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Dabengwa to challenge Mugabe

Zim Independent

Dumisani Muleya

SENIOR Zanu PF and opposition figures are pressing the ruling party’s
politburo member Dumiso Dabengwa to step forward next week to file
nomination papers and take President Robert Mugabe head-on in the critical
March elections.

The last-minute bid to rope in Dabengwa follows the failure by Zanu PF
officials and opposition activists to propel another politburo member Simba
Makoni to the front ranks to challenge Mugabe. This leaves Dabengwa with an
outside chance of contesting the poll against Mugabe. MDC leader Morgan
Tsvangirai is seen as Mugabe’s main rival but some observers think an
opportunity presents itself for Dabengwa.

The Makoni bid collapsed before it could even get off the ground
largely because of poor strategy and organisation. Makoni, who could not
stand the heat in the cauldron of national politics, ended up going to
Mugabe to talk himself out of trouble when it became evident the initiative
was a stillbirth.

Sources said key members of the Zanu PF faction led by retired army
commander Solomon Mujuru and opposition activists are now pushing for a
united front of opposition forces led by Dabengwa.

It is understood that Dabengwa is interested in taking up the
challenge provided there is a concrete plan on the table. Meetings to stitch
up the plan have been held in Harare, Bulawayo and Johannesburg, but no
agreement has yet been reached.

The sources said Dabengwa, a veteran of the liberation struggle and
former Zapu intelligence chief, told those who approached him that he was
not afraid of challenging Mugabe as long as there were structures to support
the bid. It is said he indicated that there was a groundswell of discontent
in Zanu PF and the initiative could get serious backing if properly planned.

"Dabengwa neither agreed nor refused to take up the challenge," a
source who attended one meeting with him said. "He asked questions and
basically gave signs he was not afraid of Mugabe as long as there were good
structures on the ground to support the plan."

In terms of the proposal, Dabengwa would lead a united front
comprising opposition and civil society groups. He would be supported by
opposition leaders, including MDC leaders Tsvangirai, Gibson Sibanda and
Arthur Mutambara, the sources said. Initially, there was a proposal to bring
Makoni into the initiative so he could work with Dabengwa and MDC leaders.

"The organisers felt that if the issue was carefully planned,
Dabengwa, Tsvangirai, Sibanda, Makoni and Mutambara could form an effective
line-up to challenge Mugabe because they would bring different sorts of
qualities to the team," another source said.

"Dabengwa would bring in liberation struggle credentials and
experience, Tsvangirai his popularity as the founding MDC leader and Makoni
his image as a reformer. Sibanda and Mutambara would play a major supportive
role."

The sources said the planners also wanted independent MP Jonathan Moyo
to feature in the line-up. Former Industry and Trade minister Nkosana Moyo,
who was involved in the Makoni project, was expected to provide links to the
international community. The sources said Mujuru supported the idea.

They said Dabengwa was targeted because last year he led internal
defiance and criticism — including last week at a politburo meeting — of
Mugabe. Dabengwa reportedly confronted Mugabe at the meeting over war
veterans leader Jabulani Sibanda’s activities in Zanu PF. He was supported
by Mugabe’s deputy Joseph Msika and party chairman John Nkomo. After a
heated debate it was agreed the Zanu PF presidium must resolve the issue.

Dabengwa tackled Mugabe at almost every politburo meeting last year.
He was the leading light in pressing for Mugabe to open nominations for the
party leadership at congress last December.

The sources said the plan by the Mujuru faction and its sympathisers
was to field Dabengwa as a candidate against Mugabe at congress. It is said
that the proposal to replace Mugabe with Dabengwa had been endorsed by the
three Matabeleland provinces, Masvingo, Mashonaland East and Harare.

However, the plan fell apart after Mugabe and his supporters picked up
the plot and launched a fierce counter-strategy. This is where Emmerson
Mnangagwa and Jabulani Sibanda came in, it was said.

Mugabe deployed Mnangagwa to frustrate Dabengwa through technical
means involving the constitution and congress agenda. Mnangagwa and Dabengwa
had a near row at a politburo meeting on November 28 last year over the
issue.

Dabengwa charged that Mnangagwa was manipulating the constitution to
ensure Mugabe is endorsed and confirmed as party candidate in the 2008 polls
without the usual nomination procedures. Zanu PF officials complained at
congress Mugabe was fraudulently endorsed. This was not denied.

The sources said Sibanda was unleashed onto the streets with his
solidarity marches for Mugabe to block the Dabengwa group. At every meeting
he addressed Sibanda made veiled attacks on Dabengwa and his group.

At the first meeting in Harare, Sibanda and his followers chased away
Dabengwa and Mujuru from Zanu PF HQ. After that the two boycotted all the
Sibanda-led marches.


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MDC factions to endorse Tsvangirai

Zim Independent

Augustine Mukaro/ Orirando Manwere

THE two opposition MDC formations’ national executives meet today to
endorse Morgan Tsvangirai as their candidate to face President Robert Mugabe
in the March elections.

This is the first time they have met since their acrimonious split in
2005 over the reintroduction of the senate.

The standing committees of the two formations will table a
reunification pact reached under the chairmanship of Professor Brian
Raftopoulos in South Africa this week before the national executives
consider three key options of coming together. The pact proposes that the
unity could either be an electoral pact, a coalition or a total
reunification in readiness for the March 29 elections.

Sources privy to the developments said both formations are pushing for
a coalition led by a National Coalition Council composed of national
executive committees from each formation. The pact also spells out the
criteria that will be followed in choosing the presidential candidate, House
of Assembly and Senate representatives under the coalition arrangement.

MDC secretary-general Welshman Ncube yesterday confirmed the meeting
saying it would determine the future course of the opposition.

"We will resume our negotiations tomorrow following the visit to South
Africa by the leadership of our counterparts (the Tsvangirai formation),"
Ncube said. "We are expecting them back tonight (Thursday) and we should
meet tomorrow morning to decide whether or not to participate in the
elections. Should we decide to participate, we will also agree on the
selection of the presidential candidate and candidates for the
parliamentary, senatorial and council polls, including how the coalition
will be structured."

Under the coalition, the MDC formations have agreed that if they
decide to contest the presidential election, the coalition will put forward
a single candidate, and that candidate will be chosen by the formation led
by Tsvangirai. The agreement implies that Tsvangirai would be the united
front presidential candidate to face Mugabe on March 29. If the candidate
wins the presidential election, he will appoint as vice-president a person
nominated by the Mutambara formation.

The sources said Mutambara would be declared a candidate for a safe
parliamentary constituency in Harare, most likely the newly-created Harare
West constituency.

The meeting will also endorse the selection of candidates set out in
the coalition pact. The agreement sets out that if the coalition decides to
contest the general election the question of which formation should put
forward a candidate to contest a seat will be decided as follows: where a
member of one of the formations holds a seat, that formation will put
forward a candidate to contest it. Where a seat was not held by a member of
either formation, the coalition will agree upon an equitable formula for
deciding which formation should field a candidate.

The agreement implies that sitting MPs will not be challenged, a
clause which has already riled aspiring candidates from both formations who
had started campaigning.

Ncube said the retention of sitting MPs was one of the proposals on
the table for negotiation.

The pact also proposes that if the coalition decides to contest the
senate elections, each formation will be allocated 50% of the available
seats, ensuring that 50% of the chosen candidates in the senate are women.

In the event of the coalition failing to win the presidential and
parliamentary elections, the national coalition council will meet to decide
the future.

Previous attempts to bring together the warring formations collapsed
over these key issues.

The standing committees, which met in South Africa for four days
between January 17 and 20, reconvened in Johannesburg at the weekend to
finalise the unity deal after President Mugabe announced the election date.


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Makoni distances himself from plot

Zim Independent

Constantine Chimakure

ZANU PF politburo member Simba Makoni last week reportedly blamed
former permanent secretary Ibbo Mandaza and the Zimbabwe Independent for
linking him to a faction campaigning to seize the party leadership from
President Robert Mugabe.

Sources said Makoni — in a tense meeting with Mugabe at Zimbabwe House
last Monday (January 21) — distanced himself from reports of him forming a
party to fight the 2008 elections against the octogenarian leader.

The former Finance minister met Mugabe to pledge his loyalty to the
president and Zanu PF.

"Makoni told Mugabe that Mandaza was going around speaking of the
formation of a new party," one of the sources said. "He denied ever
attending any meeting to either plot to oust Mugabe or to form a political
party to contest the March elections."

Makoni, the source added, claimed that apart from Mandaza, the
Independent published articles linking him to the faction opposed to Mugabe
out of pure hatred.

Mugabe reportedly did not buy Makoni’s explanation and questioned why
the former Finance minister failed to publicly dismiss the reports.

"Makoni said he was staying at his farm in Headlands where he had no
easy access to newspapers," another source said. "He claimed that the
Independent hate him and said he found no reason why he should have
responded to "false reports" from the newspaper. He also claimed that the
newspaper had at no time sought comment from him on the subject."

A bitter Mugabe, the sources said, told Makoni that he owed his
political career and stature he now enjoys locally and abroad to him and his
government.

The veteran leader reportedly reminded Makoni of the "mistakes" he
made when he was Energy minister in the early 1980s and when he was
executive secretary of Sadc’s predecessor Sadcc for close to 10 years.

Makoni left Sadc in 1993, three years after it was rocked by a $25 000
financial scam — a lot of money then — that saw three finance officers
fired.

The officers implicated Makoni, but he denied wrongdoing despite
accepting full responsibility for what happened.

Makoni yesterday declined to comment on the matter.

"I cannot talk to you over the phone regarding that issue. How do I
tell over the phone that you are a news reporter. Call my office and book
for an appointment," Makoni said.

Last week, the Independent reported that Makoni’s presidential
ambitions had faltered after he met Mugabe and then failed to implement his
three-phase plan to assume the Zanu PF leadership at last Wednesday’s
politburo meeting.

Makoni, sources said, was supposed to have convinced the politburo
that Mugabe was un-proceduarally endorsed and confirmed Zanu PF presidential
candidate at the party’s extra-ordinary congress in December.

He reportedly wanted the endorsement to be reversed and the matter
referred to the central committee for nominations.

If the two phases had failed, Makoni reportedly wanted to form a new
party based on the ideology and principles of Zanu PF.

The mentioning of the Independent by Makoni to Mugabe is not new in
Zanu PF politics. On September 5 last year, Zanu PF’s secretary for science
and technology Olivia Muchena raised concern in the politburo on the
reproduction of her report that she presented to the 206th ordinary session
of the decision-making body in the Independent.

She said such leakage of information was enough proof that the country’s
detractors had access to the ruling party’s deliberations.

Muchena said she was concerned that discussions on that day on the
then Constitutional Amendment No18 Bill would be equally leaked. She was
right. The Independent got the details of the meeting.

"In his intervention, the president and first secretary, Cde RG
Mugabe, stated that there were some people who had friends in the opposition
press," read minutes of the politburo meeting. "He (Mugabe) castigated the
tendency to leak information and vent out fights through the opposition
media. Furthermore, he questioned the morality and integrity of such
actions."


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High Court says Kunonga Diocese 'non-existent'

Zim Independent

Lucia Makamure

HIGH Court judge Justice Charles Hungwe yesterday said the Anglican
Diocese of Harare which fired bishop Nolbert Kunonga purports to head cannot
exist at law outside the constitution of the Church of the Province of
Central Africa (CPCA).

Hungwe said this when he dismissed an urgent application by the
diocese represented by Kunonga for a spoliation order against the CPCA and
acting Harare bishop Sebastian Bakare.

Kunonga’s diocese approached the court to bar the CPCA and Bakare from
using Anglican property in the capital.

