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Mugabe crushes rebellion

FinGaz

Rangarirai Mberi, Dumisani Ndlela Charles Rukuni

PRESIDENT Robert Mugabe has met Simba Makoni in connection with the former
finance minister’s alleged links to a group within ZANU-PF campaigning for
new leadership, as he began taking steps to crush an internal rebellion
threatening his hold on the party.

The meeting was held on Monday afternoon at State House, President Mugabe’s
official residence.
The possibility of a breakaway from the ruling party, first reported by The
Financial Gazette, has sparked panic and political gamesmanship within the
ruling party and generated intense public interest.
George Charamba, spokesman for President Mugabe, confirmed yesterday a
meeting had taken place between the two men.
“I cannot confirm over what issue they met, but I can confirm that they met.
Dr. Makoni is a member of the Politburo, he is a member of ZANU-PF, and
President Mugabe is his President. Such meetings are not unusual,” Charamba
said.
Reports have linked Makoni to a splinter group within ZANU-PF pushing for
President Mugabe’s ouster — a month after the veteran nationalist secured
the party’s backing at its extraordinary congress as ZANU-PF’s presidential
candidate in the tricky March polls.
But even amid feverish speculation over his ambitions, the former Southern
African Development Community (SADC) executive secretary, who attained high
office in President Mugabe’s government at a young age, has remained silent.
However, on Monday, for the first time since the speculation began, Makoni
met the President. The meeting lasted two hours, sources said.
Makoni, according to sources, believes he had nothing to apologise for as
“he had not been approached by anyone, neither had he himself approached
anybody” on the matter.
“To emphasise he had no interest in challenging for the presidency, Makoni
gave details of private consultancy work he will be doing for clients
outside the country that will make him unavailable over the elections
period,” the source said.
Makoni is seen as one of the young turks in ZANU-PF likely to succeed
President Mugabe, now in the twilight of his political career. He joined
President Mugabe’s government as deputy agriculture minister at the age of
30.
He became the country’s energy minister four years later and held the youth
portfolio thereafter. He abruptly left Cabinet only to emerge at SADC as the
regional grouping’s executive secretary.
Following his exit from SADC, Makoni has held several top positions in both
government and the private sector.
Makoni’s meeting with President Mugabe came as fear reigned supreme among
reformists within ZANU-PF who are beginning to dissociate themselves from
the splinter group.
President Mugabe has already begun acting against the rebels, sacking from
ZANU-PF Kudzai Mbudzi, who had already been suspended from the party for his
public opposition of war-veterans-led marches last month in support of the
Zimbabwean leader’s candidacy.
Speaking to The Financial Gazette last week, Mbudzi downplayed suggestions
of a new party, saying what was on the cards was a push for reform from
within ZANU-PF.
“If you are on a bus, and you have a problem with the driver, you do not
abandon the journey, or the bus. You do not abandon the mission. What you do
is simply change the driver,” Mbudzi said.
Promoters of the initiative have also failed in their bid to secure the
backing of Strive Masiyiwa, founder of Econet Wireless, the country’s
largest telecommunications company.
A close associate of Masiyiwa has revealed to this paper how an emissary of
the group had made overtures to Masiyiwa, who is based in Johannesburg, from
where he leads Econet’s international operations.
‘’Yes, I can confirm that I was approached to act as a go-between for
dialogue to take place. I told the people who approached me that Masiyiwa
would not even agree to talk. They insisted that I at least try, which I
did, and I got a flat ‘No’,’’ said Norman Nyazema, founding chairman of
Econet.
But even as the project appeared to stumble, a separate dimension to
internal ZANU-PF factionalism was emerging in Matabeleland.
A document has been circulated among politicians in both ZANU-PF and the MDC
in Bulawayo, purporting to weigh options available for those campaigning for
new leadership for the ruling party.
The document links Dumiso Dabengwa, a politburo member who was a senior
figure in PF ZAPU, as a potential leader of a splinter group. Dabengwa was
unavailable yesterday when The Financial Gazette sought comment. His office
said he was locked up in meetings.
The document says only a united front had the chance to dislodge President
Mugabe, but acknowledges how difficult this would be.
“The logistics of organising and running such a mammoth election will be
daunting, while opportunities for (President) Mugabe to use his incumbency
to manipulate the process on administrative and technical grounds will be
immense,” the document says.
While a boycott would be “desirable to discredit a sham election”, it says,
it would be difficult to persuade all opposition groups to shun the polls.
“To be successful, a boycott of the 2008 elections would have to be by all
and not just by some of the progressive, democratic and patriotic forces in
the opposition,” the document says.
A united front, it said, therefore remained the only viable option.
The report says consultations and a “report back” on the united front should
be completed by the end of this month. The outfit and its candidates would
be revealed on February 18, the document says.
Herald columnist Nathaniel Manheru (a nom de plume widely believed to be
that of President Mugabe’s chief spokesman) has conceded the groundwork by
those behind moves against the ageing Zimbabwean leader had been laid.
Writing recently, Manheru said they had in their corner figures that “do
hold positions in both the party and government”, and a “contingent of
ex-servicemen…high officers of the ruling party, including some controlling
provinces and with business interests”.
The group also included “Politburo members who are convening unilateral
meetings” and stirring up opposition to President Mugabe’s leadership,” he
said.
To root out the influence of the rebels ahead of the March elections,
President Mugabe is considering dissolving most local structures in the
“affected areas”, a ZANU-PF official said.
However, as of this week, meetings were still being held in the provinces to
persuade ZANU-PF’s grassroots to back the proposal. At one such meeting in
Masvingo last weekend, a retired senior army officer who is also a member of
the Politburo, held meetings with local party leaders throughout the
province.


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Mbeki plans another trip to Zim

FinGaz

Staff Reporter

SOUTH African President Thabo Mbeki plans another visit to Harare in a bid
to revive talks that collapsed last week when President Robert Mugabe
rejected opposition demands for a new constitution and a postponement of
elections scheduled for March.

With the breakdown of the talks attracting more criticism of his “quiet
diplomacy” approach to the Zimbabwean crisis, the South African leader at
the weekend reportedly told his negotiating team, led by Sydney Mufamadi,
that it was crucial to return to Harare “sooner, rather than later”.
“He told (his senior adviser Reverend Frank) Chikane in front of us that
there was an urgent need to return to Harare in the next week due to the
sharp differences between the two camps,” said a source.
“He has indicated to both parties that he wants to exhaust all available
avenues before he can consider officially declaring a deadlock to SADC (the
Southern African Development Community).”
Mbeki has on several previous occasions reported to SADC that progress was
being made but he now finds the process bogged down by arguments over the
timetable for elections and the introduction of a new constitution.
President Mugabe argues his opponents are not ready for the polls, which he
has set for March, and that a referendum – and not a committee of leaders
from both sides as suggested by the MDC – must decide on the new
constitution.
The MDC says March is too soon to hold elections, pointing out more time is
needed to allow the implementation of agreements reached so far.
One of the areas of contention is the MDC’s demand for the re-constitution
of the Zimbabwe Electoral Commission, which runs the country’s elections.
The MDC charges that ZANU-PF has stuffed the ZEC with loyalists so it can
rig the elections.
Last Thursday, “after two hours of lunch and two hours of talks on the
matter and other issues outside the talks”, according to a government
source, President Mugabe told Mbeki there would be no negotiation with the
MDC on the two outstanding matters.
Emerging from that meeting, Mbeki put on a brave face, telling journalists
he remained optimistic the talks would eventually succeed.
“I am confident the dialogue will be successful. I have listened to the
views of both sides and will continue with this process,” he said.
But government sources said he had found President Mugabe unyielding with
regard to opposition demands.
“President Mugabe told Mbeki there was no way he could implement a new
constitution when the opposition rejected a new constitution in the 2000
referendum,” said a government official familiar with the talks.
President Mugabe wants the MDC to exert pressure on “its Western allies” to
immediately lift personal sanctions imposed on senior government officials,
which ZANU-PF repeatedly blames for the economic meltdown.
But the opposition has dug its heels in on the matter, insisting it has no
authority over the European Union parliament and the United States Congress,
which imposed the measures.
The MDC is said to have asked Mbeki to refer the impasse to the SADC troika
on politics, defence and security, which is chaired by Angola.
Tendai Biti, one of the opposition negotiators, said the MDC would wait to
hear from Mbeki before deciding on the next course of action.
Eldred Masunungure, a political analyst who has been closely following the
talks, said the deadlock between ZANU PF and the MDC was another fatal blow
to Mbeki’s much-vaunted quiet diplomacy.
Sources closely following the talks said the Morgan Tsvangirai faction of
the MDC was reneging on earlier assurances it had made to Mbeki for fear of
losing its allies within the civic society movement that are for a new
constitution.
“Is it not ironic that the MDC is pressing for a new constitution before the
elections after having agreed to the 18th Constitutional amendments? Why
didn’t they push for a new constitution from the onset that incorporates the
harmonisation of the elections and an expanded parliament?” asked a source.
Yet others said the MDC had agreed to the amendments as a
confidence-building measure that was to soften President Mugabe into
accepting a wholesale overhaul of the country’s Constitution


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ZANU-PF heavies scramble for new seats

FinGaz

Clemence Manyukwe Staff Reporter

CABINET ministers sitting in Parliament as non-elected members are targeting
new constituencies created under the latest delimitation exercise so as to
secure their positions in government in the March elections following the
drastic reduction of non-constituency appointments.

