FinGaz
Rangarirai Mberi News Editor
Bank chief
pins hope on political will
CENTRAL bank Governor Gideon Gono has surprised
the market by holding the
exchange rate and leaving interest rates steady,
saying only broad political
reform could now end the country's nine-year
economic crisis.
In a statement that painted a dire picture of the state
of the economy much
more than it concentrated on core monetary policy, Gono
laid out a new
reform "transitional package", key to which he said would be
the signing of
a social contract by March to ease political tensions, the
end of
inflationary off-budget spending by the Reserve Bank of Zimbabwe, the
finalisation of proposed legislation on mine ownership, and firm public
government assurances on the security of foreign investments, also by
March.
Despite conceding that the exchange rate, unchanged since a 60 percent
devaluation in July last year, was hurting key industries such as tourism,
Gono defied widespread consensus on the need for devaluation, leaving the
Zimbabwe dollar at $250/USD. He however, said the exchange rate could be
fully floated later this year under his ambitious reform plan.
Justifying
his decision on the exchange rate, a move that drew immediate
criticism from
economists, Gono said the Zimbabwe dollar's continued slide
on the black
market had been caused by poor supply of foreign currency owing
to a lack of
foreign support, a forex fund to back any such devaluation and
the poor
performance of export companies.
"To talk of a market rate when these
structural issues remain unattended to
is to be simplistic about this
multifaceted policy area," Gono said.
He charged that another devaluation -
which would have been the ninth since
he took office in 2003 - would only
spur further activity on the black
market for foreign currency, where
exchange rates now run 20 times above the
official rate.
In remarks
apparently designed to head off immediate suggestions that his
stance on the
devaluation came out of new opposition by President Robert
Mugabe, known for
his rigidity on the issue, Gono said: "We wish to strongly
point out that
the current decision has neither been persuaded nor sown
through conformity,
but rather out of strong conviction on what is right for
Zimbabwe."
Gono
said neither devaluation nor a rate hike would help Zimbabwe out of the
current crisis if not backed by "well sequenced,complementary economic
policies, backed by unwavering political support and commitment."
He
said: "No amount of devaluation will lead to planeloads, truckloads of
foreign currency flowing into Zimbabwe until we attend to other basic
factors we need to deal with."
Apart from the disappointment surrounding
Gono's position on the dollar, a
major talking point will be the clear
undertone throughout his policy - that
chances for economic recovery now
hinge on political reform, and not on
monetary policy.
By leaving
exchange and interest rates untouched, Gono again steered wide
clear of core
policy issues - devoting the bulk of his statement to barely
veiled
criticism of sections of the political leadership, which he at one
point
said had shown "political immaturity" in running the country.
Revealing his
growing frustration at the failure of the battery of economic
measures that
he has introduced over the past four years, Gono was sharply
critical of
Zimbabwe's failure to institute wider reforms - including the
restoration of
property rights and the end to official threats to foreign
assets - crucial
to winning back the confidence of both internal and
external critics. Gono
warned that the country's failure to carry these
reforms forward was
deepening the economic crisis and building up political
tensions.
"We
currently observe latent political tensions in as much as there are
economic
and social tensions arising from the economic hardships people are
experiencing across the board. Such disunity and distrust between us does
not augur well for an economy seeking to turnaround and take-off."
He
said Zimbabwe had "overplayed the political card", while placing economic
matters at the back of the queue.
"We have at times allowed political and
individual, sectoral or regional
interests or differences to get the better
of us and pursued policies and
actions designed to fulfil those
individualistic and patronising goals at
the expense of the national
good."
He deplored what he described as "gangland" tactics and the
intimidation of
perceived opponents, which had created a climate of conflict
that would only
stall any effort towards recovery.
"Needless conflict is
intolerable and not only serves to worsen our
socio-economic circumstances
and must, therefore, be avoided by all means.
Political maturity is,
therefore, an indispensable requirement in defending
and stabilising the
economy. Gang-land tactics and intimidation of those
seeking to contribute
positively will not take us anywhere as a people."
As a solution, Gono is
proposing wide reaching reforms. The first phase of
his reform plan, which
would run from now until June, would see a social
contract to agree on a
Prices and Incomes Stabilisation Protocol - freezing
wages and prices for
three months to June, ending quasi-fiscal spending and
setting money supply
targets, restricting state spending, approaching
foreign institutions for
new aid and finalising laws on mining
indigenisation while reviewing all
existing legislation to ensure it is
business-friendly.
This phase would
also see the government committing itself to honouring
bilateral investment
protection deals (BIPPAs), concluding land reforms so
that land can be used
as collateral, and the sell-off of state interests in
at least 15
companies.
Gono envisages that the second phase of his proposals, from June
to
December, would spur an intensification of engagement of foreign
institutions, the removal of all remaining subsidies and economic controls -
including the exchange rate - the restructuring of the civil service, and a
return to a tight monetary policy.
FinGaz
Clemence Manyukwe Staff
Reporter
THE Parliament of Zimbabwe was forced to send workers home
yesterday morning
because of fears of a health hazard after taps at the
institution ran dry
amid a water crisis that resulted in a cholera outbreak
in some parts of
Harare.
Nine people in Harare were hospitalised this
week after being infected with
cholera which the City Health Department
suspects to have been caused by
drinking contaminated water. Water
distribution and billing was recently
taken over by the Zimbabwe National
Water Authority (Zinwa).
The water crisis at Parliament comes months after
government ignored a
recommendation by the parliamentary committee on local
government and urban
development not to transfer jurisdiction over water
management from local
authorities to Zinwa.
This was after report
submitted to the public accounts committee by the
Auditor and Comptroller
General Mildred Chiri had shown that Zinwa did not
have the capacity to
supply clean water.
In addition to Parliament, there was also no water at the
Harare High Court
where, nevertheless, business continued as
usual.
Employees of the Parliament of Zimbabwe were seen streaming out of the
building at about 11am yesterday. Only security personnel remained at their
posts.
At the High Court, workers could be seen carrying plastic
containers as they
went out to try to get water from other parts of town.
The workers said
ordinary employees and judges had both been reduced to
asking to use toilets
in nearby buildings.
High Court Judge President
Rita Makarau, during the opening of the 2007
legal calendar decried the poor
conditions within the judiciary system.
Clerk of Parliament Austin Zvoma said
he could not comment on the water
crisis because he is on leave.
"I am at
home. I am on leave, ask the acting clerk (Helen) Dingani." She,
however,
was not reachable.
It remains to be seen whether the water crisis will not
affect parliamentary
committees hearings scheduled for today.
Nelson
Chamisa spokesperson of a faction of the MDC said even though
parliament was
not sitting yesterday, the sending of staff home due to the
water crisis
adversely affects the work of the House of Assembly.
"If you see such a
crisis affecting Parliament, it shows that the country
has collapsed. What
we are seeing is bankruptcy of governance. At the High
Court they are even
having problems with preparing judgments because of lack
of bond paper,"
Chamisa said.
Harare commission spokesperson Percy Toriro referred all
questions to the
acting Director of Health Services, Prosper
Chonzi.
Chonzi said the order for Parliament workers to go home had not
emanated
from his office. "I sign for the closure of a building after days,
not hours
(of going without water). That order did not emanate from
me."
The Bulawayo city council has resolved to resist moves to transfer water
management to Zinwa, saying this would be disastrous.
FinGaz
National Agenda
with
Kicks ball firmly into ZANU PF's court
ALMOST telling it like it is.
That was what the 2006 year-end Monetary
Policy Statement was all about. No
answers. No nothing. Just throwing the
gauntlet and almost telling it like
it is.
It was once again a straight-talking Gideon Gono making a
powerful case for
a holistic understanding of the fundamental
interconnectedness of all things
Zimbabwean. With failure staring him in the
face and the faces of all
Zimbabweans, the Reserve Bank governor had no
option but to give the correct
diagnosis of this country's crisis.
Said
Gono: "The current fragmented and seemingly knee-jerk, half-hearted
approach
and lack of total commitment from various social, political and
economic
partners in our reconstruction journey is undesirable and has so
far
produced sub-optimal results."
I would have wanted the central bank governor
to dwell more on the politics
of the country as the root cause of our
crisis. He did but not to the extent
that most of us wanted. Perhaps his
mandate prevents him from going all the
way but I know, as most Zimbabweans
do, that politics is at the heart of all
our problems.
Gono's
interventionist policies were those of Alice in Wonderland precisely
because
those who were supposed to complement them politically were not
doing so -
being motivated more by the need to remain in office and enjoy
the
privileges of power than by a sense of justice and fairness to all
Zimbabweans.