"Applicant (Kunonga’s Harare Diocese) cannot exist outside the
constitution of first respondent (CPCA). It has no separate constitution of
its own. It, therefore, has no structures of its own other than those set
out in the constitution," Hungwe ruled. "The assets under contention are
assets which respondent lays claim to. The question of ownership of these
assets is not presently before me."

Hungwe said it was clear to him that Kunonga’s diocese was nowhere
"near demonstrating that it has placed itself within the purview of those
who confess to be Anglicans and who abide by the constitution" of their
church.

"There is no claim that there was resolution of the synod of the
diocese adopting this alleged breakaway (by Kunonga)," the judge ruled. He
said Kunonga by breaking away from the CPCA violated the constitution of the
church.

"What the papers do show is that Bishop Kunonga and the diocesan
secretary and a handful of other worshippers have decided to leave the first
respondent. They have, however, not followed the church’s constitution, as
such they cannot seek to rely on a constitution that they have so much
violated. They claimed they have been despoiled by the acts of the second
respondent (Bakare) whose only offence was to minister members of the first
respondent," Hungwe’s judgement read.

Hungwe said Bakare did not despoil Kunonga and the Diocese of Harare
of anything when he accepted invitations to conduct services in the diocese.

"I am unable to hold that where a bishop of one diocese is invited to
minister in a different diocese and accepts such invitation by the faithful,
such services as he may conduct amount to unlawful dispossession of whatever
rights are held by the ordained bishop for the locality," the judge ruled.

"In my respectful opinion no unlawful dispossession occurred in this
matter…for to argue that entry into a church premise by a bishop of a
separate diocese constitutes dispossession would be to stretch the mandament
too far."

Hungwe said the parties to the dispute, being men of the cloth, ought
to resolve their disagreements in a "God-fearing manner".


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Zanu PF old guard seek 'safe havens'

Zim Independent

Augustine Mukaro

SERIOUS infighting has erupted in virtually all Zanu PF provinces as
aspiring candidates scramble for constituencies in the inaugural joint
elections next month.

Senior Zanu PF politicians are accused of using dirty tactics to block
aspiring candidates challenging them in primary elections to stand as
candidates. The jockeying for seats has sucked in senior politicians whose
political survival has depended on President Robert Mugabe’s patronage.
Mugabe has often rescued his favoured supporters through appointments in the
event of losing elections. That will no longer be possible in the Lower
House where all seats are now elective.

Prominent figures looking for "homes" include ministers Emmerson
Mnangagwa, understood to have secured the newly created Chirumanzi-Zibagwe
constituency, Paul Mangwana tipped for another new constituency in
Zvishavane, Sikhanyiso Ndlovu, and Sithembiso Nyoni, among others. Mnangagwa
was defeated twice in Kwekwe Central by MDC’s Blessing Chebundo.

The ruling party is scheduled to conclude its primary elections to
choose senate and parliamentary candidates on Monday.

Reports from a number of provinces show that senior politicians are
using the technicality of five years in provincial leadership requirement to
sideline potential threats from contesting in primaries. There are also
spirited efforts from the top leadership to block applications for waivers
by emerging young turks who want to represent the ruling party. The
development has prompted a number of local structures to write to the party’s
national election directorate denouncing the imposition of candidates.

Sources in Zanu PF said already the election directorate is inundated
with complaints and appeals from aspiring candidates citing irregularities
in the way they were barred from contesting the primaries.

A classical example is in Manicaland where cabinet ministers Didymus
Mutasa, Joseph Made and Patrick Chinamasa have ganged-up against former
Finance Minister Simba Makoni, calling him a sell-out bent on destroying
Zanu PF after he submitted his CV to challenge Chinamasa in Makoni Central.

The Zanu PF Makoni District Co-ordinating Committee in which the three
ministers are all members met on January 3 and parcelled out parliamentary
seats among themselves: Headlands for Mutasa, Makoni West for Made, Makoni
East for former Central Intelligence Organisation boss Shadreck Chipanga,
and Makoni Central for Chinamasa.

Mutasa and Chipanga’s declarations went in unopposed but Chinamasa and
Made were challenged. Makoni’s CV is said to have been submitted in the
middle of a meeting of the ruling party’s Manicaland Provincial Coordinating
Committee that was processing the nomination papers while Made will have to
battle it out with Nation Matongorere.

Makoni has been linked with an apparent break-away plot by disgruntled
Zanu PF members opposed to President Robert Mugabe’s quest for a sixth term.

Chinamasa is one of the ministers in cabinet on Mugabe’s patronage and
desperately needs a constituency to win if he entertains any hopes of being
in the next government.

Other ministers from the same province that have to go into primaries
include Oppa Muchinguri who is being challenged by Unice Mangwende, Munacho
Mutezo faces Charles Muresherwa, Samuel Undenge is being challenged by
Edmore Siwela while deputy minister Morison Sakabuya has to contain three
other candidates: Alice Chitima, T Mlambo and R Mlambo in Chipinge Central.

War veteran vice chairman Joseph Chinotimba was one of the few
candidates whose bid went in unopposed in Buhera South but there are serious
contests in most of the constituencies.

Another interesting development was in Mashonaland Central where the
provincial leadership declared that no politburo members could be challenged
in their constituencies. The declaration, although not provided as part of
the criteria for choosing candidates, has already given ministers Elliot
Manyika, Chen Chimutengwende, Saviour
Kasukuwere and Nicholas Goche automatic tickets as Zanu PF candidates.


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Economy shrinks 6%

Zim Independent

Kuda Chikwanda

THE economy shrank by 6% in 2007, invalidating predictions made by the
government in 2006 that it would grow by between 0,5% and 1%.

In addition, official inflation jumped to 26 470% for November 2007,
according to Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono who
yesterday attacked government for embargoing inflation figures. Gono however
did not disclose the inflation figures for December.

In his Monetary Policy Statement yesterday, Gono revealed that
declining production across all sectors had resulted in the economy
shrinking.

"The economy is estimated to have declined by about 6% in 2007," he
said. "This contraction in economic activity has been mirrored in output
decline in all sectors of the economy with the exception of a marginal
increase in agricultural output," Gono said.

He attributed the declining production to critical shortages of
foreign currency and government’s disastrous price blitz implemented last
July.

Gono’s revelations directly contradict government forecasts for
economic growth in 2007 as he said all other sectors, apart from
agriculture, shrank in 2007.

Former Finance minister Herbert Murerwa projected overall economic
growth for 2007 at levels ranging between 0,5% and 1%.

Agriculture grew by only 1,4% against estimates made in 2006 that it
would grow by 6,4%. Mining, which Murerwa forecast to record growth of 4,9%
in 2007, remained depressed on the back of crippling power shortages that
saw gold production falling by 37% from 6,98 tonnes to 4,0 tonnes.

The huge variance between estimates made by the government for the
2007 fiscal year and Gono’s statistics have now put to question the
forecasts made by incumbent Finance minister Samuel Mumbengegwi in his 2008
budget statement delivered two months ago.

Mumbengegwi forecasted a real economic growth of 4% and said his
estimates were based on "anticipated growth in the agricultural sector,
improved industrial performance and economic programmes by the grassroots,
including SMEs".

Gono painted a gloomy picture for the manufacturing and mining sectors
saying they continued to face a number of problems that included foreign
currency constraints and electricity supply interruptions.

He indirectly attacked the Ministry of Finance, which prohibited the
Central Statistical Office (CSO) from publicly releasing inflation figures
since last September. By then inflation was at 7 892,1%.

"As monetary authorities, we call upon those whose role it is to
collect, compute and publish economic statistics to do so timeously so as to
preserve credibility of national accounts, as well as enabling proper
business planning," Gono said.

He said the failure to release inflation figures had resulted in
distorted guesses by the market.

"Yes, our inflation is the highest in the world, but this should not
tempt us to sweep our blemishes under the carpet."


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Banks caught in breach of financial regulations

Zim Independent

Dumisani Muleya

MORE details emerged this week on the liquidity crisis rocking the
banking sector and how banks have tied up depositors’ funds in securities
and money market instruments.

Information to hand shows nearly all banks, including building
societies,

are in a liquidity emergency for various reasons, including the
prevailing macro-economic conditions, difficulties in payment of statutory
reserves and pouring depositors’ funds into speculative securities and money
market investments.

While banks have made muffled protests in a bid to deny reports that
they have routed depositors’ funds into securities and money markets,
detailed information shows that most banks diverted funds into those
instruments.

Securities are basically fungible or negotiable instruments
representing financial value. They are usually categorised into debt
securities such as banknotes, bonds, debentures, and equities.

Securities may be represented by a certificate or an electronic book
entry.

Money market instruments are short term debt instruments that may have
characteristics of deposit accounts like certificates of deposit and certain
bills of exchange. They are highly liquid and are sometimes referred to as
"near cash". Commercial paper is also often highly liquid.

Documents show that 29 financial institutions — currently stricken by
the liquidity crisis — have put funds in securities and other investments.

In the process, the institutions committed an average of 26,33% of
their balance sheets into those activities, leaving them heavily exposed to
the liquidity constraints now prevailing in the sector.

According to the Banking Act it is illegal for banks to own shares
unless they are held as a security for a loan or are owned through swapping
debt for equity.

The beleaguered commercial banks and other financial houses were this
week scrambling to get unsecured loans from the Reserve Bank to cover their
precarious positions.

This confirmed banks were facing acute liquidity problems. Almost all
banks are teetering on the brink of collapse as a result.

Most banks have been unable to collect their cash requirements from
the central bank to deal with cash shortages due to lack of security. Banks
have also been unable to pay statutory reserves.

While monetary authorities say the banks have put themselves in
trouble, banks say they invested in securities and other investments because
of the prevailing hyperinflation to protect the value of deposits.

The banks argue keeping deposits in accounts under these circumstances
in which year-on-year inflation, according to the International Monetary
Fund, is 150 000%, could only result in wiping out of value.

"What the banks did was rational even though it was unlawful. Under
these economic circumstances any reasonable banker would have done the
same," a top banker said yesterday.

"It’s true some of the activities of the banks are illegal, but the
Reserve Bank itself is also involved in unlawful activities such as buying
foreign currency in the black market and outrageous quasi-fiscal activities.
The banking sector, from the smallest bank to the Reserve Bank, are part of
the problem."

However, monetary authorities say they have letters from banks showing
banking executives were now admitting they diverted depositors’ funds into
securities and other investments in a bid to protect value and hedge against
inflation.

"We have a bunch of letters from banks showing that they now admit to
have illegally put depositors’ funds into securities and money market
instruments in a bid to secure value and their positions. This led them to
fail to pay depositors on demand," a central bank official said.

"Some letters are very clear banks stashed money in securities and
shares. Also apparent in the letters is that most banks don’t have security
against which to borrow from the central bank. That’s why they are now
pleading for unsecured borrowing. It is fact banks have been engaging in
unethical and imprudent activities which partly led to the liquidity
crisis."

Reserve Bank officials read the riot act to bankers in a tense meeting
last Thursday over the current situation. Banks were told that it was
unacceptable and unsustainable for them to rely on central bank bailouts.

In the end it was resolved only banks that have paid interest on
previous borrowings would be considered for overnight accommodation at a
rate of 1 500%. This left most banks still stuck in a financial quagmire.


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7 banks under RBZ probe

Zim Independent

Shakeman Mugari

THE Reserve Bank of Zimbabwe (RBZ) has put seven banks under intensive
investigation to establish the root cause of their liquidity crisis. Three
financial auditing firms have been appointed to investigate the banks in a
situation which sources say is akin to the curatorships of 2004.

The central bank has hired Camelsa Chartered Accountants to probe
Kingdom Bank, Zimbabwe Allied Banking Group (ZABG), Renaissance Merchant
Bank and Genesis Merchant Bank.

Auditing firm KPMG has been appointed to investigate Metropolitan Bank
and the People’s Own Savings Bank (POSB). Barclays Bank’s books are being
scrutinised by BCA, a local forensic auditing firm.