Prospective ZANU-PF candidates started submitting their CVs to their
provincial leadership this week.
Justice Minister Patrick Chinamasa, who was appointed to the current
Parliament, this week launched his bid to represent the newly created
Manicaland constituency of Rusape Central.
David Mutasa, who is related to National Security Minister Didymus Mutasa,
is expected to contest against Chinamasa in party primaries to choose a
candidate for the constituency.
Didymus Mutasa, meanwhile, is understood to have abandoned Makoni North for
the newly created constituency of Headlands.
Before the creation of the Headlands constituency, Manicaland governor
Tinaye Chigudu and Zimbabwe National Liberation War Veterans Association
secretary for publicity, James Kaunye, had been expected to lock horns with
Mutasa in Makoni North.
Chigudu has opted not to stand in the ZANU-PF primaries, taking a cue from
Ray Kaukonde, the Mashonaland East governor.
Following his move to Headlands, ZANU-PF sources report that Mutasa is
supporting intensive lobbying to have the Makoni North seat reserved for a
female candidate.
Farm Mechanisation Minister Joseph Made is sticking to his Makoni West
constituency, where he faces stiff challenge from war veteran Nation
Madongorere.
In addition to Headlands and Rusape Central, nine new House of Assembly
constituencies have been created in Manicaland.
These include Musikavanhu and Dangamvura-Chikanga. Chimanimani, currently
held by ZANU-PF, has been split into two; Chimanimani East and West.
In Bulawayo, where the delimitation exercise resulted in the province ending
up with the least number of new House of Assembly seats, there is expected
to be feverish scrambling for seats among ZANU-PF heavyweights anxious to
secure their futures.
The constituency has 12 seats, up from seven in the last polls in 2005.
Information Minister Sikhanyiso Ndlovu is expected to stick to
Pelandaba-Mpopoma, where he has lost before.
Sithembiso Nyoni, the Small to Medium Enterprises Minister and ZANU-PF
national chairman John Nkomo are also said to be weighing their options.
In the Midlands, ZANU-PF’s provincial leadership was expected to meet late
yesterday for the processing of applications, including one from Rural
Housing Minister Emmerson Mnangagwa, who will run in one of the three urban
constituencies in Kwekwe district. These are Kwekwe Central, Mbizo and
Redcliff.
The Midlands has 28 constituencies, up from the previous 16.
The number of constituencies created per province was based on the number of
registered voters, according to the Zimbabwe Electoral Commission.
Harare province, which encompasses Chitungwiza, has the highest number of
House of Assembly seats at 29. In 2005, Harare had 18 constituencies.
Mines Minister Amos Midzi has in the past failed to win the hearts of Harare’s
urbanites and would this time be hoping for a change in fortunes.
In Masvingo, Indigenisation Minister Paul Mangwana would also be hoping that
his decision to relocate from Mashonaland West where the politics had turned
regional was the correct one.
Among the candidates who have already submitted their CVs in the volatile
Masvingo province are Eddison Zvobgo Junior and Edmund Mhere.


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Blackouts plunge economy further down the abyss

FinGaz

Dumisani Ndlela Business Editor

ZIMBABWE’S industries ground to a halt on Monday and Tuesday during the
nationwide power blackout, with mining operations being the hardest hit
after what authorities feared could be a major system disturbance on the
power distribution grid.

Reports indicated that the blackout, which occurred simultaneously in both
Zimbabwe and Zambia on Saturday and Monday evenings, spilling over into the
following days when supplies were only partially restored, had hit output in
the mining sector and trapped workers underground.
Jack Murewa, president of the Chamber of Mines, told Reuters news agency
that several hours of production had been lost during the outages and mines
flooded.
“Things came to a halt at most mines, with serious ramifications on
production,” Murewa said, adding: “Apart from the failure to produce, mines
also lost pumping capacity and lots of time will be spent pumping out water
from the ground.”
Murewa said although the total loss suffered by mining companies as a result
of the electrical failure was yet to be ascertained, it ran into millions of
United States dollars.
Reuters reported that among the mining firms affected by the power outages
was the Zimbabwe Platinum Mines, in which South Africa’s Impala Platinum,
the world’s second biggest producer of platinum, holds a majority stake.
Zambia state media said about 300 miners on night shift at units of Konkola
Copper Mines (KCM) and Mopani Copper Mines were trapped in shafts for hours
after power went off.
The power outage also caused partial flooding at Chililabombwe copper mine,
a unit of KCM, as water could not be pumped out, officials said.
Fortunately, most businesses in Zimbabwe were closed when the first power
outages plunged the country into darkness on Saturday, but hotels
operations, hospitals and other key facilities bore the brunt of an
unprecedented power supply interruption on the day, forcing generators to
rumble as most operations switched on to back up electricity power supplies
to mitigate the effects of the blackout.
But the entire economy was to feel the pinch of the problems after another
nation-wide power outage on Monday. To Page 38

From Page 4
The outage cut off the telecommunication system, plunging businesses into an
unprecedented chaos.
Banks, whose systems rely on the telecommunication network, were the hardest
hit, as were newspaper production operations.
Mutare Board & Paper Mills (MBPM), which supplies newsprint, the most
critical input for newspapers, was not spared either. Publishers were this
week calling on the power utility, ZESA Holdings, to consider the strategic
importance of MBPM to the survival of the print media in future.
The state-run national broadcaster had to run on generators.
The outages shut down automated teller machines, and most retail outlets,
including those dispensing drugs, were forced to close down.
All electronic transactions were made virtually impossible because of the
outages.
Sources say even State House, the official residence of the President, was
temporarily thrown into a state of shock.
State House has always been spared from the blackouts rolled by ZESA under a
load shedding programme caused by poor generation capacity at local power
plants as well as insufficient power imports.
Analysts said the frequent power disruptions could chase away investors,
dent growth and weaken the Zimbabwe dollar, which has already lost
considerable ground to other foreign units.
They said most market players have not fully priced in the effects of the
daily power cuts on the economy, which could run into trillions of dollars.
The outages also plunged the country into a water supply crisis as water
supply pumps into residential areas and industries failed due to
unavailability of power supplies.
An outbreak of water borne diseases, which had already hit several Harare
suburbs prior to the latest disaster, is now expected to overwhelm health
facilities across the country.
The blackouts also meant that there were no traffic lights in the central
business district. Police had to deploy officers into the streets to control
traffic to avoid road accidents.
Zimbabwe presently imports 35 percent of its energy requirements. Imports
from the Southern African Power Pool will only be available until 2007.
A planned expansion of the Kariba and Hwange power plants, under which
government could have raise over US$600 million from private equity
investors, could have seen the country significantly increasing its
capacity, with enough power for domestic requirements and surplus power for
export to the Southern African Development Community member states.
A proposed investment in Hydroelectrica de Cahora Bassa of Mozambique,
Zimbabwe would also have helped increase capacity.


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2008: Economy, economy, economy

FinGaz

Stanley Kwenda Staff Reporter
Unprecedented decline overshadows all other election issues
We unveil a new series this week under the banner ZIMBABWE DECIDES, taking
an in-depth look at events leading up to the March elections while providing
a platform for no-holds-bared debates and analysis on various other issues
related to the harmonised elections.

