MOVEMENT FOR DEMOCRATIC
CHANGE
MORE SELF-CONGRATULATORY LIES
The delayed
mandatory Fourth Quarterly Monetary Policy Review was eventually presented on 26
January 2005. What was unmistakeable from the long-winded presentation was that
it had little to do with issues of stabilising the key macro-economic and
monetary policy crises of inflation, interest rates and the exchange
rate.
Rather it was a statement of vitriolic spin, one of sanitising
Zanu-PF and mendaciously misleading the country into believing that the economy
is on the mend.
The truth of the matter is that the statement was no
more, nor no less than Zanu-PF's election manifesto for 2005. It is therefore
critically important to interrogate the document on the basis of the real issues
that an RBZ Governor is supposed to address.
Firstly, the integrity of
forecast inflation and growth rates: the monetary policy statement envisages
the continued decline of inflation throughout 2005, with the resumption of GDP
growth of between 3% and 5%. Where do these fanciful figures come from? Do
they imply that there will actually be a policy reversal sometime, with a
devaluation sufficient to restore exporter viability - this would also, in the
short run lead to the rekindling of inflation.
It must be pointed out
that the Ministry of Finance in its budget for the current year used 270% as its
underlying inflation assumption for 2005. There is therefore a clear
contradiction between the Budget Statement and the Monetary Policy Review - one
that neither surprises not shocks us.
Secondly, the viability of
exporters: the main instrument for reducing inflation has been the
deliberate overvaluation of the Zimbabwe dollar in the inaccurately named
'auction'. Inflation decline has as a result been at the expense of closing
down the export and import competing sectors of the economy.
Far from
reversing this in the latest MPS, Gono has dug in his heels. Exporting will
become progressively less viable in 2005, foreign currency will become more
scarce, more jobs will be lost, more shrinkage of incomes and dimming of
peoples' lives and prospects. Its going to be a continuation of what the state
media call 'an economic turnaround' but ordinary Zimbabweans who struggle
through its effects know better.
Thirdly, the banking crisis: let
us bear in mind that Gono's first action as Governor back in December 2003 was
to precipitate the banking crisis by engineering a sudden rise in interest rates
from under 100% to around 900%. He then handed the illiquid banks the poisoned
chalice in the form of money from the Troubled Banks Fund.
From there
on, Gono stumbled from one mismanagement of the crisis to another, so that 2004
ended with even more uncertainty about the country's once strong financial
sector than a year earlier.
In this MPS, Gono trumpets the Zimbabwe
Allied Banking Group as the solution, despite the abject failure of the
Consolidated Bank of Kenya, when in similar circumstances the government of
Kenya attempted to bail out a number of failed banks. Since ZABG was first
announced in September, several of the potential members have been dropped and
the grand proposals for ZABG to be a unified bank have given way to it being an
amalgam of its constituent parts.
What individual Zimbabwean or private
sector client would ever have anything to do with ZABG? The monstrous
misapplication of public funds that the creation of ZABG represents can only be
propped up by more public money going into it in the form of further
capitalisations and parastatals and government departments becoming its
clients.
Fourthly, parastatals and local authorities: the
parastatals have long been a vehicle of clientism and patriarchialism fostered
and promoted by Zanu-PF and its parasitic followers. The country is now
suffering the consequences. The abuse of the local authorities has also been to
promote the narrow, selfish interests of Zanu-PF. The prime example of this is
the systematic interference with the work of the elected MDC Council of the City
of Harare. Its programme of recovery for the capital city was thwarted and the
Council eventually illegally and cynically pushed aside.
Sight must also not be lost of the fact
that since 1998 the government has hardly allocated any resources for capital
purposes to local authorities thus forcing the same to divert revenue to
investment. In terms of the Urban Councils Act, capital investment is the
responsibility of central government.
The truth of the matter is that no
amount of spin, lipstick and mascara will hide the irreversible structural
decline of our economy under this regime. The sooner Governor Gono knows that
this regime will happily use overzealous individuals driven by unbridled
personal ambition, and then drop them at whim when circumstances change, the
more honest and circumspect he may become.