BCA recently concluded an investigation into the affairs of NMB Bank
which lost US$6,2 million in a fraud case involving officials in the
treasury department.

Although the liquidity crisis is a sector-wide problem, the seven
banks are the worst hit. Their balance sheets are seriously misaligned
making it difficult for them to meet their cash obligations to depositors.
Zimbabwe’s financial sector has been experiencing liquidity problems for the
past three months. This is the third such crisis in five years.

In 2004 three banks —Trust, Royal and Barbican — went under because of
liquidity problems. A dozen other asset management companies and financial
houses also collapsed.

Central bank sources said the external auditors’ roles will be to
investigate the liquidity crisis at the banks and find solutions to the
problems.

The appointment of the external auditors is part of the central bank’s
effort to rein in on errant banks which it accuses of investing depositors’
funds into shares and foreign currency resulting in the cash crisis.

The central bank has since directed financial institutions to
restructure their balance sheet to ensure that they are able to meet their
cash requirements. This comes as it emerged last week that almost all banks
have trillions of dollars stuck in investments and securities. An average of
26% of banks’ assets are in investments which include shares, properties and
foreign currency.

The RBZ has increased unsecured accommodation rates to discourage
banks from borrowing from the central bank to cover their short positions.

Any amount borrowed on secured overnight loan facility in excess of
$1t will carry an interest rate of 1200% instead of the normal rate of 975%.

The RBZ will also be strict on banks that want to roll-over loans
provided under the accommodation window. The source said the RBZ has also
directed all bank chief executives to issue signed copies of weekly
compliance certifications. The certificates will be submitted to Gono every
week. In each certificate a chief executive must certify that their bank has
not violated exchange control regulations in the preceding week.

They must also officially state that their bank has not violated
anti-money laundering laws.

The banks will also be required to carry out weekly audits on their
corporate and individual customers to monitor any suspicious transactions
between accounts.

An audit of the bank’s employees must also be done to certify that
each one of them is fit to continue handling depositors’ funds. A chief
executive must also endorse that their bank has fully complied with
statutory reserve payments and that the financial institution is not using
depositors’ funds for speculative purposes.

A chief executive who issues a certificate containing false
information will be deemed unfit to run the bank, the source said. They will
be asked to step down so that the bank’s operating licence can be speared.
The certificate is meant to insure that bank bosses have full responsibility
over their financial institutions.

Other conditions include that any request for overnight accommodation
should be accompanied by a comprehensive letter from the chief executive of
the bank detailing how the institute fell into a short position in the first
place.

The report should be submitted to the central bank governor who now
has the sole authority to decide on whether a bank gets overnight
accommodation or not.

The monitoring system will centre on banks’ assets and liabilities and
cash deployment strategies. Financial institutions whose balance sheets are
skewed towards non-core activities like properties, shares and foreign
currency will not be allowed to borrow from the central bank to cover their
positions.

The central bank also plans to evaluate the Automated Teller Machines
(ATMs) of all banks to establish whether they have been reconfigured to
dispense high denominations which were introduced two weeks ago.

Most banks have not reconfigured their ATMs.

The RBZ also wants banks to install generators in their banking halls
as a contingent plan against the persistent power cuts. External auditors
will also be required to check if banks have proper disaster recovery plans
and business continuity arrangements. Sources in the banking sector said
Gono told bankers this week that all excess liquidity on settlements shall
be locked-up in zero coupon bills of up to seven day instead of the previous
270 days. The central bank will also introduce 91-day treasury bills whose
interest rate of return will reflect market liquidity conditions.


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One-day voting a headache for ZEC

Zim Independent

Orirando Manwere

STAKEHOLDERS have expressed concern over the Zimbabwe Electoral
Commission’s (ZEC) capacity to run the March 29 harmonised polls in one day
due to logistical problems, poor infrastructure and inadequate voter
education on the new ward boundaries.

Hopes of a possible postponement of the polls were last week shattered
after the proclamation of February 8 and March 29 as the nomination and
polling dates of the harmonised polls by President Robert Mugabe.

The inspection of the voters’ roll begins today and ends on February
7.

The Registrar-General’s Office (RG) is responsible for compiling and
printing the voters’ roll under the supervision of the ZEC.

The Zimbabwe Election Support Network (Zesn), opposition politicians,
individuals and government officials said the lack of resources and voter
education would affect the smooth running of the elections.

However, ZEC director of public relations Shupikai Mashereni said the
commission had made the necessary logistical arrangements for the elections.

He conceded though that ZEC had not done enough on voter education and
would, with effect from today, step up awareness campaigns through the media
and that voter educators would be deployed countrywide.

Mashereni, who was not in a position to explain what the commission
had covered so far, said the ZEC had procured enough material for the
elections, such as ballot boxes, indelible ink, polling booths, fuel,
vehicles, tents and gas lamps, among others.

He added that the ZEC had recruited staff from various government
departments to be complemented by teachers as polling officers.

Mashereni could not be drawn to reveal the number of polling officers
and stations needed for the elections, saying that would be determined after
consultation with contesting candidates.

However, stakeholders argued that the majority of the electorate would
be prejudiced due to several logistical factors.

Zesn national director Rindai Chipfunde-Vava said the one week set
aside for the inspection of the voters’ roll was not enough following the
introduction of new wards and constituencies.

"This is the shortest voters’ roll inspection period I have come to
know. Over the years when elections were not harmonised, inspection would
take between three and four weeks," she said.

"Given the magnitude of this year’s polls where there are four
candidates and an increased number of constituencies and wards with new
boundaries which people are not yet aware of, one would have expected a
longer period."

She pointed out the working class in urban areas would not have time
to inspect the rolls between 7am and 6pm, while possible extension of the
closing time at the inspection centres to cater for such people would
probably be affected by frequent power cuts.

The Zesn director said there was need for vigorous door to door
awareness campaigns by the voter educators in rural areas where people had
no access to the media.

She said the decline in newspaper circulations and the ever rising
cost of newspapers also affected information dissemination even in urban
areas, hence the need for more voter educators in both urban and rural
areas.

Her concerns on voter education come amid revelations that only two
voter educators would be deployed per ward owing to financial limitations.

Sources within the ZEC said there were instructions to operate within
the budget allocated for the elections.

A local government official said areas hit by floods like Muzarabani
and the Lowveld where roads were badly damaged by heavy rains would be
difficult to access.

Commenting on this concern, Mashereni said ZEC had since liaised with
the Airforce of Zimbabwe to provide helicopters should the need arise.

"We have air transport in place for such places. We will also ensure
early deployment of staff and delivery of material to these areas. We are
aware of these places and our officials have put contingent plans in place,"
he said.

Opposition MDC (Morgan Tsvangirai formation) spokesperson Nelson
Chamisa said his party was concerned about the way ZEC was preparing for the
polls, adding that they had not received a copy of the delimitation report.

"The whole thing is being done secretly by Zanu PF. The report was
tabled in parliament on a ‘take note’ basis when in actual fact parliament
was supposed to have debated it," Chamisa claimed.

"That is why we have always expressed concern over the way in which
the Zanu PF regime is doing things. It looks like the report is just for
them alone and it is tantamount to expecting us to write an exam without a
syllabus."

He said that was one reason why his party has been advocating a
reconstitution of the ZEC to ensure integrity, transparency and credibility.

The two MDC formations are scheduled to meet tomorrow to decide on
whether or not to participate in the polls.

Most people interviewed felt that the voters’ roll inspection period
was not adequate and should be extended to two weeks.

"I registered at Market Square during the mobile registration exercise
but I am not yet aware of my new ward and which polling station I will cast
my vote at. I hope to check on that over the weekend as I will be at work
during the week," an Avondale resident said.

"I think this exercise has started rather too late and I foresee a lot
of people being turned away at the polling stations. There is need for more
publicity on the ward boundaries so that those who fail to inspect, at least
know where they should go."

Mashereni however appealed to people who registered and those who did
not to inspect the rolls during the inspection period.

"I need to reiterate the importance of this inspection exercise
because these elections will be ward-based and people need to know their new
wards where they will cast their votes," Mashereni said. "There shall also
be the final voter registration for these elections and those who did not
register should take advantage of this period."

Contacted for comment on the provision of security for the polls,
police spokesman Chief Superintendent Oliver Mandipaka said the force would
mobilise adequate personnel despite a report to the parliamentary portfolio
committee on Defence and Home Affairs late last year by deputy commissioner
Levy Sibanda that recruitment to boost staff was affected by lack of funds.

"I am not worried by the figures you are talking about. All I can tell
you is that we will endeavour to provide enough officers to cover the
polls," he said.

Earlier reports indicated that the Zimbabwe Republic Police needed to
boost its manpower from about 25 000 to 50 000 to cover the elections but
recruitment during the last quarter of last year had been affected by lack
of funds.

At least four police officers are expected at each polling station.


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No respite for banks

Zim Independent

Shakeman Mugari

THERE is no respite for Zimbabwe’s struggling banks despite a 10%
reduction of the statutory reserves rate yesterday.

In his first quarter monetary policy review Reserve Bank governor
Gideon Gono reduced statutory reserves for all financial institutions to
ease their liquidity problems.

Gono slashed the statutory reserve requirements by an average 10%. The
problem, however, is that the central bank also increased the secured
lending rate for banks from 975% to 1200% making it more expensive for
financial institutions to borrow from the RBZ under the overnight
accommodation facility.

Unsecured accommodation rates were increased for the second time in
two weeks to 1 650% up from 1 500% further hitting the banks that might want
to borrow from the central bank without security.

Gono reduced the statutory reserves for commercial banks on call and
demand deposits from 50% to 40%.

This means that for every dollar that a client deposits with a
commercial bank the central bank will take 40 cents for security in the
event that the financial institution fails to meet its obligation to the
depositor.

Statutory reserve requirements, on time deposits and buybacks were
reduced from 45% to 35%. Merchant banks will now pay 40%, down from 50% on
call and demand depositors.

Statutory reserve requirements for discount houses have been reduced
from 45% to 35%.

Banks have been accused of investing trillions of dollars of
depositors’ funds into properties, foreign currency and shares resulting in
the liquidity crisis. An average 26% of all banks’ balance sheets are said
to have been
put into investments and securities.

This has resulted in almost all banks failing to honour their cash
obligations to the depositors. The result has been long queues because of
the cash crisis. A number of banks are facing a serious liquidity crisis.

Seven banks have since been put under special monitoring systems by
the central bank to establish the root cause of their liquidity problems.

The banks are Kingdom, Metropolitan, Barclays, ZABG, Renaissance,
Genesis and POSB.

For their part banks have accused the central bank of demanding a huge
portion of the depositors’ funds to hold as statutory reserves.

This, the banks say, has forced them to find other illegal methods to
recover the value of the depositors’ funds in order to meet their
obligations.

According to the Banking Act it is illegal for a bank to invest in
shares unless if it is holding the investment as security for a loan or the
shares have been acquired during underwriting.

Analysts say the reduced statutory reserves might offer some relief
for banks but they still have to contend with the increased lending rates
being charged by the central bank for overnight accommodation.

"It’s a step in the right direction but we will still struggle because
the RBZ’s rates are still very high," said a chief executive with a
commercial bank.

"As monetary authorities, we once again wish to reiterate to the
banking sector that the Reserve Bank has no appetite for injecting
inflationary liquidity into the system through the accommodation window,"
Gono said.

"In order to promote discipline in the banking sector’s
assets-liabilities management regimes, all interest for previous
accommodations have to be paid in full prior to any new borrowings or
roll-overs of past loans."

The central bank also reduced the rate at which it mops up excess
liquidity in banks at zero rate.

