The Telegraph
By Peta
Thornycroft in Marange
Last Updated: 2:10am GMT
08/12/2006
A British-listed mining company, the first to
invest in bankrupt
Zimbabwe since the political crisis began, was ordered
off its valuable
diamond claim yesterday.
While President
Robert Mugabe has seized thousands of white-owned
farms since 2000 he has,
up until now, left mining property alone.
The claim, an
extraordinary chunk of ancient tribal land in south
eastern Zimbabwe, may be
one of the richest diamond fields found in recent
years.
And
the Zimbabwe government wants it.
African Consolidated Resources
plc, with about 1,000 claims in
Zimbabwe, listed in London in June and says
it was granted title by the
Ministry of Mines.
The order to
leave the dry, poverty-stricken Marange district, about
200 miles south east
of Harare, comes after months of drama.
When rumours of diamonds
spread during the summer, thousands flocked
there from all over Zimbabwe and
neighbouring countries in what may have
been the largest diamond rush in
Africa in the last 100 years.
Company officials estimate £120
million of diamonds were dug out by
desperate people over the last few
months. Dirk Benade, 57, an ACR
geologist, saw it all. As the hordes massed,
they dug deep holes within a
metre of one another.
There were
no toilet facilities, people were buying water with
diamonds and sleeping in
the holes which they also used as latrines. The air
was thick with
flies.
"Between 6,000 and 15,000 people moved one million tonnes of
earth by
hand in a 1.4 sq mile area in a month. World class machinery
couldn't have
moved what they did," said Mr Benade.
"One man
was murdered for diamonds in the hills behind us. And a woman
died after a
huge Baobab tree fell on her after soil around its roots had
been dug away,"
Sabo Sauke, 31, told The Daily Telegraph, the first Western
newspaper to
reach the area since the rush began.
Mr Sauke, like all the
diggers, was pressed to sell his stones to the
state's Minerals Marketing
Corporation of Zimbabwe at a fraction of their
real value.
As
the hygiene conditions continued to deteriorate, Tinos Rusere, the
deputy
mining minister, went to the site on September 25 and told swarms of
diggers
to carry on mining and sell their stones to the government.
Dealers
from neighbouring South African also appeared, offering better
prices.
ACR has built roads and refurbished dams for the local
community and,
when the diggers were finally moved out of the area by police
last week, the
company began sifting gravel to estimate how much had been
looted.
But yesterday came the eviction order which the company is
challenging
in court. Andrew Cranswick, 44, ACR's chief executive, said: "I
don't
believe Zimbabwe would allow illegal seizure of claims without due
process."
Zim Independent
Dumisani Muleya/ Shakeman Mugari
ZIMBABWE'S plans to purchase passenger aircraft from Russia have
collapsed
amid bribery allegations involving US$25 million.
Reliable
aviation sources said this week that Transport minister
Chris Mushohwe and
Reserve Bank governor Gideon Gono recently left Russia in
a huff after a
dispute erupted during negotiations.
They feared a Russian
Mafia-style backlash after the deal fell
through as a result of
disagreements over a US$25 million "commission" that
was supposed to be paid
in advance, over and above the agreed price for the
controversial
planes.
Zimbabwe wanted to buy at least five llyushin and
Tupolev
aircraft from Russian's Voronezh Aircraft Construction Company
(Vaco).
Zimbabwe was to get five Ilyushin 1l-96s consisting of three 400T
and two
400M passenger aircraft.
The planes have been
nicknamed "flying coffins" because of their
technical faults and frequency
of horrific crashes. Engineers at Air
Zimbabwe, which is trying to buy
planes to beef up its depleted fleet, have
raised serious concerns over the
quality of the planes although Russian
diplomats in Harare have downplayed
the concerns. Air Zimbabwe recently
acquired three MA60s from
China.
Sources said Gono had to virtually flee Russia in fear
of his
life after the protracted negotiations stalled and the deal turned
sour.
The problem, sources said, started after the Russians
demanded
that Zimbabwe must pay in advance a "commission" of US$25 million
which was
to be shared equally among political and business "chefs" in
Moscow and
Harare to facilitate the deal.
Questions have
been raised in government circles about how they
were supposed to be the
beneficiaries of this "commission".
The "commission" has been
interpreted by aviation observers as a
kickback.
An
aviation expert said there were unscrupulous dealers in the
industry who
behave like arms dealers.
Mushohwe went to Russia recently as
the responsible minister to
conclude the talks over the planes. When he
arrived the Russians told him
Zimbabwe had to pay a US$25 million
"commission" before the deal could be
concluded.
While
Mushohwe was still negotiating with the Russians,
President Robert Mugabe
dispatched Gono to carry out a due diligence on the
deal and tie up the
loose ends. The central bank was going to help with
foreign currency to pay
for the planes.
Sources said when Gono arrived in Moscow he
was told a US$25
million "commission" had to be paid before the deal could
be signed.
He was also told, according to sources, that half
of the money -
US$12,5million - would go to senior officials in Russia and
the other to
Zimbabwean big shots.
The sources said while
Mushohwe was still looking into the
issue, Gono told the Russians that
Zimbabwe was not able to raise that kind
of money because of foreign
currency shortages and a general fiscal crisis.
The Russians
however insisted that it was the norm in the
aviation industry for a
"commission" to be paid to senior politicians when
such deals were
negotiated.
"When Gono tried to protest, the Russians were
not amused and
told him he was becoming a problem," a source close to the
issue said. "It
then became clear that Zimbabwe must withdraw from the deal
but the Russians
did not take it lightly."
The Russians
insisted that money had to be paid and warned they
were not interested in
negotiating such a deal with "inexperienced"
officials who did not know the
unwritten rules in aviation deals.
Gono pretended to give in
under pressure and said the issue
would be looked into and said he still
needed to consult his principals.
After getting off the hook through
delaying tactics, Gono, fearing for his
life, scurried out of his hotel and
went to another near the airport, before
leaving the country in a
hurry.
"Having bought some time in the deal, Gono booked out
of his
initial hotel and went to check into another one by the airport to
ensure
his safety before practically fleeing Russia," a source
said.
"Mushohwe also left Russia in a hurry after he failed
to deliver
on his side of the bargain and had also developed a
misunderstanding with
Gono over the deal," the source
said.
Sources said Gono's security fears were worsened by the
recent
murder of his friend, deputy chairman of Russia's central bank,
Andrei
Kozlov, who was shot dead while coming from a football match in
Moscow. The
sources said Gono and Mushohwe had to literally flee Moscow
fearing
reprisals from the Russians. Neither Gono nor Mushohwe could be
reached for
comment last night. Mushohwe hung up the phone as soon as he
heard that it
was the Zimbabwe Independent calling. Gono was still locked in
meetings.
Sources said in the end Mushohwe and Gono were at
loggerheads
after negotiations faltered because the minister thought the
Reserve Bank
chief had thrown a spanner into the works. Mushohwe, sources
said, was angry
because Gono had come to Russia trying to dictate how the
deal should be
done when he had already made progress in his talks with the
Russians.
It is also said Vice-President Joice Mujuru, who
was acting
president when Mugabe was in China, was also unamused by Gono's
role because
it had led to the collapse of negotiations.
Sources said the clashes which occurred between Mujuru's allies
in the
National Economic Development Priority Programme and Gono during a
recent
National Economic Recovery Council meeting were linked to events in
Russia.
It is also said the political fight over the
importation of
inferior fertiliser from South Africa was part of a chain of
events which
have been playing out in the corridors of power.
Zim Independent
Ray Matikinye
ZIMBABWEANS could
be saddled with President Robert Mugabe's
despotic rule for longer than
feared if recent statements by his inner
circle are anything to go
by.
While his ruling Zanu PF party is being whipped into line
at its
forthcoming "national people's conference" to extend his term of
office to
2010 on the pretext of "harmonising" presidential and
parliamentary
elections, his closest associates have been quoted as
supporting a move to
make him president-for-life.
A South
Africa-based news website this week reported Lands and
Security minister
Didymus Mutasa as endorsing an indeterminate extension of
Mugabe's
term.
"When people talk about harmonising the elections and
holding
them jointly in 2010, they think we are using this to give the
president a
ticket to hold office till 2010," he was reported as saying.
"No. It could
as well be that we might actually want him there for much
longer."
Contacted for comment yesterday, Mutasa denied
making the
statement and said it would be unlike him to anticipate
conference
resolutions.
"I am the party secretary and
senior enough to know not to
discuss such issues in the media. Resolutions
are for party delegations at
the conference to discuss," he
said.
In 1996 in a BBC interview Mutasa compared Mugabe to
Britain's
monarch who was not elected.
Zanu PF
information chief Nathan Shamuyarira recently suggested
his party was
mulling a constitutional amendment that would harmonise
presidential and
parliamentary polls, a move Justice minister Pat-rick
Chinamasa advertised
as one of several possibilities in an interview with a
state newspaper last
year.
The move to extend Mugabe's term could face opposition
from the
political camp associated with Vice-President Joice Mujuru and that
for
Rural Housing minister Emmerson Mnangagwa.
"There is
a realistic chance that someone among the delegates or
one of the provinces
could come up with a proposal that Zanu PF should make
him
president-for-life and that he remains the party's presidential
candidate
until Amen," Mutasa is quoted as saying. Mutasa said Mugabe (82)
had done
"so many wonderful things" for Zimbabwe but was still not showing
any signs
of tiring despite his advanced age and it was possible delegates
could decide to appoint him for life.
Resolutions emanating
from Zanu PF's annual conference have in
the past been endorsed by
government. For instance, the decision in December
2003 to pull out of the
Commonwealth stemmed from a similar arbitrary
decision by party seniors at
their annual conference in Masvingo.
Harare and Midlands are
proposing different agendas concerning
the succession issue that could
ignite serious intra-party fighting over
whether to hold presidential and
parliamentary elections at the same time in
2008 or 2010.
Harare province secretary for publicity William Nhara yesterday
said his
executive had only discussed the harmonisation of mayoral and
council
elections.
"The issue of harmonising presidential and
parliamentary
elections is a highly explosive political issue. Our main
focus of
discussion was issues that affect Harare as an urban province,"
Nhara said.
Harare province would go along with others if the
harmonisation
of presidential and general elections came up for discussion,
he said.
"It is not a matter of competing resolutions. The
conference is
meant to discuss issues that come up."
Although there appears to be general agreement on harmonisation,
it is the
dates that have become contentious with the two provinces deciding
on
different dates.
Zanu PF Midlands chairman Jaison Machaya
said the issue must be
discussed and that the elections must be
harmonised.
Nhara said discussion of harmonising elections
was premature
because President Mugabe's term does not run out until March
2008. But given
recent statements from Zanu PF luminaries, the issue is
rapidly moving to
centre stage. This comes as reports circulate of Joice
Mujuru fading as
Mugabe's anointed successor.
Zim Independent
Ray Matikinye
A SPECIAL
parliamentary committee has demanded guarantees that
the proposed Pricing
and Incomes Commission will not turn out to be another
state body riddled
with corruption.
MPs expressed fears that members of the
commission would be
selected on a patronage system.
Legislators tasked to scrutinise the provisions of a Bill set
for tabling in
parliament during the current session expressed cynicism
about the
commission.
The Bill seeks to punish industrialists and
retailers who flout
price controls with prison terms and closure of their
business.