Indeed, this country has had
enough of dishonesty and half-baked measures that address symptoms and not
substance. We need a RESTART, a new beginning that boldly and sincerely
addresses the structural exigencies and legacy of this criminal state. Such a
paradigm shift is not possible under Zanu-PF or its functional acolytes at the
Reserve Bank.
Tendai Biti
MDC Secretary for
Economics
Fingaz
Gono slashes interest rates
Nelson
Banya
1/27/2005 7:33:17 AM (GMT +2)
RESERVE Bank of
Zimbabwe (RBZ) governor Gideon Gono, renowned for his
unorthodox but
somewhat effective policies, yesterday announced a radical
interest rate
policy which will see the bank's benchmark overnight rate
reduced by 40
percentage points by June.
Attempting to guide Zimbabwe through
uncharted economic waters, Gono
also announced a return to interest rate
convergence in June, when the
concessionary productive sector facility rate
of 50 percent will be wound
up, while a new currency would be introduced to
replace all the current
denominations including bearer cheques, in
2006.
Unveiling his fourth quarter monetary policy review in Harare
yesterday, Gono announced a reduction in the rate, from the current 110
percent, to 95 percent with effect from February 1. There would then be
progressive monthly reductions in the rate, to 85 percent in March, followed
by 80 percent in April, 75 percent in May and 70 percent by June.
Alternatively plunging into mathematics and politics during his
presentation, Gono said the key policy rate would continue to be adjusted
downwards periodically in line with the progressive decline in the annual
inflation rate, on a compounded basis.
"Over the outlook period,
the targeted further reduction in inflation
is expected to induce
concomitant falls in market interest rates," said
Gono.
The rate
for unsecured overnight borrowing, which currently stands at
120 percent,
would remain at 10 percentage points higher than the secured
rate.
Banks, which take their cue from the RBZ's overnight rate and have
recently
slashed their minimum lending rates in tandem with the low interest
rate
policy, are expected to further reduce interest rates.
"Monetary
authorities are pleased that the banking sector has
positively responded to
the decline in inflation and central bank
accommodation rates and realigned
their lending rates downwards," Gono said.
Average bank lending rates
have fallen from about 400 percent at the
peak of an interest rate spike in
early 2004 to around 140 percent in
December 2004.
Gono also
revised, downwards, the RBZ's inflation target for 2005 to
between 20
percent and 35 percent, from the initial 30 percent to 50
percent.
"In 2005 the inflation rate is projected to continue to decline
steadily
through the year, to end the year between 20-35 percent, a revision
from the
30-50 percent we had made in our October 2004 monetary policy
statement and
in the fiscal budget.
"The revision has been necessitated by
encouraging recovery signs in
the horizon, reaching single digit levels in
the first half of 2006."
Zimbabwe's inflation, which peaked at 623
percent in January 2004,
decelerated to 132.7 percent in December, below an
initial target between
170 percent and 200 percent and a revised 150 percent
as the RBZ stridently
pursued a tight monetary policy and introduced
exchange rate stability in
2004, among other measures.
The
much-awaited exchange rate review did not come yesterday, as Gono
chose to
maintain the current weighted average auction rate, about $5 800 to
the
United States dollar, following a series of devaluations amounting to
almost
600 percent between January and December 2004. There was also no
review of
the diaspora exchange rate, which currently stands at $6 200 to
the
greenback.
Instead, the RBZ enhanced its carrot and stick foreign
currency
retention scheme under which the bulk of expert proceeds were now
being
repatriated within 30 days, effectively allowing exporters to retain
100
percent of their earnings in foreign currency accounts (FCAs), free of
any
previous surrender requirements.
"As of December 2004, 75
percent of export proceeds were repatriated
within 30 days, effectively
benefiting exporters through 100 percent
retention of inflows in FCAs. This
was up from a proportion of 26.6 percent
of export proceeds which came
within the 30-day period in January 2004."
Gono said with effect from
February 1, exporters who repatriate their
export proceeds within 90 days
from the date of shipment will retain 70
percent of their foreign currency
in their FCAs and sell the remaining 30
percent onto the RBZ's auction
system, at the ruling rate.