"In order to consolidate the assets-liabilities management positions
in the banking sector, with immediate effect, the tenor on the excess
liquidity management, zero coupon bonds has been reduced from 270 days to
seven days."


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Unpacking the banking crisis - second time around

Zim Independent

Nhlanhla Nyathi

THE financial services sector has plunged into another liquidity
crunch reminiscent of the 2004 banking crisis that saw the fall of iconic
indigenous banks and the subsequent restructuring of the sector by the
Reserve Bank of Zimbabwe (RBZ).

This time around, what initially started as a cash crisis feeding off
an unprepared monetary authority in rapidly absorbing inflationary pressures
through the introduction of higher denominated bearer cheques or further
slashing of zeros has taken an unexpected twist.

It appears to be the making of unethical banking practices within the
financial services sector. After mounting pressure from a restless banking
public since the onset of the cash crisis late last year, the RBZ governor
last week made revelations that monetary authorities had over $100 trillion
in cash uncollected in their vaults because banking institutions did not
have the security to access the money to meet their customer withdrawal
requirements.

At that point the blame for the cash crisis shifted entirely from the
RBZ to banking institutions and the manner in which they invested liquid
depositor funds. It appears many of them were guilty of violating provisions
of the Banking Act and invested liquid depositor funds into relatively
illiquid speculative investments that put them at risk in the event of a run
on deposits facilitated by a massive increase in daily withdrawal limits for
individual and corporate account holders.

The manner in which most of these financial institutions structured
their balance sheets now puts their very existence at risk because of the
prohibitive interest payments that they will have to make to the RBZ for
accommodating them during this liquidity crunch. The ordinary man on the
street might be probably cursing banking institutions for engaging in
illicit operations that have caused them so much discomfort, but the
question that remains unanswered is: what gave banks the courage to venture
into the same unethical speculative tendencies that claimed the scalps of
Trust Bank and many others in 2004 and are they solely to blame?

Should the RBZ bail them out to preserve the institution of banking
that has been shaken far too many times? To find answers to these complex
questions, we need to understand the effects of the economic recession on
the banking sector and the impact of the regulatory environment on
profitability before passing judgement.

The economic recession presented an operational challenge dimension
for all sectors of the economy. The banking sector has been no exception and
consequently fell victim to the economy wide culture of corporate
cannibalisation wherein business entities engaged in more lucrative non-core
business activities to remain viable.

In normal circumstances, the banking sector thrives when other sectors
of the economy are doing well. However, during the economic recession core
business activities have fallen by the way-side because of stifling
government controls and reduced business activity in the commercial sector.

For instance departments in banking institutions such as corporate
finance, corporate banking, and international banking have been drastically
affected because of a depressed commercial trading environment.

Adding to this, the RBZ instituted punitive statutory reserve
requirements on all deposits made to banks of up to 50%, implying that what
every investment finally made by the banks has to cover for the 50% that is
earning 0%.

In addition, the RBZ had of late been issuing 270 days non-negotiable
certificates of deposits at 0% to banks that had surplus positions in their
books at trading day end.

Unfortunately with the thrust in government being that of low interest
rates to facilitate growth of the productive sector, it was impossible for
banks to secure high yielding instruments within the confines of traditional
banking to cover for the non-performing portion of bank deposits held by the
RBZ at zero cost.

Perhaps such punishing requirements contributed to the errant
practices of banks to trade part of depositor funds in more lucrative
equity, property, and currency markets to compensate for the non-performing
portion of deposits held by the central bank.

Obviously banks being private institutions, the profit motive cannot
be ruled out. Whatever the case, the urge to trade in other markets,
unethical as it might have been was part of the survival strategy given the
difficult circumstances that the economic recession has presented for
everyone. Obviously the massive portfolios controlled by banks through
non-core operations did not materialise overnight.

The RBZ bank supervision and surveillance department ought to have
known about this errant behaviour. The suspicion is that they conveniently
turned a blind eye to it.

Given that they had allowed this culture to develop in the sector, the
RBZ should have given financial institutions time to regularise their
illiquid positions before drastically hiking withdrawal limits that
obviously created a situation akin to a run on deposits, in the process
destabilising the stock market.

Prior to the massive increase in withdrawal limits, banks could count
on a significant portion of their deposits not being withdrawn over a short
period of time hence having some semblance of control over their positions
which in a way gave them latitude to explore the equity, property, and
currency markets as alleged.

The current situation has shaken the people’s confidence in the
banking sector and has created a dangerous situation whereby investors feel
the stock market can be literally swayed in any direction by the RBZ.
Integrity of the markets needs to be protected at all costs because it’s a
game of confidence at the end of the day.

When the current RBZ governor, Gideon Gono, took office he initially
adjusted and linked commercial banking capital requirements to a foreign
currency amount of US$10 million. Looking at it now, the banking sector
would have not been able to maintain such capital requirements from strict
banking practices that required them to invest in low yielding TBs and other
government stocks obviously out of sync with inflation and the parallel
market.

If banking institutions towed the line
as had been expected, we would have had the frequent situation were
banks went back to their shareholders time and time again for rights issues
to remain in sync with US$10 million. In a way this also pushed banks to
pursue other unofficial markets in violation of the Banking Act.

At the end of the day, people need to make their own informed
decision. However, going forward, it is important for people to understand
that most of the banks experiencing the current liquidity crunch do not have
structural balance sheet faults that cannot be fixed. What might actually
bury many of them is the continued payment of punitive accommodation rates
to the RBZ if this unfortunate period is extended unnecessarily. The RBZ
needs to act fast and bail out many of these banks through a more amicable
process that does not perpetuate their fall. In essence, the RBZ cannot
allow these institutions to fold without denting its own bank supervision
and surveillance image in the public eye because they allowed the contagion
to take hold in the sector unabated.

* Nyathi is a director of a private equity firm. He can be contacted
on 0912 250 092 or kexhe@yahoo.com


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RBZ rejects 990 bank transactions

Zim Independent

Constantine Chimakure

OVER 990 transactions by commercial banks and building societies
valued at $34 trillion were dishonoured by the Reserve Bank last week as the
liquidity crunch at financial institutions deepened after they illegally
routed depositors’ funds into the stock exchange and money market.

Confidential documents in the possession of the Zimbabwe Independent
revealed that as at January 23 the central bank refused to honour 999
transactions valued at $33,9 trillion from 18 commercial banks and building
societies due to lack of funding by the financial institutions.

The transactions were done through the wire transfer scheme, Real Time
Gross Settlement (RTGS).

The liquidity crisis prompted banks to write to the RBZ seeking
expensive unsecured accommodation to meet depositors’ demands.

An average of 22% of depositors’ money was invested in shares, money
market investments and other securities by almost every bank and building
society in the country.

Most of the dishonoured payments were from Standard Chartered Bank
which had 374 transactions valued at $14,6 trillion, followed by ZB Bank
with $5,8 trillion for 149 arrangements, and Beverley with $4 trillion for
80 dealings.

Kingdom had five dishonoured transactions valued at about $1,7
trillion, followed by ZABG with $1,5 trillion for 42 dealings and
Intermarket Building Society with $1,5 trillion for 18 arrangements.

FBC had its 11 transactions valued at $,1,2 trillion referred to
drawer, Barclays Bank had three dealings worth $947 billion dishonoured
while CBZ had six transactions valued at $698 billion rejected.

The RBZ also refused to honour Tetrad’s 92 transactions valued at $614
billion, Premier Bank’s 184 dealings worth $566 billion and ABC’s five
transactions valued at $405 billion.

The central bank further declined to honour Genesis’ six transactions
valued at $167 billion, Renaissance Bank’s four dealings valued at $123
billion, Metro’s five arrangements worth $105 billion, CFX’s seven
transactions worth $68 billion, NDH’s six dealings valued at $50 billion and
Interfin’s two transactions worth $31 billion.

"With such huge dishonoured payments, there is likely to be a public
outcry emanating from clients whose payment instructions are not being
executed by banks," reads one of the confidential documents on the state of
the financial sector in the country.

The document revealed that the RBZ would not allow this to continue as
it may dampen the confidence in the RTGS system, pushing more people back to
the use of cash.

"The series of the letters that are being sent to the Reserve Bank
clearly shows how banks, large and small, are admitting to misallocation of
depositors’ funds, leading to inability to payout withdrawal requests," the
document read. "It is clearly explanatory in some of the letters in the
governor (Gideon Gono)’s possession that some banks are admitting to having
stashed money in shares."

Also apparent in the document was confession by the banks that they do
not even have security against which to borrow from the central bank, hence
their pleas for unsecured borrowing.

"The critical value of this exposition is that it underscores monetary
authorities’ point that some banks have been and are engaging in unethical
and imprudent behaviour, in the process imposing intolerable frustrations to
depositors who would have worked so hard for their money," the document
added.

In response, the RBZ with effect from January 25 tightened its
accommodation policy in a bid to force banks to shun "selfish and
self-serving tactics that needlessly tie up depositors’ funds in dark
corridors" not easily reachable when people want their money.

The central bank came up with a stratified accommodation policy that
dictates that all secured borrowings by banks of up to $1 trillion shall be
at the prevailing unchanged overnight rate of 975%.

Any excess secured borrowing over and above $1 trillion would be at
the escalated deterrent accommodation rate of 1 200% overnight, up from
975%.

All unsecured borrowing would attract a penal rate of 1 500%
overnight, a rate which came into effect on January 23, up from 975%.

"On all loans provided under the Reserve Bank’s accommodation window,
interest on all prior accommodation must be paid in full before any
consideration for a new loan or roll-over is done," the document read.

Last week, the Independent revealed that some banks, among them
Kingdom and ZABG, were facing serious liquidity problems and owed the
central bank trillions of dollars in non-payment of statutory reserves and
interest.

ZABG became one of the first banks to write to Gono last week
requesting $2,5 trillion for unsecured accommodation.

The bank revealed to the RBZ that it had underwritten two initial
public officers by under performing property firms — Pearl Properties and
Zimre Properties.

ZABG has over 8,5 million shares in Pearl Properties and 5,2 million
shares in Zimre Properties.

The bank said it would repay the RBZ through the sale of its shares in
the two real estate companies.


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RBZ prepares post-elections monetary policy

Zim Independent

Paul Nyakazeya

THE Reserve Bank of Zimbabwe (RBZ) said it announced a low key
monetary policy yesterday because it is working on a comprehensive Post
Elections Monetary Policy Blue Print.

The blue print will cover 24-month recovery plan which will run from
May 2008 to April 2010.

In his 2008 first quarter monetary policy statement yesterday, the
Reserve Bank governor Gideon Gono said the post election monetary policy
will dovetail into other government fiscal and economic blue prints under
preparation by the relevant economic and sector ministries.

"As monetary authorities, we have chosen a silent issuance of this
Monetary Policy Statement for strategic reasons whilst we prepare for the
post-elections policy programme," Gono said.

Gono said the bank’s economic imperatives programme will focus on the
removal of economic pricing distortions in areas such as fuel, agricultural
inputs and outputs, multiple interest and exchange rates, electricity, water
and other municipal, and parastatals service delivery charges.

Gono said the policy will "remove untargeted general subsidies in
favour of targeted and specific subsidies. Promote inward investment from
across the globe, with bias towards the East, in line with government’s Look
East Policy but without excluding desirable investment which meets the
country’s criteria from other investors".

The post election monetary policy will also seek to re-modify
investment laws; protection of investment; respect for private property and
implementing a sustainable indigenisation framework.

Finding common ground for the immediate and long-overdue lifting of
sanctions against the country and securing balance of payments support from
willing and cooperating partners are some of the issues Gono said will be
highlighted in the blue print.

"Uplifting productivity through incentives in mining, agriculture,
tourism, manufacturing and other primary and tertiary sectors of the economy
will be contained in the document," Gono said.