As published elsewhere in this issue, facts presented in the
Monetary Policy
Statement by Governor Gono speak for themselves. The many
distortions in the
agricultural, fuel, telecoms and many other sectors of
the economy cry out
for sustainable solutions, for solutions that last. Not
to mention the
indiscipline, corruption and smuggling that has become so
rampant in the
mining and many other sectors.
Prices of goods and
services that are skyrocketing on a daily basis if not
on an hourly basis
speak volumes of an economy that is terminally ill. It is
to his credit that
the governor has now taken the bull by the horns and made
it loud and clear
that the central bank alone has no answers to this nation's
crisis.
The
country's growing economic ills for which no answers have yet been found
are
indeed well well beyond the Reserve Bank of Zimbabwe. Indeed, Gono
himself
and many other economic and financial analysts have been saying this
for a
long time now. But it is a new context now with this 2006 year-end
Monetary
Policy review. The new context being complete openness and brutal
truth
about our situation - moving away from mouthing pious platitudes and
irrelevant things to telling almost like it is.
All talk and no action
does not get us anywhere. We know what it takes to
turn the tide against
this economic epidemic: political will. As long as
there is a lack of
political will in the fight against our economic
stagnation, Gono's talk of
a social contract involving government, business,
labour, civil society and
other stakeholders will be but a voice crying in
the wilderness. The
Zimbabwe that we want will not come about full stop.
I put it to the
powers-that-be: How much longer will our current situation
be sustainable?
What will it take for ZANU PF to see that we are living on
borrowed time?
When will the ruling party realise that it is conducting the
lives of all
Zimbabweans in an unsustainable way? When will we see an end to
the
political paralysis that has gripped this country for sometime now?
As
Governor Gono rightly put it: "Our people today are crying for holistic
solutions and not half-hearted efforts or piecemeal programmes; they are
crying for action and not just talk or endless meetings that produce nothing
at the end of the day".
And how good it is that Gono has produced
nothing, almost nothing anyway in
his 2006 year-end policy review. Not even
the much-touted devaluation of the
Zimbabwe dollar. For to devalue in
isolation from other comprehensive
supporting measures would have worsened
matters a great deal.
To devalue or not to devalue - that is the question.
Gono himself provides a
convincing answer to the this question: "It is clear
that the foreign
exchange market setbacks are a supply and demand issue,
linked to sanctions
against the country, linked to lack of balance of
payments support, linked
to smuggling and indiscipline in the economy,
linked to shortage of a fund
to support whatever devaluation we may
contemplate, and above all, linked to
poor performance of the export
sectors. To talk of a market rate when these
structural issues remain
unattended to is to be simplistic about this
multifaceted policy
area".
The point must be made that trying to address the Zimbabwean conundrum
is
not easy. It is not fanciful business like Father Christmas. There are
some
people in government who think that they can fight market forces and
win.
How deluded they are. Not in a thousand years. Gono said just as much
in his
Policy Review Statement yesterday. How I wish we could be more frank
about
telling each other a few important truths like the governor did
yesterday.
What I found redeeming and illuminating in his statement
yesterday was his
unflinching courage and refusal to take refuge in
consoling fictions.
Workable solutions are the name of the game (pardon the
pun). We all too
often base our ideas and actions on a narrow perception of
reality that is
woefully inadequate for dealing with the major problem of
out time. I liked
Gono's emphasis on the need to address the total reality
on the ground.
It is easy to caricature what other people have tried to do in
all sincerity
and honesty. It is equally easy to be cynical about what other
people have
done. Gideon Gono and his team at the central bank have made
mistakes no
doubt like all people do but it is a much easier task to say
with hindsight
or sitting at the terraces what might have been done.
I
think it is important to avoid cynicism. The key issue is that a call to
arms has been made that ours are common difficulties and challenges and that
we need to work together to meet them. The need for strong political will in
our political leaders can not be overemphasised.
There are solutions to
all our problems waiting to be found. All
Zimbabweans, just as Governor Gono
has done, need to communicate to the
decision-makers the fact that there is
a way forward. The human spirit,
human ingenuity will take care of the rest
and in the end deliver the
desired result.
Zimbabweans are anxious for
results not political rhetoric. And it is in
this context that the ball is
firmly in ZANU PF and President Mugabe's court
by and large and to a much
lesser extent the opposition MDC, other political
parties and the society as
a whole. To a lesser extent yes because the
opposition parties are currently
not in government.
E-mail: borncha@mweb.co.zw
FinGaz
Charles Rukuni Bulawayo
Bureau Chief
A WRANGLE revolving around allegations of corruption
threatens to paralyse
the operations of the Zimbabwe Red Cross
Society.
A group of 23 members from Matabeleland, led by Bulawayo City
Councillor
Matson Hlalo, is seeking a court order to bar the society's
president Edmore
Shamu and secretary-general Emma Kundishora, from using the
society's
offices and facilities pending investigations into their alleged
misconduct.
Documents filed at the High Court in Bulawayo show that Shamu and
Kundishora
were suspended from the organisation at a general assembly
meeting in Gweru
on October 21 last year, but they have refused to
budge.
The pair were suspended because of their alleged misconduct in the
management of the society's affairs.
The disgruntled group said the two
officials should be barred from the
organisation's offices "to protect the
society's property and funds from
abuse".
The wrangle was sparked by
allegations of corruption contained in a 13-page
"dossier" that was
circulated to members in May last year. The document ,
said to have been
compiled by "vigilant Zimbabwe Red Cross members and
workers", is on a Red
Cross Society letterhead.
The dossier shows how Red Cross Society officials
have been buying vehicles
and motorcycles from the organisation at
ridiculously low prices in some
cases without going to tender.
A schedule
of motor vehicle disposals from 2002 to 2005 shows that Shamu
bought two
vehicles, a pickup and a double cab, as well as three
motorcycles.
The
dossier also claims that board members of the society showered
themselves
with Christmas gifts in 2005. Each of the seven members was given
$45
million. Provincial chairpersons received half of this figure with the
grant
total dished out to officials for Christmas amounting to $450
million.
Members say they conducted an informal investigation into corruption
allegations levelled against the society's president. He is referred to in
the document as Edwin but court documents show his first name as
Edmore.
"It is disheartening and shocking that our investigation has
established to
a large degree that the president has, with impunity, turned
the Zimbabwe
Red Cross Society into a cesspool of graft, dishonesty and
corruption."
The president and the secretary-general are also accused of
"globe trotting"
at the expense of their colleagues and staff
members.
Kundishora could not comment on the allegations. She was reported to
be
attending a meeting.
FinGaz
Stanley Kwenda Staff
Reporter
THE widely condemned Operation Murambatsvina, which left a trail
of
destruction and thousands of people homeless two years ago, took centre
stage at the World Social Forum (WSF) conference held in Nairobi, Kenya
recently.
A coterie of Zimbabwean civic groups described how
displaced people were
still living in the open, nearly two years after the
operation was
undertaken.
"As the Combined Harare Residents Association
(CHRA) we were mainly focusing
on highlighting the crisis in local
governance in Zimbabwe reflecting on the
challenges of Operation
Murambatsvina," said Jabusile Shumba, a senior CHRA
programmes officer who
was a delegate to the WSF meeting.
"Our focus was in terms of the system of
governance and legal framework
under which cities and towns in Zimbabwe are
being administered. Power is
vested in one person who centralises decision
making, a situation which does
not reflect the will of the people reducing
them to subjects rather than
citizens."
Delegates came from all over the
world and close to 300 are said to have
attended meetings that dealt with
issues concerning Operation Murambatsvina
in different sessions. The World
Social Forum is a platform designed to
counter the influence of the World
Economic Forum.
Thousands of displaced families are still living in the open
in such places
as Glen View, around Mukuvisi River, resettlement farms
around Harare and
Glen Norah.
Most of these people lost the means to earn
a livelihood and are exposed to
diseases such as cholera, malaria and some
chronic diseases due to the lack
of proper sanitary facilities.
Some of
the WSF sessions focused on lobbying the United Nations Habitat
Office in
Kenya to map out new strategies to address the problems spawned by
the ill
advised operation.
FinGaz
Njabulo Ncube Chief Political
Reporter
MORGAN Tsvangirai, the leader of the main faction of the
Movement for
Democratic Change (MDC) has written to African Union President
Alpha Konare
asking him to prevail upon President Robert Mugabe to embrace
all-inclusive
political reforms to save the country from imminent
collapse.