The MPs cited the Anti-Corruption Commission that
has yet to
make a mark in fighting corruption since it was set up with great
expectation from the public.
Zanu PF senator for
Mutate-Mutasa, Mandy Chimene, expressed
scepticism over the functions and
competence of the Pricing and Incomes
Commission to deal with daily price
hikes.
"Do we have competent people to run the proposed
commission and
guarantees that the commissioners will not be tempted to take
bribes from
well-heeled business people?" Chimene asked officials from the
Industry and
International Trade ministry who gave oral evidence to the
committee.
MDC legislator for Chitungwiza, Fidelis Mhashu,
said the setting
up of yet another commission to control prices and incomes
indicated
government's failure to run the economy.
"What
is it that this commission will achieve where other bodies
before it have
failed? It goes to show the government has failed to enforce
the Control of
Goods Act," Mhashu said.
But the Director of Research and
Consumer Affairs in the
Industry and International Trade ministry, Norman
Chakanetsa said the
proposed legislation sought to strengthen monitoring and
research into
prices and incomes.
He admitted that
government could not provide guarantees against
possible corrupt practices
saying although corruption was endemic, it was
everyone's duty to make an
effort to curb it.
Reeling under an economic meltdown and
runaway inflation, the
government has sought to rein in prices, accusing
manufacturers of
unwarranted increases that have accentuated poverty among
the poor.
The government has unleashed inspectors to enforce
prices on
basic commodities.
Manufacturers have argued
that the price hikes result from fuel
shortages which have forced them to
source the commodity on the black market
at premium
prices.
Police have over the past two months arrested more
than 3 000
retailers for flouting price control regulations since they
launched a blitz
to curb profiteering.
The populist Bill
has been heavily criticised by commerce and
industry bodies. Both view it as
yet another impediment to their operation
as government seeks to tighten
tentacles on the economy.
The Zimbabwe National Chamber of
Commerce fears price controls
will scare away investors. It recommended that
the commission be independent
from the executive for it to be
effective.
It submitted that the Bill should clarify the
extent to which
producers would determine profit margins and the
commission's influence on
goods and services supplied by parastatals. Price
controls should take into
account the whole production process, they
argue.
Zim Independent
Loughty Dube
THE National Bakers
Association (NBA) has written to the
Industry and International Trade
ministry seeking permission to raise the
price of bread from $295 to
$700.
The bakers claim that the baking industry is facing
total
collapse due to the uneconomic price they are currently forced to
charge by
government on bread.
The bakers want Industry
and International Trade, minister,
Obert Mpofu, to allow them to raise the
price of bread so as to enable the
bakers to continue in
business.
NBA national chairman, Burombo Mudumo, confirmed
before his
arrest last Friday that his organisation had made representations
to the
government on the matter.
Mudumo said his
organisation was awaiting a response from the
ministry.
"We sent representations to the Ministry of Industry and
International Trade
to seek permission to raise the price of bread to $700,"
Mudumo
said.
"The reason is because the current operating
environment is very
uneconomic and it makes it difficult for us as bakers to
continue
operating," he said.
"As bakers we buy plastic
containers for bread at more than $100
and we are expected to sell a loaf of
bread for $295 and we are saying this
is uneconomic and unviable," Mudumo
said.
The government has in the past reacted to bread price
increases
by arresting bakers who they claim are overcharging. On November
7, the NBA
wrote to the ministry secretary, Christian Katsande, asking to
raise the
price of bread to $638.
The association had
written in October asking to raise the price
of bread to $467.
Zim Independent
Lucia Makamure
PRISONERS in
Zimbabwean jails have complained over the Zimbabwe
Prison Services (ZPS)'s
practice of using them as cheap farm labour on
government officials'
farms.
Government officials who benefited from the
controversial land
reform programme are taking advantage of prisoners as a
source of cheap
labour without additional costs such as accommodation and
food.
This has resulted in serious food shortages in prisons
as in
previous years prisons used to get supplementary food from their farms
that
are now derelict.
After the chaotic land reform
programme, new farm owners threw
out farm workers, leaving them stranded and
homeless.
Instead of hiring the former farm workers who are
entitled to a
minimum wage, some of the resettled farmers prefer cheap
prison labour
despite international treaties to which Zimbabwe is a
signatory.
Otto Saki of the Zimbabwe Lawyers for Human Rights
said it was
unfortunate that government officials are abusing their powers
and using
prisoners as cheap labour.
"There are standard
minimum rules for the treatment of
prisoners. They should not be treated in
a vindictive manner as several are
suffering from chronic illnesses that
cannot be seen by the naked eye," Saki
said.
He said
prison labour was intended to rehabilitate and make
inmates better people
who can be integrated back into society by exposing
them not only to
agriculture but also to other industries.
"What is pathetic
about this system is that these prisoners
spend hours working on government
officials' farms yet their own prison
farms, which are supposed to provide
them with food, are lying idle," he
said.
The
International Labour Organisation (ILO) has strict standards
prohibiting
such use of prison labour. Zimbabwe ratified an ILO treaty in
1998,
undertaking to recognise that it is immoral for private individuals to
profit from labour performed by prisoners.
The Prisons
Act says that every prisoner may be kept to labour
within or outside the
precincts of any prison in any part of Zimbabwe and in
any employment that
may be approved by the minister.
But the Act does not empower
the minister to contravene
international statutes as governments are
supposed to put in place
instruments that give full meaning to these
standards.
A former inmate at Harare Central Prison who
talked to this
paper said prisoners are usually taken to the farms very
early in the
morning and return in the evening.
"They are
usually in the fields by 5am until around 4pm," he
said.
This could mean that the ZPS is infringing an international
instrument which
prohibits prisoners from working for more than ten hours a
day. Prisoners
should work for at least eight hours under the provisions.
Zimbabwe is a member of the ILO that has strict standards
prohibiting use of
prison labour by private individuals.
One farmer who spoke to
the Zimbabwe Independent and has no ties
to the government but has used
prison labour before said farmers applied for
prison labourers and signed a
contract with the ZPS.
"We apply for prison labour through
the ZPS office and we make
payments there too. They give you a contract,
under which the prisoners work
for seven hours. We are not obliged to
provide food for them but usually we
do as a way of motivating them," the
farmer who preferred not to be named
said.
"But I just
feel government is cheating these prisoners who in
most cases are badly
treated by their wardens while working in the fields
yet the money they earn
is not being used to improve the living conditions
in
prisons."
These prisoners earn daily rates that are
equivalent to the
statutory farm workers rates.
He said
these prisoners are not examined for fitness before they
are taken to the
farms as there are cases when some prisoners had to be
taken back because of
ill-health. In the past Zimbabwe has attracted the
attention of human rights
pressure groups on the unethical use of prisoners
as farm
labourers.
Efforts to get a comment from the Minister of
Justice, Patrick
Chinamasa were fruitless.
ZPS also
failed to respond to questions sent to them although a
recent parliamentary
committee report presented this month notes: "At
Chikurubi Maximum Prison
there are only two working steam pots out of 20.
Prisoners are now having
two meals instead of three because of limited
pots.a supplementary budget
had to be allocated to avert a looming crisis on
prison rations, toiletries,
medical supplies and detergents."
Zim Independent
Lucia Makamure/Loughty Dube
THERE are strong fears that
the Small Enterprises Development
Corporation (Sedco) could collapse under
the weight of mismanagement,
shortage of manpower and lack of funds, the
Zimbabwe Independent heard this
week.
Since the beginning
of this year, the Reserve Bank of Zimbabwe
has not released any funds to the
lending institution leading to an exodus
of management
staff.
Sedco last disbursed funds a year ago in Mutoko when
Claude
Maredza was still general manager.
The corporation
caught media attention last year in October
after Maredza was suspended on
allegations of exceeding board cash limits
and misuse of fuel
allocations.
He was later exonerated after an internal audit
undertaken by
the then finance and administration manager, Compasion
Hondonga, cleared him
of wrong-doing.
Earlier this year
Maredza's driver Tendai Makashu was sacked
while in police custody facing
fraud allegations. Although he was later
acquitted, Sedco has not paid him
terminal benefits. Sedco abolished his
post.
A source who
refused to be named for fear of reprisals told the
Independent that there
was gross mismanagement of funds at Sedco.
"The $15 million
(revalued) which Maredza raised last year from
the National Social Security
Authority was not disbursed to the
organisations that were supposed to
benefit," the source said.
"Instead it was used to buy fuel
for personal use and cellphone
allowances for management," the source
said.
The source said some Sedco executives used to take fuel
in drums
to their homes and farms.
The company's acting
general manager Stewart Murambanhaka
initially refused to comment on the
allegations, referring all questions to
board chairman, Owen
Tshabangu.
Yesterday Marambanhaka said executives at Sedco
were allocated
fuel.
"The fuel in question was my monthly
allocation. Each manager
has a monthly allocation," he
said.
"No such thing as taking drums of fuel to my farm ever
happened.
The fuel drivers took to my farm in Mazowe was bought from Noczim
and I have
the papers to prove it."
Marambanhaka has been
acting general manager since Maredza left
last year.
The
Sedco head office is also operating without a substantive
risk manager,
internal auditor or a receptionist.
When the Independent made
inquires at the headquarters the
person who answered the phone said the
company did not have an internal
auditor or risk manager.
The Harare and Gweru branches have been operating without
managers for some
time.
Masvingo and Bulawayo branches have both lost two
managerial
personnel and Gweru and Mutare have lost one each. The main
reason for the
exodus has been low salaries.
In October
the company had its telephone lines cut for three
weeks over unpaid
bills.
An insider revealed that this week the board met and
discussed
issues that included the Mercedes Benz E240 that the company
bought for
Maredza and is now being used by Marambanhaka.
Some board members wanted the vehicle sold.
Small and Medium
Enterprises Development minister, Sithembiso
Nyoni, on Wednesday said she
was not aware of what has been happening at
Sedco.
"I
haven't heard anything concerning Sedco," Nyoni said.
"The
board has not reported anything to me so I cannot say
anything. Talk to the
chairman."
Tshabangu, the Sedco chairman, said he was
surprised at how
issues that are supposed to be internal were out in the
open.
"It is not true that there are branches that are
operating
without managers. The Gweru branch manager resigned and the
Bulawayo manager
is currently working in the Harare office," Tshabangu said,
adding: "We now
have an internal auditor but I am not sure about the risk
manager."
"Things have been difficult for Sedco and we had
some staff
member leaving because we were short of
funds."
Tshabangu said Sedco received significant funding
from the
national budget.
"I am sure things are going to
be better."
Meanwhile, Sedco employees have written to
Vice-President Joice
Mujuru expressing concern over deteriorating conditions
at the parastatal.
In their letter to Mujuru, the employees
said 26 out of a total
of 77 of their colleagues left the parastatal this
year alone due to poor
working conditions.
"Workers have
been and continue to be frustrated by the
deplorable or humiliating salaries
such that between January and November
2006 more than 26 employees have
resigned including some long-serving
members.
"It is our
view that management is deliberately frustrating
workers so that they leave
the corporation with nothing after loyally
serving the corporation for a
long time," reads the letter sent to Mujuru
who is also the focal person for
parastatals in government.
In their letter to Mujuru, the
workers allege that poor salaries
at the organisation have forced senior
management to leave the organisation
while those still in employment are
being frustrated by inefficient
management.
