that it
sometimes comes alone, he not so long ago, insulted Zimbabweans by saying:
"Yes we make political decisions but that is because you do not advise us .
. . If we are sloppy and incompetent, it is because you let us . . . " Good
God of heavens above! Zimbabweans are to blame for the failures of
government. Little wonder the Nigerians say wonders shall never end.
If nothing else, what Mutasa said reminded me of Thomas Paine saying of
former American president John Adams that, "it has been the political career
of this man to begin with hypocrisy, proceed with arrogance and finish with
contempt". Those words could have been said at another time, place and
targeted at a totally different individual. But this is exactly what the
piscatorial politician, Mutasa, who has been a persistent fisherman in the
country's political waters, has done. Thus John Paine could have been
referring to Mutasa or many of his colleagues serving in President Mugabe's
government because if a cost-benefit analysis of having them in Cabinet were
carried out whereby their performances are measured by results against
specific targets, very few, if any, would come out of it smelling of roses.
Of course being a dyed in the wool ZANU PF politician, Mutasa's statement
alluded to above might have seemed a perfectly innocuous remark to the
minister. But what exactly did the contemptuous Mutasa mean? Just how many
times have the people, who bear the brunt of misguided government policies,
run into a brick wall in their efforts to make government change its
Band-Aid approach to serious socio-economic and political issues? Since when
has ZANU PF cared two hoots about what the people say or feel? Innumerable
editorials have been written on the dangers of cronyism, corruption,
nepotism, hiring of ZANU PF loyalists who have run down parastatals they
found in fine fettle, and the chaotic land reform exercise. And what did
government do about it? So, since when has the ruling party - which is
currently engaged in an orgy of self-congratulation over the supposed
success of the land reform programme at a time when there is the spectre of
economic collapse, hunger and famine, heeded the voice of reason? This is
just but one example.
But what is indisputably clear is that incompetent ministers in President
Mugabe's Cabinet are too numerous to mention. The President knows them and
he has just come short of mentioning quite a few himself every time he
expresses exasperation and lack of confidence in his lieutenants. Zimbabwe's
avant-garde writer, the late Dambudzo Marechera would have said the list of
incompetent ministers with bloated self-interests is as long as the original
snake. That is why the economy has lurched from one crisis to another.
They are so bereft of ideas that every time they are taken to task over why
they have run down the once reassuringly resilient economy, they take refuge
in reminding all and sundry, without missing a beat, about their liberation
war credentials. It is as if their participation in the struggle for
independence gives them the inviolable right to play Russian roulette with
the people's lives. And Zimbabweans are fed up to the back teeth because if
nothing else, this proves beyond reasonable doubt that the best defence
against logic is stupidity!
This is why I, and indeed millions of Zimbabweans, feel that these failed
ministers should simply walk the plank. Hoping that they will change is to
me, hopefulness bereft of realism. It is not possible for them to change
because they do not give a damn about the people. Self-enrichment is all
that matters to them. And President Mugabe has acknowledged as much. That is
why when the ministers speak of patriotism to appease their boss, the very
word becomes impure. It's like the word love coming from the mouth of a
whore in some spit-and-sawdust pub in Mbare! The writer would say the
ministers' patriotism is only jawbone.
And hoping for these hypocrites who are chockful of self-importance and
self-concern to change is like asking for the moon! The only option is
therefore to fire the deadwood - no pun intended.
President Mugabe can talk until hell freezes over. But he hasn't a cat in
hell' chance of convincing his hard-boiled ministers to mend their ways. The
earlier he realises this the better. Or else plans to arrest the
accelerating economic meltdown will go down the plughole because his
ministers have now become the problem. As it is, the damage they have
inflicted on the economy is inculculable. I rest my case.
- email: gg@fingaz.co.zw

Tail wagging the dog!

FinGaz

Comment

THE Zimbabwean government is desperately seeking to stitch together the
fragile fabric of a frayed society. Running parallel to this is a heated but
sterile debate by stakeholders ranging from housewives concerned about the
prices of basic commodities, gilt-edged stock investors interested in real
returns, to the large businesses who are having to factor in inflation when
deciding how to invest their capital.