WITH elections expected in March this year, the main political parties, the
governing ZANU-PF and the feuding factions of the Movement for Democratic
Change (MDC), have begun taking their campaigns to the people.
Amid all the usual sloganeering synonymous with the elections, what are the
critical issues in these polls?
One thing is certain. ZANU-PF, which has dominated the country’s political
scene for the past 28 years, will repeat its tired mantra of attributing all
the country’s misfortunes to sanctions it claims have been “illegally”
imposed by Western countries at the insistence of the MDC. The main
opposition, ZANU-PF will once again charge, is a creation of former colonial
master – Britain, to drive home the point that only the ruling party stands
for “the people”.
In the disputed 2000 general elections, land was ZANU-PF’s campaign
platform. But how many more campaigns can the party base on this issue?
The MDC, which has been weakened by the October 2005 split, is on the other
hand focussing on the need for a new government to right ZANU-PF’s wrongs as
its campaign cry.
It says a new government is needed to restore good governance and rebuild
the economy, which it says has been ruined over the last 28 years of ZANU-PF
rule.
Last week, the MDC launched a website explaining what the party intends to
do once it gets into power. It also gives its perspective on the emotive
land issue that precipitated the collapse of the country’s economy, and
refutes ZANU-PF accusations that it intends to return land on which the
majority blacks have been resettled to its former white holders.
Less than a month away from the polls, neither party has yet published a
manifesto — a public declaration of intentions.
But ZANU-PF, which will be represented by President Robert Mugabe in the
presidential race, is already on the trail, promising the people it will
soon solve all their problems.
But it is the economy that will obviously be a major election issue,
especially after the events of the past few days.
This article was written on a computer using power from a stuttering
generator. The entire country has faced some of the worst power blackouts so
far, piling more misery on a population already enduring water cuts and cash
shortages.
Obviously, many voters remember they had a cashless Christmas and New Year
holidays, and that they have had to learn to go for days without meals.
When they cast their votes, the chronic water and electricity shortages that
most visibly represent the failures of the ZANU-PF government will be
uppermost in their minds.
Inflation as estimated by the International Monetary Fund (IMF) has scaled
past 150,000 percent, the highest in the world and quite unusual for a
country not at war.
“It will be a miracle if ZANU-PF wins this election, and such a miracle can
only be understood in the context of an electoral fraud. There is a lot of
despondency over how the economy is being run; prices are skyrocketing,
there is no food in the shops, people are dying because there are no drugs
in the hospitals,” said Hopewell Gumbo, a political analyst.
The ruling party insists the crisis is a direct result of the MDC’s Western
sponsored campaign to topple it from power through an economic implosion.
For the past nine years the government has failed to access foreign credit
after the IMF and other backers of its economic reforms pulled the plug on
Zimbabwe.
Following the haphazard land reforms of 2000 the United States and the
European Union introduced a raft of travel bans and targeted sanctions on
President Mugabe and his close lieutenants, effectively incinerating the
country’s finance and credit facilities.
Government apologists argue the foreign currency shortages, rapid
devaluation of the local unit and hyperinflation are a result of declared
and undeclared sanctions.
But government critics scoff at its attempts to absolve itself from any
wrongdoing.
They cite controversial land policies, endemic corruption, unbudgeted war
veterans payments and the country’s involvement in the costly Democratic
Republic of the Congo war as some of the major contributors to the economic
malaise.
It is however, among urban voters that the steep decline in the state of the
economy will be a more acutely felt grievance.
Across the country’s towns, people are being forced to make demeaning
changes to their lifestyles.
Bathtubs are now routinely turned into water storage facilities. Families
take the initiative to catch rainwater in all types of containers. Electric
stoves are obsolete, with urban families now using firewood to prepare meals
they can afford, or for which they can find ingredients.
Urban life has reverted to the Stone Age.
Weeks after schools re-opened, a real issue is the plummeting standards in
an education sector that was once the pride of the country.
Since 1997, when government began withdrawing support to the sector, the
number of dropouts from primary to tertiary education level has soared.
The Zimbabwe National Students’ Union conducted research last year to
establish the extent of the crisis.
It reported: “To date, government only funds about three percent of the
students in tertiary institutions. Due to lack of funding, students have
resorted to immoral and abominable sources of funding, for example
prostitution and peddling illicit drugs.”
Progressive Teachers Union of Zimbabwe president Raymond Majongwe said
teachers would continue to leave the country this year because of the
economic meltdown, which has made it impossible for many of them to survive
economically on their meagre salaries.
“We are being taken off the post. The ZANU-PF government is simply fighting
for political power at the expense of the economy. It will be important for
the people of Zimbabwe to think hard about the situation that we find
ourselves in and then decide how they want to be governed,” said Majongwe.
Infrastructure at state-owned schools continues to deteriorate. At one
Harare school, this reporter found four pupils sharing a single desk and one
textbook.
Boarding schools are asking students to bring their own food – ranging from
rice to cooking oil - because they can no longer afford to feed them.
This only affects the children of the poor. Ironically, top government
officials send their own offspring to institutions of learning in booming
economies, particularly in the West.
Although there are growing signs that the appetite to vote is being whetted
with every new crisis, there is little indication that the elections will be
free and fair.
On Monday, the Zimbabwean police gave the clearest evidence yet that
regionally brokered talks have failed when they barred the MDC from going
ahead with a march in Harare to protest against misrule and economic
mismanagement.
The police said the MDC march would cause “mayhem”. There were no such
concerns or bans when ZANU-PF supporters undertook the million-man march
last month.


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Cash crisis: Scourge to ordinary people

FinGaz

Kumbirai Mafunda Senior Business Reporter

WHEN Nhamo Mutamangira, a widowed mother of five, suddenly fell ill early
this month, she needed urgent medical attention. She had no resources, but
managed to get to Parirenyatwa Group of Hospitals – one of the country’s
largest referral hospitals – with the help of a Good Samaritan. But that
could not guarantee her immediate help.

She spent over five hours at the hospital without any assistance, with
relatives and friends battling to contact her brother, Tendai, in case he
could help them out of the situation by taking her to a private medical
facility where drugs, medical personnel and equipment are still available.
Indeed Tendai finally arrived, and had Nhamo moved to a private hospital
close to the public health facility. But that was the beginning of a
nightmare.
Staff at the private hospital flatly refused to assist her unless they paid
cash upfront.
Tendai had the money, but it was locked in his bank, where hundreds of
people have been spending long days in queues to make withdrawals, but still
leaving at the end of the day without accessing cash.
Eventually, Nhamo had to be taken back home, writhing in great pain.
Desperate to save his sister’s life, Tendai woke up the following morning,
queued for cash at the bank as early as 3 am, but only managing to secure
barely enough cash to pay for the admission fees.
And, as fate would have it, Nhamo died the same day, a casualty of a cash
crisis that has afflicted the recession–plagued economy since October last
year.
Last week the Reserve Bank of Zimbabwe (RBZ) moved to ease the cash crunch
by introducing higher denominated bearer cheques of $1 million, $5 million
and $10 million.
The new notes came barely a month after the lender of the last resort had
introduced $250 000, $500 000 and $750 000 bearer cheques ahead of the
festive season. But the measures appear to have had little impact in
alleviating the cash crisis as evidenced by the meandering queues outside
most financial institutions and most banks even slashed maximum cash
withdrawal limits to between $50 million and $200 million from the $500
million announced by RBZ governor Gideon Gono last week.
And this week the biting cash crunch forced Gono to humiliate most banks by
naming and shaming them for aggravating the cash crisis by creating
artificial shortages after failing to collect money from the central bank
and dispatching it to clients.
Gono charged that some banking institutions were engaging in imprudent and
unethical practices, such as tying depositors’ funds into illiquid
speculative investments such as real estate, stocks and trading in foreign
currency on the parallel market and therefore creating cash shortages.
The central bank chief took the unprecedented move of showing captains of
industry and the media RBZ vaults where higher–denominated bearer cheques
amounting to $100 trillion had not been collected by the banks.
Gono advised the banking public to report to the police or the monetary
authorities banks failing to dispense cash on demand.
On Tuesday, Finance Minister Samuel Mumbengegwi gave the banks up to next
week to clear the long queues or face unspecified action.
“Your are just undefendable. It is high time government does what it has to
do because I cannot continue to defend you because you are simply
undefendable,” he was quoted in a local daily saying.
Gono last week warned of the unintended consequences of introducing higher
denominated notes particularly in an environment of high indiscipline on the
part of economic agencies and in light of the prevailing shortages.
“Just like people have been happy with the abundant rains, the downside has
been that farmers cannot go into the fields because of the incessant rains
while crop nutrients are being lost due to leaching,” he said. “Higher
denominations are good, but it backfires when businesses hike prices,” he
said.
In its weekly commentary Kingdom Stockbrokers (KSB) echoed Gono’s
sentiments.
The brokerage firm said while the introduction of higher denominated bearer
cheques was welcome, the measures were by no means the panacea to the
country’s problems. KSB said a long–term solution to the cash crisis is the
stabilisation of the economy through reducing inflation and the
re-establishment of positive real interest rates.
Given that the amount of money held for transactions and precautionary
purposes depends, among others, on the movements in prices,
KSB said the current hyperinflation environment would soon render the new
and higher cash withdrawal limit inadequate.
“The hyperinflationary environment coupled with low nominal investment rates
has caused serious negative real investment rates,” said KSB.
“These negative returns on investment have significantly reduced banking
habit as the resultant reduction in the opportunity cost of holding cash has
given rise to significant speculative activities, which have worsened the
inflation situation through an increase in asset price inflation. Such
financial disintermediation weakens monetary policy effectiveness as its
transmission mechanism works through banks,” added KSB.
Now in their fourth consecutive month, the country’s cash shortages, the
latest addition to the long list of shortages that have ravaged the country,
has brought a lot of suffering and pain to most Zimbabweans.
People cannot get medical attention after failing to secure cash from their
banks. Service providers no longer accept electronic payment methods like
the Real Time Gross Settlement facility because transactions are taking long
as much as a week before funds reflect in the receiving account.
Cheque payments are no longer practical because payment limits imposed by
the central bank have been overtaken by inflation.
As a result, even those trying to give the dead decent burials have been
affected.
Funeral homes are stuck with dead bodies for days because relatives have to
battle to withdraw cash from banks to transport corpses and meet burial
costs.
And while this is happening, unemployed youths are cashing in on the crisis
buy joining queues on behalf of people desperate to get cash, taking home as
much as $20 million per day for just helping them jump queues. Unemployement
in the country is now estimated to be close to 90 percent.
Security guards manning bank premisess have set up make–shift stalls next to
the queues where they sell anything ranging from maputi to cigarettes and
newspapers to make that extra dollar.
The guards say the “extra trade” helps them supplement their meagre salaries
in a country ravaged by one of the highest inflation rates in the world.
“It makes me earn extra money to take care of my family,” says Tapera
Matuke, a guard manning one of the black owned banks.
Economic observers say because of hyperinflation which is compelling most
people to use up their savings on buying daily basic consummables, life has
been reduced to queuing, for cash and basic commodities like bread.
Nonetheless, while enterprising youths make a killing out of the cash
crunch, most Zimbabweans continue to suffer.
Inevitably, Zimbabwe now needs not the much talked-about turnaround, but
drastic economic surgery to turn the corner back to nomalcy.