Zim Independent
Augustine Mukaro
ZIMBABWE'S
emotive land reform programme goes under
international scrutiny next Friday
when the hearing of evicted Dutch farmers'
case against government opens
before the International Court.
The International Centre for
the Settlement of Disputes (ICSID),
which is normally based in Washington,
will sit in Paris on December 15.
The first hearing will be
by a tribunal of three arbitrators,
Judge Gilbert Guillaume of France,
former Boston University School of Law
dean Ronald Cass representing the
farmers, and former Pakistani Justice
minister Mohammad Wassi Zafar on
behalf of the Zimbabwe government.
The hearing will set a
timetable for when the full claim will be
served by the farmers, the filing
of the defence counter claim, the
claimants' reply and then Zimbabwe's
rejoinder, disclosure of documents and
service of witness
statements.
Judge Guillaume, a former president of the
International Court
of Justice and a designee of the government of France to
the ICSID panel of
arbitrators, will preside as the casting vote in the
case.
Zimbabwe has been pushing for the hearing to be held in
Harare
arguing that it would be difficult to raise the foreign currency
required to
finance the process. The request was however thrown out on the
basis that it
would not be fair to the farmers.
The ICSID
last month demanded an advance payment of US$150 000
from Zimbabwe to meet
anticipated expenses to be incurred during the
hearing.
"ICSID administrative and financial regulations provide for the
periodic
advance payments to be made to the centre by parties to the ICSID
arbitration proceedings in order to enable the centre to meet the costs of
such proceedings, including the fees and expenses of arbitrators," an ICSID
letter to the government said.
If Zimbabwe loses the case
it will be expected to pay in excess
of US$15 million as compensation for
improvements, land (title deed value)
and expropriated moveable assets. The
claim is currently accruing interest
backdated to the time land was
expropriated.
The evicted Dutch nationals are demanding that
Harare uphold the
Bilateral Investment Promotion and Protection Agreement
signed by the two
governments and ratified by President Robert Mugabe in
1996, four years
before the chaotic and often violent land take-overs in
2000.
Zim Independent
Shakeman Mugari
BUBYE Minerals has lost control over
River Ranch Mine after the
High Court threw out its application to compel
the Minister of Mines and
Mining Development to reverse his decision to
cancel a special grant to the
mine.
The ministry
cancelled Bubye Minerals' special grant to the
diamond mine on the grounds
that it had not been properly ceded to them by
the owners, River Ranch
Ltd.
The court said Bubye had not consulted River Ranch Ltd
before
they got the permission from the Mining Affairs Board to take over
the
special grant.
Bubye, however, made an application to
the High Court seeking to
compel the ministry to reinstate the special grant
to them. Their
application cited the ministry, Minerals Marketing
Corporation of Zimbabwe,
Mining Commissioner and River Ranch Ltd
itself.
In his ruling this week, Justice Lawrence Kamocha,
concurred
with the ministry's findings that the special grant was not
properly ceded
to Bubye.
He said the ceding of the
special grant to Bubye was null and
void.
Justice Kamocha
said it was curious that it was Bubye itself
which had applied for the grant
to be ceded to them.
"It is common ground that it (Bubye) did
not advise River Ranch,
the holder of the special grant, that it
was
seeking the cession from the ministry," said Kamocha in his
ruling.
He also said River Ranch Ltd had not been given
the chance to
present its case when the special grant was ceded to
Bubye.
Zim Independent
Augustine Mukaro/Shakeman Mugari
THE Reserve Bank of Zimbabwe is importing poor quality wheat
from Intshona
Agricultural Products of South Africa, the same company that
supplied
substandard fertiliser to Zimbabwe last month.
The
controversial fertiliser imports cost former Agriculture
permanent secretary
Simon Pazvakavambwa his job last
week.
Intshona supplied between 160 and 800 tonnes of fertiliser,
prejudicing the
country of up to US$300 000.
Confidential documents to hand
show that Intshona was awarded a
contract to supply 600 000 tonnes of wheat
to Zimbabwe. The first tranche of
90 000 tonnes is expected by the end of
the month, following a deal signed
between the RBZ and Intshona in
June.
The wheat has been classified as BS1 and BS2 grades,
which
experts said was low quality wheat best suitable for
stockfeed.
The wheat is described "as per South African
standard, mixed
quality of BS1 and BS2 grades or equivalent of protein 10%,
specific weight
72kg, germinated grain 5%, moisture 13,5% and grit 0,5%" by
Christa van
Louw, Intshona executive chairperson in a letter dated September
25.
The letter was countersigned by Millicent Mombeshora on
behalf
of the RBZ.
Experts said wheat for human
consumption should not contain any
germinated grain and should have a
density of around 75% and a protein
content at around
14%.
"Once there is germinated grain, that wheat should be
recommended for stockfeeds," experts said.
The wheat
costs US$345 per tonne.
President Robert Mugabe recently
summoned RBZ governor Gideon
Gono and Agricultural minister Joseph to
explain their involvement in the
procurement of the substandard fertiliser
from the South African company.
The new grain deal has
triggered fears that there could be
senior officials linked to Intshona who
are benefiting from import deals.
Bakers said poor quality
wheat lacks glutton needed to give
bread the rubbery properties which keep
it fresh for some time.
"Lack of glutton results in
substandard bread that crumbles when
you try to slice it," one baker
said.
He said this explained why most bakeries had stopped
selling
sliced bread which had become common in
supermarkets.
* Meanwhile, another letter written on the same
day regarding
maize imports shows that Intshona will also supply 190 000
tonnes of maize
by March 2007 as first tranche of the
consignment.
"Intshona Agricultural Products (Pvt) Ltd,
hereby confirms with
full corporate and legal responsibility, under full
penalty of perjury that
we are ready, willing and able to sell product
mentioned Non-GMO Maize,"
Zim Independent
Paul
Nyakazeya
THE cost of living as depicted by
PriceWaterhouse Coopers (PWC)
for a high income family of six rose to $43,2
million a year from $2,3
million (revalued) last year.
PWC noted this week that the main inflation drivers during the
period under
review were consumables, which went up 2 633% year-on-year,
domestic
workers, up 2 627%, and personal care which rose by 2 362%.
On a month-on-month basis, domestic workers were up 150%, canned
foods
advanced 66%, while personal care was 62% higher. Day schooling showed
the
lowest annualised increase at 729%, followed by air travel on 1
001%.
"The record month-on-month rate for high income earners
was
48,9% in September. A high income family now requires $43,2 million a
year
to live compared with $34,16 million in October, $24,12 million in
September
and $16,2 million in August," PWC said.
According to PriceWaterhouseCoopers' inflation series for
November, the high
income inflation index rose by 26,5% month-on-month and 1
716%
year-on-year.
"High income inflation was running at 1 716%
year-on-year in
November, having risen by 26,5% from October. It was a
slight decline on
October figure of 1 736%," said PWC. It said inflation for
middle income
earners during the same period was accelerating at 1 966%, a
record rate
among all 3 categories (high income, middle income and low
income).
"Inflation for middle income earners was up 1 966%
in the year,
having risen 37,5% on the month with consumerables showing the
largest
annual gain at 2 821%, while medical was the lowest at 1 168%," PWC
said.
In October, middle income inflation was running at 1
612% year
on year. Canned foods drove the month-on-month increase, rising
79% from
October, while consumerables were up 67% on the
month.
A middle income family now requires $18,62 million a
year to
live the life they were accustomed to, compared with $13,54 million
in
October, $10,06 million in September and $901 435 in November last
year.
Prices for low income earners rose by an average 37,7%
on the
month and were accelerating 1 658% on the year, more than 200
percentage
points up on October's 1 442%, but below the record 1 773%
achieved in July.
"The figure was driven largely by the 2
962% increase in the
cost of personal care year-on-year. At 953%, rent was
showing the lowest
annualised increase," said PWC.
It
said the annual income required at $2,878 million compared
with $2,09
million in October, $1,561 million in September, and $163 682 in
November
last year suggesting that taking the government's parameters for
measuring
of inflation, prices rose by 30,5% between November and October,
and were
accelerating at 1 102% year-on-year.
Meanwhile, the Consumer
Council of Zimbabwe's low-income urban
earner's monthly budget for a family
of six were most Zimbabweans fall under
has risen from $141 706,79 in
October, to 208 714,84 in November reflecting
a 47,3%
increase.
In US$ terms the Family Basket shifted from
US$566,83 in October
to US$834,86 in November.
During the
month under review notable increases were recorded in
Roller Meal which rose
by 197,79%, cooking oil by 196,16%, washing bars by
112,12%, rice by 95,30%,
salt by 91,05%, margarine by 85,03%, and transport
by
50%.
The total cost of the family basket increased at an
increased
rate by 47,3% in November. In October and September it rose by
26,4%
and16,3% respectively.
Zim Independent
Ray
Matikinye
THE cost of liberating ourselves from
colonialism and settler
domination is rising.
Figures
released in the budget statement last Thursday indicate
government's lack of
prudence in awarding individuals honoraria for fighting
a war to defeat
settler colonialism.
Copies of the "blue book" that spells
out the budgetary
appropriations to each ministry became available on
Monday.
Nine years after "Black Friday" in November 1997,
when the
dollar crashed, the Zimbabwean taxpayer is saddled with a heavy
burden.
A look at Finance minister Herbert Murerwa's budget
statement
reveals the folly of certain decisions government has made for
populist
political ends - decisions that debase the noble sacrifices every
peasant,
professional or student made to throw off the colonial
yoke.
Quite how Zimbabwe has acquired the habit of aping
others,
without taking time to weigh the long-term advantages and
disadvantages
simply boggles the mind.
The decision seems
to have been cloned from pensions whites
received for fighting in World War
II.
Under Constitutional and Statutory Appropriations, the
cost of
fighting for our liberation has risen from $334 323 360 to a
whopping $7 111
624 000 for those that were detained or jailed on account of
their political
activism.
For the more intrepid that made
it to Mgagao, Tembwe, Chimoio
and such other camps, the cost of their
courage has scaled fresh heights.
From a princely $2 750 899 696 during the
last financial year the projected
cost next year is $83 297 288
000.
The figure is eight-fold the amount allocated for the
Youth
Development Fund under the Youth Development and Employment Creation
ministry.
Murerwa admits: "Youth constitute 67% of our
population with
around 400 000 leaving school every year. The formal sector
absorbs only 10%
of the school-leavers resulting in a large number being
unemployed."
A whole ministry in charge of small and medium
enterprises, to
support development of SMEs as part of an economic
development strategy, has
a budget less than half the outlay for war
veterans pensions at $41 024 367
000.
The combined
payouts for independence war fighters, detainees
and restrictees at $90 408
912 000, exceeds the appropriation for the Rural
Housing and Social
Amenities ministry 9,32 times.
Zim Independent
By John Robertson
GOVERNMENT'S intentions to replace former freehold title to
agricultural
land with 99-year leases appears to offer political advantages
that make the
concept attractive to political authorities, but no advantages
to the
lessees can be determined from the lease agreement, other than that
it
commits the lessee to separate yearly rentals for the land and
improvements,
rather than a single purchase price.