"This effectively means that repatriation
of export proceeds within 90
days now entitles exporters to 100 percent
conversion at the auction rate,
should they not wish to keep some of their
funds in FCAs." Only the
horticulture sector, which has a shorter marketing
cycle, would be required
to repatriate their export proceeds in 45
days.
Fingaz
Gukurahundi killed my father: Moyo
Njabulo
Ncube
1/27/2005 7:33:47 AM (GMT +2)
EMBATTLED Information
Minister Jonathan Moyo, who is clutching at
straws for political survival,
has made startling revelations that his late
father was a victim of the
dreaded Fifth Brigade blamed for the Matabeleland
massacres in the
1980s.
The disclosure, captured in the preamble of the
tongue-lashing
government spin-doctor's curriculum vitae (CV), could open
old wounds in the
restive Matabeleland region, which once clamoured for
compensation over the
massacres.
President Robert Mugabe, 80, whose
ruling ZANU PF is still struggling
to make inroads in the Matabeleland
provinces, has since described the
killings during the insurgency as part of
a dark chapter in the history of
Zimbabwe.
Thousands of people were
reportedly killed during the dissident era,
which only ended with the
signing of the Unity Accord in 1987 between ZANU
PF and PF Zapu, then led by
the late vice-president Joshua Nkomo. Wounds
inflicted by the uprising in
Matabeleland have not however completely
healed.
"My father is
late. He was killed in 1983 in Tsholotsho in a tragic
encounter with
elements of the Zimbabwe National Army who took his life
during Zimbabwe's
post-independence dark period generally referred to as the
Gukurahundi Era,"
says Moyo in his 11-page CV submitted to the ZANU PF
National Electorate
Directorate during the vetting exercise of party cadres
interested in
contesting last week's primary polls.
"At the time he was a councillor
in Tsholotsho Rural District Council.
He was a long serving political
activist and cadre of Zimbabwe's Second
'Umvukela'," added Moyo, whose CV
did little to prevent ZANU PF from barring
him from contesting Tsholotsho, a
constituency he has coveted since the 2000
parliamentary polls.
Moyo, a father of five, has kept his options a closely guarded secret
after
ZANU PF allocated Tsholotsho to women contestants.
A perusal of the CV
also shows that the troubled minister, whose
fortunes took a tailspin over
what has come to be known as the Tsholotsho
Declaration, claims credit for
President Mugabe's 2002 victory over Morgan
Tsvangirai of the Movement for
Democratic Change (MDC) and in ZANU PF
by-election victories after June
2000.
However, the MDC attributed ZANU PF's victories in the
Presidential
polls and by-elections to rigging, systematic bullying,
intimidation and
violence against its supporters by the ruling party. The
MDC also accused
the government of denying it access to the public
media.
Moyo mentions as highlights, in his political career in ZANU PF,
his
appointment by President Robert Mugabe to serve in the Constitutional
Commission in 1999, his eventual appointment as non-constituency member and
subsequent Minister of Information and Publicity in the war cabinet. Moyo
claimed to have researched and wrote the ZANU PF Election manifesto for the
2000 Parliamentary elections.
In 2002 he said, he designed and led
the implementation of the media
campaign strategy for the Presidential
Election Campaign, adding that he was
the official ZANU PF team leader for
President Mugabe's campaign in
Tsholotsho were ZANU PF polled 10 838 votes
against the MDC's 10 089.
In the 2000, parliamentary polls, the MDC had
overwhelmingly won in
Tsholotsho garnering 12 318 votes against ZANU PF's 5
634 votes.
"I grew up in and within ZANU PF politics. I have not known
any other
politics and, as a matter of fact, I have never been part of or
associated
with any opposition party in post-independence Zimbabwe. My
father was an
active ZAPU cadre and a community leader. I was raised by my
mother, who was
separated from my father from my birth, and who was very
close in the early
sixties and mid-seventies to the family of the late
Reverend Sithole who was
at the time the President of ZANU. It was true
these links that I ended up
in Zambia and later Tanzania between 1973 (age
16) and 1977 (age 20)," he
says in his CV.