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Broad coalition, not Makoni, only hope for winning polls

FinGaz

EDITOR – While the arrival of Dr Simba Makoni on the opposition political
stage is a welcome development as far as the expansion of democratic space
is concerned, it is nothing to write home about.
Makoni is a Zimbabwean whose rights should be respected. He is a ZANU-PF
person, youngish and handsome, but without any success story to talk about.
Makoni is a real ZANU-PF mafikizolo who is being touted for the Zimbabwean
presidency.
Is it the impressive academic background or a successful track record that
Zimbabweans want in Makoni?
Some Zimbabweans are blind to the extent of not knowing what they want, i.e.
some people want Morgan Tsvangirai because he was once the secretary-general
of the ZCTU, while others want the MDC leader to lead this country because
he comes from Buhera (Manicaland).
The only way we can unseat (President) Robert Mugabe is through a united
coalition, which Morgan Tsvangirai dismissed from day one.
Zimbabweans are not careful people with their presidential choices. It does
not make sense to elect someone president on the basis of coming from the
same region with her/him or sharing the same totem.
Nyika iri kunzi inofanirwa kutongwa neVahera, Dziva nanaGushungo chete.

Kurauone Chihwayi
Harare


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Zim losing potential export earnings

FinGaz

Clemence Manyukwe Staff Reporter

ZIMBABWE is losing US$650 million in potential farm export earnings due to a
deepening shortage of power and key inputs, a Parliamentary committee
reports.

In its latest report on the state of preparedness for the 2007/8 summer
season, the Portfolio Committee on Lands, Land Reform, Resettlement and
Water Resources said farmers faced delays in the processing of loan
applications, adding to already existing problems pertaining to the supply
of seed, fertiliser, fuel and power.
“Apart from seed maize, your committee was informed that seed for other
crops was also in short supply on the market. The sunflower situation was
the most critical, with virtually nothing in stock,” the report said.
“Representatives of the fertiliser industry informed your committee that the
industry was not able to meet national requirements for fertiliser due to a
combination of such factors as unviable prices, scarcity of foreign
currency, power outages and erratic coal supplies”.
Fertiliser companies said they required US$35.6 million between September
last year and next month to produce 265 000 tonnes of the commodity.
The committee said even if the companies were to receive the required
foreign currency, they would not be able to produce enough fertiliser as
production capacity remained at 250 000 tonnes per year against a national
requirement of 750 000 tonnes.
Zimbabwe’s economy is heavily dependent on agriculture.
A hurried land reform has decimated the country’s agriculture, resulting in
a massive slump in foreign exchange receipts, particularly from tobacco, the
single largest foreign currency earner.
“At the time your committee conducted its enquiry, the permanent secretary
for the Ministry of Agriculture confirmed an acute shortage of fuel.
“He said only six million litres against a national requirement of 119
million litres had been sourced and this was being distributed at 1 000
litres per farmer, which stakeholders felt was a drop in the ocean if set
targets for the summer crop were to be met,” the committee said.
Parliamentarians said the situation regarding fertiliser and agro–chemicals
had been a cause of concern to them for the past five years, with government
failing to come up with a lasting solution.
On seed, growers reported the gaping deficit was a result of unviable
prices, not their failure to produce.
“Your committee was informed that the country was under-producing by US$650
million worth of agricultural exports and importing goods worth US$350
million to cover mainly food deficits, annually,” the report said.
In a report on the winter crop last year, the committee said Zimbabwe had
accumulated a farm trade deficit of US$5 billion over the last five years.
The committee said tobacco output forecasts for this season were varied.
The Zimbabwe Tobacco Association had projected output of 120 million kg,
while the Farmers Development Trust expects yields to stand at 150 million
kg.
Meanwhile, a local stockbroking firm has quoted the president of the
Zimbabwe Tobacco Association, Andrew Ferreira saying the country may produce
41 percent less tobacco this year than originally forecast due to the
unfavourable weather conditions and a lack of fertilisers.
Initially a forecast figure of 120 million kilograms had been made but this
has now been reduced to 70 million kilograms.
Zimbabwe produced 73 million kilograms of tobacco last year, earning the
country US$170 million. “We’re expecting a crop of less than 70 million
kilograms because of drought in the early season and unseasonably heavy
rains more recently have affected the crop,’’ Ferreira said. “Some growers
have opted out of tobacco because of the problems in getting hold of inputs”.
Tobacco production in Zimbabwe, which produces mainly flue–cured tobacco
which rivals that from the U.S. for quality, has plummeted since the year
2000 when it produced 236 million kilograms, earning Zimbabwe US$400
million.


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Efforts to help HIV patients continue

FinGaz

Zhean Gwaze Staff Reporter
USAID support expected to increase women and children’s access to HIV
prevention services
“SOMETIMES in life,” HIV/AIDS activist Elizabeth Glaser once remarked,
“there is that moment when it’s possible to make a change for the better.”

Faced with the prospect of more than 17 500 children being infected with HIV
each year, Zimbabwe is looking for that moment, when it can increase its
thrust to eradicate Aids among children.
Last week, the Ministry of Health received a major boost to its national
prevention of mother to child transmission (PMTCT) programme at a ceremony
in Murehwa.
The Elizabeth Glaser Paediatric AIDS Foundation (EGPAF) rolled out a
five–year initiative with US$12.5 million support from the United States
Agency for International Development (USAID), which is expected to
dramatically increase women and children’s access to HIV prevention
services.
Glaser unknowingly passed the HIV virus to her son and daughter, and when
her daughter died, she created a foundation to save her son and other
children suffering from the disease.
Glaser, who subsequently succumbed to AIDS herself, was the first person to
raise awareness about the plight of children infected with HIV.
But Zimbabwe will have to do more to address the paucity males participating
in the programme.
As testimony to this, women constituted the greater segment of the audience
at last week’s event, prompting television talk show host Rebecca Chisamba
to say: “Vanababa vanoti izvi ndezvemadzimai asi sezvo zvanzi baba ndivo
musoro wemba, ko muripiko?” (Men say this programme is for women but since
at the same time they say they head households, where are they?)
It later emerged that men in the area had opted to queue up for farming
inputs at the Murehwa Grain Marketing Board.
However, by the time the USAID event ended, no farm implements had yet been
distributed.
Only women gave testimonies on how PMTCT had helped them protect their
unborn babies from contracting HIV.
An official from Murehwa polyclinic said although the health centre had not
done a survey on the number of males accompanying their wives for PMTCT, the
numbers were insignificant.
According to a member of the Zimbabwe Aids Prevention Project (ZAPP) support
group, there are only four males out of the 22 members of the group.
EGPAF country director Patricia Mbetu says: “We need to ensure that more
male partners of pregnant women are counselled and tested and are actively
involved in PMTCT at home and in the community.”
Senator Sheila Mahere a former director of Msasa Project highlighted the
links between HIV/Aids and women. Surveys carried out by civic groups showed
that men refused to be tested and easily walked out on their pregnant wives
to remarry, even though the expected baby can be HIV negative.
“It has been one of our main advocacy issues in Parliament to have couples
have the same test.
“I think if the woman is tested and turns out positive, clinics should
insist that she bring her partner so that he too can be tested, and then
reveal the results to both parties.
“It’s really weird when it comes to HIV because there is confidentiality,
but considering that the aim now is to have people live, this should be
revisited,” Mahere said.
USAID support has enabled more than 280 000 pregnant women to access PMTCT
services, and of these, 180 000 have been tested for HIV and 166 000 have
received the results.
In Zimbabwe, of 360 000 women who fall pregnant every year, 60 000 are HIV
positive.
At least 34 000 women living with HIV have been identified within the
programme, and 22 500 of them and 17 000 infants have received single dose
Nevirapine prophylaxis.
“These are impressive statistics for any national programme, and USAID is
determined to build upon this success,” said USAID director Karen Freeman.
EGPAF says over the next five years it will follow up on HIV infected
families who have gone through the initial stages of PMTCT, improve pregnant
mothers’ access to CD4 count analysis, include more psychosocial support,
and introduce more effective prophylaxis regimens.
“But even in the face of adversity, we are continually inspired because we
know that when done properly, programmes to prevent mother to child
transmission of HIV can and do work.
“ We know that the combination of vision and courage with the appropriate
resources and leadership can effect real change,” said Pamela Barnes, EGPAF
president.