For any improvements on
the land, the rental calculated by the
authorities, or lessor, is payable by
the lessee for the following 25 years,
unless the lessee chooses to reach
agreement with the Ministry of
Agriculture for the outright purchase of
these improvements. And, on signing
the lease, the lessee is required to pay
within three months, a one-off
deposit equal to the sum of the annual rent
on the land and the annual rent
on improvements.
These
outlays secure for the lessee the rights to occupy and
farm the area
specified in the lease. These rights bring with them a series
of obligations
and requirements that must be met at the lessee's expense.
They
include:
* Taking up permanent residence on the property, or
appointing a
manager who will move onto the property within three
months;
* Fencing and farming the property in a sustainable
manner
acceptable to the lessor;
* Gaining approval for a
five-year development plan that will
have been submitted ahead of the
signing of the lease and;
* Initiating minimum developments
as required by the lessor
within three months of signing the
lease.
Minimum developments within the first three months
include:
* Development of a permanent homestead and water
supplies for
personnel and animals;
* Provision of
approved access roads;
* Erection of adequate accommodation
for employees and;
* Initiating minimum production in terms
of the approved plan.
A new five-year plan must be submitted
for approval on the
expiry of an existing plan or if the lessee is directed
to do so by the
authorities.
Other requirements include
ensuring that no illegal tree-felling
takes place, no noxious weed growth is
left unchecked, no poaching of
wildlife takes place, fire-breaks are
maintained and measures are taken to
prevent soil erosion as well as to
prevent the development of plant and
animal diseases.
Where lessees inherit plantations, they are required to
rehabilitate and
maintain them to the satisfaction of the authorities.
All
lessees are required to assume full responsibility for
maintenance, repairs
and replacements required to ensure the upkeep all
other improvements
already on the property.
If the lessee fails to meet these
responsibilities, the
authorities will be entitled to carry out the work and
recover the costs
involved from the lessee.
While the
duration of the lease is 99 years, the lessor reserves
the right to
terminate the lease if the lessee becomes insolvent, or fails
to properly
manage the leasehold, fails to meet the terms and conditions of
the lease,
fails to meet the rental or other financial commitments to the
lessor or
fails to pay the required rates, levies and other charges to local
authorities.
If the authorities do not receive settlement
or acceptable
representations after giving the lessee 30 days notice of its
intention to
terminate the lease, the lessor is entitled to cancel the lease
and
repossess the leasehold after another 90 days.
From
the point of view of the farmers, the leasehold terms and
conditions suggest
that they will have to have confidence in their abilities
as well as courage
to commit themselves to five-year plans, and will have to
meet very high
standards to retain their rights to continue farming.
Two
issues arise from this: firstly, as a percentage of the
population, the
number of farmers who have skills of this order is very
small. Secondly,
even those who have the necessary skills are likely to find
that
profitability will still elude them on their small-scale leasehold
operations.
Government's intention is to have tens of
thousands of farmers
work to their A2 land resettlement format with the
support of 99-year
leases. If, for political reasons, the intention is that
very nearly all of
these farmers are to be defined as successful, generously
low performance
levels will have to be accepted when interpreting the terms
of the lease
agreement.
Concessions that permit farmers
to be "successful" without being
profitable will make subsidies a necessity.
In effect, farmers will be
invited to become reliant on subsidised input
costs together with support
prices for crops. Under such arrangements, the
farmers' need for loan
facilities to finance their operations will be
greatly reduced.
For farmers, this will be just as well, as
their prospects of
using their 99-year lease agreements as collateral in
support of bank loans
are extremely poor. This is true even though in
Section 24 of the lease
agreement government claims that, because the lease
can be registered in a
deeds registry and endorsed to the effect that
certain sums are owed to
certain lenders, the lease can serve as collateral
for the loan.
While some banks might extend loans to certain
farmers in token
gestures to show compliance with government policies, given
the government's
determination to see their land reform policy succeed, the
lease agreements
will be found to have no legal standing as collateral for
several
fundamental reasons:
* At the most basic level,
the lease agreement does not qualify
as collateral because the property
referred to in the agreement cannot be
bought or sold on an open market and
it therefore has no market value;
* The lessor's rights to
terminate the lease after serving the
lessee 90 days' notice renders what is
left of the 99-year duration of the
lease irrelevant. While the lender's
debt recovery rights might remain
intact, their prospects of recovering the
debt will have been effectively
demolished;
* The claim
that borrowed money used to carry out improvements
on the property increases
the value of the property does not translate into
a realisable sum of money
that can be recovered by the lender in the case of
the borrower defaulting
on the repayment terms;
* Borrowers might default on
repayment obligations at any time,
but would certainly do so if evicted from
the property by the lessor. In
apparent recognition of these shortcomings,
Section 24.3 of the lease
agreement provides for amounts outstanding to be
recovered from the person
to whom the lease is ceded or transferred, and
states that the final
transfer of the property will not be permitted until
the intending new
lessee has settled the previous leaseholder's debt or the
new lessee has
come to an acceptable arrangement with the
lender.
This highly impractical provision is certain to cause
every new
applicant to seek an unencumbered property. Every property that is
burdened
by outstanding debt will remain vacant and every affected lender
will be
forced to forfeit the amounts owed. But as the lease documents will
not be
readily accepted as collateral in the first place, government will
have to
remain committed to support and subsidies, the costs of which will
be borne
by taxpayers and will impact on the whole country through
inflation.
Direct government assistance to individual farmers
so far has
been typically confined to farm inputs, but the authorities have
tried to
encourage farmers to also become owners of their own farm
equipment, rather
than source the needed capital items from the state. Loan
finance is usually
essential for the purchase of such
assets.
Lessees trying to buy farm implements might be able
to borrow
from banks on the strength of the security of a Notarial General
Covering
Bond that would put the bank's claims ahead of concurrent creditors
if the
farmer went insolvent or was evicted from the leasehold for some
other
reason.
However, as these items of equipment would
be moveable assets,
the bank would face the additional risk that the assets
could be moved
beyond their reach ahead of the disclosure of financial
difficulties.
For the government, the advantages centre on
features of the
arrangements that will permit the state
to:
* Acquire and exercise ultimate control over the
land;
* Make agricultural land an asset within the gift of
the state;
* Eliminate pressure groups of farmers empowered
by property
rights;
* Re-allocate land that officials
consider is not being
efficiently used;
* Protect peasant
communities from the harshness of market
forces;
*
Receive rental incomes from all lessees;
* Receive separate
rental incomes from the improvements
installed by previous property
owners;
* Administer, regulate and control the initial
selection of
lessees;
* Directly influence the selection
of successors when existing
lessees choose to vacate their leaseholds or
have their leases cancelled.
In its launch of the new 99-year
lease agreements, government
made no reference to these underlying
objectives, but confirmation of their
being intrinsic to government's
thinking is its basic distrust of market
forces and its unwillingness to
permit citizens to exercise freedom of
choice.
As the
initial beneficiaries of land redistribution are being
given the land free
of charge through the exercise of government patronage,
the intention is
that their successors will also take over the land free of
charge through
the transfer of patronage to them. However, they will be
expected to pay a
rental to the state for the use of existing improvements
or pay the former
lessee for improvements carried out during their tenancy.
In
previous presentations in support of its 99-year leasehold
propositions,
government has cited the fact that considerable areas of land
in certain
developed countries are successfully leased to farmers.
Unfortunately, the conditions the government has entrenched in
the leases
make them distinctly different from conditions that apply in
first world
countries.
In the countries concerned, the leased land in
question is not
owned by the State; a property-owning individual, family or
company owns it,
each lease is on an identifiable piece of land, each lease
has a market
value and each lease is therefore marketable. Because of the
marketability
of the lease, it can be offered as collateral in support of a
loan.
This protects the lessor, as a bank that is owed money
that the
lessee cannot repay has the legal right to place the lease on the
market.
When a new lessee pays for the remaining years covered by the lease,
the
bank will recover the funds owing. Laws governing tenant rights also
protect
lessees, but in exchange they are required to meet these fully
acceptable
obligations or forfeit their rights.
In the
event of a lessee deciding to relinquish a lease, the
market value of the
remaining years will be established in the market, a
buyer will be sought
through the market and the transaction will be
formalised and registered in
the market by real-estate agents and
conveyancers.
Other
than collecting transfer duties registering the new
lessee, the state plays
no part in the procedures.
These features make all such lease
agreements bankable in other
countries, but the leases being issued by the
Zimbabwe government are not
bankable, simply because no mechanism exists
that could be used to establish
a market price and no market exists that
will permit a normal transfer of
ownership of the pledged
security.
Government's right to approve or reject any
applicant wishing to
take over an existing lease further distances the
arrangements from the open
market requirements of genuine, bankable
collateral.Notes on the evolution
of leasehold to freehold title leasehold
arrangements first evolved from the
earlier feudal systems in Europe, as
landlords and tenants tried to find
means of unlocking the capital value of
land.
As the shortcomings of leasing became apparent and as
the power
of the landed aristocracy waned and as the need for capital and
security of
tenure increased, freehold ownership rights offered the required
assurances.
When new areas of settlement and investment were
being
established in the Americas, the feudal systems of Spain and Portugal
were
transplanted into South and Central America. However, in North America,
the
evolving freehold land tenure systems were adopted. Today, hundreds of
years
later, South and Central America remains a collection of developing
countries, but North America has become the most prosperous area in the
world.
The essential difference between these two vast
areas - and the
essential difference between the former communal and
commercial areas of
Zimbabwe - is that, where they had individual title, the
owners of the land
used its capital value as leverage to raise the funds
required to develop
the land's potential as well as their own. With access
to the capital they
needed and the confidence that came from security of
tenure over their
property, they achieved remarkable
successes.
Property owners' title deeds provided them with a
bridge that
led directly into the banking sector. Their ability to make
long-term plans
and their eagerness to repay their loans to preserve their
ownership rights
drew from them exceptional levels of resourcefulness,
ingenuity and
determination to succeed.
By contrast,
where the occupants of the land were tenants, their
ability to raise money
to carry out development work or to augment their own
skills was severely
limited. Their uncertain hold on the land they occupied,
but could not own,
left them with neither the means nor the incentives to
plan ahead, and they
never felt inclined to shoulder the burdens of expense,
risk and effort to
invest in productive capacity that would enhance the
value of someone else's
property.
Today, many South American countries are moving
towards
individual freehold property rights in an effort to accelerate
development.
China has accepted the need for individual property rights, and
ownership
rights are being restored to East European families that were
dispossessed
of properties after the USSR extended its territories after
World War II.
Zimbabwe's proposals are taking the country in
the opposite
direction.
The government's declaration at
the end of the lease agreement
that "the lessee may use this lease as
collateral in securing agricultural
financial assistance from any financial
or agricultural institution" is not
enough to make the lease acceptable to
lending institutions.
As the conditions created by land
reform have effectively
eliminated the collateral value of farmland, they
have made development
funding entirely the responsibility of the state and
they have made each
individual's performance dependent on state subsidies
and support. Personal
progress within such a system has therefore become
dependent upon political
patronage, rather than upon resourcefulness, good
management and hard work.
Although fixed assets of some value
could be built with money
loaned by a bank, the separation of land from the
improvements on that land
makes the recovery of the debt almost impossible
if the borrower defaults.
This is
because the farmer's right
to remain on the land is conferred,
not by business procedures supported by
market forces, but by a political
act that the bank cannot
challenge.