In a letter dispatched to Konare a few days before the the
just-ended AU
summit of continental leaders got underway in addis Ababa,
Tsvangirai
informed the AU chairman of the alleged political machinations of
President
Mugabe's ruling ZANU PF which is determined to extend his term of
office
when it officially expires next year.
"The people of Zimbabwe find
the proposal to be wholly unacceptable,
unnecessary and an affront to their
democratic right to elect leaders of
their choice for political office in
regular and consistent national
elections," reads part of Tsvangirai's
letter dated January 18 2007.
"The challenge facing Zimbabwe, and the entire
continent, today is to devise
an effective mechanism to save this country
from further haemorrhage.
Zimbabweans look to the AU to assist them to
determine their own destiny
against the numerous odds imposed by Robert
Mugabe and the ZANU PF
dictatorship."
Tsvangirai said President Mugabe
and his ruling elite had no right to impose
their will on all Zimbabweans by
planning to unilaterally postpone the
presidential elections to 2010.
"We
desire a stable political environment to allow for a new constitution;
open
the way for a free and fair election; and enable us to embark on a
reconstruction agenda, national healing and a stabilisation programme.
Twenty-seven years after independence, we still depend on a colonial
power-transfer document crafted by the British at Lancaster House and
subsequently amended, selectively, 17 times for political expediency," he
said.
Given the humanitarian emergencies confronting the country,
Tsvangirai urged
the AU to press President Mugabe and ZANU PF to open the
door to all
Zimbabweans to save the country. "We owe it to our children to
resolve the
national crisis speedily and to cast away our current pariah
status in the
eyes of the international community."
FinGaz
Stanley Kwenda Staff
Reporter
Korean messages greet Chinese visitors
ZIMBABWEAN officials,
eager to lure China to prop up the country's waning
economic fortunes, were
left with egg on their faces when a visiting Chinese
tourism delegation
pointed out that the messages of welcome displayed at
Harare International
Airport upon their arrival were in Korean.
"I think you have to
create a good image among Chinese people. The first
impression that you get
when you hear about Zimbabwe is that it is not safe
and is poor, although
this is not what we have seen. In fact, it is Africa's
paradise," said a
member of the visiting Chinese group at a press briefing
this week.
But
it became apparent at a media briefing that the Chinese were not
impressed
by being greeted in the language of their great rivals, the
Koreans.
"We
arrived at the Harare International Airport and felt embarrassed to see
messages meant for the Chinese written in Korean," said a member of the
delegation.
Zimbabwe Tourism Authority (ZTA), in a bid to save face, said
the
organisation now would hire Chinese translators to correct the error and
avoid similar ones in future.
"We have been trying to teach our own
people to speak Chinese but without
much success," said Givemore Chidzidzi,
ZTA marketing and communications
manager. "We now fear using the wrong
language, writing Korean when you
think you are writing
Chinese."
National airline, Air Zimbabwe, is also making frantic moves to
recruit
Chinese-speaking flight attendants as it struggles to lure tourists
to
improve business on its Asian routes.
"We are currently training our
crew to speak Chinese and for those who
travel regularly to China you might
have heard a few greetings in Chinese,
things like welcome on board, thank
you and so forth," a senior Air Zimbabwe
official told The Financial
Gazette.
FinGaz
Clemence Manyukwe
Staff Reporter
PARLIAMENT has barred MPs probing the conduct of Trade and
International
Trade Minister Obert Mpofu over the Zisco saga from speaking
about the
investigation after adopting committee chairperson, Defence
Minister Sidney
Sekeramayi's proposal to impose a blackout on the
proceedings.
The gag order bans all committee members and Sekeramayi
himself from making
any comments to the media on the proceedings until the
conclusion of the
hearing. The committee comprises four ZANU- PF members and
two MDC MPs.
Sources told The Financial Gazette this week that Sekeramayi's
committee
will quiz Mpofu, accused of giving contradictory statements to a
parliamentary committee last year, on Wednesday next week..
Trouble for
Mpofu began when he told the Foreign Affairs, Industry and
International
Trade committee under oath in September last year about the
existence of a
"shocking" report that showed that influential figures,
including MPs, had
looted Zisco, only to deny having made such a statement
at the next
hearing.
The Financial Gazette understands that depending on Mpofu's
testimony next
week, the committee could consider summoning the Minister of
State
Enterprises, Anti-Monopolies and Anti-Corruption, Munyaradzi Paul
Mangwana
to say whether he had tried to suppress the release of the damning
Zisco
report.
The committee started meeting last week to deliberate on
Mpofu's alleged
contempt of Parliament charge and this week it summoned
Trade committee
chairperson Enock Porusingazi.
Last week, different tapes
and transcripts of Mpofu's testimony before
Porusingazi's Committee, when he
allegedly contradicted himself, were
availed to the Privileges Committee for
scrutiny.
On Tuesday, Porusingazi, who is ZANU PF Chipinge South MP, was
summoned by
the committee to swear on the authenticity of the tapes and
transcripts.
In December last year, Speaker of the House of Assembly John
Nkomo ruled
that there was a prima facie case against Mpofu for allegedly
falsifying
information before Parliament. Under the Privileges, Immunities
and Powers
of Parliament Act, the legislative assembly is empowered to sit
as a court
to mete out punishment for relevant offences .
If convicted,
Mpofu could be fined or jailed for up to two years.
The rest of the members
of the committee are Webster Shamu (ZANU PF,
Chegutu), Mabel Mawere (ZANU
PF, Zaka West) and MDC MPs Welshman Ncube and
Paurina Mpariwa.
FinGaz
Nkululeko Sibanda Staff Reporter
ZIMBABWE is among 10
Southern African countries that have failed to meet the
30 percent quota
stipulated by the Southern African Development Community
(SADC) protocol on
the appointment of women legislators into higher
positions of authority,
according to a SADC Parliamentary Forum official.
Only three countries,
namely South Africa (38 percent), Mozambique (36
percent) and Tanzania (30.4
percent) out of 13 have met the 30 percent quota
set by African heads of
state at the 1997 SADC summit held in Namibia.
Botswana, Lesotho, Namibia,
Malawi, Swaziland, Angola, Swaziland, the
Democratic Republic of the Congo,
Zambia and Zimbabwe are lagging behind at
20 percent
Speaking at a
signing ceremony for a grant made to the SADC parliamentary
forum by the
Swedish Embassy, Kasuka Mutukwa, secretary-general of the
forum, said the
continent still had a lot of ground to cover with regard to
the advancement
of women to positions of authority.
Mutukwa said the challenge to facilitate
the advancement of women will be
more pressing because the heads of state
had mooted increasing the quota to
50 percent of all leadership
positions.
"Since the protocol was launched in 1997, only three countries
have managed
to attain the 30 percent quota that was set by the heads of
state. The task
that lies ahead is even more difficult, taking into
consideration that heads
of state and government are planning to increase
that quota from the 30
percent to about 50 percent. If this sails through,
it will leave member
states and the forum with a lot of work to do," said
Mutukwa.
FinGaz
Clemence Manyukwe Staff
Reporter
BUBYE Minerals has accused World Diamonds Council (WDC) chairman
Eli
Izakhoff, of taking a stance on the dispute between it and River Ranch
Limited which undermines the country's judiciary system.
In a letter
dated January 26, Bubye Minerals legal counsel, Terence Hussein,
said Bubye
was concerned over Izakhoff's pronouncements in correspondence to
River
Ranch Limited legal advisor, retired judge George Smith, to the effect
that
the world body was prepared to provide "guidance, advice and expertise
that
may help River Ranch to protect its production and its reputation."
Hussein
said the splashing of the contents of the letter in the state media
would be
seen as WDC endorsement of Bubye Minerals' forcible ejection from
the
diamond mine without a court order.
"Your letter and stance will be seen as
seriously undermining the judiciary
system, which in terms of our mining
laws, is the final arbiter of mining
disputes. It may also be seen as an
endorsement of the appropriation of a
mining claim and remaining there
without a court order," Hussein said.
"Put simply, forcibly take a mine and
thereafter the WDC will give you
'guidance, advice and expertise' and help
'protect' your production and
reputation."
The Attorney-General has
reprimanded Mines Minister Amos Midzi for making
public statements on the
ownership of the mine, while the Minerals Marketing
Corporation of Zimbabwe
(MMCZ) has said it will not certify diamonds from
the disputed
mine.
Hussein said this showed the mine's ownership was still disputed and
was not
vested in the hands of River Ranch Limited.