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Mann’s fate in Patel’s hands

FinGaz

Clemence Manyukwe Staff Reporter

SITTING in his cell at Chikurubi Maximum prison, British mercenary Simon
Mann could well be trying to untangle the contradictions and legal dilemmas
surrounding those involved in his trial.

A catch–22 situation revolves around whether acting Attorney General (AG)
Bharat Patel can deliver judgment on the Briton’s appeal against a lower
court’s decision to extradite him to Equatorial Guinea, in view of the fact
that he presided over the same matter last year as a High Court judge.
Wearing his judiciary hat then, Patel heard the extradition appeal
separately from members of the executive and parliament who are intent on
having Mann extradited. But now as an ex–officio Member of Parliament and
Cabinet, Patel freely mingles with these parties.
Patel reserved judgment in the case, and is yet to come up with a verdict a
month after taking over from Sobusa Gula–Ndebele, who was suspended towards
the end of last year after being accused of abusing his office.
Mann’s case represents a number of issues that are likely to cause headaches
for Patel. He may find that positions he has previously taken as a judge are
at cross purposes with those taken by prosecutors now under his command in
the AG’s office.
The Law Society of Zimbabwe (LSZ)’s council members are expected to meet
next week to deliberate on the legal tangle and come up with a position
regarding Patel’s appointment, LSZ president Beatrice Mtetwa told the
Financial Gazette on Monday. She could not comment further.
But Chris Mhike, a lawyer, said there was concern over Patel’s appointment,
as it goes against the doctrine of the separation of powers.
“My concern as a legal practitioner is that I am confronted with a situation
where the concept of separation of powers is compromised in the manner that
it has been in relation to justice Patel’s appointment. I say so because the
judiciary and the prosecuting authorities clearly fall into two separate
categories.”
“Patel’s appointment is problematic in that it is not clear whether or not
he has now resigned as a judge of the High Court.”
Constitutional law expert Lovemore Madhuku said under current law, there was
nothing wrong with a member of the judiciary being appointed AG.
But, he said, “it is a bad constitutional provision”.
The law requires that for a person to be appointed to the position of
Attorney General, he or she must have the same qualifications as a judge,
and vice–versa.
Madhuku said the post of AG is unique in that it makes the holder a member
of both the executive and the judiciary. But as the top prosecutor the AG is
supposed to be independent of both branches.
“The problem is that in the political context of Zimbabwe, the AG is seen as
a mere extension of the executive, and so the public might be justified to
believe that, while serving as acting AG, judge Patel may be manipulated by
the executive, and that is not good for the judiciary,” said Madhuku.
Mann’s lawyer, Jonathan Samkange, could not be reached for comment.
When Mann was arrested in 2004 along with 69 others while allegedly on their
way to Equatorial Guinea to stage a coup, it was Patel, also serving as
acting AG at the time, who directed that the alleged mercenaries be
prosecuted.
Months later, Patel was appointed to the bench. Last year, Mann, whose
prosecution Patel had ordered, lodged an appeal in the High Court against
conviction and deportation to Equatorial Guinea. The presiding judge turned
out to be Patel.
Mann, an Eton graduate, had previous associations with Executive Outcomes,
one of the world’s most renowned mercenary outfits, before he co-founded his
own group, Sandline International, in 1996.


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Party talks: Compromise a necessary evil

FinGaz

Daniel Molokele

IN 1997, I decided to pass up a chance to attain the status of being ‘one of
the founding members’ of the Movement for Democratic Change (MDC). Since
then I have never joined any other political party up to today. I had
several reasons for all this.

I intend to highlight them in my forthcoming book on my role and
contribution to the student movement in Zimbabwe. But for the purposes of
this debate, I will immediately highlight one of them.
I decided not to join the MDC because I knew that it had the ultimate duty
to engage the status quo and help to move the Zimbabwean political
dispensation forward.
Inevitably, such a task involved two asymmetrical processes of engagement
with ZANU–PF. The first option was an outright victory over the ruling
party. (Witness the MMD’s experience with UNIP in Zambia).
The second one was by way for compromise in the event of a failure by the
MDC to completely dislodge the ruling party.
The elections of both 2000 and 2002 were clearly dominated by high hopes and
expectations of an outright victory on the part of the MDC. Unfortunately as
history would have it, it was not to be. ZANU–PF managed to survive the MDC
juggernaut by hook or crook. The rest as they say is history.
Be that as it may, the last chance was presented to the MDC in March 2005
but, the MDC proved by then that it had lost much of its original venom and
ZANU–PF this time had an easier task of brushing off the challenge.
The issue of the Senatorial elections had the effect of further dividing the
MDC and in the end gave an upper hand to ZANU–PF.
Since the October 2005 split, it was always going to be harder for the MDC
to stick to the first option. It is thus hardly a big surprise that as I
write today, the dominant alternative at the moment is now option B.
Both MDC and ZANU–PF need to compromise in order to move forward. Zimbabwe
has virtually come to a standstill.
The difference between the two political parties has narrowed down so much
that they are both presently facing the risk of political irrelevance.
Neither of the two can honestly claim to have the full confidence of the
electorate. Let alone the greater Zimbabwean populace.
Public confidence in the electoral system of Zimbabwe is now at an all time
low. It is doubtful that, given the history of lack of credibility of the
national polls, the forthcoming elections will garner sufficient interest
from a weary electorate. The reality is that voters are suffering from a
serious bout of election fatigue, which can result in voter apathy.
In this regard, one should seriously take note of the words in Parliament of
the likes of Patrick Chinamasa, Joram Gumbo, Thokozani Khupe, Gibson Sibanda
and Welshman Ncube on the eve of the unprecedented unanimous endorsement of
the 18th Constitutional Amendment.
They all clearly held the notion that as long as the political impasse
continued to persist, then both ZANU–PF and MDC risked being accused of
political sterility and stagnation. They both risked outright rejection by
the long–suffering masses of Zimbabwe who have borne the brunt of the
failure of the national electoral system to produce a clear political
leadership for our people.
Here are some excerpts from the reports of the parliamentary debate at that
time:
“This (agreement by ZANU–PF and the MDC on the amendments) should be
regarded as the first step of a holistic resolution to the Zimbabwe crisis,”
said ThokozaniKhupe. She said the negotiating teams should deliberate
further on other important aspects, including the overhaul of the security,
media and electoral laws.
Bulawayo North–East MP and secretary general of the Mutambara faction
Welshman Ncube also supported the Bill:
“I fully and unconditionally endorse the remarks made by my colleague (Ms
Khupe). I confirm what the Honourable Minister of Justice has said in his
statement in respect of the process and content of the negotiations between
the government and ZANU–PF on one hand, and the MDC in its collective
 sense.”
He said the two parties had taken the right steps to address the
socio–economic challenges and the two leaders of the MDC factions were
impressed with the progress being made through dialogue.
Nkulumane legislator and deputy leader in the Mutambara faction Gibson
Sibanda also welcomed the landmark development, saying the nation should now
collectively find a lasting solution to its problems.
Sibanda said despite the divisions between ZANU–PF and the MDC, the two
parties were showing maturity in addressing their differences.
ZANU–PF chief whip and MP for Mberengwa West Joram Gumbo said these events
showed Zimbabweans were level–minded people who could sit together and
resolve their own problems.
On the other hand, other leadership paradigms such as the notion of a “third
force’ were already being whispered around the dark alleys of the corridors
of power at the expense of both the political parties.
ZANU–PF could not decisively defeat the MDC and the MDC could not decisively
dislodge ZANU–PF and so as political logic demands, the two had no option
but to reach out for some form of a compromise. This is not a unique
political experience at all.
In South Africa, in the late 1980s, a process of engagement between the
apartheid regime and the nationalist movement was begun against all odds. By
1990, the process had led to the unbanning of crucial organisations such as
the ANC, SACP and the PAC.
Not only that, political activists returned from exile and those that were
in solitary confinement were released to actively lead the process of
political engagement between the hitherto bitterest of political enemies.
The Patriotic Front (as represented in the battlefield by Zanla and Zipra)
had to engage the powers that be in the Rhodesian government, which led to
the Lancaster House agreement.
Zimbabwe was born on the mortal bedside of another one called Rhodesia in
April 1980.
It was compromise that led to a breakthrough amid the internecine nature of
the armed liberation movement. Over 40 000 innocent civilians lost their
lives in that bloody national political conflict.
After the euphoria of independence, all hell broke loose in Midlands and
Matabeleland as the struggle for political hegemony between the two former
Patriotic Front allies escalated.
Between 1982 and 1987, over 20 000 innocent civilians lost their precious
lives in a political struggle that had tribalistic or ethnic overtones. (The
great Ndebele versus Shona debate)
But still in December 1987, after several months of secret negotiations, as
facilitated by the late President Canaan Banana, Zimbabweans and indeed the
international community were pleasantly suprised to see President Mugabe and
Nkomo sign the Unity Accord to end the ZANU–PF/PF–ZAPU conflict.
To the extent that the ANC managed to compromise with the Nationalist Party;
the Patriotic Front with the Rhodesian Front and PF–ZAPU with ZANU–PF; it
should thus not come as a surprise that both MDC and ZANU–PF are now on the
verge of coming up with a political compromise that might initiate the
process of unlocking the political deadlock that has crippled the nation’s
once thriving economy.
Both MDC and ZANU–PF owe the people of Zimbabwe a compromise that will help
heal the nation and open the society for a broader national discourse.
Compromise, in whatever form, is the necessary evil that both parties have
to face. It is a bitter pill that will ultimately prove to be part of a
political panacea to heal the socio–economic malaise that has bedevilled our
once prosperous country.
Just last week I passed by some desperate fellow countrymen at Marabstad
Home Affairs Department in Pretoria and also, as usual met the desperate
hand of Zimbabwean blind beggars at several traffic lights and thought to
myself; why are we as Zimbabweans allowing this humiliation and indignity of
our people to continue unabated?
Yes there is the necessary national ideological debate that needs to
continue. We cannot avoid it at all. But it belongs to those that have
access to resources such as the internet and its concomitant discussion
groups or forums. But what about those of us that are presently wallowing at
the Lindela Deportation Centre, Marabstad, Hillbrow, Sun City prison complex
etcetera.
Don’t they deserve a better chance of a peaceful life back home in Zimbabwe
at all? I honestly believe that if the leading politicians cast their petty
differences aside and focus on nation building, those long suffering
Zimbabweans will get another chance to be willingly associated with the once
‘Proudly Zimbabwean’ brand.
Last but not least, let me end by quoting Morgan Tsvangirai. I was less than
three meters away from the podium in Harare on July 31, 2006 when he said
these immortal words to the delegates at the launch of the Save Zimbabwe
Campaign. “Let us as politicians not listen to our voices but that of the
people. Our people are saying stop dividing us and start uniting us.”
So if it means that ZANU–PF and MDC have to agree to a political compromise
to end the crippling impasse, then let it be. The time for that has come.
The time for that is now.
The MDC has not been “Zanunised”. Neither has ZANU–PF been “MDCised”.
The political reality we all have to face is that the inevitable process of
compromise has eventually dawned yet again on the Zimbabwean political
landscape and hopefully it will ultimately prove to be for our own good.
Daniel Molokele is a human rights lawyer and civic society leader who is
based in South Africa.