Investment is the first requirement for economic
growth. By
according a capital value to land, considerable capital sums are
unlocked
and made available to the investment process. Individual property
rights,
market prices for land, transfers of ownership through the market
and the
official registration of ownership rights make up the essential
components
of the market mechanism that releases this capital onto the
market.
The responsibility, accountability and legal
obligations that go
with individual freehold property rights quickly help
communities to accept
the challenges of modern economic development and they
place the means of
achieving profound economic empowerment within reach of
the majority. But
because Zimbabwe's authorities consider these levels of
success to be a
threat to the ruling party's power-base, these advantages
are being denied
to Zimbabwe's population. Zimbabwe's current policies very
clearly have
nothing to do with empowering the people.
Government's decision to revert to feudal state-ownership of
land is already
proving to be a massively retrograde step.
* Robertson is an
independent economist.
Zim Independent
By Eddie Cross
THE decision
last week to imprison two of the largest bakers in
Zimbabwe for six months
and to hold them in custody while their appeal
hearing was dealt with was a
shock to the entire business community.
Not only was the
sentence out of proportion to the "crime" they
had committed, but the fact
that the maximum fine for the same offence by
the company they ran was a
paltry $10 000 demonstrates the absurdity of the
sentence.
Their crime was to sell bread for a price that
was above the
"controlled price". In fact, the last time the price of bread
was formally
controlled by a Gazette notice was many months ago at the level
of $85 per
loaf. There are no regulations which say that the price of bread
should be
above this even though price controllers are using $295 as the
"controlled
price".
There are now over 6 000 outstanding
court cases against
business managers in all fields on price control-related
issues. This means
that all of them may be subjected to the same treatment.
On Tuesday, the
price control officials raided the largest food company in
Bulawayo and took
a "warned and cautioned" statement from the managers. The
issue on this
occasion was the price of cooking oil. The managing director
of the largest
wholesale group in the country was on the same day in court
on the same
charges.
Companies are responding by
withdrawing stock from their shelves
and avoiding products subject to
controls.
Bakers have either stopped producing bread which
they cannot
manufacture and make a profit at the controlled price and
switched to
non-controlled products or slashed the weight of a loaf of bread
by 40% in
order to make it profitable.
It is clear that
this standoff cannot continue for much longer
without serious consequences.
Firms are threatened with closure by the
crisis while managers are refusing
to continue operations if they threaten
their own safety and
security.
It is time for the major firms to either stand up
to government
or take it to court.
In the event that the
courts support the government, then the
production and distribution of
controlled products through the formal sector
will become impossible. Such a
situation is in the interests of nobody
living in
Zimbabwe.
By the way - the price of bread they are trying to
enforce is
the equivalent of less than R1 or US$0,13 per
loaf.
The price of bread in all our neighbouring countries is
the
equivalent of at least R3,50 per loaf.
* Eddie Cross
writes from Bulawayo.
Zim Independent
Shame Makoshori
AS Reserve
Bank of Zimbabwe governor Gideon Gono sat in the
public gallery, chin in
hand, listening to Finance minister Herbert Murerwa's
attack on his failed
monetary policies, a whirlwind of thoughts must have
shot through his
mind.
In a major turn of events that could derail Gono's
ongoing
experiments with the economy, Murerwa finally woke up last week and
demanded
back the powers wrestled from his ministry by
Gono.
Murerwa's body language spoke of a man fed up with the
ruinous
actions of his defiant subordinate.
There have
been cold wars in the corridors of the Ministry of
Finance and the RBZ over
Gono's funding of public and private sector
projects outside national
budgets.
The RBZ governor had until last week literally taken
over the
role of the ministry in a development that has been criticised by
industry,
commerce and some in government.
One journalist
asked Gono: "Does Zimbabwe need a Minister of
Finance?" to which he retorted
that ancient textbook economics did not work
in Zimbabwe's rapidly
deteriorating economy.
While presenting the 2007 budget last
week, Murerwa came out
blazing, attacking unplanned expenditure and the
central bank's quasi-fiscal
activities in the economy.
"Consistent with our constitution and the Audit and Exchequer
Act, beginning
2007, all such and any other additional public expenditures
will be strictly
and adequately reflected through the budgetary process," he
said.
"Such quasi-fiscal expenditures had risen to levels
that are now
undermining our turnaround efforts by increasing the growth of
money supply
and therefore fuelling inflation," Murerwa
said.
Economic analysts say money supply growth contributes
over 30%
of core inflation.
Money supply growth has
escalated to over 400% against an
average output of between 0 and 5% as a
result of the RBZ's quasi-fiscal
operations, but Gono has ignored advice,
pumping in $2,7 billion in 2004
through the Productive Sector
Facility.
He purchased agricultural equipment, inputs, funded
dam
construction projects, channelled billions into small enterprises,
infrastructure and many others.
The quasi-fiscal
expenditures reached $372,9 billion last year.
Incorporating these unplanned
expenditures into the 2006 budget increased
the overall budget expenditures
to $824 billion from $451 billion.
This was against projected
revenue inflows of $250 billion. The
budget deficit had ballooned, Murerwa
argued last week, from 18% to 43% of
GDP.
This is too big
a deficit for an economy in crisis to manage.
Economists said budget
deficits must not exceed 5% of GDP.
Gono has his own
supporters though who argue that given the
continued shrinkage of the tax
base as a result of massive industrial
closures, employment losses and low
disposable incomes, Murerwa would not
collect enough revenue to finance the
budget.
Independent economist John Robertson said Gono's
quasi-fiscal
operations began after realisation that government's purse was
empty.
"It was a brave statement which might not be possible
to
accomplish," Robertson said this week of Murerwa's
announcement.
"The reason why Gono had introduced the
quasi-fiscal operations
was the lack of finance. To some extent, it would be
necessary that he is
allowed to continue," he said.
Quasi-fiscal allocations to parastatals and local authorities
alone had
gobbled $17,8 billion by November with no corresponding increase
in output
as envisaged by Gono.
University of Zimbabwe Graduate School
of Management lecturer
Isaac Kwesu said the response by the productive
sectors was slow.
When Gono arrived at the RBZ in December
2003 he promised to
reduce inflation - then around 600% - to two-digit
figures by the end of
2005. But inflation has surged to its worst levels,
ending October at 1
070%.
Gono has in recent months
focused on funding the productive
sectors.
This has
outraged the International Monetary Fund (IMF) that
warned this would
escalate the economic crisis.
"The approach we have taken to
the economic turnaround programme
is not the textbook type. What we are
trying to do is to be practical and
relevant to the situation," Gono told
New African magazine last year.
"We are taking a holistic
approach. and please do not just focus
on the Finance minister, the central
bank is now dealing with agricultural
issues, communication issues,
therefore it is only the mischievous mind
which wants to divide the governor
from the constituent parts of the
economy," he argued.
However, the results have been catastrophic and the taxpayer has
borne the
brunt of price distortions, high interest rates and the
quasi-fiscal
operations.
In most cases, the quasi-fiscal expenditures did
not achieve the
desired supply response owing to the abuse of availed
facilities by most
beneficiaries as a result of weak control
measures.
Kwesu said last week's phasing out of quasi-fiscal
expenditures
from the RBZ was the best announcement by Murerwa in his budget
statement.
"We were worried that the hyperinflation the
country is facing
was instigated by Gono's quasi-fiscal operations," he said
this week.
"It was good to see authorities finally realising
how
quasi-fiscal expenditures had undermined our turnaround efforts by
increasing levels of money supply growth, thereby fuelling the budget
deficits and money printing," Kwesu said.
"Whilst I
recognise that money supply is not always
inflationary, it becomes
inflationary if its growth is greater than output.
A deficit has to be
financed and this means in the absence of foreign lines
of credit, we have
to borrow from the local market or print money.
"But printed
money is not income, the majority of people confuse
this, including the
governor," Kwesu added.
Gono's inner circle at the RBZ said
Gono does not easily give up
and could take his case to the president to
justify his actions.
"Adamburwa musweka murume uyu (his tail
has finally been cut),
but he does not give up easily. However, he could be
losing now because if
you see the minister making an announcement it means
the matter has been
discussed at length and his bosses are not happy with
him," said an RBZ
official.
But Gono has previously made
critical decisions without
consulting his principals at the Ministry of
Finance.
In August, he implemented radical changes to the
currency which
were aimed at combating vice and currency
externalisation.
He brought in new bearer cheques without
consulting Murerwa.
This week analysts said Gono could easily
convince Mugabe that
Murerwa's moves were militating against a project whose
results would turn
around the economy.
On Saturday he
announced the postponement of his monetary policy
review, originally
scheduled for yesterday, to January 2007 in what
observers thought was a
result of Murerwa's directive which had forced him
to readjust the policy to
reflect the new requirements.
"He has no option," said
Kwesu.
Zim Independent
By Walter Hurley
NOW that the
IMF is back in town for consultations with
Zimbabwean authorities one would
hope that they will at last adhere to their
charter and come to terms with
reality.
After nearly a year of their alleged "IMF
transparency" we are
yet to hear where the last surprise payment by the
regime to the IMF
actually came from.
In what is now a
depiction of the erosion of general Western
standards and values, not less
than by the bean-counters from the IMF, no
more do we hear about the
suggested installation of good governance in
Zimbabwe to save
it.
Neither the Reserve Bank's governor or the IMF now even
bother
to mention corruption and the evil disposition of the Zimbabwe
government
that has caused the downfall of the nation.
Gideon Gono, once said to be a proponent of restoration of law
and order and
the respect for property rights, is now silent on these
matters. If one were
to research his own wealth and history, there may be a
bigger story to
tell.
One has to remember that Gono could be considered as "royal
game" - a protected and especially nurtured species who knows too much to be
alienated.
The so-called anti-corruption campaign is a
primitive joke. The
facts are that high-level corruption as revealed to the
Reserve Bank's
Investigation Unit has been ignored by that
office.
Various confusing and contradictory policy statements
continuously emanate from the regime.
Whilst there is a
leadership and power struggle in progress, it
is not difficult to filter out
the primitive strategies of the aspirants and
office
bearers.
Playing the amateurish good guy versus the bad guy
roles, Gono
until recently provided window-dressing to the world that he may
have some
sane contributions to make to save the nation.
Naturally, he is powerless to influence change by the greedy or
mentally-challenged geriatrics still hanging onto power. Now he is stalling
on his promised review statement pending "consideration of advice" from the
IMF! We can count on the fact that whatever he says in the coming days will
not be adhered to by the real persons in control of the Zimbabwean
circus.
Unless the IMF officials are brain-dead, many others
know that
President Mugabe has often told the IMF impolitely to get lost -
we do not
need them! (Perhaps he hallucinates that the enormous debt and the
lack of
specific performance debt will be written off!)
The rug is repeatedly pulled from under Gono's feet by alleged
radicals in
the regime such as Didymus Mutasa and others who are clueless
about the fact
that government is supposed to respect the law and serve the
nation.
Zimbabwe's external debt exceeds US$2,2 billion.
This excludes
expected liabilities from pending international court cases
for damages,
theft and the like, and for millions of pounds that the
government is liable
for institutionalised looting from externally-based
investors and from many
citizens of the country.