The debate has centred mainly on stagflation, where rising inflation is
accompanied by steeply falling industrial production and employment. And it
is not difficult to see why the debate has zeroed in on matters inflation.
Despite the central bank employing an aggressive interest rate policy to
fight inflation, the outlook remains very bleak. Money supply growth levels
in Zimbabwe are not consistent with real economic activity. Yet simpler, if
less compelling economic logic dictates that there can never be a vibrant
economy without sound money.
The doom-laden inflationary forecast is not without foundation. It is said
that if you see the evidence of accelerating inflation it may be too late to
prevent it, which is why some well-functioning economies believe in
pre-emptive actions, something Zimbabwe is yet to muster let alone learn.
Zimbabwe has all along been chasing its own tail insofar as fighting
inflation is concerned. Thus much more still needs to be done, although many
would agree that the Reserve Bank of Zimbabwe (RBZ)'s fight against
inflation has been, to a certain extent, robust albeit ineffective. Indeed,
Gideon Gono, the governor of the central bank who is a staunch defender of
tight monetary policy, was widely seen as an old school anti-inflation hawk
of the traditional economy as he never took his foot off the pedal. But
something kept stoking the inflation fires. Something was missing somewhere.
Thus the monetary authorities, through no fault of theirs, have failed to
hold the line on inflation. This means that the RBZ has been barking up the
wrong tree in its search for a cure to inflation. Yet curbing inflation is
probably the most important factor in producing a growing economy.
As pointed out in our editorial comment of June 23, 2005, inflation
interferes with the efficient allocation of resources by confusing price
signals and undercutting a focus on the long run, among other things,
thereby imposing a speed limit on economic growth. There is no arguing
therefore that taming the inflation scourge is key to economic stability,
surplus and security.
Be that as it may, we feel that focusing on inflation per se is missing the
point altogether. In our humble estimation, this is a symptom of an
underlying problem - a frighteningly shrinking production base. This is what
lies at the heart of the country's economic problems. Of course in this
debate, highly charged rhetoric about the European Union/USA sanctions being
directly responsible for the unprecedented economic meltdown has been
substituted for informed and reasoned analysis.
Admittedly, the West's so-called targeted sanctions have played their part
in weighing down the economy. But only to a certain extent. The ruling ZANU
PF government has been exaggerating the true extent of the damaging effect
of the sanctions on the economy, which is why that line of argument has been
effective in appealing only to ZANU PF, a political party that is always
looking for someone or something to blame. But this does not cut the ice
with the majority of Zimbabweans. They know that the problems lie
elsewhere - dangerously shrinking production capacity, resulting directly
from government's impractical policies and intransigent attitude. And thus
the ZANU PF government case collapses.
Indeed, the poor levels of productivity are a typical story of choice and
consequence. Spurning international suggestions that the historically valid
land reform exercise must fit the country's implementation capacity, the
headstrong government went ahead with its chaotic, unsustainable and
non-transparent agrarian reforms, which have had a ripple effect on the
economy. Inevitably, agriculture has gone to the dogs and production in the
sector has frighteningly plummeted to negligible levels. It is instructive
to note that agriculture has traditionally made the single largest sectoral
contribution to gross domestic product (GDP). Hence the ZANU PF mantra
without a hint of an irony: land is the economy, the economy is land. What
seemed lost on government was that by destroying agriculture it was also
destroying the economy! This is the genesis of the country's productivity
woes.
Thus focusing on achieving price stability, without addressing the central
issue of productivity is to us, a case of the tail wagging the dog! Indeed,
this is a typical case where the least significant part of a situation has
too much influence over the most important part. If anything, there is
urgent need for fundamental structural changes in the economy to right the
consequences of government's misguided macro-economic and structural
policies, failure of which inflation problems will remain a finite game.

FinGaz Letters

Poor chisels for carving peace

EDITOR - In his "Strength to Love" speech of 1963, the late legendary Dr
Martin Luther King Jnr bemoaned the culture of resorting to violence at the
expense of non-violent means to resolve conflicts since "the chain reaction
of evil - hate begetting hate, wars producing more wars - must be broken or
we shall be plunged into the abyss of annihilation."