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An intolerable bungle

FinGaz

Comment

THE country plunged into an unprecedented nationwide power failure on two
separate days this week, throwing the entire economy into turmoil.

It was not the magnitude of the blackouts that was strange; it was the
deafening silence from ZESA Holdings and its principals who should be called
to account for the disaster.
Across the border in South Africa, there has been an outcry over brief power
outages. Yet President Thabo Mbeki saw it fit to personally apologise to
South African citizens for the “minor” power crisis, and to admit his
government was wrong when it turned down advice from its power utility,
Eskom, to inject more capital into the creation of new power plants that
could have mitigated the crisis.
Perhaps the tragedy in this country is that long-suffering Zimbabweans have
ceased to be a complaining lot, and have become despondent and resigned to
their fate.
But that does not grant public officers the right to abuse and show scant
regard for the welfare of citizens and businesses operating in this volatile
and frail economy.
Zimbabweans received no apology from ZESA, whose key operations have been
obscured by convoluted subsidiary dealings in agriculture and exports, as
well as mining projects, which diverted them from key areas of business but
yielded too little or nothing to justify the spree.
There was neither an apology nor an explanation of the crisis from the
Zimbabwe Electricity Regulatory Commission. It was also business as usual
for Energy Minister Michael Nyambuya.
Government has for a very long time ignored pleas from key stakeholders to
increase investment towards power generation.
It was known much earlier that traditional sources of power imports would
dry up in 2007 because of increasing demand for electricity in regional
countries, resulting in those countries having no surplus power to export to
Zimbabwe.
Yet very little or nothing meaningful was done to boost domestic power
output. In fact, Engineer Simba Mangwengwende had to be managed out of ZESA
for steering the power utility on the correct path.
The country is lucky that despite the gloomy regional power supply
situation, Mozambique can still export at most 300MW of electricity to
Zimbabwe, despite strong competition from deep-pocketed neighbours.
Yet ZESA has always been stuck with overdue invoices for power imports, and
has often had to be cut off by suppliers to pay up its dues.
ZESA can possibly generate up to 1 110MW from its various power plants out
of a potential capacity of 1 680MW.
Yet electricity generation at ZESA’s power plants is a far cry from the
ideal output thresholds.
Power demand for peak periods during the year has often run into 2 000MW
during certain months — like in June and July last year - despite the fact
that most industrial concerns are operating at between 30 and 40 percent
capacity.
As far back as 2000, ZESA recommended to government that it should hive off
a 50 percent stake in both Hwange and Kariba South power stations to private
investors, raise US$600 million from the disposal and boost the country’s
electricity generating capacity.
Proceeds from the privatisation were earmarked for expansion projects at the
Hwange and Kariba South power stations, as well as to retire ZESA’s external
debts and facilitate other power generation investments.
While overtures were made to court international investors for the deals, no
transactions have up to now been made because of government bickering and
political fears that Zimbabwe could lose its family silverware.
But the two plants continue to deteriorate because of lack of maintenance
and spares.
Government has only encouraged piecemeal deals that have done very little to
transform the beleaguered power utility’s fortunes.
ZESA signed a deal in January last year with Turbo Engineering of Russia for
a US$150 million joint venture, facilitating the creation of 17 mini-hydro
electricity power plants across the country. The utility also signed in 2004
a memorandum of understanding with China National Aero Technology Import and
Export for the injection of US$600 million towards the renovation of Hwange
Power Station.
Talks were held early last year for a Build Operate and Transfer
arrangement.
The utility also entered into several agreements for the refurbishment of
its power plants with Indian, Malaysian and Iranian investors, with very
little to show for the deals, some of them riding on
government-to-government cooperation agreements.
Recently, ZESA signed a US$40 million deal with Namibia’s NamPower for the
refurbishment of the Hwange Thermal Power Plant, terms of which included a
firm power supply agreement under which NamPower started receiving cheap
electricity from Hwange this month, despite chronic shortages in Zimbabwe.
Clearly, it is the lack of commitment on the part of those responsible that
has plunged us into the current chaos.
The fact that they do not feel accountable to the general population has
enabled them to ride roughshod on the people, disregarding their mandates.
But, certainly, this attitude cannot continue.


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Ministry caught flat-footed again

FinGaz

Mavis Makuni

Agriculture Minister Rugare Gumbo , began his tenure in this portfolio with
great flourish when he announced that the 2007-208 farming season would be
the “Mother of all agricultural seasons” when farmers would perform wonders
and production would soar.