Many
have speculated as to how Zimbabwe still survives. There
are many answers
that include the fact that the government does not pay its
debts, theft and
conversion of national and private assets, aid from pariah
states, the
conversion of enormous sums of alleged unmonitored donor aid
money, and the
willful violations of international laws such as Bippas that
Mutasa says are
not worth the paper they are written on.
What Western nations and
related institutions finally need to
come to terms with is
that:
* The president has continuously failed in proper
service and
diligence to the nation, and the only way he can keep support is
by enabling
evil, looting, corruption, human rights abuses, and the local
and
intentional breakdown of proper law and order;
* The
state has institutionalised and legitimised extortion,
lying and
fabrication, corruption and widespread criminal conduct. The
beneficiaries
of this accommodation is naturally reserved for the solidarity
elitists
riding on the party faithful gravy train;
* Corruption and
evil emanates from the top down. Politburo
comrades, judges, magistrates,
ministers, Zanu PF parliamentarians, civil
servants, police and militia
forces can generally be considered to be
totally corrupt or to be devoid of
moral principles. They hold their offices
only out of hand-out patronage
provided "solidarity" is returned together
with loot sharing. There is no
prospect whatsoever of proper law application
when the related institutions
are wholly corrupt and self-serving;
* Zimbabwe has stolen,
mortgaged or sold most of its assets to
survive a while
longer;
* Zimbabwe has no prospect whatsoever of ever serving
its
enormous local and global debts. The IMF must now count its
losses;
* In view of the conduct of this regime consideration
of debt
forgiveness and further aid of any kind by woolly-minded Western
deadbeats
should terminate forthwith. Zimbabwe has brought about its own
demise.
Most citizens of the country are actually complicit
since they
have cowardly succumbed or often willingly joined with the
corrupt
retrogressive regime. The "useless" United Nations and the
boot-lickers of
the West have effectively sponsored the addiction to
blame-passing,
hallucination, begging and dependency syndrome in
Zimbabwe.
* Mugabe continues to cash in on the stupidity of
the West. He
is at least twice smarter than Bush, Chirac and Blair put
together.
* The regime will never voluntarily give up its
evil ways.
Naturally this is because the associates are so steeped and
dependent on
their patronised power and looted wealth the prospect of local
or
international prosecution is unpalatable to them.
*
Zimbabwe is now a certifiable failed state that is clearly
beyond
rehabilitation for a long time in terms of modern
civilisation.
* The intellectual assets of the nation have
long since fled to
better and saner pastures - not much is left of capable
intellectual
resources.
* The life support aid mechanisms
from the West should be pulled
out of the Zanu PF polluted Zimbabwe
near-death cadaver.
* Zimbabwe should deservedly be booted
out of the IMF, and that
its debt should be forthwith demanded to be
serviced.
* Let the inevitable meltdown now be stimulated and
life started
again after the extinction of the dinosaurs.
* Hurley writes from Pretoria, South Africa.
Zim Independent
By Chris Mhike
THE
much-flaunted 99-year Lease Agreement is a high-sounding
nothing. In
numerous respects, it gives with one hand and takes away with
the other. In
that disempowerment lies the document's grave deficiency.
The
agreement purports to empower "new farmers" who have settled
on land under
the A2 scheme, when in fact it wipes away the traditional and
sound concept
of land ownership.
The document rightly acknowledges in its
preamble section, that:
"It is desirable that the farmers be given security
of tenure . for land
allocated to them."
Under the
subject of the Law of Property, "security of tenure"
refers to the assurance
given to the owner or occupier of a given piece of
property, that his/her
real rights over that property shall not be adversely
affected, through
human action, for a certain and considerable period of
time.
The 99-year lease agreement however only goes as
far as
expressing the desirability of endowing "new farmers" with the prize
of
security of tenure. The substantive provisions of the lease agreement
leave
farmers vulnerable to arbitrary dispossession.
While on the face of it, the lease agreement guarantees the
lessee (that is,
the beneficiary farmer) and dependants or family,
century-long tenancy, in
actual terms, the guaranteed duration of tenancy is
only three
months.
The agreement carries a clause which stipulates that
". the
lessor (that is government), reserves the right to cancel this lease
and
repossess the leasehold, on ninety (90) days notice or any longer notice
period as the lessor may deem fit".
That possibility of
termination upon three months notice dilutes
the whole concept of security
of tenure for the farmer under the agreement.
The dilution entrenches the
description of the document as a defective one.
Termination
on "90 days or longer" notice is a qualified course,
to apply to in
situations of the insolvency of the farmer, multiple farm
ownership, "any
breach of the terms and conditions" of the lease,
sub-standard use of the
land, or failure by the farmer to pay rentals.
Certain
qualified situations do make sense, for example, the
sub-standard use of
land would warrant corrective action. The prevailing
wastage of rich soil
around the country is testimony to the senselessness of
allocating farmland
to incapable persons.
Yet the document lacks the mechanism to
determine levels of
acceptable or unacceptable productivity. The measurement
of productivity
remains opinion-based, as opposed to scientific or
systematic inquiry.
Government holds absolute power and discretion in the
assessment process.
If government is serious, it would have
in the first place
developed an effective and systematic process of
separating sincere farmers
from chancers. Under-utilisation of land would
therefore not have been a
serious an issue as it arises in the lease
agreement.
The history of civic and political governance has
illustrated
over the years that opinion-based decision-making models are
open to abuse.
That aspect therefore also makes the agreement
deficient.
Space constraints make it impossible to
interrogate the other
unjustified situations under which termination may be
effected on short
notice.
The 99-year Lease Agreement
goes deeper than threatening farmers
with eviction on short notice. It
provides that government "may at any time
and in such manner and under such
conditions as it may deem fit, repossess
the leasehold (that is the relevant
farmland) or any portion thereof if the
repossession is reasonably necessary
in the interests of defence, public
safety, public order, public morality,
public health, town and country
planning or the utilisation of that or any
other property for a purpose
beneficial to the public generally or to any
section of the public".
That is definitely a very long
provision. More significantly, it
is very wide and vague. The use of terms
such as "at any time" and
"conditions as it may deem fit" are extremely
wide. Many of the concepts
listed, including "public safety", "public
morality", and "purpose
beneficial to the public generally", are certainly
vague.
Yet local and international jurisprudence has long
established
the principle that wide and vague provisions have no place in a
democratic
society.
If Zimbabwe is indeed democratic as
claimed by the reigning
rulers, then all the wide and vague provisions
contained in the agreement
ought to be done away with.
In
giving one hand and taking away with the other, Clause 24 of
the Lease
Agreement provides that the lessee may register the lease with the
Deeds
Registry, and that he may use the document as collateral in securing
agricultural financial assistance from creditors.
However, the challenge lies in the reality that financial
institutions will
hesitate or even refuse to accept the lease as an
instrument to be trusted
for security purposes.
Some of the respectable bankers and
economists have already
expressed their reasoned reservations about the
document. A few
government-backed finance and banking organisations could
swallow the
lease-based assurance. Such institutions have been financing new
farmers
anyway and incurring heavy losses in the process, without any
reference to
any lease agreement.
It will be interesting
to see new financiers coming onto the
scene, on the strength of the lease's
assurances.
Financiers shall be dealing with a weak lessee
who pays rent to
an omnipotent lessor. The government shall, under the
lease, in its sole
discretion, determine rental levels, on an annual basis.
Should the farmer
be unable to pay the stipulated rent, eviction shall
become imminent.
Any structural alterations to existing
infrastructure, and
agricultural or pastoral improvements, ought to be done
in consultation, and
with the approval of government.
The
farmer's weakness extents even to livestock. Under Clause 9
of the
agreement, where the farmer intends to sell five or more cattle, such
intention should first be communicated to government.
One
in five of the animals on commerce should be offered for
sale to the
government, or person/s or organisation/s whom the government my
elect to be
agents. That could be one cabinet minister, some parastatal,
Zanu PF or any
other person deemed suitable for government's benevolence, at
the expense of
the lessee.
Should government not exercise its right of first
refusal, the
farmer is obliged to stick to the selling price that had been
offered to
government, notwithstanding the dynamics of the prevailing
hyper-inflationary environment.
These provisions are
clearly flawed at law in that they create a
serious injustice, and they are
unintelligible in economics in that they do
not make economic
sense.
The provision for the appointment of government
agents is also
politically deficient in that it opens up the whole system to
abuse and
patronage.
To further weaken the lessee, the
agreement ensures that the
farmer cannot freely transfer title over land. He
would first have to apply
to government for permission to transfer.
Obviously, as with any other
application, such application could be granted,
or could be denied.
Such limits to the transferability of
title wipe away the
assurance given, as to the possibility of using the
lease as a form of
security of collateral.
Lenders and
prospective farmers would rather deal with the party
that wields more and
actual power, that is government, than deal with an
impotent new farmer
whose tenure on the land is subject to numerous and
nefarious
conditions.
Without sound title to land, our farming system
shall remain
close to nomadic and fiefdom-type models of
production.
Sound title lies in private ownership of land as
enshrined in
the title deeds system, as opposed to state ownership, which is
reflected in
the so-called 99-year lease agreement.
*
Mhike is a Harare-based lawyer.
Zim Independent
Comment
WE do not believe Reserve
Bank governor Gideon Gono's
explanation that he postponed the announcement
of his monetary policy to
accommodate input from the Zanu PF people's
conference and advice from the
visiting International Monetary Fund
team.
Gono, who was scheduled to deliver his statement
yesterday, was
quoted in the weekend papers as saying the market "should
trade normally"
because there was no need for the central bank to "be rushed
into conformity
without conviction ." That is to say abnormal things happen
whenever he
announces his monetary policy!
He offered
this statement as the reason to postpone the
announcement of the monetary
policy: "It is critical that the forthcoming
monetary policy statement be
reconciled not only with the budget but with
economic views, sentiments,
advice and opinions from our interactions with
the IMF team arriving in the
country this week as well as economic views
emanating from the forthcoming
national people's conference of the ruling
Zanu PF
party."
This is tantamount to saying that Finance minister
Herbert
Murerwa's budget had nothing to benefit from the IMF counsel and
opinions
from the Zanu PF conference. This is to suggest that Gono will
continue with
his quasi-fiscal antics in the New Year to "complement" the
budget. This is
despite a clear signal from Murerwa that he is keen to phase
out
"quasi-fiscal operations (by the Reserve Bank) by allocating resources
through the national budget".
There is no doubt that
Gono's quasi-fiscal activities have
played a major part in fuelling money
supply growth and inflation. At the
beginning of the year the IMF - from
whom Gono is now seeking advice and
opinions - warned that the budget
deficit could be as much as 60% and not
the 3% announced by Murerwa in his
budget speech at the end of last year.
The IMF attributed
this high budget deficit outturn to the
allocation of resources by the
central bank outside the budget. We hope the
visiting IMF team will remind
Gono of this and talk him out of printing
money. The deferment of the
monetary policy announcement can therefore
partly be as a result of the
shock induced by Murerwa's statement.
The quasi-fiscal
activities have been Gono's major source of
political power. He has become
so powerful that ministers and parastatal
heads queue at his door to beg for
lifelines.
To run this quasi-fiscal role, the central bank
has in the last
two years set up structures to administer funds doled out to
parastatals and
government departments.
This has inflated
staff at the central bank where there are now
departments dealing with
agriculture, procurement of capital equipment,
mining, exports, investment
promotion, fuel procurement among many others.