Hussein had noted
that the WDC chairman addressed his letter to "justice LG
Smith" and added
that Smith is no longer a judge but an employee of River
Ranch Limited and
as such his statements were an opinion and not
pronouncements relating to
the country's laws or the dispute.
FinGaz
Charles Rukuni Bulawayo
Bureau Chief
. . . how daft can employers be?
"IF YOU can survive in
Zimbabwe today, you can survive anywhere in the
world." This is the
conventional wisdom among Zimbabweans, whose country has
the highest
inflation in the world and is in its eighth successive year of
recession.
The country has lost half its national wealth. Annual
inflation now stands
at 1 281 percent. Four out of every five Zimbabweans are
now considered
poor, and this includes even those in full-time
employment.
The local currency is losing value so fast that it does not make
any sense
to invest any money at all. A graduate teacher does not even
qualify for a
loan to buy a bed on hire purchase.
The Zimbabwe Teachers'
Association says its members can no longer afford bus
fares to and from
school.
In January last year, a family of six needed $21 000 to get through
the
month. It now needs $351 630, according to the Central Statistical
Office
(CSO). Most people do not earn that kind of money. But costs continue
rising.
How then do people survive? The answer is often: "inokorera
payakasungirirwa". Literally translated, the Shona adage means that "a cow
gets fat grazing around the tree to which it is tied".
In plain language:
People are stealing from their employers be it cash,
equipment, time and
resources. Most have resorted to moonlighting.
Have you heard the one about
the married couple wondering why their home
phone bill was very high? The
husband says it can't be him because he makes
most of his calls at work. The
wife says the same thing. Then their domestic
worker chips in: "I too make
all my calls at work."
Employers must be daft. How do they think their
workers survive, when they
pay them salaries as low as $30 000 when bus
fares alone total more than
that each month?
And workers also have to pay
rent. Their children need to go to school. They
have to eat, even if this
means a single decent meal a day.
While ordinary Zimbabweans resort to all
manner of devious means to survive
through each single day, out-of-touch
politicians in Western capitals are
wondering what else to do
with
President Robert Mugabe's administration.
Sanctions targeting Zimbabwe's
political elite only seem to be hurting the
ordinary person more, not those
targeted.
President Mugabe may have been barred from travelling to New York,
London or
Paris, but he hardly spends two weeks in the country these days
before
flying off to some exotic destination.
Lord Howell of Guildford
aptly described it two weeks ago when he told the
British House of Lords
that the so-called targeted sanctions were not very
effective in hitting the
right target.
"Should we not try to refocus the whole of our operation
vis-ą-vis Zimbabwe
in ways which hit the criminals who are ruling the
country and not hit the
poor people who are starving in very large numbers
and longing for greater
help?" he asked.
That is the
question most
Zimbabweans ask everyday: "Why is the West hurting the poor
rather than the
chefs?" The answer is simple.
The West does not care about the average
Zimbabwean. It is more worried
about its own interests.
In the meantime,
Zimbabweans are likely to continue "using the office
telephone", so to
speak, in order to survive.
FinGaz
Charles Rukuni
SOME 400
highly skilled Zimbabweans have settled in the United Kingdom over
the past
five years under a special scheme allowing highly skilled
professionals to
stay in Britain.
Britain's Home Affairs secretary Liam Byrne said 399
Zimbabweans had settled
in the United Kingdom between January 2002 and
September last year. He,
however, pointed out that the figure was based on
the country of origin
stated on individual applications. This, therefore,
did not necessarily
reflect the nationality of the applicant.
Only the
three African economic powerhouses - Nigeria, South Africa and
Egypt - have
higher numbers, according to recent statistics made available
by the British
Home Office. Nigeria lost 3 058 workers, followed by South
Africa with 2 527
and Egypt with 444.
Foreign skilled people are allowed to settle in the UK
under a special
programme called the Highly Skilled Migrant Programme
(HSMP). It is designed
to allow individuals with exceptional skills and
experience to work in the
UK without having a prior offer of employment, or
to take up self-employment
opportunities. Zimbabwe suffered its biggest loss
in 2005 when 105 highly
skilled nationals were allowed to settle in the UK.
Last year's figure could
surpass that of 2005, as 101 highly skilled
Zimbabweans had settled in the
UK in the first nine months of the year.
A
quarter of the country's population is reported to have left Zimbabwe
because of increasing economic hardships. Last year, South Africa and
Botswana deported more than 140 000 Zimbabweans. However, South Africa is
courting Zimbabwean science and mathematics teachers, while a flurry of
advertisements for engineering and construction work in South Africa has
appeared in the local press.
FinGaz
Clemence Manyukwe Staff
Reporter
PRESSURE is mounting on Mines and Mining Minister Amos Midzi to
speed up the
drafting of new legislation on empowerment so as to end the
chaos in the
mining sector.
The Parliamentary Portfolio Committee on
Mines and Environment, which last
week held a public hearing on the
free-for-all situation prevailing in the
mining sector, has written to the
minister asking him to speed up the
introduction of legislation on local
participation.
The new legislation, first mooted in 2005, will facilate more
black
ownership of mines.
The government had earlier threatened to take
over at least 51 percent of
all foreign mine assets but it has now agreed to
a trade off with social
investment.
The committee has had to call another
hearing today with Home Affairs
Permanent Secretary, Melusi Matshiya after
some miners accused the police of
brutality and arbitrarily closing mines
that were operating legally.
ZANU PF's Bikita West MP Claudius Makova, who
chairs the Defence and Home
Affairs committee, said the committee would
consider conducting an enquiry
into the mining sector. An on-going police
exercise code-named operation
Chikorokoza Chapera has resulted in the arrest
of 28 000 alleged illegal
miners.
Highfield MDC MP Pearson Mungofa said
during the public hearing last week
that the committee had written to Midzi,
pressuring him to speed up the
drafting of new legislation pertaining to
black ownership of mines.
"We have asked the minister to speed up the
drafting of the mining
legislation, but that has not happened. We are
concerned that the ministry
has no power at the moment. He has not even
brought a draft to our
committee," the legislator said.
Parliament is
worried that the Ministry has taken a backseat while the
police have
spearheaded the operation.
Former mines minister Edward Chindori-Chininga
said authority to administer
the Mines and Minerals Act lay solely with the
Ministry.
"Reports that some security vehicles in transit are being
confiscated with
gold being intercepted are scary, to me it's very scary.
You don't know who
is stopping vehicles on the way".
A Chamber of Mines
official, David Matanga, said the sector was under threat
due to the
Ministry's sidelining.
FinGaz
Njabulo Ncube Chief Political
Reporter
TEACHERS started a nationwide go-slow yesterday over low pay
following the
expiry of the 14-day notice given to the Public Service
Commission (PSC),
setting the stage for yet another crippling industrial
action by civil
servants.
Although visits to schools in Harare
yesterday gave a sense of tranquility,
pupils and students said teachers
spent most of the time in staff rooms as
disgruntlement over low salaries
swirled within the profession countrywide.
Zimbabwe Teachers Association
(ZIMTA) representatives said while they were
appalled by inadequate
remuneration for teachers, the union was consulting
members for a way
forward while at the same time engaging the relevant
authorities.
The
militant Progressive Teachers Union of Zimbabwe (PTUZ) said it had
instructed its members to embark on a go-slow with effect from yesterday
following the government's failure to respond to their demands for salaries
above the poverty datum line (PDL).
"From 31st January to 2nd February
2007, teachers are directed to embark on
a go-slow while we extend an olive
branch to the government to engage us,"
said Raymond Majongwe, PTUZ
secretary-general. "If the government snubs our
magnanimous gesture a full
throttle strike shall commence on 5 February,
2007. Teachers are hereby
directed to sit in the staff-rooms. This will also
help expose enemies and
sell-outs of the struggle," said Majongwe, urging
teachers not to stay away
from work. "We must emphasise that this collective
job action will not end
until our demands are met."
ZIMTA president Tendai Chikowore, said: "ZIMTA is
of the view that teachers
are being short-changed, and thus, paying heavily
for their understanding,
patience and resilience."
Teachers are demanding
a minimum basic salary of $400 000 for the first
quarter of 2007, transport
allowances of $100 000 and $150 000 for housing,
among other
demands.
. . . As govt moves to mollify health workers
Kumbirai
Mafunda
Senior Business Reporter
THE government has moved to end a
crippling six-week-old health workers'
strike by announcing a second salary
increment within a month.