In an attempt to justify
that he is not a mafikizolo, a disparaging
term used to describe the
Johnny-come-latelys in ZANU PF, Moyo stated that
his two scholarships from
the United Nations and the Africa American
Institute to the University of
Southern California in June 1978 were through
the ZANU office in New York
then headed by Kangai Tirivafi. He said from
November 1977 to December 1981,
he was ZANU's Secretary for Commissariat for
the Los Angeles Branch in
California.
"Our branch was very active in mobilising material support
for the
comrades in Mozambique and worked very closely with the late
comrades Kangai
Tirivafi and Edison Shirihuru, who was Cde Kangai's deputy
at the ZANU PF
offices in New York," said Moyo adding that he worked with
the two between
May 1978 and August 1978. Moyo says he graduated from the
University of
Southern California in June 1982 with a Bachelor's (Bsc)
degree in public
policy obtaining a Masters Degree in Public Administration
(MPA) with same
university in 1984.
He said the numerous Galas that
he initiated were for mobilisation
designed to give "Zimbabwe's artists an
opportunity to express themselves
within nationalistic themes and for
Zimbabwean audiences, especially the
youth, to appreciate the Pan African
roots, nationalism and unity through
music."
"One challenge I faced
as Minister of State for Information and
Publicity was the unprecedented
international and local media onslaught on
Zimbabwe's sovereignty and
particularly against His Excellency President
Robert Mugabe. It is my humble
and considered view that, the multimedia
response to this global and local
media onslaught on Zimbabwe, was in the
final analysis very successful and
even the ardent t critics have
acknowledged this fact. I'm very proud of
this fact as a matter of national
service and commitment to principle," he
said.
He mentions that he spearheaded the draconian Access to
Information
and Protection of Privacy Act (AIPPA) (2002), the Broadcasting
Services Act
(BSA) (2001) and the Zimbabwe Broadcasting Corporation
(Commercialisation)
Act (2003) which he describes as three landmark
legislations, pieces of law
detested by a majority of media players and the
opposition.
"The first two (laws) have gone through a series of
amendments that
have left them as much sought after pieces of legislation by
jurisdictions
in Africa and other countries elsewhere facing the sort of
regime change
challenges that our country has f ac ed between 2000 and now,"
Moyo said.
Analyst were this week unanimous Moyo was drifting out of
ZANU PF with
his sidelining from the post of deputy secretary for
information and
publicity, central committee and Politburo.
They
however, noted he still controlled The Herald, Chronicle, the
Zimbabwe
Broadcasting Holdings and coterie of other provincial and regional
news
outlets indicating that President Mugabe held him in high esteem as the
party and government gate-keeper.
President Mugabe has remained
tight-lipped over Moyo's hard-hitting
attacks on senior members of his
party, giving credence to unconfirmed
reports he was privy to Moyo's
political machinations.
The analysts added that by virtue of having the
temerity to take John
Nkomo, the party national chairman, head-on,
exemplified by the $2 billion
lawsuit against former PF ZAPU guru, and his
continued hard-hitting
newspaper articles against ZANU PF senior officials,
showed Moyo had an ace
up his sleeves.
"He is still there (in ZANU
PF and government). They need him because
he stills writes his columns and
responds without any hindrance in the
government papers," said Heneri
Dzinotyiweyi.
"Yes, his role seems to have been reduced but his
influence is there
for all to see. He might not be in the politburo but he
still controls
information even. It seems his influence in that department
is well
appreciated if it was not, he was not going to be still a minister
in charge
of such a crucial portfolio," said Dzinotyiweyi.
"ZANU PF
does not need him anymore," said Max Mkandla, a Matabeleland
based political
commentator, a war veteran of Zimbabwe's war of liberation.
"They have used
him but they now seen that he has become to big for his
boots," added
Mkandla. "ZANU PF wins by rigging and violence not mere
propaganda. It is
not the propaganda that counts but the ballots in the
boxes and ZANU PF is a
master in stuffing ballots," he said.
Fingaz
Govt taking over Dairibord?