This is virtually another
little cabinet presided over by Gono as prime
minister.
The duplication of roles between departments of the central bank
and
government ministries has not improved service delivery and efficiency
of
state operations. It has instead given rise to uncontrolled expenditure
arising from the printing of cash to finance activities outside the national
budget.
Gono does not see anything wrong in this. He sees
it as a faster
method of policy implementation and achieving economic
turnaround. He sees
nothing wrong in doling out money to government
departments largely through
the printing of money.
In an
interview in October, Gono maintained that his fiscal
functions were within
the scope of the Reserve Bank of Zimbabwe Act. He said
his interventions
were meant to make Zimbabwe "a better and prosperous
economy". He said his
interventions were also as a result of the "absolute
ineptitude by some
officials accentuated by misplaced sectoral myopia on the
part of those
entrusted with the responsibility of running with those
portfolios."
This is the problem with Gono. He sees his
policies as being
superior to those of ministers hence his pursuit of
quasi-fiscal activities
is likely to continue.
Murerwa's
statement last week is however a major test of his
ability to control the
economy and expenditure by ministries. As the
situation stands, he has very
little chance against the ambitious Gono. The
governor needs a major
conversion to drop his fiscal interventions and the
printing of money. We
keenly await the monetary policy statement in the New
Year.
Zim Independent
Candid Comment
By Joram
Nyathi
THE opposition is fatally trapped in its fixation with
President
Mugabe. It is a contradictory obsession - on the one hand they
loathe
anything that involves Mugabe and on the other must daily face the
painful
reality that the Mugabe phenomenon now transcends the individual.
They must
face the reality that there is no legitimate way in which
Zimbabwe's
festering crisis can be resolved without engaging Zanu PF and
Mugabe.
I had hoped that Arthur Mutambara would avoid the
trap and move
the discussion on the National Vision beyond witch-hunts and
personal
accusations. He fell deep into it. Witness the trademark claims
about the
bishops being used by Mugabe to "buy time" and that Mugabe
"embraced the
project to destroy its credibility".
I
don't know how he embraced the initiative when Mugabe was so
furious with
the bishops who want his powers "circumscribed" in a new
constitution.
Moreover, there is no way Mugabe could have stopped the
bishops from
circulating the document - which is not the same as supporting
it. It can't
be convincingly claimed that Mugabe loves the ugly evidence of
his handiwork
shown to him by the bishops, no matter how "apologetically"
expressed as
claimed Mutambara.
The bishops are not a political party to
indulge in propaganda
about the "criminal dictatorship of Mugabe". The
efficacy of that language
has been pathetic in the past seven years. And how
do you promote dialogue
by fanning mutual hostility between the parties to a
round table?
A major criticism of the Zimbabwe We Want
document is that there
was no consultation with key stakeholders. The
bishops have called for input
from everyone to plug the loopholes. The
critics have unfortunately not
shown how that omission is fatal to the
entire initiative, except to then
assert that it was done by Zanu PF. You
would imagine that Zanu PF was so
foolish as to criticise itself for a badly
executed land reform programme
when that has been its electoral plank since
2000.
In the same breath Mutambara declares that the people
"will
reject any process that provides a lifeline to Mugabe's evil
regime".
Mutambara has not consulted "the people" but is
certain that
they are concerned more about the "process" than the outcome,
that is an end
to their misery. What is the correct process and who
suggested it? How
effective has it been in ending Mugabe's "evil regime"?
This is no more than
a myth of political leaders calling themselves "the
people". Each one of
them now wants to be approached in their little
Munhumutapa offices so that
they can say "the people" have been consulted.
This is despite the fact that
the bishops serve the same civil society, Zanu
PF and MDC supporters in
their churches every week and should know better
what they want.
The issues of political legitimacy, the
economic vision and
corruption Mutambara raises are matters of emphasis. The
same goes for
Gukurahundi. It depends on the constituency you want to appeal
to and
whether the objective is national healing or primitive retribution.
But that
is putting the cart before the horse. The weakest part of the
document is
that it doesn't say how we will attain the vision. But that is
where
political parties come in, for the goal is the
same.
As with Murambatsvina, Project Sunrise and other abuses
that
Zimbabweans have endured in recent years, the opposition has failed to
provide the leadership that they should. The churches have not said anything
out of this world. What they have done differently is to produce a document
on the missed opportunities and the Zimbabwe We Want. Above all, they have
taken an unequivocal position on the side of the people and Mugabe is
bitter. A people-focused MDC should have seized this momentum to mobilise
the people and isolate Mugabe and through force of numbers, compel him to
dialogue.
Once that is achieved it is then up to the
politicians to make
sure he doesn't "buy time" or "appear to be doing
something" but that he
does something or concedes
failure.
The churches already have a huge constituency on
both sides of
the political divide. They have openly declared that they will
no longer
have their territory prescribed for them by self-seeking
politicians who say
they should help only in health and education but not
politics - a key
determinant of any nation's material wellbeing. Could there
be a more robust
rebuke of the Establishment?
After
watching from the sidelines as Zanu PF and the MDC engaged
in mutual
destructive battles for supremacy, the church has stepped in to
initiate a
nation-building process involving all the contestants to power.
Instead of
capitalising on this, the opposition has obsessed itself with the
form
rather than the substance - the "who" and not "what" of the document.
Would
that substance be different had an MDC church drafted the National
Vision?
That is if one believes the infantile accusation that the bishops
"want to
placate or sanitise the dictatorship".
What the MDC needed to
do was to tap into an already existing
groundswell of disgruntlement as
evidenced by the churches to build critical
mass. Who said a majority of
Zanu PF supporters are not hungry and do not
want change? But that is
expecting too much from an opposition so fascinated
by Mugabe that they
would rather engage in peripherals than confront the
issues that should
unite them.
Mugabe is having the laugh of his life. It is the
opposition,
not the bishops, who are giving him a very long lifeline. While
they are
hunting for the authors of the National Vision Mugabe is laying for
himself
a marble-coated pavement towards 2010. Those with eyes would have
seen the
timing of agricultural equipment, the computers to schools and the
rural
housing programme among many populist development initiatives ahead of
the
Goromonzi people's conference.
Zim Independent
Editor's Memo
By Vincent
Kahiya
THE central bank appears to be living a charmed life
in which it
spoils itself with all the trappings of affluence while the
economy is on a
rollercoaster.
What quickly comes to mind
about this material comfort is not
only the inflated workforce which
includes fitness trainers and other
dubious officers whose services were not
required before December 2003, but
also the monetary policy statement
presentations.
These are occasions when the governor wheels
out volumes of
documents to demonstrate how busy he has been trying to mend
the economy.
These are printed on expensive gloss paper that
exclusive haute
culture magazine publishers can only dream
of.
Paper does not come cheap in Zimbabwe where a tonne of
shoddy
quality locally-produced newsprint now costs $1 662
326.
The Reserve Bank uses expensive imported paper. It even
has the
temerity to use expensive paper to print humourless cartoon books
purportedly exposing economic saboteurs.
I do not want to
believe that there is now a resident cartoonist
at the glass and mortar
tower along Samora Machel Avenue. All this in the
name of economic
recovery?
It can only be in Zimbabwe where a central bank
cartoon book is
printed on gloss paper while the Finance ministry fails to
print enough
copies of the budget statement for government ministers,
parliamentarians
and the media.
Last Thursday we
scrounged around looking for Finance minister
Herbert Murerwa's budget
speech. There was nothing at parliament where the
PR department told me they
were also looking for the speech.
This was confounding, as in
the past reporters covering
parliament were handed the speech together with
the "blue book" and were
also given extra copies to take back to their
newsrooms.
That is all gone now. There were a handful copies
of the speech
last week and none for the media which had to rely on e-copies
availed by
friends in government and in business.
While
there was not much in the speech itself other than the
attempt to tame
Gideon Gono and the usual fictitious forecasts growth - or
is it recovery? -
I was disappointed by the failure by the Finance ministry
to avail the blue
book.
The book should give a detailed analysis of the
performance of
the previous budget and the employment of funds by
ministries. It also
provides estimates of how government would utilise
resources in the coming
year.
In the past this provided
an analysis of how ministries employed
state funds. Then government used to
state how much it was setting aside for
individual capital projects like
roads, dams and bridges. The blue book
would spell out how much the
government would spend paying salaries for
civil servants, repaying loans
and so on.
Debate around the budget was more informed then
because there
were facts and figures to large groups of stakeholders.
Advocacy groups
would articulate their disquiet over the military budget
being larger than
that of health and other social
services.
Perhaps it no longer makes sense to come up with
detailed
expenditure estimates in an environment where the budget is
exhausted in
three months, but it is prudent for the Finance ministry to
show us the
performance of the previous budget, including monies doled out
to ministries
under his nose by the central bank. That is
accountability.
The paucity of information availed to the
public on state
expenditure, especially the unavailability or very limited
circulation of
the blue book, has undermined the significance of the event.
It is the
figures and their justification which make up a budget
speech.
Today the budget speech is being construed as an
economic policy
statement hence we hear "analysts" opining that a budget
speech is the
panacea to our economic woes. Zimbabwe still requires a proper
economic
recovery plan under which the budget should operate. Or is it the
monetary
authorities who have taken the gloss off Murerwa's
budget?
Zim Independent
Muckraker
DESPITE spirited denials by
government apologists, there is more
than just smoke about the state of
corruption in the country. This week it
was President Mugabe himself, that
people like Nathaniel Manheru are trying
to protect, who complained about
the "rottenness" at Arda.
The president was told that 400
tractors released by government
some 18 months ago had vanished. Brigadier
General Douglas Nyikayaramba
allegedly told the president that the
equipment, which had been put in the
custody of Arda, "had been
cannibalised" or gone missing.
While the president
acknowledged that "Arda yakaora karekare",
this being Zimbabwe, we can be
sure nothing will be done. More bark than
bite.
We have
seen more or less similar occurrences at Zisco where
those tasked with
fighting corruption are in fact trying their best to make
the culprits stay
farthest from the famous "wrath of the law".
Mugabe blamed
the corruption on a "get-rich-quick mentality" of
which there are plenty
opportunities in fuel, a murky tendering processes,
scarce basic commodities
and now farming implements.
Even as Mugabe spoke, one could
tell he was far from providing a
solution. Mashonaland Central governor
Ephraim Masawi spoke of "confusion"
in the allocation of the recently
imported farm equipment. He said his
office had been asked by the Reserve
Bank to compile a list of beneficiaries
while Agribank was doing a separate
one.
Deputy Youth minister Saviour Kasukuwere weighed in with
a
proposal that the tractors be given to the District Development
Fund.
It's called the politics of power. If nothing dramatic
happens
soon, most of that equipment will either vanish or be cannibalised
before it
gets to the people who desperately need it.
The president also talked about succession. He gets angry once
that subject
crosses his mind. He said some politicians were consulting
spirit mediums to
enhance their chances while others had been given snuff to
sprinkle at State
House so that they could succeed him.
Now that's what we call
witchcraft if it's true. How do they get
to State House undetected? In any
case Muckraker reckons it's time we got
some names here. The game is getting
really dirty.
Typically, beyond witches, Mugabe chooses to
remain enigmatic
about the subject. Why the mystery about what should be in
the public domain
unless he is keen to fuel unnecessary speculation and make
witch doctors
rich?