Sources told The Financial Gazette that the
government paid the health
workers additional salaries in an attempt to
placate the doctors and nurses
and end the job action, which has paralysed
the health care delivery system.
Nurses were awarded an additional $263 000
on top of last week's $195 000
new salary, bringing their month's earnings
to between $458 000 and $500
000. But nurse aides' salaries were increased
by a paltry $3 000. New
salaries for doctors who initiated the strike in
December were not available
as Kuda Nyamutukwa, the president of the
Hospital Doctors Association, did
not have details. His salary and those of
other doctors at Parirenyatwa
Hospital were frozen last week. The doctors
claim this action was taken as
punishment for the strike.
Health Minister
David Parirenyatwa confirmed the new salary scales, saying
negotiations for
better remuneration would continue.
"We made sure that salaries outstanding
were paid," Parirenyatwa said.
But despite the adjustment, health workers
pressed ahead with their work
boycott, telling this paper that their
salaries could still not cover the
cost of basic commodities.
At Harare
Hospital, the boycott by nurses entered its third day yesterday,
with
administration and general staff joining the bandwagon. Wards were
deserted
when The Financial Gazette visited major hospitals this week.
FinGaz
Stories by Rangarirai Mberi,
Kumbirai Mafunda and
ZSE smells blood as Gono holds rates
THE stock market
closed flat yesterday, but brokers see shares opening
strong today after
Reserve Bank left interest and exchange rates unchanged
yesterday.
Currency rates on the parallel markets also remained
unchanged from Monday,
and dealers said some short-term stability could
follow after a widely
expected devaluation did not come.
Central bank
governor Gideon Gono ruled out devaluation of the local unit
and left
interest rates at 500 percent, despite painting a bleak outlook for
inflation.
The Zimbabwe Stock Exchange's key industrial index rose 0.01
percent to
close at 970 478.72 points from Tuesdays 958 297.13 points, as
the market
digested a statement that did not touch on the main policy areas
of interest
rates and exchange rates.
Minings fell by 2,46 percent from
Tuesday's 516 159,48 points to close at
503 438,15 points.
"At current
levels of the accommodation rates for secured and non-secured
lending to
banks . . . the interest rate framework is appropriately aligned
to both
developments and outlook on the inflation outlook," Gono said.
The last rate
hike came on October 9 last year, when rates went up 200
percentage
points.
Analysts had expected devaluation in the face of rising rates on the
parallel foreign currency market where the local unit has fallen to $5 000
against the United States dollar, compared to $250 at the official
market.
Shares had ended first call largely flat, but life returned in the
second
session with mid caps leading the way and setting the stage for what
analysts say will be a strong opening today.
"It (policy statement) is
more of a non-event because there was no key
policy change on accommodation
rates and the exchange rate. Basically
nothing has changed," said an analyst
with a local brokerage house.
Blessing Sakupwanya, economist at CFX Bank,
said central bank's statement
had been at wide variance with market
expectations.
"The expectations were at variance with what was said in the
statement.
Expectations were that there would be some kind of devaluation
and a shift
on interest rates. But he did not touch on either of those
rates. Stock
prices were firm largely because people are hedging against
inflation
because money market rates will not give real value," said
Sakupwanya.
At the foreign currency parallel market, the US dollar traded at
around $5
000, while rand was quoted at $700 after Gono's speech, both rates
unchanged
from earlier in the week. Bank currency dealers said they see
black market
rates stabilizing in the short term, arguing that the current
rates had been
exaggerated, only buoyed by the anticipated
devaluation.
. . . but says sun to set swiftly on bearer
cheques
THE curtain will soon come down on bearer cheques as the Reserve Bank
prepares a new round of currency changes.
RBZ Governor Gideon Gono said
yesterday a successor programme to the first
phase of the currency reform,
which was dubbed Operation Sunrise, would be
rolled out soon. The
implementation process of the final leg of the currency
switch, Gono said,
would be short and swift, with tighter cash limits for
allowable
deposits.
He did not give a date, only saying the arrival of the new note was
"imminent".
"As monetary authorities, we are pleased to report and update
stakeholders
that all preparatory work for SUNRISE 2 have
now been
completed, and implementation is imminent once the few minor
logistical
refinements have been completed," said Gono.
Gono once again warned against
the stockpiling of huge stacks of cash beyond
the permitted limits, as those
doing so risked serious prejudice at the
currency switch over.
Under the
country's banking laws, daily cash withdrawal limits for
individuals
currently stand at $500 000 and $1 million for corporates.
The first leg of
the currency reforms that began in July last year saw RBZ
knocking three
zeros off the currency, introducing a new set of bills.
The bills are only
bearer cheques, and not bank notes, as they are
promissory notes rather than
official legal tender. It is expected that the
new currency reform will see
the introduction of new, "real" bank notes.
World record inflation forced RBZ
into the currency switch last year, as
computer systems failed to read the
extra zeros while large cash
transactions became impossible due to the
increasingly huge amount of bank
notes required.
What they said .
. .
David Chapfika
Deputy Minister of Finance
On Gono's call for
reform: "We are already working on that, even together
with the governor, in
the context of the NEDPP."
On devaluation: "The Governor is correct. We have
been devaluing year in,
year out but there has not been supply
response.
"Beneficiaries of devaluation have been the speculators. We cannot
devalue
in an environment where there is limited foreign currency. What we
need to
do now is to acknowledge that we are under sanctions.
"The
economy is not generating sufficient foreign currency to meet market
demand."
Tony Hawkins
University of Zimbabwe Business
Professor
This was a damp squib and a great disappointment. He had a
choice to make a
difference but he did not, he might as well resign if he is
to do nothing.
Callisto Jokonya
President, Confederation of Zimbabwe
Industries (CZI)
Devaluation is a solution they still have to implement
no matter what. He
cannot avoid it.
The delay is damaging to the whole
economy. We need to speed up the process
of agreeing on the terms (of any
devaluation) and it has to be done like
tomorrow.
I am quite hopeful that
everybody will commit themselves to ensuring the
call for a social contract,
this would help achieve macroeconomic stability.
We don't want to get people
excited over things that are not workable.
He hasn't really presented a
monetary policy statement. He is just saying
let's have a holistic package.
He has highlighted the problems and
challenges of the nation, which he is
saying all stakeholders need to sit
down and fix. The drivers of the economy
have to meet without delay because
the economy is bleeding.
Jack
Murehwa
President, Chamber of Mines
The context of the monetary policy
is that a lot of fundamentals need to
change. We look forward to a situation
where the fundamentals do indeed
change. We will be part of that (social
contract). If there is anybody
smuggling minerals, they must be arrested.
But we believe that's not the
issue here. The issues are the fundamentals
that Gono was talking about.
Gabriel Chaibva
Spokesperson MDC
(Mutambara)
The Governor has thrown everything back to politics. We agree
with him. He
is saying 'sort out your politics and then you can get third
party
endorsement'. To me that was a bold statement.
Nelson
Chamisa
Spokesperson MDC (Tsvangirai)
This is a statement that
politics is the problem in this country. Until we
unlock the political
logjam it is not possible to talk of any meaningful
transformation. The
economy is only a tail of the body, and the body is
politics. This is a
challenge to politicians to take the responsible role to
bring about a new
Zimbabwe. The Governor now agrees with the MDC that the
solution is
politics.
'Quasi-fiscal moves stoked inflation'
RESERVE Bank chief
Gideon Gono says he will now put an end to quasi-fiscal
expenditure,
admitting publicly for the first time that such activity had
stoked
inflation.
A new special purpose vehicle, Fiscorp, would be formed to
"quarantine" all
quasi-fiscal projects and administer outstanding loans,
Gono said yesterday.
"The RBZ will, with immediate effect, bring to an end
such interventions and
wishes to concentrate on core business
activities.
"The RBZ will incorporate a special purpose vehicle to be called
FISCORP
(Pvt) Ltd, 100 percent owned by the Reserve Bank, whose primary
object will
be to step into the RBZ's shoes for the purposes of collecting
and
administering the outstanding loans," Gono announced.
Gono's
quasi-fiscal spending last year reached $372.9 billion, exceeded 2006
recurrent spending of $341 billion, swelling money supply growth and driving
inflation to record highs.
Over the past three years, the central bank
has had to parcel out huge
chunks of money into mainly badly managed state
owned firms, attracting
criticism from the International Monetary Fund (IMF)
and even the Finance
Ministry which reportedly sanctioned these
expenditures.
The RBZ gave billions to Air Zimbabwe, Zesa Holdings,
Ziscosteel and the
National Railways of Zimbabwe (NRZ) but this did not help
much as they would
continue knocking on its doors for more.