Speaking at the Zimbabwe Framers’ Union annual congress in Masvingo in
September, Gumbo announced that the government had set national strategic
cropping targets, which would require 3,5 million hectares to be put under
maize and other crops. This would enable the country to achieve food
security. Many Zimbabweans must have suppressed strong feelings of
incredulity because Gumbo made this over-optimistic announcement against a
background of a solid seven-year record of failure by the Ministry of
Agriculture to get the equation for a successful cropping season right.
Disastrous farming seasons have been the order of the day since 2000 when
land was allocated to new farmers under the land reform programme. Various
reasons have been given over the years for the failure of the agricultural
sector to perform at a level that would ensure food security and restore
Zimbabwe’s status as the regional bread basket.
The drought has usually been cited as the main culprit when expectations
have not been met and crop forecasts did not tally with the situation on the
ground. Under ex-Agriculture Minister, Joseph Made, some of the reasons
cited for repeated failure and under-performance were ridiculous and
hilarious. One year, after projecting a bumper harvest that eventually
failed to materialise, the minister said an airplane pilot was to blame for
the disastrous state of affairs. How so? The minister explained that during
a flight undertaken to survey the state of crops, the pilot had flown too
high, apparently rendering the bespectacled Made unable to differentiate
between greenery that represented lush maize fields and that which was tall
grass .
As a result, his enthusiastic forecast of a bumper harvest turned into a
major disaster when the country recorded a large maize deficit that resulted
in nationwide food shortages. At other times failure to produce enough was
attributed to havoc wreaked by birds on the winter wheat crop and lack of
draught power. In the later years, the authorities began to admit, albeit
indirectly, that the main problem could have been the fact that people who
had neither an inclination for nor an inkling about farming had acquired
farms that they regarded only as weekend venues for braais and parties.
It was also revealed that the reason some people had applied for land was
because they were only interested in the mansions at some farm homesteads.
They had no intention to dirty their hands by engaging in the hard slog that
characterizes successful large-scale farming.
Then there were the scandals involving farmers abusing subsidized fuel and
inputs availed by the government. While the officials have blamed farmers
for these ills, they (farmers) have in turn complained about the failure of
the Ministry of Agriculture to disburse loans, seed and fertilizers
timeously. The need to pass the buck culminated in Made, claiming last year
that a monkey was to blame for a nationwide shortage of fertilizer that was
blamed for poor yields.
Despite his over-ambitious hopes for the “Mother of all seasons”, it is
clear that Minister Gumbo’s dream will not come true this year, although
copious rains have been received. The usual problems that have dogged the
agricultural sector have once again conspired to rule out a bumper harvest.
Some problems, such as disruptions caused by unending invasions and
evictions, cannot be attributed to the ministry. Another factor that has
affected production relates to disputes that arise when new “offer letters”
are issued and some farmers are required to make way for new occupiers. The
result is usually that both the displaced farmer and the one taking over the
property cannot be productive in the current season.
It was recently announced that an order had been issued from the very top to
stop the issuing of new offer letters but the intervention came rather late
in the day considering the disruptions caused and the ill will sparked .
Indications are that a majority of the new commercial farmers are not on the
land, despite the fact that the government has distributed implements under
the farm mechanization programme. There have been reports that this facility
is already being abused with some farmers reportedly using the tractors
received as hired transport and others selling their allocated implements
and equipment.
It would seem that despite being a new broom determined to sweep clean,
Gumbo’s first season of presiding over the Agriculture portfolio will be as
disastrous as those seen under Made’s stewardship. Gumbo has apparently
failed to break the jinx and the ministry has been caught flat-footed for
the umpteenth time with regard to preparedness for the planting season. The
perennial complaints about the non-availability and late delivery of inputs
to farmers are still being voiced. A particular problem following the heavy
rains this year is the lack of fertilizer for top dressing. One wonders
whether any strategic planning is undertaken so as to come up with
contingencies for eventualities such as leaching caused by excessive rains.
The drought and other factors have been blamed in the past for the dismal
performance of the agricultural sector. No doubt the same excuses and
explanations will be given when the current season proves to be as
disastrous as all the others since the land reform programme began in 2000.
Desperate Zimbabweans always hope that a successful agricultural season
resulting in the availability of enough food could could bring a measure of
relief. But they watch in disbelief as the comedy of errors is repeated
every year. Farming is a fast yielding activity through which positive
results can be achieved in the first season of embarking on it.
But Zimbabwe is into the eighth year of the farming revolution that began in
2000 and is yet to score an all-round successful cropping season. After
blaming saboteurs, sanctions, the drought, etc. the authorities now need to
address the problems that have resulted in the ruination of this sector
honestly.


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MDC has a historic opportunity!

FinGaz

Ken Mufuka

In times of crisis, God raises up a leader who will be equal to the
challenge at hand. The leader does not have to be a saint. Moses was a
murderer, but he rose up to the challenge. Thus Morgan Tsvangirai, despite
his limitations, has a historic opportunity to rise up to the table if he
fulfills the following conditions.

The MDC must assume that there is only one ZANU-PF party and that the
divisions so much talked about are meaningless. Nobody in ZANU-PF, other
than Mukuru, is worth a hell of beans. The so called dissidents, and many of
them are thoroughly good men, are useless because all of them have been
supping with Mukuru for almost 20 years. Even the so called ZAPU dissidents
celebrated their 20th year last year. It is a no brainer for them to
complain about anything when they have been participants in the inner
circles with Mukuru. They have showed lack of courage for 20 years over the
absence of development in Matabeleland, over voodoo economic practices, and
over voodoo oil exploration practices. In my opinion, there is no need for
Tsvangirayi to be distracted by these guys. For all we know, they could be
secret agents.
However, the MDC must assume that Mukuru will insist on an election in
March, giving the opposition less time than the ruling party. However, this
is where, the leader of the opposition and the MDC can pull a white rabbit
out of a hat. Great leaders are either conciliatory or movement leaders
rather than party bosses. Movement leaders, such as Dr Martin Luther King,
are at the forefront of overwhelming social discontent.
However, by his conduct, Tswangirai must show respect and a sense of
forgiveness for opponents; so that there should be no possibility of a
witchhunt should the ruling party lose. The millitary and the civil service
should not feel that they will be singled out for retribution in the event
of a successful regime change.
The MDC has a very simple task to perform within the next 60 days. There has
never been a simpler task for an opposition party. The land policy is very
simple to articulate.
Those who want and can grow crops should be supported in doing so, but no
one should have more than one job. This policy does not exclude whites from
farming, but can help African farmers who do not have skills and capital to
farm.
Mukuru's record of success should be painstakingly explained to whosoever
will listen. That is a very simple task. Everything is collapsing around
him. An agent we sent to prepare for my students to travel to Zimbabwe drove
from Bulawayo to Harare. The street lights were not working in Gweru.
Without lights, most petrol stations were out of order. Any Zimbabwean, who
believes that Mukuru, after 27 years in power, will improve this situation,
needs our blessings.
My family supports three kids at Africa University. Last year their fees
were less than Zim $100 million per semester. The university is forced by
government to accept voodoo money. This year, the fees are equivalent to
voodoo Zim dollars 900 million per semester. The MDC has a very simple task.
If anybody believes that Mukuru's voodoo dollars will appreciate, please
more power to him. No cursing, no bad words are allowed, we are a non
violent people. Bless the brothers who, after 27 years in power, believe
that life will improve.
The BBC has just relayed a secret report from a Zimbabwean hospital. The
patient had to make a strategic decision to catch a bus from his village.
Buses were few and far between. Using voodoo money, which villagers do not
have, the fare was counted in the millions. The secret video showed almost
empty hospitals; no water, no blankets and no medicines. The hospital could
not fill in a prescription, written by its own doctor.
Civilisation assumes that water is an ever present commodity. Harare was
never meant to be without water for one hour. What does the butcher do for
one hour without water to wash his hands? The same question applies to a
doctor. How does a janitor clean a government central banking toilet without
water? Two whole townships have been reported to be without water for over a
month.
The work of the MDC is easy. The difficult part for the MDC (as it was for
Moses as well) is to inspire the people that the night of suffering will
come to an end, and morning brings joy. A movement does not deal with
specifics; it deals with the larger issues of hope, charity, reconciliation
and mercy. Of these, hope is the greatest. People always respond to a great
leader. A trade union leader has the advantage that he is trained to be pari
inter pari (an equal among equals) as was Dr King. The moment is begging for
such a leader. There is another reason why Mukuru can get the surprise of
his life.
In the boxing world, the champion gets worn out with age. Stupid little guys
challenge him and he knocks them out. In the long run, he get careless, his
steps lose bounce, and a thoroughly raw youth like Shangirayi (as he is
called by secret agents) knocks an older and wiser boxer down. Mayor Ed Koch
of New York, who had been mayor for 12 years, wrote the rule of politics:
"If you stay long enough, you will be beaten."
Now you will say: "Ken you are naïve. Mukuru will count the votes."
Sometimes the champion is beaten so thoroughly he cannot rise up." Mukuru is
no longer an issue now. CHANGE is the issue. Ask any Zimbabwean: Do you want
change or not? Zimbabweans are humans like anybody else. It is time to try
new things.


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Cash Shortages - the Value of Dollarisation

Financial Gazette
24 January 2008

Terrence Zimwara
Harare

As economic decline worsens, the country's currency has become the first and
prominent casualty of the combined effects of hyperinflation and the rapidly
depreciating local currency value.

The ensuing cash shortages bear testimony to this and it is the pace of the
decline, which is making it impossible for the central bank to find
practical solutions.

As an interim solution, the central bank has been forced to resort to
increasing the currency in circulation by introducing higher denominations
though the recently injected amount and that which is already in circulation
appears to be inadequate as indicated by the continuing cash shortages and
long queues at banks.

In the past, higher denominated notes were introduced by way of
redenominating the currency through knocking off zeroes as one way to
solving the problem of cash shortages. This short-term solution apparently
worked for sometime between August 2006 and October 2007 but the high rate
of inflation and currency depreciation finally caught up with the new
currencies.

As experience has shown such a strategy will only work for a few months
before a new wave of cash shortages starts again, suggesting therefore the
need for a different approach to the problem. For instance, in 2003 the
country faced similar shortages of cash and then it was a combination having
of lower denominations of bank notes in circulation and fast rising prices
that primarily resulted in the shortages.

During 2003, the highest denomination of banknotes in circulation was the
$1000 note, an amount which was just too little particularly given the
inflation rate which at the time was already classified as hyperinflation.

People had to carry wads of cash just to pay for small and normal daily
expenditures while for business organisations, business was becoming a
challenge as the handling of cash was not only time consuming but it
resulted in an additional risk of handling the money before banking.

New and higher denominated banknotes had to be introduced to cater for the
high demand of cash and after much resistance higher denominations were
eventually introduced though these were referred to as bearer cheques.

Denominations as high as $20 000 came into circulation and immediately the
long queues disappeared as the supply of banknotes was at last matching the
demand for cash.