Staff
Reporter
1/27/2005 7:34:44 AM (GMT +2)
A MYSTERIOUS buyer
splashed $67.3 billion to swoop on 21.3 percent of
highflying Dairibord
Zimbabwe Limited (DZL) on Tuesday amid speculation that
the government,
which privatised the country's largest milk processor in
1997, might have
had a change of heart.
The record-shattering transaction cobbled
through Remo Investment
Brokers saw 67 325 090 DZL shares changing hands at
a special bargain price
of $1 000, signifying the entry of a new significant
shareholder which
caught the market unawares.
The Financial Gazette
can reveal that the parcel was snapped from
Commonwealth Africa Investments
Limited (Comafin), which struck a lucrative
exit deal after being frustrated
by its inability to repatriate dividends
because of the biting foreign
currency shortages.
Comafin's continued presence in DZL had become
doubtful after Zimbabwe
quit the Commonwealth - a 54-member club of mainly
former British colonies -
in 2003.
Launched by former South African
president Nelson Mandela in July
1996, Comafin is a private equity fund
whose objective is to provide risk
capital to private sector
businesses.
DZL chief executive Anthony Mandiwanza confirmed the $67
billion
transaction yesterday, but said it was no threat to other
shareholders in
the Zimbabwe Stock Exchange-listed concern, which has a
stake in Charhons
and owns 60 percent of Dairibord Malawi Limited.
Said Mandiwanza: "It (transaction) will strengthen the position of DZL
because we have massive programmes to develop our milk supply base and make
farms productive, which requires partners, and so against that background,
we are not worried."
Speculation was rife yesterday that the
acquisition could be one of
the jigsaw puzzle pieces being assembled by the
government as it moves to
establish an Agricultural Marketing Authority
(AMA) that seeks to assume
overall control over the marketing of all
agricultural products.
Sources could not rule out the new investor
ganging up with other
"friendly" shareholders such as the National Social
Security Authority,
which has a 5.35 percent stake, to effect far-reaching
board, management and
operational changes at DZL.
Of late, there
has been open regret in the government over the
privatisation of
DZL.
There is a strong feeling that the former parastatal, just like
the
Cold Storage Company and the Agricultural Rural Development Authority,
are
strategic national assets that should be used to spur the government's
land
reform and cushion consumers against relentless increases in prices of
basic
commodities such as milk.
An AMA Bill, which is yet to be
signed into law, provides for the fair
pricing of agricultural products for
the benefit of those participating in
the agricultural industry,
particularly communal and resettled farmers.
There is concern, however,
that the authority could result in loss of
lucrative export markets and
worsen investor disenchantment.
Management and workers are the majority
shareholders in DZL with a
27.4 stake. Other significant shareholders
include Old Mutual with 20.96
percent and Fed Nominees with 6.57
percent.
DZL, which processes about 89 percent of Zimbabwe's milk
production,
became one of the first state-owned enterprises to be privatised
in 1997,
the same year the country's economic fortunes plummeted following
the crash
of the local currency.
The company boasts both
zero-gearing and high cash generative
capacity, factors which have helped it
survive the current high interest
rates.
In 2001, DZL, which will
have to issue a notice to shareholders in
light of the new changes, took
control of Lyons Zimbabwe.
Fingaz
Fertiliser smuggling scandal
Felix Njini
1/27/2005
7:35:13 AM (GMT +2)
A MURKY smuggling syndicate could be behind the
chronic fertiliser shortages
stalking the country, industry players have
said.
Fingaz
SADC delegation jets in for compliance
appraisal
Staff Reporter
1/27/2005 7:35:47 AM (GMT
+2)
THE Southern African Development Commu-nity (SADC) delegation
of
lawyers is expected today to asses Zimba-bwe's compliance with the
Mauritius
Protocol on the staging of elections in a democracy as the
regional grouping
races against time to ensure Harare's March parliamentary
elections are free
and fair.
The visit by the delegation of
SADC lawyers comes amid a chorus of
complaints by the main opposition
Movement for Democratic Change (MDC) that
President Robert Mugabe and his
ruling ZANU PF were in serious violation of
most of the guidelines and
principles of the Mauritius Protocol signed by
member states last
August.