Meanwhile, Nathaniel Manheru
decided it was time to close the
debate on the subject which appears to also
anger him but on which he
relishes dropping hints of appearing to know a
lot.
Writing in his Saturday column in the Herald, Manheru
said the
land reform had "straitjacketed Zimbabwe's presidency" and that
President
Mugabe offered the surest security to the beneficiaries. Those
people were
beholden to the president and would therefore ensure he stayed
on "beyond
2008, much to the chagrin of the British and their tools
here".
Many might have been aware of the machinations in Zanu
PF to
prolong Mugabe's rule beyond his legal term next year. However,
Manheru's
wistful anxiety betrays the fear of someone with something to
hide. It may
be more than losing his piece of land once Mugabe
leaves.
We hope it's nothing along the lines of Zisco or the
shenanigans
at Zupco that have already landed some beneficiaries of state
patronage
behind bars. Nor does Mugabe himself appear so sure about what
might happen
to him should he leave the fortress of State
House.
Having said that, it is only fair that we restate an
immutable
law of nature - that every dawn must eventually give way to
sunlight and
that Manheru's celebration will one day come to an
end.
There was a report in a local daily this week that
Home Affairs
minister Kembo Mohadi had attacked the judiciary over the
release of
hard-core criminals from remand prison. He said he was concerned
at the
"vicious cycle in which notorious armed robbers are arrested by
police,
placed on remand and granted bail to rejoin the communities they
terrorise"
in which they commit further crimes.
The paper
said Mohadi's comments were prompted by the release on
bail "of more than
100 hard-core criminals" from Harare Central following a
tour of the
facility by Judge President Rita Makarau. This was part of
efforts to
decongest the holding facility, it was explained. Since then
there had been
an upsurge in cases of armed robbery, carjacking and
burglary, the paper
said.
We found the causal link most curious. Who is
responsible for
the congestion in remand prison? More importantly, who
decides who should be
released? Certainly not the judge who wouldn't tell a
murderer or carjacker
from a vegetable vendor!
We
hear Canadian journalists and tour operators are in the
country to sample
Zimbabwe's tourism offerings. The tour, it was reported,
is being
coordinated by the Zimbabwe Tourism Authority and the Zimbabwean
embassy in
Canada.
ZTA chief executive officer Karikoga Kaseke said the
visit was
part of "our perception management programme" which is meant "to
portray a
true picture of Zimbabwe". Surely, once perception has been
"managed" it can
no longer be a true portrayal of the
situation.
We suspect part of that "management of the
perception" will be
to ensure that the tourists are provided with abundant
fuel while the whole
nation runs dry, that they have the best food while
Zimbabweans starve and
that they are chauffeured along the cleanest avenues
while in the townships
garbage goes for months
uncollected.
But if they are true journalists they will
occasionally take off
their hosts' blinkers to see the world and not allow
themselves to be used
as accomplices in this perception
charade.
There was a lot of noise about a similarly fashioned
tour by
some 17 Russian journalists and business people a few months back so
that
they could tell the "true story" of Zimbabwe.
After
being feted at government's expense they returned to their
cold clime and
forgot all about it. The best we saw was a little filler on
the leader page
of the Herald two weeks ago.
There was a report in
Saturday's Herald that President Mugabe
was concerned about unilateral price
increases by retailers. He said this
was unwarranted as it caused a lot of
suffering among the poor.
He however said his government had
a solution - "boosting the
supply side of basic commodities and putting in
place a legal framework that
would provide deterrent
measures".
The first is a prerequisite of any government
while the second
has never been known to work anywhere in the world. It is
strange that what
is obvious is announced as a discovery and what doesn't
work is prescribed
as a miracle cure for problems caused by
shortages.
The Voice newspaper carried a sad story this
week about one of
its lost sons. It was the story of Last "Tambaoga"
Chiyangwa who earned
himself $200 000 during a show in Harare from Saviour
Kasukuwere for his
"Blair toilet" tune at the height of the Third
Chimurenga.
Now Tambaoga says he is broke he can't release an
album he
recorded last year in April. He told The Voice he couldn't raise $5
million
to record the album.
He says he has been
everywhere - except the presidency.
"The party and government
have tried their best but they have
other problems to sort out, they cannot
attend to Tambaoga only," remarked
the musician
charitably.
"I only have money to buy my cigarettes," he
said.
We were immediately reminded of what Zanu PF does to
those who
no longer serve its purpose - throw them away like cigarette
butts.
But all is not lost yet for Tambaoga. There is the
Zanu PF
people's conference next week and another take at Tony Blair might
earn him
a few Zimdollars in time for Christmas.
In
its column "Last week in retrospect" The Voice reported that
Metallurgical
Corporation of China had put up a US$3 billion bid for a 60%
stake in
Ziscosteel in an investment deal that was set to bolster
productivity at the
financially-troubled company. This was despite the fact
that the story had
been categorically denied the previous week when it was
originally reported
in the Herald.
Talk of the right hand not knowing what the
left is doing. There
is no such windfall coming Zisco's way given the
corruption that government
is trying in vain to sweep under the capacious
carpet.
There was a lot of premature celebration in the
media about
Finance minister Herbert Murerwa "clipping Gideon Gono's wings"
for his
damaging quasi-fiscal activities.
Murerwa said
these activities fuelled inflation and made the
economic turnaround that
much difficult. He said in his budget statement
that from now on expenditure
would have to come from the national budget.
We held our
breath, wondering whether we should prepare
ourselves for an epic battle
between the minister and the governor given
that the Reserve Bank has become
a virtual commercial bank with limitless
resources.
Before the ink was dry President Mugabe came to our rescue.
There is no epic
battle of any kind, Murerwa is a dreamer. He told
supporters in Lupane in
Matabeleland North on Monday that construction of a
government office
complex had been delayed because of "strict government
accounting systems
where projects have to wait for budgetary allocations".
He
said as a developing country under sanctions Zimbabwe could
"not rely on
textbook economics" to meet its agenda.
"We can't plead the
nice bookish way," he said. "I don't believe
in this nonsensical theory
about quasi-fiscal activities," he said,
effectively telling Murerwa to go
and hang and Gono to add fuel on the
printing press.
But
why doesn't Murerwa quit? He was told as much when he tried
to launch new
bearer cheques in Gono's absence. If it's any consolation to
Murerwa, at
least the IMF knows where our problems are rooted.
The
former George Hotel used to be a place to spend a good
Friday, listening to
music or dancing. You quaffed a cold brew to your heart's
content if you had
a fat wallet. Back then that was not a tall order.
The place
has been renovated and houses clients of a different
order. One of them is
Mweb, the Internet service provider.
For some strange reason
the place has changed its name to
PaSangano, which sounds close to MuSangano
where nothing useful ever
happens. Since moving to their new place of abode
Mweb have been a disaster.
They have even started avoiding answering queries
from clients about poor
Internet service.
Is it because
of the MuSangano culture or have they been
sniffing some fermented stuff
from the cellars of old George Hotel?
Some nasty things
about people are safer said from a distance.
Apparently President Mugabe is
not immune to fear. He had to travel to far
away Mashonaland Central in
Musana to complain against sisters who go around
making babies that they
can't look after.
"Vazukuru vanouya nevasikana vachizotora
mazita edu," he
complained. "Hauchaziva vako veropa chaiwo ndevapi. Mangwana
panhaka
vachadawo nekuti vanenge vakarerwa pamwe nevana vedu. Tave
kukanganisa
rudzi."
Can somebody kindly explain? Somebody
said it had something to
do with a woman who shares parliament with a son
who uses Mugabe's surname
and now wants to take the crown from Robert
Jr.
Zim Independent
By Eric Bloch
LAST
week's presentation by the Minister of Finance, Herbert
Murerwa, of
Zimbabwe's 2007 Budget, was yet another masterful demonstration
of
government's immense prowess at presenting myths as facts, applying those
mythical facts to policy formulation doomed to fail, due to the lack of
foundation, and total disregard for unpalatable
realities.
It boggles the mind to understand how a person
with such proven,
unquestionable, intellect as the minister can enunciate so
much as is devoid
of factuality, and to do so with an impression of total
authority.
One must assume that either absolute loyalty to a
misguided and
inept government, or to a staff myopically unaware of the real
circumstances
of the Zimbabwean economy, repeatedly blinds the minister's
intellect to the
genuine circumstances impacting upon the economy, and
lowering it ever
further.
Admittedly, the minister did
recognise that the economy's
distress continues to worsen. He acknowledged
that the economic "challenges"
include ever-increasing prices, continued
distortions in the pricing of key
commodities and utilities, unemployment
and rising poverty levels, foreign
exchange shortages, low industrial
capacity utilisation underutilised
allocated land, inadequate measures to
deal with rising levels of corruption
in both public and private sectors,
deteriorating provision of basic public
services, from maintenance of
infrastructure, inconsistency of policy
pronouncements, and declining
clarity over the role and accountability of
the key institutions of
government.
In particular, he noted that "one of the
consequences is of the
lowest paid workers earning below the poverty datum
line", and that "the
deterioration in the welfare of our people has seen
their capacity to access
basic healthcare services, education, housing and
other amenities collapse
overnight, under the prevailing hyper-inflationary
environment".
However, whilst having realistic recognition of
the distraught
state of the economy, not only was there no demonstration of
like realism in
identifying the causes of the state, but there was also no
credible veracity
to the expectations of reversal and recovery. Once again,
government denies
all liability for causing the economic
morass.
Instead, once again it trotted out the specious
contention that
the cause is that "the country remains under siege, facing
sanctions from
the West, characterised by lack of balance of payments
support, lines of
credit, foreign direct investment and deliberate efforts
to undermine our
economic turnaround initiatives."
What
unadulterated hogwash! No country has legislated a
prohibition upon
investment in Zimbabwe, but who wishes to invest in a
country which is
authoritarian instead of democratic, has no respect for law
and order,
contemptuously disregards human rights, excessively regulates its
derelict
economy (to the extent of harsh imprisonment of business directors
whose
crime was to try to ensure the survival and viability of their
businesses,
and availability of bread for the populace), alienates the
international
community, overrides property rights, mismanages government,
and does
nothing to contain corruption or curb state expenditure, but fuels
endless
inflation?
In like manner, which banker will advance lines of
credit to a
country (or any other borrower) that has extensively defaulted
in debt
servicing, and whose circumstances are such that continuing default
is
virtually inevitable. Yes, the USA's Zimbabwe Democracy Act precludes
that
country supporting any provision of funding by the International
Monetary
Fund (IMF) to Zimbabwe, but in practice there is, in any event, no
possibility of such funding for so long as Zimbabwe continues to have all
the characteristics of a delinquent, high-risk, borrower, so there is no
effective sanction.
And, far from seeking to undermine
Zimbabwe's economic
turnaround activities, the world at large continues to
support Zimbabwe. The
European Union buys more goods from Zimbabwe than it
sells to Zimbabwe. So
too does the United States!
Zimbabwe has a significant favourable trade balance with both
the EU and
USA. If they wished to prevent economic turnaround, they would
not engage in
trade favourable to Zimbabwe. It is incontrovertible that
foreign direct
investment (FDI), balance of payments support, and lines of
credit, would
accord some relief to the aforesaid state of the economy, but
their absence
is not the reason for that state and,