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Gono says NIPC must stop interference

Zim Independent

Jesilyn Dendere

THE Reserve Bank of Zimbabwe (RBZ) has said the National Incomes and
Pricing Commission (NIPC) should not interfere with any other products other
than the three controlled products — bread, cooking oil and mealie-meal.

In his 2008 first quarter monetary policy statement Reserve Bank
governor, Gideon Gono should also concentrate on monitoring the 16 products
which were approved by government. Gono said the NIPC should exercise
extreme caution to avoid the repetition of yet another price blitz by
interfering with basic commodities which are not on the list of the three
controlled goods and the 16 monitored products.

"Our recommendation and advice is that the NIPC confines its
operations around the three controlled products and the 16 nationally agreed
products on the monitoring list, and not concern itself with tourism
products, air travel, entertainment, beer and other product prices," said
Gono.

NIPC chairman Godwills Masimirembwa had told the businesdigest on
Wednesday that his commission had the power to control every product and
prices of imported goods.

Gono said the NIPC should also concentrate on being "beneficial as
opposed to being a threat and a risk to businesses".

"The full machinery and expertise of the NIPC will be concentrated for
maximum beneficial impact, as opposed to the potential risk of this key
institution being spread too thinly across too many products, regions and
markets, in the end degenerating into a vehicle of disruptive distortions,"
he said.

"Specifically, through the work of the NIPC, extreme caution should be
exercised to ensure that this does not degenerate into yet another
unintended catastrophic blitz exercise and fight between government and
business that impairs business operations and breed a spirit of mistrust
among stakeholders."


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Growers' association sees 20% fall in tobacco output

Zim Independent

Paul Nyakazeya

TOBACCO production for 2008 will decline by 20% due to heavy rains,
shortage of fertiliser and diesel, the Zimbabwe Tobacco Growers Association
(ZTGA) said this week.

ZTGA had earlier projected a total tobacco yield of 120 million
kilogrammes for the current season.

In an interview with businessdigest this week ZTGA president, Julius
Ngorima, said the initial target of 120 million kg of tobacco in 2008 would
not be achieved due to a combination of factors which includes late
planting, shortage of diesel and fertiliser and heavy rains.

"There is no way the initial projection of 120 million kg can be
achieved. We are now expecting an output below 100 million kg," Ngorima
said.

A total of 73 million kg of tobacco valued at US$170 million was
achieved last year.

"A significant hectarage by farmers who planted in November was badly
affected. Despite the farmers applying fertiliser the crop has failed to
recover," he said.

Ngorima said the heavy rains which the country received over the past
two months will affect tobacco which was planted late.

"The shortage of diesel affected some farmers’ production including
those who planted early," said Ngorima.

Other organisations are however expecting the yield to be much lower
than 100m kgs. The Zimbabwe Tobacco Association (ZTA), which also represents
tobacco farmers, said the tobacco for this year will go down to as low as 70
million kg.

"We’re expecting a crop of less than 70 million kg because drought
earlier in the season and incessant rains more recently have affected the
crop," said ZTA president, Andrew Ferreira.

"Some growers have opted out of tobacco because of the problems
related to obtaining inputs," said Ferreira. Zimbabwe’s Tobacco production
has plummeted since 2000 when the country produced a record 236 million kg.


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The trouble with gifts and alms to judiciary

Zim Independent

Alex T Magaisa

A STORY is told of one judicial officer in a certain African country.
The man of the law was known to have a habit of demanding "a small fee" from
litigants appearing before him. The word was that he even had a "tariff"
indicating the cost to a litigant of obtaining a favourable judgement
depending on the type of matter.

To avoid detection during surprise inspections, the judge would
deposit his illicit proceeds in the rubbish bin located his office. He would
later collect the total proceeds at the end of the day. On this occasion,
however, the office cleaner came earlier than usual whilst the good judge
was in court. He collected the bin to dispose of the rubbish, whereupon he
stumbled upon a substantial amount of cash. The cleaner could not thank his
ancestors enough for this unusual generosity.

Upon his return later that afternoon, the good judge noticed that the
bin had been emptied. He was not a happy man. He found the cleaner and a
dispute ensued over the fate of the bin’s contents, which neither could
mention in exact terms. A colleague who offered to arbitrate enquired into
the subject-matter of the dispute. The judge claimed that the bin contained
valuable "things" that belonged to him and the cleaner argued that it was
not his business to verify the value of a bin’s contents before chucking
them. A crowd had gathered to witness this extraordinary scene of a judge
and cleaner fighting over a bin’s contents. A few who were familiar with the
judge’s ways struggled to suppress laughter.

This may be an extreme illustration of the problem but cases of
corrupt judicial officers are fairly common, especially in countries where
the judiciary is generally under-resourced and judicial officers are poorly
remunerated. But bribes do not always take the straightforward form. There
is concern that they can be clothed in the form of gifts and other acts of
charity to the judiciary.

Compared to last year, Judge President Rita Makarau’s speech at the
opening of the 2008 Legal Year in Harare passed with limited media coverage.
Last year’s unprecedented pleas for assistance on behalf of the judiciary
drew widespread media interest. Even the Governor of the Reserve Bank of
Zimbabwe was reported to have taken it upon himself to address the concerns
of the forgotten arm of the state -- assistance coming in the form of
four-wheel drive automobiles, computers, etc.

A point picked from the otherwise diverse speech this year is that the
judiciary appeared to be more complimentary, expressing gratitude to public
institutions such as the RBZ to private organisations that had chipped in
with assistance. That the pleas of the judiciary have been heard by members
of society is surely to be applauded. But it is also not without question,
not least because of the concern that gifts and alms can in some cases
camouflage more sinister intents.

A very good reason why the remuneration of judges is drawn from the
Consolidated Revenue Fund as provided for under the Constitution is that
there is a definite and neutral source from which the judiciary draws its
income. Of course, it would be preferable if the judiciary had total control
of its budget. The provisions for judicial remuneration are designed to
safeguard the judiciary not only from the arbitrary conduct of the executive
but also from exposure to overtures of a commercial nature from both public
and private persons, especially big business.

If there were other sources from which they draw their income, it
would raise questions about its impartiality. Whether or not the other
sources are well-intentioned is often immaterial – the very fact that they
are seen to be giving gifts and alms to the judiciary creates wrong and
dangerous perceptions about the judiciary’s capacity to dispense justice
without bias, especially when the benefactors are potential litigants.

The problem is there is no real limit as to who among those other
sources is acceptable as a donor to the judiciary. And where there is a
limit questions are raised about the criteria. There must surely be great
caution where the person (natural and artificial) is a potential litigant.
The reality is that such alms can only come from the well-heeled members of
society and corporate citizens that can spare resources. The indigent
members of society have reason to feel uncomfortable, especially when they
are locked in battles with these rich benefactors to the judiciary. It
creates an unfortunate perception of promoting the "rule of money" rather
than the "rule of law".

Confidence in the impartiality of the courts is shattered when it is
clear that one of the litigants is a large benefactor of those that sit in
judgement. How can an employee of a bank that has donated lavishly to the
judiciary feel at ease when he has an employment dispute with the bank?
There was recent controversy in Botswana, when it was reported that the
local entity of the large diamond multinational company, De Beers donated
100 000 Pula to the Botswana judiciary. At the time, the company was also
locked in a dispute with the Botswana Mineworkers Union over the sacking of
more than 400 workers. Such a gift may have been well-meant but one can see
the concerns raised in those circumstances.

The problem, of course, is that the Zimbabwean judiciary is
under-resourced, especially at the lower echelons of the system. It is not
unusual for magistrates and prosecutors to be seen jostling with suspects
and witnesses at commuter omnibus ranks. How those members are expected to
dispense justice fairly and impartially when they are exposed to the
temptations resulting from a penurious existence is very difficult to even
imagine.

Members of the judiciary occupy an important role in society and they
discharge a unique responsibility. It is, therefore, important that they
maintain a standard of living that is both respectable and commensurate with
their status. It is no secret that one of the main reasons why most senior,
experienced and competent members of the legal profession are reluctant to
accept judicial office is that the judiciary is financially under-resourced.
As a result, the judiciary has long been deprived of more quality and
experience that would greatly benefit justice delivery and the development
of the law.

There are at least three ways to deal with this problem:

First, private persons or public institutions should be cautious not
to promote a "gifts culture" among members of the judiciary. The line that
separates genuine assistance from corruption is unhelpfully thin. They
should be wary of creating impressions of currying favour with members of
the judiciary;

Second, the judiciary should be take a careful approach to acceptance
of these alms and gifts from various sources. Tempting though they may be,
given the hardships the judiciary faces, one can never be sure of the wider
intentions, not least the security breaches that may arise especially where
information technology is involved. They have had similar problems more
recently but I am advised that the Constitutional Court of South Africa has
a way of dealing with this issue of gifts.

There exists a Trust, set up to receive the acceptable donations which
are then channelled towards the Trust projects like furnishing the court
library. The Trust Accounts are audited and available for public inspection
and the trustees are drawn from a large pool of retired and sitting judges,
practising lawyers, academics, accountants, etc. Having a structure with a
public face can only be a good starting point.

Third and most importantly, the opportunity to give or the temptation
to accept such gifts could easily be minimised if the judiciary is given
adequate control over its budget and is adequately resourced by the state
which is required to do so by the law.

Otherwise, if this "gifts culture" is left unchecked scenes such as
that of the judge wrestling with a cleaner for the contents of a rubbish bin
may easily become commonplace in Zimbabwe’s judiciary. The issue of gifts is
particularly important as Zimbabwe prepares for crucial elections. One does
not have to throw bones to predict that there will be electoral challenges
before the courts of law in the aftermath of the elections. People will
watch closely who is giving what to the judiciary. It also happens to be a
key period for salary increases. Of great importance is the need to prevent
the risk of promoting the "rule of money" in place of the "rule of law".

* Dr Magaisa is based at Kent Law School and can be contacted at
a.t.magaisa@kent.ac.uk or wamagaisa@yahoo.co.uk


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Central bank under fire

Zim Independent

Kuda Chikwanda

THE Reserve Bank of Zimbabwe (RBZ) has come under intense criticism
from the banking sector which says it is being "milked dry" to finance a
cash-strapped government.

Bank executives who spoke to the Zimbabwe Independent this week on
condition of anonymity said the central bank was the instrument government
was using to force the banking sector to finance its excessive borrowing
which shot up to $21 trillion in November last year.

The executives accused RBZ governor Gideon Gono of vindictiveness
hence their unwillingness to be named. Gono, together with Finance minister
Samuel Mumbengegwi, last week accused banks of being responsible for the
cash crisis and threatened unspecified action if corrective measures were
not taken by this week.

Mumbengegwi went to the extent of asserting the banking sector as
over-banked and issued threats of a government crackdown on the sector,
saying cabinet was concerned about the cash shortage.

However, bank executives and economists have attributed the cash
crisis to the RBZ saying the central bank was now trying to pass the blame
on to the banking sector.

University of Zimbabwe economist Tony Hawkins laid the blame squarely
at RBZ’s door which he accused of failing to print enough money to put into
circulation.

"The fact that there is not enough cash is RBZ’s responsibility. It is
a realistic projection banks will go bust. The fact banks are being forced
to take up negative yielding instruments points to how RBZ is funding
government on the back of banks’ sweat," Hawkins said.

Hawkins was harsher in his assessment of the crisis, accusing the
central bank of engineering the crisis to prove the existence of cash
barons.

"RBZ engineered the crisis trying to prove the existence of cash
barons," he said. "While I am a bit surprised that banks would admit playing
the equities market, I believe there is a very real problem that 50% of
their money lies with the RBZ at negative yielding rates and when they want
to borrow back their money, they are charged penal interest rates."

The Banking Act prohibits banks from buying shares on the Zimbabwe
Stock Exchange except when underwriting listings.