Gono is
battling to tame runaway inflation and a worsening economic
recession, but
critics say his eagerness to support state enterprises, farms
and industry
had in fact contributed to inflation. President Mugabe came out
in support
of quasi-fiscal spending when addressing political leaders in
Matabeleland
in December last year. But Gono said RBZ now needed to return
to its "core
business".
Yesterday, Gono pledged to bring annual broad money supply growth
from
current levels of over 1000 percent to between 415-500 percent by
December
this year, and to under 65 percent by the end of next
year.
Counting the losses
ZIMBABWE stands to earn US$3 billion
from the sale of its loss making state
enterprises, Reserve Bank of Zimbabwe
governor Gideon Gono said yesterday.
Gono said although the government has
for years talked about privatisation,
the take-off of the programme had
remained only on paper.
"As monetary authorities, we estimate that out of
these recommended
entities, at least US$3 billion can be raised in 2007 if,
as stakeholders,
we avoid throwing spanners in the program, for one reason
or the other. The
proceeds from this initiative could go towards support of
export-enhancing
programs, support the liberalisation of the exchange rate
and stabilise
value of the Zimdollar and hence contribute to inflation
reduction,
offshoots of which could be used to clear the current outstanding
foreign
payment arrears owed by the parastatals or the country," said
Gono.
He said proceeds of the sell-off would provide the foreign currency
fund
needed to support the floating of the exchange rate, which he rejected
yesterday. Gono said speeding up the pace of privatisation the programme
would also generate additional financial resources for the financially
crippled government and help remove parastatals' burden on the
fiscus.
Gono said a Privatisation Committee would be set up to speedily
execute the
programme, adding that by disposing of its interests, government
would
narrow its wide inflationary deficits.
Among some of the key state
enterprises Gono earmarked for privatisation are
fixed phone operator
Tel*One, mobile operator NetOne, Zesa Holdings,
National Railways of
Zimbabwe (NRZ), the Cold Storage Company (CSC) and Air
Zimbabwe.
Gono
said eligible strategic partners include Zimbabweans, investors from
African
Caribbean and Pacific (ACP) countries, Asia, Middle East and other
western
countries.
If government accedes to Gono's privatisation bid, it would have
made a
major policy shift as it halted any sell-offs in 2003 preferring to
commercialise them. Recently, government restructured the Privatisation
Agency of Zimbabwe (PAZ) into SeRa, a new body government said was tasked to
restructure state companies.
Among some of the most notable privatisation
success stories are Zimbabwe's
largest dairy processor, Dairibord Zimbabwe
Limited (DZL), Cottco, the
former Cotton marketing Board, and reinsurer
Zimre.
Analysts say privatisation of state enterprises, which in 2002 when
the
programme was suspended raised less than $2 billion from a $40.9 billion
target, could help bring to a close the catastrophic impact that parastatals
are exerting on the economy.
This is our last chance, says
governor
Gono speaks on new policy thrust
Rangarirai Mberi
News
Editor
ON a table in an RBZ meeting room lies a pile of papers and files.
A stolen
peek at a cover label shows tantalisingly that the huge files
contain
minutes of a series of meetings with cabinet ministers over the past
four
weeks.
On the same table are at least a dozen copies of state of the
nation
addresses by President Robert Mugabe, dating back to 2001, and
another hefty
file apparently containing "Tips for Gideon" - a mountain of
mail from
people ranging from economists to ordinary Joes, all weighing in
with their
one Zimdollar worth of turnaround wisdom.
And at the end of
that table sits a visibly fatigued Gideon Gono, pondering
over what some in
the ruling ZANU PF might view as a protest monetary policy
statement.
"This will be the most important and most difficult monetary
policy
statement since I came into office," he said, choosing his words
carefully,
obviously aware we were scanning his every word for additional
clues as to
his future policy.
The weight of expectation is clearly
beginning to tell on Gono, heading into
his fourth year as governor. He
looks back: "A lot has been expected of the
governor. From being expected to
quell quarrels between rival farmers and
helping Zifa fulfil its
fixtures."
His brazen, hawkish approach to policy and the slowdown in
inflation through
2004 had combined to build up that expectation. But
critics say, much to his
discredit, Gono had at some stage appeared to revel
in the image of some
Marvo comic superhero, flying in, cape fluttering,
saving the day. But ahead
of one of his most eagerly awaited statements yet,
he could not hide an
evident feeling of anxiety - almost one of
resignation.
"If we do not do this, if we do not take the bull by the horns
now, our
inflation will run to levels never seen anywhere before," he said,
pausing
before stressing the grim point, "this may well be our last
chance."
As it was to turn out yesterday, Gono has been converted by critics
who have
long told him that the economy can never be mended in the absence
of
political will.
But he still refuses to name the figures he constantly
chides as the barons
of the black market. Obviously, politics remains tricky
territory - see how
there was an animated buzz around town yesterday
afternoon about how one
faction of the ruling party was purported to have
been "conspicuous by its
absence" during Gono's speech.
In addition to
his many reported political critics is a long list of private
sector cynics.
There are many who believe his policies have worked against
the economy, and
his new position on the exchange rate will only strike a
few more names off
his already short list of friends. And he knows it.
"There are some people
who think I'm some kind of nut who doesn't understand
fundamentals," he
said, again suggesting that the depth of economic decline
now required much
more than attention to the "fundamentals" of monetary
policy.
Gono now
believes the era of interest rates, exchange rates and other
monetary policy
instruments is gone - at least for now. He's been converted
to the theory
that moral suasion would put a bigger dent in inflation than
would any
policy tool, and that "deploying the traditional tools of monetary
policy",
as he called it yesterday, has become a waste of time.
It is most likely that
a meeting of ZANU PF's Politburo held late yesterday
would have discussed
Gono's policy statement. But what is less certain is
whether Gono will win
any political backing for the far reaching reforms he
says are Zimbabwe's
last hope for recovery - especially from figures happily
feeding off the
crisis.
Gold deliveries fall 18 percent
Chris Muronzi
Staff
Reporter
GOLD deliveries fell 18 percent last year to just under 11
tonnes, central
bank governor Gideon Gono said yesterday.
Gold delivered
last year to Fidelity Printers, a subsidiary of the central
bank and the
country's sole gold buyer, stood at 10.96 tonnes from 13.4
tones delivered
in the previous year, Gono reported in his fourth quarter
monetary policy
statement.
Gono blamed the low deliveries on smuggling, low exploration in
the sector
and ageing equipment.
The RBZ received a total 21 tonnes in
2004.
"Cumulative gold deliveries in 2006 stood at 10.96 tonnes, painting a
disappointing picture in this critical sector when compared to 21 tonnes
achieved back in 2004. Year 2005 was similarly lower than 2004, with total
gold deliveries to the Reserve Bank amounting to 13.45 tonnes. The above
decline is attributed to a combination of factors, including the lack of
equipment, reduced exploration and mine development as well as illegal
trading and smuggling of gold," said Gono.
As a result of the leakages,
the RBZ has put in place measures compelling
millers to become more
accountable.
"All Custom Millers are given up to end of March 2007 to convert
their
production systems to lockable concentrators so as to improve on gold
recovery. Analysis of the systems by the Reserve Bank has shown that where a
concentrator is used, gold recoveries are 80 percent, compared to around 35
percent where a copper plate is used, or 30 percent where the blanket or
rubber mat method is used," added Gono.
Miners attribute the declining
gold deliveries to the static exchange rate,
which Gono chose to keep intact
yesterday. Mine costs are denominated in
foreign currency, miners argue,
while earnings remain depressed due to the
exchange rate, restricting
expansion.
Chamber of Mines president Jack Murehwa told The Financial Gazette
yesterday
that any smuggler should be arrested, but that there was need for
more
fundamental economic reforms.
Last year the RBZ hired Israeli
experts to look into the leakages but their
efforts have yielded little
results as gold continues to find its way out of
the country.
Gold is a
key foreign currency earner for the country, accounting for 51
percent of
Zimbabwe's mineral output. The country received over 27 tonnes of
gold in
1999, the highest in the last decade.
FinGaz
Kumbirai Mafunda Senior
Business Reporter
CRUCIAL on-and-off talks to remedy the country's
deepening economic crisis
could resume soon following bipartite
consultations between business and
labour.
Deliberations under the
Tripartite Negotiating Forum (TNF) hit a deadlock
last May after the
Employers Confederation of Zimbabwe (EMCOZ), which
represents business,
refused to award workers wages and salaries indexed to
the Poverty Datum
Line (PDL).