King's words come amidst a plethora of cut-throat fights in the Middle-East,
in Somalia, in Iraq, in the Darfur region and in many such conflict-ridden
areas. Without delving on the justifications or otherwise of these wars, all
I can say is that since time immemorial, wars have been known not to
determine who is left. Wars have a pervasive tendency to claim casualties
among the innocent and unarmed civilians hence proving right the adage that
when elephants fight, it is the grass that suffers.
And what pains most is that the world has become so accustomed to these
daily casualties that they become mere statistics - "40 killed in bomb
blast", "three marines killed", among a myriad of similar reports are
normally read without emotion. It is indeed true that consistent exposure to
evils can at times, regrettably though, result in the distortion of reality
to such cataclysmic proportions that people regard it as the norm.
Respecting the sanctity of life is an axiom that has since been thrown into
the dustbins of oblivion and I am afraid that this dog-eat-dog kind of world
we are moving towards is abominable in the eyes of the Lord. This
trigger-happy attitude, which if unabated will graduate into another world
war, must stop forthwith.
What perturbs me most is not only the inaction of world bodies and
non-governmental organisations that are purportedly in existence to ensure
world peace, but also the deafening silence thereof in the midst of
deepening world crises.
The repercussions of war cannot be overemphasised and Harry Emerson
Fosdick - the American clergyman, was right when he said; "I hate war for
its consequences, for the lies it lives on and propagates, for the undying
hatreds it arouses, for the dictatorships it puts in the place of
democracies, and for the starvation that stalks after it. I hate war, and
never again will I sanction or support another."
Besides the unwarranted loss of life that is characteristic of wars, the
destruction to infrastructure and the subsequent economic haemorrhage have
been notorious for plunging countries and continents alike into quagmires of
economic comatose.
All said and done, it becomes unequivocally clear that killing one another
is not a panacea to disagreements. What nations and individuals alike should
realise is that the quintessential ingredient of peace is to give
negotiation a chance. As King pointed out, wars are poor chisels for carving
out peaceful tomorrows but "non-violence is a powerful and just weapon which
cuts without wounding and ennobles the man who wields it. It is a sword that
heals."

Canisio Mudzimu
Harare
-------------
He's clouded by tribal myopia

EDITOR - After reading last week's contribution by Geoff Nyarota I think it
is about time you pulled the plug on this guy until such a time that he has
some constructive contributions to make. More and more it seems like he has
only been clouded by some kind of tribal myopia which would be best kept to
himself or in exchanges with those who he is actually fighting with.

Last week's article is the most glaring example of his tribalistic
tendencies of late. I have read his article several times and I cant seem to
grasp exactly what he is trying to say except to denigrate and insult
Ndebeles by making some sweeping and general statements. If Nyarota has an
axe to grind with whatever has been said about him on the NewZimbabwe.com
forums why does he not log on and and engage those people who are actually
making those allegations about him. It is also a shame on you that you would
allow the Fingaz to be used as a launching pad for denials of accusations
which have been made not from a mainstream media organisation but from a an
Internet chat room.
In short please we as readers would appreciate it very much if your regular
columists showed more maturity and relevance on the issues that most affect
Zimbabweans today rather than some 1960's gutter tribalism.

Nqobile
Harare
----------
We need to know

EDITOR - Zimbabwe's opposition political parties especially the two MDCs
must make their constitutions accessible to the public to enable them to
familiarise with the contents of their respective constitutions. At the
moment only the faction led by Professor Arthur Mutambara has made its
constitution accessible to the public and it is obtainable from the party's
website.

The Tsvangirai faction has not made its constitution accessible and at the
moment some people have expressed concern that the provisions of the
constitution adopted at the party's inaugural congress in March this year
may have been tinkered with to reflect the opposite of what was agreed and
adopted.
Of particular interest to Zimbabweans is the section that deals with term
limits of office bearers. The nation needs to know how the Tsvangirai
faction deals with the issue of leadership succession and term limits.
We do not want leaders who take people for granted and manipulate the
situation because the public is not knowledgeable on some aspects of the
constitution.

Zivai Vusimbe
Harare
-----------
I've been reduced to a country boy

EDITOR - I read the announcement made in a local daily on Friday July 28
2006 by ZINWA where residents of Chitungwiza, Epworth and Ruwa were advised
about the expected disruption of water supplies to these areas for a period
of eight hours.

I personally thought that these people were lucky to have an interruption of
only eight hours, and with a proper announcement being made. I reside in
Hatfield where I have water cuts going for over 24 hours. Each morning when
I have water, then I will be quite sure that the following morning at
0600hrs there will be a water cut only to get the water the next morning at
0600hrs. So I have 23 hours with no water and 25 hours with water as a
cycle. Not to mention that when we have the water restored, it brings all
the dirt that you can ever imagine.
Who is responsible for this - the Harare City Council or ZINWA? I pay my
bloated bills on time only not to have water at my place. Now with ZESA also
making sure that as long as I am awake, there will be no electricity, I have
just been reduced to a country boy in a place where the only form of
civilisation is the sun.
I pray that I get continous supply of both water and electricity.