But the executives admitted that they had been forced to trade in
equities occasionally to avoid going bankrupt, meet client needs and to
preserve shareholder value.

"In the face of record high inflation, a rapidly depreciating dollar
and silence from the central bank, we had to do something. We faced
bankruptcy and we still do if solutions do not emerge from RBZ," one banker
said.

Other bankers said the cash crisis had been precipitated by the
central bank’s refusal to adopt policy measures geared to preserve value in
times of hyperinflation.

An analysis of claims made by the executives reveals one thing — that
the RBZ is no sacred cow. The central bank has been fighting excess
liquidity on the market and introduced a number of measures to do so.

However, despite an obvious liquidity crunch that has affected the
sector, the RBZ has continued holding on to half of all demand deposits from
banks.

"If there was excess liquidity justifying the use of these RBZ
instruments, we would not be facing a liquidity crunch," said economist John
Robertson.

Robertson accused the RBZ of holding onto statutory deposits of 50%
and charging punitive rates of 975% for secured lending as a means of
providing funding.

"They simply wanted cheap funding and that’s why the RBZ will not
reduce the statutory deposits. Those demand deposits are financing
government expenditure and subsidies through cheap financing options offered
by the RBZ," Robertson said.

He said the Agricultural Support Enhancement Facility and the Basic
Commodity Supply Side Intervention (Baccossi) funds were coming out of
statutory deposits.

The bank executives also claimed that apart from inflation, these
"excess-liquidity mopping" measures had managed to worsen the crisis.
Besides the high statutory deposits, the RBZ has also used Treasury Bills
(TBs) and Non-negotiable Certificates of Deposit (NCD) instruments.

The RBZ also holds statutory deposits of 50%, meaning that at any
point in time, half of any banks’ demand deposits are with the central bank
at 0% interest. As lender of last resort, the RBZ charges punitive interest
rates on banks faced with shortages. Currently the RBZ is charging 975%
interest, compounded daily on secured lending.

"RBZ holds half of our money in statutory deposits, and yet when we
face a shortage," one banker said. "It charges us 975% daily for that money.
It is daylight robbery, and if everyone demands their money at once, we pay
975% for storing it with the RBZ where it earns no interest."

Robertson said because of high inflation, the money held as statutory
deposits was fast losing value and in the process, weakening banks.

"That money loses value faster because of inflation," he said.
"Government does not want to hear inflation figures of 150 000% and yet
those are the ones operating. This leaves banks in a very precarious
position having been unfairly robbed of their deposits."

In the name of fighting excess liquidity, the RBZ outlawed banks from
holding surpluses at the end of a trading day.

Banks are supposed to use their trading surpluses to buy TBs with
negative yielding interest rates of 340% per annum or to lend to other banks
facing shortages under inter-bank trading or to lend to clients.

Since the cash crisis set in some three months ago, the latter option
has been unfavourable with banks as they all have been facing liquidity
problems. Lending to clients requires a minimum of 90 days before the bank
can recover its money and has also proved very unpopular given the rampant
inflation.

"The risks of the inter-bank market cannot be overstated," another
banker added. "What if another bank fails to pay you on time in this
liquidity crunch? Lending to clients means money is tied down for a minimum
of 90 days. We have to think on our feet to survive."


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Only Zanu PF won in secret talks

Zim Independent

Comment

'THERE are no secrets better kept than the secrets everybody guesses,"
says Sir George Crofts in the third act of George Bernard Shaw’s Mrs Warren’s
Profession. One of the specific secrets the deceptively genteel Irish comic
dramatist referred to was Mrs Warren’s profession as the world’s oldest.
Sometimes it is hard to keep a secret. As one of America’s most influential
founding fathers, Benjamin Franklin said: "Three may keep a secret, if two
of them are dead."

In diplomacy however a worn argument in support of secrecy is that
well-publicised negotiations tend to become hostage to the very conflict
they are trying to solve, hence the insistence by diplomats that the best
results in conflict resolution are achieved through secret negotiations.

It is without doubt that secrecy is an integral part of diplomacy and
governance. We are familiar with the tendency to over-regulate which has
really never been beneficial. Excessive secrecy has significant consequences
for the national interest when, as a result, stakeholders are not fully
informed, government is not held accountable for its actions, and the public
cannot engage in informed debate.

By the same token, it is true that secrecy is vital to save lives,
bring miscreants to justice, protect national security, and engage in
effective diplomacy. Yet the best way to ensure that secrecy is respected,
and that the most important secrets remain secret, is for secrecy to be
limited to its necessary role. Secrets can be protected more effectively if
secrecy is reduced overall. Negotiators in the now-flopped South
African-mediated dialogue to solve Zimbabwe’s political logjam stretched
their luck too far when they substituted effective diplomacy with too much
secrecy.

The negotiators Tendai Biti and Welshman Ncube from the divided MDC
and Nicholas Goche and Patrick Chinamasa of Zanu PF were sworn to secrecy at
the start of the talks. They believed that they could contribute to the
Thabo Mbeki-led process without necessarily telling the whole nation what
they were up to. So the negotiators did not take kindly to the Zimbabwe
Independent making revelations about the content and scope of the dialogue.

The negotiators regarded our coverage of the talks as a threat to the
process. There were attempts to gag the paper through crude diplomacy, that
almost amounted to threats to staffers. Civic groups that attempted to
impose themselves on to the processes were shut out. This was a deal between
the MDC and Zanu PF. The parties believed they were representing the
national interest.

Despite attempts to put a lid on proceedings, information still came
out in large torrents. We knew what the two parties were up to and last
September we pointed out the direction the talks were likely to take — that
Zanu PF would not agree to a new constitution, that President Mugabe wanted
to die in office and that he wanted an election in March.

We revealed details on the 18th amendment, Posa and Aippa. There was
too much information around to keep under wraps. Put simply, details of a
proper deal to settle a national crisis cannot be kept away from
stakeholders. It has never worked. United States jurist Justice Potter
Stewart in a legal opinion in the Pentagon Papers case opined: "when
everything is secret, nothing is secret".

Details of the dialogue became a public secret but because the
negotiators, especially in the MDC, refused to share what they were agreeing
to even with those of their own kind, Mbeki’s negotiated processes lacked
national ownership. The evidence of this came out when Mugabe thumbed his
nose at MDC’s calls for a transitional constitution before the elections.
There was no popular outcry because the public had not really called for
that.

The MDC, which believed it had Mugabe on tenterhooks through the
dialogue, misread the usefulness of secrecy in dialogue. They naively
believed everything said to them across the negotiating table but did not
appear to know the grand Zanu PF plan of using the dialogue to seek
legitimacy for Mugabe. We last year repeatedly warned the MDC that President
Mugabe was not going to legislate himself out of office and that it was
important for the opposition to have a plan B in the event of the talks
collapsing.

To Zanu PF, the talks have been a huge success. The ruling party has
achieved all it wanted and, more importantly, the achievements have the MDC’s
seal of approval.

The MDC on the other hand is still dazzled by Mugabe’s call for an
election next month and his rejection of a new constitution. They are now
seeking popular support to fight for these from a populace that was shunted
out of the process at the onset of the dialogue. We question what the quest
for secrecy achieved other than putting a veil over Zanu PF’s sinister plan?


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Let’s contest elections, not results

Zim Independent

Candid Comment

By Joram Nyathi

"BEING prepared for the worst is the only way to be prepared for the
best," said Cuban leader Fidel Castro recently. This is hardly what one can
say of Zimbabwe’s main opposition, the MDC, and it is proving a costly
lapse.

The die is cast as it were. Zimbabwe’s first harmonised presidential,
parliamentary and local government elections will be held on March 29.
Zimbabweans from all sections of society would be expected to freely choose
their leaders and representatives in parliament and in the senate. The
question is whether the elections will be free and fair. Will all those who
are eligible be able to cast their ballot? In just one day?

The experiences of the recent past have not prepared us for any of
this, and already we are being primed for a disputed electoral outcome. It’s
a bad omen.

While Zanu PF says it is ready for the elections, there is the usual
confusion in the MDC. There are even calls for a boycott so as not to
"legitimise" a flawed electoral process and the inevitable result.

It is not difficult to understand the MDC’s dilemma. Even without
posturing about a new constitution, the party is sorely divided (as is Zanu
PF), lacks focus and in desperate need of a decent excuse to pull out. It
put all its eggs in one basket at the Sadc-initiated talks with Zanu PF,
which talks were magically expected to even the electoral playing field and
end politically-motivated violence. Then it sat back.

Now the MDC is preoccupied with condemning every electoral institution
over which it has no control, from the voters’ roll to the Zimbabwe
Electoral Commission, but doing precious little to galvanise its supporters
to vote. Soon they will be condemning their own brainchild: voting in one
day. The number of polling stations and officers needed to do this is
mamoth.

What I find sad about calls for a boycott is that apart from
exacerbating political tensions in the country, there is no national benefit
in the proposition. Those pushing this hard line are said to be in the NGO
sector where Zimbabwe’s crisis has become a major source of personal
enrichment. Boycotting the elections by the MDC is their survival kit — it
means the crisis will persist and there will be a lot of crocodile tears
shed among the donor community on behalf of the victims of Robert Mugabe’s
dictatorship.

Pitted against this crisis syndrome gang are aspiring MPs who know
that a boycott would cost them the good life on the gravy train. Most of
them are ruing the day they boycotted the senate elections in 2005. A
boycott is unimaginable.

But boycotting elections so soon after endorsing an amendment adopting
those elections is as disingenuous as boycotting senate elections in 2005
because it (senate) was deemed a costly waste and then endorsing a larger
one soon after. It is a woolly-mindedness that verges on the vexatious.

However, it is not as if the MDC doesn’t have valid issues to complain
about. From violence to arrests and denial of access to the state media, the
electoral system is skewed in Zanu PF’s favour and susceptible to
manipulation.

The problem with the MDC is that after the events of March 2007, after
condemning every local initiative as an attempt to buy time for Zanu PF,
once the talks began under Thabo Mbeki’s mediation, it started behaving as
if it had a lot of leverage in the dialogue. Instead of engaging in serious
preparations for the elections, it expected Mbeki to be its saviour from
Zanu PF when he has neither the magic wand nor the obligation to do so. He
is merely a facilitator. More than that, it believed Zanu PF’s duplicity
that only it (MDC) mattered in the talks against the advice of its civil
society partners under the Save Zimbabwe Campaign.

But since its "treacherous" endorsement of Constitutional Amendment 18
Act the MDC leadership has been under immense pressure to demonstrate that
it has not given Mugabe and Zanu PF a new lease of life and conferred
legitimacy on more piecemeal amendments to the constitution. This is evident
in its latest complaints about Zanu PF backtracking on a "transitional
document" before the March 29 elections which Mbeki is supposed to be
hiding.

Mugabe never minced his words on a new constitution.You needed to be
MDC to believe outsiders or the threat of an MDC election boycott would
force him change his mind. Whether he is right or wrong is not an issue.

What is an issue is the MDC’s strange demand for a hurried,
election-specific constitution without a popular referendum. I don’t know
whether this is a genuine demand or electioneering. This is raised together
with the outlandish demand for a "transitional document".

The only instance when such a mechanism is often used is when you move
from one system of government to another such as from apartheid to majority
rule in South Africa or from Rhodesia to Zimbabwe. The logic in both cases
was that a section of the population was wrongly but legally proscribed from
participating on an equal basis in the affairs of their country of birth.
Now we want a transition from what to what?

Now that the election date has been set, a new constitution is
rendered a non-issue for all practical purposes. Even if the date was moved
by three months, which is what the current constitution allows Mugabe to do,
there would still be no time to hold a referendum for a new constitution.
The MDC rejected proposals by Mugabe to push back the elections to 2010
because "he was afraid of losing" the elections this year. Now they face the
prospect of losing and the only figleaf they can find is a new constitution
and a postponement of the polls.