At the time of the collapse of the consultations, labour,
business and
government appeared close to signing the Prices and Incomes
Stabilisation
Protocol to curb runaway inflation and rejuvenate the
country's comatose
economy.
But industry and labour sources said this
week talks between the leaders of
the business lobby body and of the
Zimbabwe Congress of Trade Unions (ZCTU)
were underway to resuscitate the
stalled talks.
They said EMCOZ president Johnson Manyakara and ZCTU president
Lovemore
Matombo had held informal talks a fortnight ago that centred on the
urgent
need for the resumption of the TNF to act as a springboard for
economic
recovery through enhanced social dialogue.
FinGaz
Kumbirai Mafunda
Senior Business Reporter
SIGNALS of widespread bankruptcy in the troubled
baking industry have begun
flashing only four weeks into the new
year.
The National Bakers Association (NBA) says its members are under
increasing
threat of insolvency unless the government urgently grants a
fresh increase
in the retail price of bread.
Government gave in to the
bakers' demands for a review in the price of bread
last December by hiking
the retail price to $825/ loaf. But the NBA says the
government should
approve another 93 percent price increase to $1 593 if the
industry is to
survive and retain jobs.
Bakers say continued demand for working capital as a
result of increases in
raw materials such as flour, sugar, oil, fuel and
packaging material are
severely bleeding the industry.
At $825 a loaf,
bakers say they are unable to recoup production costs, hence
an urgent
review in the retail price would help stave off the collapse of an
industry
that employs 20 000 people.
"As the industry situation stands, the gazetted
price is lagging behind by
two months and the bread industry is fast
grinding to a standstill unless
something is done to salvage it. The ship is
now sinking and this is an SOS.
Unless the pricing issue is urgently
resolved, the future of the industry is
bleak and more closures,
retrenchments and bread shortages would be
inevitable," the bakers grouping
warned in a statement that is its most dire
to date.
Besides unprofitable
retail prices, bakers are also failing to replace
ageing plant and
equipment, repair and replace their delivery fleet and to
competitively
remunerate employees, hurting the morale of their hard-pressed
workers.
If the industry were left to collapse, the livelihoods of more
than 120 000
people directly and indirectly dependent on the industry would
be in the
balance, according to the NBA.
Bakers are the second major
industry this year to send out signals of
insolvency after sugar producers
resorted to holding onto their stocks until
the government hiked prices by
more than 100 percent.
Rising bread prices are just but one of the many price
increases
manufacturers are effecting on most basic commodities to cushion
themselves
from escalating production costs. But the price increases are
worsening
hardships for most households who earn salaries below the
breadline
currently at $350 000/ month.
FinGaz
Personal
Glimpses with Mavis Makuni
THE torrent of denunciation that maverick
politician, Edgar Tekere's book, A
Lifetime of Struggle has provoked reminds
me of the time last year when I
was subjected to an unwarranted and barbaric
attack by Saturday Herald
columnist, Nathaniel Manheru.
As
readers will recall, Manheru got hot under the collar because of a piece
I
had written about South African President Thabo Mbeki's discredited "quiet
diplomacy" approach to the Zimbabwean situation after accepting the mantle
of trouble-shooter. By Mbeki's own admission, his brand of diplomacy did not
make a dent in unravelling the problems bedevilling Zimbabwe and he has
thrown in the towel. The piece that made Manheru's blood boil was my
personal view of how the manner in which Mbeki had conducted his
peace-broking mission had simply been a waste of time which had resulted in
prolonging the suffering of ordinary Zimbabweans like myself. As an African
and Zimbabwean journalist I assumed I was entitled to write about issues
affecting my country and to comment on the role of an African head of state
trying to resolve them.
I was wrong, Manheru decreed. He proceeded to
advertise his raging bigotry
and chauvinism by unleashing the crudest form
of invective imaginable
against me as a person. I was "accused" of being
menopausal, suffering from
premenstrual tension, having been educated in
colonial Rhodesia and having
lived in "colonial citadels". The put-downs
were too numerous to mention
here again but the main thrust of Manheru's
argument was not to dispute and
rebut what I had said but to rage against me
as an individual and to dismiss
me as being unfit, mainly for the biological
reasons listed above, to
express any views at all.
I refused at that time
to stoop as low as Manheru because even inebriates on
the streets are not as
foul-mouthed, intolerant and narrow-minded as that. A
year later however, I
wonder how Manheru would feel if someone were to
decree that he was unworthy
to be a columnist or whatever else he does, by
alleging, let us say, that he
was a brutal wife batterer or was afflicted
with a stigmatising disease such
as AIDS?
It would be totally uncalled for, barbaric, insensitive and
irrational but
this is what he himself did to me and what Tekere's
detractors are doing to
the veteran nationalist. They are not viewing his
book as a literary work to
be read, analysed and critiqued calmly but as an
opportunity to take turns
to take pot-shots at him - the worst example of
resorting to shooting the
messenger. This is underscored by the contribution
to the furore by the ZANU
PF Women's League which was reported to have
"noted with great concern"
Tekere's lack of respect for the office and
person of the President. The
Women's League was quoted as suggesting that
there were various remedies
within the ruling party that Tekere should have
exhausted. But what is the
remedy to the desire and choice to write one's
memoirs? Not writing anything
at all?
Tekere has been publicly labelled
as being mentally unstable and for this
reason therefore not being the
"right" person to talk about the history of
the liberation struggle. But if
Tekere was good enough to participate in the
liberation struggle, there is
no earthly reason why he should now be deemed
unfit to recount his
experiences as he recalls them. Those who were in the
thick of things at the
same time are free to publish their own accounts of
events during this
important time in Zimbabwe's history. This includes women
freedom fighters
and politicians. Future scholars and researchers should not
be deprived of
as an extensive a body of knowledge as possible on this
important period
through the myopic insistence that only one decreed
perception of events
should be recorded.
Great brouhaha is usually made about those who do not
have liberation war
credentials not having the right to aspire to govern
Zimbabwe or to point
out errors made by those who regard themselves as the
true liberators of the
country from colonialism. But here is a man whose
liberation war credentials
are as impeccable as anyone else's being told to
shut up. Tekere was
formally re-admitted into the ruling party only in
December. It is odd that
a month later he is suddenly considered insane
simply because he has
published a book about his life and his political
experiences. ZANU PF
propagandists and apologists are taking their notorious
intolerance for
divergent views to ridiculous lengths. They are
belligerently promoting the
fallacy that freedom of speech and expression is
only for those who toe the
party line and agree with them on every
issue.
They never stop to think how ridiculous their one-opinion-fits-all
crusade
is when dealing with any form of human activity and endeavour that
inevitably includes different personalities, specific situations,
controversies and conflicts. They have labelled those who see things
differently on various issues sellouts, enemies of the state, agents of
foreign interests and many other unwarranted epithets.
The frenzied
onslaught against Tekere shows that at this rate, the number of
people
considered to be true citizens of this country and entitled to
express
personal opinions about goings-on in the land of their birth
continues to
dwindle. The justifications for this totalitarian intolerance
are getting
more weird by the day.
But as Burns, Peltason and Cronin point out in their
book, Government by the
People, "Free speech is simply not the personal
right of individuals to have
their say; it is also the right of the rest of
us to hear them." In the same
book, John Stuart Mill, whose Essay on Liberty
is considered the classic
defence of free speech is quoted as saying: "The
peculiar evil of silencing
the expression of opinion is that it is robbing
the human race . . . If the
opinion is right, they are deprived of the
opportunity of exchanging error
for truth; if wrong, they lose what is
almost as great a benefit, the
clearer perception and livelier impression of
truth, produced by its
collision with error".
FinGaz
Comment
CHINA. That one word,
that one country, is at the top of everybody's mind.
And it is not difficult
to see why. With the world's fastest growing economy
China, whose trade with
Africa topped US$42 billion in 2005, is now
indisputably a key player in the
global economy.
Even the increasingly isolated Zimbabwe, whose friends
are few and far
between over an alleged democratic deficit by erstwhile key
trading partners
in the West, has also joined the crowded path to China
which through its own
admission attaches very little, if any, importance to
the issue of human
rights, the reason why - to the chagrin of many human
rights activists and
democratic movements - among China's allies are to be
found odious regimes
which ignore all values and international norms in
their political
behaviour.
Zimbabwe's propagandists and authorities have
been telling all who care to
listen that in China, Zimbabwe has found a
friend not only flushed with cash
but eager to lend too. They have even gone
as far as trying to portray
Zimbabwe as China's biggest friend in Africa.