Concerned Resident
Harare
----------
The British must learn to play fair

EDITOR - The arguments by the British Embassy that there are no sanctions
against Zimbabwe are incorrect. Yes, it is their right to withdraw their
aid. However, they should not stop or threaten those who are willing to
cooperate with Zimbabwe. The US in particular has a law which we all know
prohibits any form of assistance to Zimbabwe and this has been applied
effectively over the past five or so years.

There are failings by Zimbabwe's government, but these have been multiplied
many times by the actions of the powerful nations, including Britain and the
United States, who are often referred to as (the discredited) "international
community".
The focus on regime change is indisputable as real videos have been played
in the media where the British Prime Minister has stated in no uncertain
terms that he has been working with the MDC to effect regime change in
Zimbabwe. Anybody disputing such clear facts is out of his mind. Newspapers
have a duty to point out some of these facts when interviewing opinion
makers, including the British Embassy in Harare.

Chibwa Sipambi
Botswana
--------
CHRA to press ahead with mass demos

EDITOR - On April 15 2002 the Mudzuri-led council was officially dismissed
from office by Minister Chombo over flimsy charges of nonperformance and
maladministration. The Makwavarara-led commission was then appointed to run
the affairs of Harare with the specific mandate to turn around the fortunes
of the city and improve service provision. Since then, Chombo has
continuously reappointed the commission beyond the legal term. In the Zvobgo
vs City of Harare (HC 1286/00) case, Justice Makarau ruled that continued
reappointment of commissioners is unlawful and unconstitutional. Today, the
quality of service provision has deteriorated to unprecedented levels with
piles of mounting refuse, burst sewer pipes and erratic water supplies.

The commissioners are not professionals; the chairperson Sekesai Makwavarara's
highest qualification is a ZANU PF card and a dress-making certificate -
complete skills mismatch amounting to fitting of square pegs in round holes.
The commission's tenure has been characterised by extravagance and abuse of
public funds at the expense of declining service provision. Inconsistency,
lack of consultation and impulsive decision making has become the norm at
Town House. The atrocious, vindictive and trail-blazing Operation
Murambatsvina epitomises the highest peak of the commission's insanity and
its impulsiveness in decision making in total disregard of fundamental human
rights.
The City of Harare had a waiting list of over 200 000. After Operation
Murambatsvina destroyed over 500 000 housing units and displaced over two
million Harare residents, the City of Harare is now sitting on a backlog of
over one million homeless people while Operation Garikai has failed to
complete just a 100 housing units. These few have been allocated to ZANU PF
sympathisers at the expense of the genuine victims.
City of Harare resources are being manipulated to feed political party
interests expressed at central government level. The wishes and aspirations
of residents to have elected representatives of their choice are being
frustrated by central government through the Minister of Local Government.
As the vanguard for restoration of good and effective local government
practice, transparency and accountability, the Combined Harare Residents
Association (CHRA) made the following resolutions as our commitment to the
democracy project in Zimbabwe.
lWe reject the rates being charged by the Harare Municipality as they are
illegal and unjustified.
lCHRA resolves to intensify the rates boycott campaign.
lTo pursue the legal channel over the inconsistencies on billing of rates by
the Harare municipality.
lTo intensify the holding of public meetings across all wards.
lMobilise residents to submit generic letters of objections to illegal and
unjustified levying of rates by the City of Harare.
lHold peaceful processions to submit petitions to Town House and ZESA over
poor service delivery.
lMobilise support for victims of Operation Murambatsvina still leaving in
the open in Mutungwazi Ward 1, Glen Norah, along Mukuvisi River and on the
outskirts of Caledonia.
lCHRA resolves to hold sustained mass demonstrations at Town House and
district offices over collapsed service delivery in the City of Harare.
lWe demand the immediate holding of council and mayoral elections in the
City of Harare.
In pursuit of the above resolutions, on Wednesday the 19th of July 2006,
over 300 Harare residents led by the CHRA ward leadership from across the 45
Harare wards took it to the streets to peacefully protest against the crisis
of governance in the City of Harare. The state unleashed two UD trucks of
baton-wielding riot police to thwart the demonstrators, arresting 19 and
seriously injuring three peaceful residents. The demonstrators were locked
up at Harare Central police station and released the following day.
CHRA will continue to hold peaceful mass demonstrations without seeking
clearance from the police as this is at variance with the constitution of
the country, Section 11 and the Universal Declaration of Rights. Residents
should not despair against a regime which does not respect the rule of law,
as a genuine cause is immortal.

Jabusile Madyazvimbishi Shumba
CHRA Advocacy
and Training
Officer