Our leaders should prepare the electorate more for the elections and
less for a disputed result. The simplistic conclusion one draws from this
political stand off is that while Zanu PF has been cunning and selfish in
dealing with the opposition, the MDC is itself guilty of amateurism and a
failure to articulate its cause. It is equally guilty of overrating its
bargaining power.


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Banks insensitive to clients

Zim Independent

Editor's Memo

By Vincent Kahiya

'KINDLY note the RTGS system has been down since Friday. The RBZ
advises that the vendors are working to rectify the problem. As a result of
that down time, payments could not be processed. I will advise as soon as
the system is up. Kindly bear with us."

Those privileged to have access to the Internet started to receive
messages such as the one above from banks on Monday and Tuesday.

The messages sought to shed light on why salaries had failed to
reflect in people’s accounts and why accounts remained unfunded despite
monies having been transferred through the now misnamed Real Time Gross
Settlement (RTGS) system.

Monies transferred as far back as Monday last week were still not
showing in accounts of recipients despite remitters having been debited.

The e-messages from banks were a tacit admission by the banking sector
that there was a problem.

Meanwhile those without Internet access thronged banking halls only to
be told that monies had not been transferred into their accounts.

They were told of a gridlock in the RTGS system. They were told that
it was the RBZ which had suspended the RTGS system "because it had no
money".

The other well-recited excuse was that the power outage on Tuesday had
thrown the RTGS system into a tailspin.

One question banking staff at enquiries desk failed to answer though
was when this would be fixed and when accounts would be funded.

The desperate depositors included those afflicted with chronic
illnesses having to endure extended periods of pain because they could not
access money sent through the RTGS system by relatives to purchase
life-sustaining drugs.

At one bank branch I visited in the city centre a frail man left the
bank in tears after he was told there was no money in his account. He had in
hand a Barclays Bank RTGS form as proof that money had been transferred into
his account. To illustrate his desperation, he pulled out a bottle of
Stalanev tablets and placed it in front of the bewildered clerk who scarcely
got the message that the man was on ARVs.

He was not the only victim. The list included thousands of workers who
failed to access their salaries on time this week and pensioners who failed
to access their miserly incomes.

Individuals and companies had unpaid invoices to hand as their
accounts remained empty despite monies having been transferred into them
this week.

Many failed to purchase goods and services whose prices went up
exponentially in sync with the weakening local currency. Fuel for example
has gone up more than four times in the last 10 days.

Deals worth trillions of dollars were not sealed as punters failed to
move funds to stockbrokers to pay/buy shares on the bourse. Activity on the
money market was also badly affected.

Money locked in the system has been losing value daily and there is no
recourse to the depositor who is still expected to pay bank charges, taxes
and at the end of the day earns nothing in interest from the money deposited
with banks.

Wholesalers and manufacturers registered reduced business this week as
retailers — who pay for orders through the RTGS system — failed to pay for
purchases.

The quantum of business lost countrywide would be difficult to fathom
but evidence of its extent was abounding in dejected faces of depositors at
banks and desperate parallel market dealers working feverishly on their
cellular phones to calculate lost opportunities and positions.

In this desperate situation, there was no coherent statement from
banks and the central bank, which bred speculation and disinformation.

But this paper’s investigations revealed that the major reason there
was no movement of funds between banks since the latter half of last week
was that banks’ accounts at the central bank were not adequately funded.

The banking public was never told this line. By last Wednesday, 999
transactions between banks, valued at $34 trillion, had been dishonoured.

The dishonoured transactions were concentrated at Standard Chartered
Bank with $14,6 trillion, ZB Bank with $5,8 trillion and Beverly Building
Society at $4 trillion, according to RBZ figures.

We revealed the banks’ short positions last week in a series of
stories and in our Comment.

We stirred a hornets’ nest. The news editor Dumisani Muleya and myself
were bombarded with angry phone calls and text messages from bankers.

Banks were very quick off the blocks, accusing us of lying,
misrepresentation and ignorance of the functioning of banks.

I dared the banks to write to us or grant us interviews concerning
their liquidity positions.

I also challenged them to come up with statements to inform their
clients that our story was way off the mark and that the financial
institutions were healthy and operating normally. Their universal response
to this was "Gono munomuziva — he is vindictive. He will close us down
tomorrow."

"So you won’t defend your position even if it is correct because you
are afraid of Gono?" I asked one of them. "Perfectly so if that will save
the bank," he responded.

But this silence on key policy issues and fundamental aspects for mere
survival will not endear banks to their clients.

Depositors are the least interested in this gobbledygook about
scary-Gideon. It is incumbent on banks to tell depositors exactly what is
happening.

Some of the troubled banks are quoted on the stock exchange. In this
circumstance, were the banks not expected to issue cautionary statements to
explain their liquidity positions? Perhaps that is not as important as the
need to build confidence in the banking sector. At the moment it has plumbed
to embarrassing lows and does not appear to have hit the bottom yet.


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What will Mbeki tell Sadc?

Zim Independent

MuckRaker

SO we are well and truly in election mode as March 29 looms on the
horizon. The president and ministers have been making "no going back" noises
as if the date is cast in stone.

But it might be worthwhile to reflect on the context here. The whole
point of the Sadc mediation initiative was to spare Zimbabwe another
damaging disputed election outcome. President Thabo Mbeki right from the
get-go saw the danger after the March crackdown of a nation divided against
itself. Already the country’s economy was spiralling out of control and a
disputed result would have been disastrous for Zimbabwe and the region.

Everywhere else Sadc states were prospering. Botswana, Mozambiqe and
Namibia were flourishing. Zimbabwe under Zanu PF was heading in the opposite
direction. And it had nothing to do with sanctions.

Mbeki, who had been struggling with the problem since 2000, was the
logical Sadc choice of mediator. And within 24 hours of the Dar es Salaam
summit he had outlined his agenda. It was essential that all parties to the
election agree on the instruments conducting it, he said. While he made
clear this was the position the opposition was likely to adopt, there could
be little doubt it was his own view as well. The ruling party and the main
opposition groups would have to agree on the constitution and role of the
electoral body running the election.

In the event the government and the MDC agreed that the ZEC should
manage the election from beginning to end.

That did not happen. The Registrar-General’s office continued to
control the voters’ roll, which as a result remained a mess, and the ZEC
very quickly proved itself a vehicle of government’s needs. For instance,
despite its claims to independence, it allowed the government to invite
observers when it should have been responsible for that aspect of the
process.

Last week South Africa’s chief elections officer Pansy Tlakula was in
the country to attend a conference on electoral preparations. She paid a
courtesy call on ZEC chair George Chiweshe and reportedly asked him why he
wasn’t attending such an important conference. "I’m too busy," was the
reply.

This tells us all we need to know about the seriousness of this
outfit!

Mbeki was here recently to follow up talks in Pretoria between the two
parties the previous weekend. But he made little or no impression upon
Zimbabwe’s obdurate ruler on the need for flexibility around the election
date and transitional modalities.

If Mugabe believes he has caught the opposition on the back foot he
will soon find himself at a disadvantage. Mbeki will have to explain to Sadc
leaders why Zimbabwe is refusing to comply with the Mauritius protocol that
underlines the need for all parties to agree on electoral bodies and
procedures.

Kenya has provided a wake-up call to those who believe an incumbent
can manipulate an electoral supervisory body and get away with it. But as in
all things the MDC has been supine in spelling all this out. Instead we had
Nelson Chamisa’s maladroit remarks.

When is the MDC going to wake up and give the country a lead? They
could start by exposing the manipulation already taking place.

The Chronicle last week carried a picture of Senator Chief Vezi Maduna
addressing delegates to a Zanu PF district workshop in Filabusi. Listening
was Andrew Langa.

This illustrates the partisan manipulation of chiefs which we reported
two weeks ago with the allocation of vehicles, even to those who can’t
drive!

Why don’t chiefs, the president, ministers and officials all set a
good example of electoral behaviour by eschewing state resources, telling
voters what rights they have, and generally raising the tone of the campaign
in line with the reforms recently introduced?

Chief Maduna to his credit spoke out against the imposition of
candidates, but Langa made a fool of himself by claiming the West was out to
repossess the land.

If brains were taxed he would get a rebate. Only the dumbest of party
followers will swallow this nonsense but it is indicative of how the
bankrupt party of power intends to conduct the campaign in the absence of
any clues as to how it intends to rescue the country from the pothole it has
been plunged into.

We were pleased to note that David Moore of the University of
KwaZulu-Natal has reminded readers of the South African Sunday Independent
(following publication in the Zimbabwe Independent two months ago) that
Mugabe’s claims to have been locked in lasting conflict with all things
British represents a selective recall of history. Mugabe claimed at the
meeting of the UN General Assembly in September that he had fought a
protracted war against British imperialism "which denied us human rights and
democracy".

But Moore has published a telegram sent by Mugabe from Salisbury
Prison to British prime minister Harold Wilson in 1970 appealing for a
residence permit for his wife, Sally.

"Disturbed my wife Sally Mugabe at 20 Madeley Rd London W5 asked (to)
leave Britain. (I) contend Sally (is a) Rhodesian citizen by marriage,
therefore British subject. (Her) return to Rhodesia impossible (in) present
circumstances. (I) appeal (to) you (to) recognise her status and grant
residence permit till my release from political detention."

With a bit of lobbying from liberal supporters and a petition signed
by MPs Sally was allowed to stay. Human rights, it would seem, had triumphed
over hard-hearted bureaucrats.

But please can we hear a little less of the "sinister forces" Mugabe
fought against. He was only too happy to cooperate with them when the
occasion required it. He depends upon us all having short memories.

Perhaps this is a good time to remind ourselves of all those degrees
Mugabe was able to accumulate while locked up in detention. Would any
prisoner now be able to take a correspondence course of this sort? Would the
writing facilities be available to them, the postage stamps etc?

Does anybody remember post offices, those places we used to go for
stamps? Does anybody remember when Zimbabweans used to write to each other
and to relatives in neighbouring states? We have now been reduced to
medieval conditions where we write by candlelight and send the letter by
messenger. This is the revolution Zanu PF is seeking to defend.

M-Net’s Carte Blanche on Sunday night took us inside the control
centre for South Africa’s power stations. It showed that while South Africa
was in the midst of its recent blackout power was being exported to the
country’s neighbours including Zimbabwe.

At the same time Zesa was saying no South African power had been
received in Zimbabwe.

An asylum seeker with no right to work in Britain was employed for a
year — handling asylum appeals, the Daily Express reports.

Eugene Tawanda Madzima helped process appeals in Leicester after
landing a job with a fake Home Office letter and National Insurance number.

He even helped in staff training and was only found out when he tried
to open a bank account with a fake passport which he said he bought from a
London solicitor for 1 000.

In an added farce, the Express says, it emerged his asylum claim has
not been dealt with in four years because he is one of the 450 000 backlog
cases.

A judge said the blunder "beggars belief".

Sunday Times columnist David Bullard quotes Barry Ronge as saying on
Talk Radio 702 that he has noticed a shift in emphasis in the foreign media’s
coverage of South Africa.

"We are no longer the miracle nation of 1994," Ronge had pointed out.
"Instead we are rapidly becoming a global freak show."

Ronge did concede that some of the foreign reporting was intentionally
sensationalist, Bullard says. But "how for example do you explain to an
interested foreigner that the best the ANC could come up with as its
presidential hopeful was a man who everybody knew would eventually be
charged with money-laundering, racketeering, fraud and corruption"?

Harare reader phoned in on Tuesday to say deputy-Technology minister
Patrick Zhuwawo was screaming on ZTV news on Monday evening that there was
no power because Tsvangirai asked for sanctions, hence everyone is suffering
from the power cuts. On the same day, Zesa had advertised apologising for
loss of power due to a serious technical fault.