In August 2006, after having correctly anticipated the imminent cash
shortages particularly as inflation had gotten out of control, the central
bank issued higher denominations of banknotes of up to $100 million though
this was disguised as $100 000 after currency redenominations.

After 'removing' the zeros the highest note was $100 000 and this helped to
pre-empt the re-emergence of the cash shortages though it was becoming clear
then that currency redenominations or the issuing of higher denominations
was just a cosmetic exercise since it did not address the fundamentals.

The high inflation rate, which has mainly been fuelled by the declining
value of local currency and the deluge of money against minimal production
levels, had resulted in fresh shortages of cash.

The high prices brought about by inflation in turn resulted in a
proportional increase in demand for cash though during this period while
there was no corresponding increase in the cash in circulation and issue of
higher denominated notes.

Basic commodities, which used to cost between a few thousands to several
tens of thousands of dollars in 2006, the last time the currency was
redenominated now cost several millions of dollars.

These commodities which include food, clothing and other semi-durable
products are by and largely paid for in cash and from this simple
illustration it is clear that much higher denominated banknotes are needed
if the current demand for cash is to be matched with the currency in
circulation.

In addition to cash shortages, the high rate of inflation has also taken its
toll in the country's financial system, with confidence in the banking
system particularly low.

Keeping money inside banks has become irrational for most people, firstly
due to the very low interest or no interest at all on deposits thus removing
the first incentive of keeping money in the bank.

In addition to not earning an interest, there are limits on the amount of
cash one can withdraw each and such limits are inadequate to meet the daily
needs of an average person.

Businesses that mainly rely on imported merchandise also face the same
limits on withdrawals. These in turn get foreign currency from black market
dealers who nonetheless demand cash in their transactions.

As a result most of these businesses would also demand cash from their
customers while some have actually gone further by demanding foreign
currency while rejecting bank transfers or cheque payments.

The result has been the gradual collapse of the country's financial system
and urgent steps need to be taken to restore confidence to the financial
system.

A close analysis of the cash crisis and the fast waning confidence in the
banking system will show the unstable and almost worthless local currency as
the main factor thus replacing it by dollarising could prove to be a useful
attempt at reversing the situation.

When people decide not to keep their monies inside banks they always have
alternatives and the main alternative has been to keep such savings in the
form of foreign currency like the rand or the greenback.

Allowing ordinary people to keep their forex savings in banks and more
importantly allowing them to withdraw as and when they need to use the
money, could potentially help to restore confidence in the financial system.

Therefore in addition to bringing price stability, dollarisation could also
help kill off the excessive demand for cash, as other payment options would
become acceptable to most individuals and businesses thus reducing demand
for cash.

Dollarisation appears to be the most practical and realistic short term
solution to the currency problems we are currently facing.

Authorities need to really look at this as an option particularly as other
measures such as redenomination of the currency have apparently failed.

The Zimbabwe Economics Society articles are coordinated by Lovemore Kadenge
and he can be contacted on email lovemore.


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FinGaz Letters

Price controls: Who benefits?

EDITOR — Trade as we all know is an act or instance of buying and selling
goods and services; it is as old as the hills. Trade was already being
carried out before the invention of money, that is, by way of barter where
gold, for example, was exchanged for grain or vice-versa. In those days,
there was a non-monetary value attached to tradable commodities whose values
were arrived at after taking into consideration the amount of effort put
into the manufacture of the commodities in question or rather the effort put
in acquiring them.
Rare metals such as diamonds and gold naturally carry a much higher value
than other metals, which are easy to come by. For instance, the value put on
river sand and gravel is far less than that of precious stones. The same
logic applies to manufactured goods, which fetch more than their raw
materials.
One will also have to consider the cost of labour and raw materials added
into the manufacturing processes and the quality control processes involved
in coming up with prices/values.
The question, which begs an answer, is therefore: At which stage can one
apply price controls and who should effect the controls? By way of an
example, consider a situation where there is a person who sources raw
materials before selling them to the manufacturer. From there on comes the
manufacturer who processes the raw materials into finished goods before
selling them directly to the wholesaler. Then comes the retailer who passes
the goods on to the final consumer. In response to the questions posed
above, I will argue that no one else who is not in this production circle
has the right to determine the price at which the consumer should purchase
the product.
Price controls are responsible for fuelling the black market. It is
pertinent to note that the profits earned in the production cycle, that is,
from the sourcing of the raw materials right through to the final consumer
are only meant to keep businesses operational.
If one has to produce a loaf of bread for $200 000 but forced to sell it for
$150 000, it is either that the seller will be pushed into using unorthodox
methods to survive or close the business altogether.
The other downside of the controls is that there would be serious shortages
and because of the deficiencies in the supply side, the consumer will be
forced to hunt for his/her loaf of bread even across the borders and pay up
to five times the controlled price.
Inadvertently, the controls will also serve to congest our borders as our
consumers are forced to hunt for bread of all things. And yet the country
should not engage in anything that discourages the trade cycle to freely
determine prices.
Price controls are only possible when the government can pay heavy
subsidies. They can only work in socialist economies where the means of
production are state-owned. Price controls have no room for succeeding in a
capitalist or “free” economy like ours. They only serve to kill the economy.
Where price controls were introduced, manufacturers have been known to
relocate to other economies where there are free trade policies, living
citizens of the controlled economies jobless.
And because of the resultant contraction in the economy, a massive exodus of
skilled manpower occurs.
In most cases, consumers will also track down the relocated companies in
order to access their products. In such cases, the consumer would have to
pay a premium for the commodities, as he/she will have to acquire hard
currency needed to fund the imported goods.
By imposing price controls, the markets are robbed of their role of setting
correct prices.
It is therefore, not surprising that our supermarket shelves went bare as
soon as price controls were introduced. The shelves will be full again if we
let the pre-price controls situation prevail.
One may argue against this assumption, but the truth of the matter is that
most homes today are stuffing their fridges and freezers with food products
from Botswana, South Africa and Zambia, which they source at very high
prices.
People employed as price control inspectors are in fact making life more
difficult for the consumers and not the other way round.

Rtrd Colonel Tshinga Dube
---------------
 What happened to Africa’s jewel?

EDITOR — What is happening in Zimbabwe?
Just a few years ago, it was considered a modern and fairly industrialised
nation but now you seem to have returned to some sort of prehistoric period.
It is just terrible that you are all just sitting back while your country
completely falls apart. I feel that you have possibly reached a point of no
return.
I am reminded of something once said by a United States president: Ask not
what your country can do for you, but what you can do for your country. How
tragic...makes you yearn for the days of Ian Smith.
Best of luck.

Anthony
----------------
 Democracy in South Africa encouraging

EDITOR — The recently held African National Congress (ANC) 52nd congress in
Polokwane exposed a number of weaknesses that our own ruling party suffers
from.
Democracy does not exist in ZANU-PF by any stretch of imagination and it is
my fervent hope that the supporters of the ruling party learnt something
from the ANC on how to organise congresses, like the one ZANU-PF held in
Harare in December last year.
It is very unfortunate that at the ZANU-PF special congress some items that
were perceived to be sensitive but have led to the suffering of the majority
of the country’s population were deliberately left out of the agenda just
because President Mugabe and his leadership were not comfortable having them
discussed.
The fact that the position of the president of ZANU-PF was not contested but
endorsed at the special congress shows the extent to which democracy has
been emasculated in our beloved country.
We all wish what transpired at the ANC congress could one day happen in our
country, particularly in ZANU-PF. Such a scenario of a tug-of-war between
the incumbent and his/her deputy would open a new chapter in our relatively
young democracy.
The battle between Thabo Mbeki and Jacob Zuma for the ANC presidency was
quite a healthy one for the party. Our own brothers and sisters in ZANU-PF
should take a leaf from what transpired in Polokwane.
Leaders come and go but the party remains. Leaders who cling to their
positions fear reprisals. If respectable political leaders like Nelson
Mandela who languished in prison for a period equivalent to the independence
of our own country was able to voluntarily step down from power after
serving one term then what is wrong with some of our African leaders?
What irks me most is the fact that I also participated on the war-front as a
guerrilla. We only witnessed true democracy in 1980 when we were all able to
exercise our universal right to vote, that is, when every Zimbabwean aged 18
and above and in possession of an identification card was able to vote from
anywhere in the world.
I am a war veteran and I enjoy getting support for farming from government
but what pains me is whether my kids will be able to survive in future
considering the way the cost of living is skyrocketing on a daily basis.
The future of our own kids is very uncertain. Surely, they shall insult our
graves when we are long gone.
Our message to President Thabo Mbeki is that he should create an environment
conducive for free and fair elections in Zimbabwe through the current talks
he is mediating between the MDC and ZANU-PF. We also want free and fair
elections like what we saw at the ANC congress in Polokwane.
To the MDC factions, I say unite and speak with one voice during the coming
elections. Learn something from what the opposition parties in Kenya did
recently.
Concerned war veteran.

Gashu
Chinhoyi

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