Yet nothing could be further
from the truth, if what has happened over the
past 12 months is anything to
go by.
The Chinese President, Hu Jintao, is
currently visiting Africa, a source of
raw materials for China's
over-heating economy. The tour, the second of his
African visits inside nine
months, will see him going to Cameroon, Liberia,
Sudan as well as Zimbabwe's
fellow SADC member states namely Zambia,
Namibia, South Africa and
Mozambique. Zimbabwe is not on the itinerary. In
April last year, the
Chinese leader visited Nigeria, Morocco and Kenya among
other African
countries. Once again, he avoided Zimbabwe. And as if that was
not enough,
in June 2006, the Chinese Premier, We Jiabao undertook a
seven-nation
African tour which took him to Egypt, Ghana, the Democratic
Repblic of the
Congo, Angola, South Africa and Tanzania. Zimbabwe was not
part of that
visit either.
As we said in our comment of June 22, 2006 titled All Good
Words But . . . ,
whatever their reasons, the Chinese leaders' actions are
even more
perplexing in light of the fact that these African tours are
widely seen as
an aggressive diplomatic push for deeper bilateral relations
of which
Zimbabwe is supposed to be part of the equation. This is
particularly so if
the political posturing from both sides as regards the
"solid" bilateral
relations between Zimbabwe and China is anything to go
by.
We do not want to risk speaking too soon. But, no matter how the
Zimbabwean
government sees it, the Chinese move is clearly intended as a
deliberate
snub on Zimbabwe. It speaks volumes about the significance the
Chinese
attach to their relations with Zimbabwe. What is increasingly clear
is that
the Chinese view Zimbabwe with the same suspicion as does the West.
The only
difference is that the Chinese do not say it. As we said in our
comment
alluded to earlier on, diplomatic niceties notwithstanding, just
like the
West, China is also avoiding Zimbabwean risks like the plague. This
might be
politically unpalatable. But it's a cold hard fact.
Predictably,
the Chinese ambassador to Zimbabwe this week desperately sought
to downplay
his country's rapidly waning confidence in Zimbabwe seen through
its
unsettling lack of commitment to invest in the Southern African country.
That is what diplomacy is all about. What else could he say? But from its
actions the emerging economic giant's ominous message is loud and clear:
steer clear of Zimbabwe and don't touch it with a barge pole, lest you pour
money into the jaws of completely irrational policies. The Chinese do not
believe, just like the fence-sitting Western investors, that Zimbabwe can
uphold bilateral investment protection agreements and manage its economy to
international standards. They have witnessed, in Zimbabwe, instances of the
arbitrary violation of that which is fundamental to market economy and
business confidence - the law of property and law of contract. Thus the
bogeyman of uncertainty is forever present.
And unless the government
realises this, then all Zimbabwe will continue to
get from the Chinese are
good words of intent until such a time the
situation in the country is
deemed to have returned to normal. For now the
Chinese will maintain a low
level government-to-government contact with
Zimbabwe just to keep the lines
of communication open.
True, over the past couple of years Zimbabwe has
signed many Memorandums of
Understanding (MOU) with the Chinese. But how
many of these have borne
fruit? In any case these would have to be
implemented on a purely commercial
basis or else they will not be worth the
paper they are written on. And
there is the rub, which has seen many such an
agreement collapsing. The
doomed Libyan fuel deal is a case in point.
FinGaz
No Holds Barred with Gondo Gushungo
LAST
week, Christopher Chetsanga officially confirmed what The Financial
Gazette
reported on November 23, 2006 - ZESA is teetering on the brink of
collapse.
The utility is broke and the spectre of a critical power
blackout looms
large, providing a perfect backdrop for a dramatic collapse
of an economy
already pushed into historic contraction.
Surprisingly,
Zimbabwe has known for years about the impending power
deficit, which will
render the region's major exporters - South Africa and
the Democratic
Republic of the Congo, which the country has frequently
counted on to
provide up to 35 percent of her power requirements - unable to
export.
This paper reported on the impending regional power shortage as
far back as
May 2003. But from the way ZANU PF politicians living off the
fat of the
land and ZESA officials are now falling over each other to
shamelessly
sermonise on the need to avert disaster, a visitor from Mars
would be
forgiven for thinking that the country finds itself in awkward
scrapes
because this is the first time authorities have heard of the looming
crisis.
Yet nothing could be further from the truth.
We have in the past
seen the same Band-Aid approach to key issues being
adopted by a government
which does not seem to know that its policies and
actions have long term
consequences that are borne by the long suffering
people. Examples abound:
the country's irrigation infrastructure which only
becomes an urgent issue
during drought years or election time. And the
recurring farm input
shortages, which have created a situation whereby what
the "new" farmers
gained on the swings they lost on the roundabouts as they
are neither
improving their individual economic standing or adding value to
the national
economy.
Back to the power crisis. A few questions beg for answers here. What
did the
Zimbabwe Electricity Supply Authority (ZESA) do to secure the
country's
power requirements ahead of the widely predicted 2007 regional
power
deficit? Other regional power utilities such as Eskom of South Africa
commissioned studies into ways of preparing for the power deficits. Indeed,
the issue of preparing for self-sustenance before 2007 attracted priority
attention in most of the countries. And they are better prepared.
But
other than the token awareness of the problems displayed by both ZESA
and
Zimbabwean government officials at the odd energy conference they
addressed,
what else did the Zimbabwean authorities do to show that they
appreciated
the urgency and gravity of the situation that confronted the
country?
Absolutely nothing, only to get frantic at the eleventh hour! This
is
inexcusable. They should be ashamed of themselves. That is if they have
enough conscience to prick their hearts.
Forget what the ZESA management
says. What is clear is that the mismanaged
and corruption-riddled power
utility had no plan to forestall the imminent
disaster. Otherwise the
country would not be caught up in this situation
where it now has to fight a
rearguard action. It is probably too late to
prevent a crisis. Suffice to
say that nothing succeeds where there is no
plan. History is unequivocal on
that. But if ZESA did have a plan, then
nothing more than this case proves
beyond reasonable doubt that no plan is
worth the paper it is written on
until it gets you doing something.
And what does the man at the centre of
this mess, Sidney Gata - the deposed
ZESA executive chairman who bought
favour as close to the centre of power as
possible by way of marriage - have
to say for himself? What was he doing at
the power utility all these years
before he was given that undeserved golden
parachute? What, after the
government - whose idea of getting the right end
of the stick is, in the
words of Theodore Roosevelt, to snatch it from the
hands of somebody using
it effectively and to hit him over the head with
it - jettisoned Simbarashe
Mangwengwende, did Gata do at ZESA to justify his
plum job? I am struggling
for an answer. As far as I can recollect, in his
wisdom, tariff hikes were
the panacea to the country's power woes - typical
of a man whose toolbox
only consists of a hammer and thus sees every problem
as a nail!
Whatever
happened to the Iranians, Indians, Malaysians, South Africans and
Chinese
that Gata made Zimbabwe believe had signed agreements to throw a
financial
lifeline to ZESA's expansion and refurbishment plan for the Hwange
and
Kariba South power stations? Or were the hapless Zimbabweans, as usual,
being led up the garden path once again?
Of course the US$2 billion that
Gata indicated over a year ago as the amount
needed to boost the capacity of
the power utility's two power stations is a
top line ripple for a country
whose credit rating has not only been reduced
to junk status but which also
has a litany of critical imports-medicines,
fuel and food.
And I also
know that ZESA has over the years had serious problems settling
its power
import bills due to the severe shortages of foreign currency. This
has on
several occasions resulted interruption of power supplies by
Hidroelectrica
de Cohora Basa of Mozambique, ESKOM of South Africa and
Societe Nationale
d'Elecetricity of Democratic Republic of the Congo.
But what became of the
ZESA's offshore Escrow Account number 01111040061314
with Standard Bank
Mauritius in which the utility's exporting customers,
billed in foreign
currency, were supposed to pay their electricity bills?
Can ZESA come clean
on this account which Finance Minister Herbert Murerwa
said in 2003 had been
sanctioned by both the Exchange Control Department at
The Reserve Bank of
Zimbabwe and his ministry?
The questions for which there are no ready answers
are too many. The reason
is simple. I am struggling to see any justification
for the power crisis
other than ineptitude, malfeasance, cronyism, political
interference,
back-stabbing relationships and sweetheart deals - the bane of
state-owned
companies in Zimbabwe.