Our advice to Zhuwawo: Don’t make a fool of yourself. Get hold of Zesa
before claiming to be speaking on its behalf.

Just to add to our miseries phone lines appear to be going down all
over the city. Many people have not had a working line since November. The
phones come back on sporadically but mostly people have come to depend on
their mobiles. As a result readers are suggesting we rename TelOne "Tell No
One".


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Minister should return to the womb

Zim Independent

By Eric Bloch

THE Minister of Finance, Samuel Mumbengegwi, has a remarkable tendency
to tackle anything and everything back to front.

He favours putting the cart before the horse, and then blames the
horse for its inability to pull the cart.

He is so prone to do things in reverse that, perhaps, it is time for
him to return to his mother’s womb, for he must surely believe that birth
comes before conception.

The latest demonstration of this ministerial philosophy occurred when
he addressed chief executives of banks last week.

He dogmatically informed the bankers that the exchange rate will only
be reviewed when there is increased productivity in the economy. He stated
that "the exchange rate is a function of productivity", and that "the
exchange rate cannot be addressed until we do what we can to increase
production".

Zimbabwean productivity has fallen cataclysmically in recent years,
and especially so in the last six to nine months.

The causes of the decline are many. Although they do not include the
oft-repeated, totally false, governmental contentions that a major cause
thereof are diabolical, evil machinations of Western countries, in
conspiracy with Zimbabwean businessmen, in order to destroy the economy and
thereby ensure a political regime change.

The causes of shrinking productivity are also not so-called "illegal,
international sanctions", for such sanctions only exist in the convoluted,
distorted thought processes of the minister and his colleagues, but not in
reality.

However, one of the most pronounced causes of the tumultuous fall in
productivity is government’s gross mishandling of the exchange rate.

The exchange rate policy impacts both directly and indirectly upon
productivity, and if government obdurately adheres to its current stance,
then yet further collapses in productivity are inevitable. The productivity
of agriculture, mining, tourism and manufacturing operations in Zimbabwe is
greatly dependent upon exports.

Save for certain agricultural commodities, the capacity of the
Zimbabwean market to absorb the volumes of the production necessary for
viable productivity of those sectors does not exist.

Not only is the total population only about eleven million, but much
of the population is poverty-stricken and vested with minimal consumer
spending power.

Therefore, such volumes as can be produced and sold to Zimbabweans
must be greatly complemented by production for, and sale to, export markets.

However, one cannot sell in export markets unless one’s products are
both quality and price-competitive.

Zimbabwe has long proven its ability to meet the highest of
internationally sought quality standards, be it Zimbabwean tobacco, cotton,
beef, precious and semi-precious minerals, tourism amenities and services,
or be it manufactured textiles, clothing, footwear, furniture,
pharmaceuticals, toiletries and cosmetics, engineering products, or a vastly
diverse array of other goods.

But its ability to be price-competitive is wholly frustrated by a
governmental bigoted policy on exchange rates, which policy fails to
recognise the consequence of Zimbabwe’s world-record levels of
hyperinflation.

When costs of production soar upwards by more that 25 000% in one
year, which was the case in 2007, and when those costs more than double each
month, as is currently the case, any aspirations to export are totally
destroyed, unless there is commensurate exchange rate movement.

The producer cannot increase prices to cover the rising costs, for his
competitors in other countries are not faced with similar cost escalations,
and therefore do not have to increase their prices other than very
marginally to address the low levels of cost inflation sustained by them.

Therefore, if the Zimbabwean producer is to be able to compete, the
exchange rate must adjust in alignment to the real inflation borne by the
producer.

The destruction of export viability, by government’s rigid adherence
to tunnel-vision exchange rate policy determination is a major contributant
to inflation, for in the absence of exports, the production for the domestic
market has to absorb the entirety of the producer’s fixed costs, whereas if
higher volumes were produced, in order to service export markets as well as
the domestic market, then the proportion of fixed costs attributable to
domestic production would diminish.

A further very major hindrance to productivity is the insufficient
availability of foreign exchange to fund importation of operational inputs,
consumables, spares, and state-of-the-art machinery and equipment.

Agricultural production has been curtailed, year after year, by
insufficient availability of fertilizers, insecticides, fuel, equipment, and
much more.

So too has been mining production. For much of the manufacturing
sector, production volumes are heavily reduced by frequent stoppages
necessitated by non-availability of inputs, or by the scope of operations
being severely constricted by insufficiencies of such inputs.

However, were producers to have real export viability, accorded to
them by credible exchange rates, they would be generating the foreign
exchange required by them for both their export and domestic market
production. In addition, most of them (if not all), would also be generating
foreign exchange required by those producers servicing only domestic needs,
not being engaged in exports, and as required by government and other
sectors of society.

In particular, substantially increased exports, made possible by
meaningful exchange rates, would result in a very significant reduction in
the unlawful foreign currency "parallel" and "black" markets, bringing about
a stabilisation of rates therein, and ultimately a reduction of such rates.

As those markets are amongst the biggest triggers of Zimbabwe’s
ongoing hyperinflation, those increased exports would markedly reduce the
inflation attributable to the operations of those markets. This would, in
time, contribute to stabilisation of official exchange rates, due to the
then falling levels of inflation, although in part contingent upon
government also taking other overdue, constructive steps to contain
inflation.

Whilst back in the womb, minister Mubengegwi should seek to develop a
more substantive economic backbone, so that after his rebirth he can put
first things first.

One of those first things must be to move rapidly to market-force
driven exchange rates. Minister, put the horse before the cart and you’ll be
amazed how both it and the cart can then go forwards!


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Zim Independent Letters

Respect for property rights can save economy

I BELIEVE that we were on the eve of another dramatic move in the
legal revolution that continues to destroy commercial agriculture and
Zimbabwe.

In September 2005 Zanu PF MPs put in place amendment number 17 which
acquired all white owned land for the state and gave no right to challenge
this in court. No Zanu PF parliamentarian voted against this act.

At the end of 2006 Zanu PF MPs put in place the Consequential
Provisions Act which said that all those farmers still in their homes and
farming without permission from the Minister of State Security would be
committing a crime and would face jail. No Zanu PF MPs voted against this
Act either. And neither have any of them got the the neccesary "permission"
for white farmers to continue.

In October 2007 the Zimbabwe Republic Police initiated prosecutions
under this Consequential Provisions Act; and to date approximately 150
farmers are in the process of being prosecuted for still being on their
farms. Any farmer without an offer letter, lease or permit is on the wrong
side of the law. The 150 farmers currently being prosecuted will, we can be
sure, be expanded.

In January 2008 our Supreme Court upheld the law that the Zanu PF MPs
put in place expressly saying that the Bill of Rights and right to
protection of the law no longer exists in Zimbabwe for farmers or anyone
else that the parliamentarians care to make unjust laws against.

Sometime between now and March 29 I believe white farmers are going to
be thrown into jail again for continuing to commit the crime of being in
their homes and farming.

Are our agricultural leaders going to make the same mistake as they
did in 2002 and take no legal steps to ensure their members are protected
from the effects of being on the wrong side of the law: jail and
dispossession?

In 2002, Colin Cloete and his CFU council made a concious decision not
to protect their members. They were apparently assured, like Piet Retief,
that they would not be harmed.

As a direct result of that unfortunate decision the vast majority of
farmers were dispossessed of everything that they had ever worked for. Many
were incarcerated. Their workers lost their jobs and their homes and the
country went hungry. The economy collapsed. Roads, schools, hospitals,
electricity supplies, water delivery systems collapsed and continue to
collapse today.

The effect of destroying title has been felt by all. The engine of the
bus called Zimbabwe has been stripped, sold off or vandalised by the driver;
and the people of Zimbabwe have had to get out and walk. Without property
rights, the engine that drove the economy can not function.

Ben Freeth,

By e-mail.

------------
What shall we be in five years?

WE shall wake up one day and discover that we no longer have all that
we used to have.

What shall become of our roads, if we add five more years to your
existence in power, Mr Transport minister?

Our roads have become a jungle over night, infested with potholes all
over. This has reduced the lifespan of our motor vehicles, escalating the
cost of maintenance and increasing the frequency of servicing the vehicle.

What then shall become of our electricity, if Mr Energy minister you
are given another five more years in office? Load shedding and unresolved
ever recurring faults, this is the order of the day. It will be a shocking
thing to have electricity 24 hours a day.

Where is the spirit of ubuntu? Now that you have managed to buy a
generator with our taxes, you don’t see the need of those who have put you
there. Why not have pro-active approaches to managing our power?

What then shall become of our drinking water, Mr Water Resources
minister, if we throw another five years to your tenure? Our water has been
getting dirtier everyday; no remedies have been taken to rectify this.

People are getting sick everyday due to this dirty water you pump into
our homes and offices. If you have failed us like this in your stint, what
then shall we be in five years time?

What shall become of our money, Mr Governor sir, if we are to continue
in this vein in the next five years? Will our money have any significance?
Will we be able to trade with other nations?

Can you tell where our health sector will be, if we allow the current
Health minister to steer the boat for the next five years? Already we have
seen our dear doctors, nurses and health workers taking industrial action,
leaving for the diaspora in droves and risking lives of many who are lying
on hospital beds. If we can’t do it, let us leave it because we are holding
a lot of lives and their blood is upon us.

Our industries are now a pale shadow of what they should be, or should
we say what they used to be a few years ago. Who should we pin it on Mr
Trade minister?

I have often been told that the first point of failure is when you
look for someone to blame in a situation. I am not going to blame anyone. As
a voter, I have but myself to blame. I am the culprit.

It is in our hands to make or break this March, who shall we trust
with our future?

Anonymous,

By e-mail.

---------------
Home truths for Sasa

AFTER reading Mabasa Sasa’s piece entitled, "MDC must march against
sanctions" (Herald, 25 January), I must admit that Zanu PF has more than its
fair share of bootlickers, ranging from Manheru to Ceaser Zvayi to Goodwills
Masimirembwa.

What started as an intelligent and verbally colourful article
degenerated into an incoherent babble when he tried to make a case for the
MDC to denounce "illegal sanctions". His piece lacked originality as we have
been bombarded with the same rhetoric from just about everyone within Zanu
PF circles.

When it suits them, these sanctions are often described as
"non-events" then they suddenly become "illegal sanctions".

A few home truths for Mabasa to digest:

*Mabasa has no authority to prescribe or dictate what the MDC should
or should not march for.

*People are suffering because of the bankruptcy of sound economic,
social and justice policies in Zanu PF.

*Zanu PF instigated the fast track land reform programme purely for
political survival. Is it a coincidence that this reform was launched in
2000? After a resounding no vote for the new constitution in 1999?

*Pro-people statements do not put bread on tables. It would be also
wrong for the MDC to support a land reform that has not benefited the
ordinary citizens. In any case, this so-called land reform has brought about
massive unemployment and hunger.

*The MDC Freedom March was just but one way of registering concern at
the ever deteriorating standards in all spheres of life in Zimbabwe.

Joseph Mhlanga,

Dublin, Ireland.

--------------
Mixed-up priorities

I LISTENED to the radio this week and heard that the African Cup of
Nations soccer showcase currently being played in Ghana will now be beamed
live by ZBH after a massive US$1 000 000 was paid to secure braosdcasting
rights.

Last week there was an article in the Herald that the Ministry of
Water was failing to raise R15 000 000 for pipes required to sink boreholes
in suburbs worst hit by the shortage of water.

A quick calculation will show you that US$1 000 000 is equivalent to
R7 000 000, half the amount needed for pipes to sink the boreholes.

What sort of prioritisation is this where a game of soccer takes
precedence over human lives?

Masawi Munyanyi,

Greendale.

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