The MDC cites this week's arrest of two of its legislators
Thokozani
Khupe (Makokoba) and Nelson Chamisa (Kuwadzana), the barring of a
number of
its political meetings and refusal by the public media to accept
opposition
advertisements, as some of the latest violations of the Mauritius
Protocol.
Harare is a signatory of the Mauritius Protocol signed in
August
which, among other things, demands that all registered political
parties
should be allowed to campaign freely; have unlimited access to the
public
media; freedom of association and that all citizens should be allowed
to
exercise their right to vote.
The principles and guidelines also
talk of the need for an independent
electoral commission to run the
elections and the deployment of election
observers two weeks before the
polls.
But the MDC said this week it doubted the impartiality of the
newly-appointed chairman of the Zimbabwe Electoral Commission, Justice
Charles Chiweshe who, in the past, has handled court cases involving MDC
officials and activists.
Priscilla Misihairabwi-Mushonga, the MDC
shadow minister for foreign
affairs, said although her party had not been
formally informed, they had
been aware for the past few months that a SADC
delegation was due in Harare
before the polls.
"We are just
preparing our submissions so that we are ready when they
eventually come. We
are aware that they are coming but we don't know if they
are already in the
country or not," said Misihairabwi-Mushonga.
An official at the SADC
headquarters told The Financial Gazette by
telephone that the team,
comprising lawyers, would be in Harare up to the
weekend.
South
African deputy Foreign Affairs Minister, Aziz Pahad, said a team
of lawyers
from SADC were due in Harare today or tomorrow to assess
Zimbabwe's
compliance with regional election guidelines and principles ahead
of the
parliamentary polls delegation. They would also examine Zimbabwe's
electoral
laws and institutions.
Pahad told a Johannesburg-based Sunday weekly
that the SADC delegation
of lawyers upon arrival in Harare would examine
Zimbabwe electoral laws and
institutions and then compare them with the
principles and guidelines
adopted by the heads of states of the regional
grouping in Mauritius last
August.
The delegations would also
consult state, political and civic
organisations on further initiatives
needed to ensure free and fair
elections in Zimbabwe.
"There is
still going to be consultation. There is some question mark
about whether
the new electoral commission is independent because the
President (Robert
Mugabe) chooses the chairman," the South African deputy
minister of foreign
affairs was quoted as saying.
Fingaz
Court to deliver Daily News judgment
Zhean
Gwaze
1/27/2005 7:36:37 AM (GMT +2)
THE Supreme Court is
expected to deliver judgment on the fate of the
Associated Newspapers of
Zimbabwe's (ANZ) two titles - The Daily News and
The Daily News on Sunday -
on February 7 2005, fuelling speculation that the
papers would soon hit the
streets.
Well-placed sources said the newspaper's cases have been
consolidated
and judgment was ready.
"The judgment has been
circulated among members of the bench for
proofreading, corrections,
signatures and opinions and will be handed on
February 7," the sources
said.
The Daily News and the weekly Daily News on Sunday were shut down
in
September 2003 after the courts ruled they were operating illegally after
they refused to register with the state-appointed Media and Information
Commission (MIC), resulting in the retren-chment of nearly 160
workers.
Johannes Tomana of Tomana Muzangaza and Mandaza, who is
representing
the MIC, confirmed that judgment had been circulated among the
judges for
proofreading but could not give any dates for its
deliverance.
"We have not been formally advised and we will only get to
know of the
judgment when it is delivered," he said.
A judgment
favour-able to the ANZ would spruce up the country's image
ahead of the
March parliamentary polls.
The country will be under the spotlight
during and after the polls as
the government is under pressure to adopt the
Southern African Development
Community guidelines for democratic
elections.
The Zimbabwean government has been accused of closing
democratic space
through repressive legislation such as the Access to
Information and
Protection of Privacy Act.
Fingaz
Troubled banks need whopping $2.5 trillion
Staff Reporter
1/27/2005 7:37:02 AM (GMT +2)
A CAPITAL
injection of about $2.5 trillion is required to salvage
troubled financial
institutions currently under curatorship, with Trust
Banking Corporation
expected to chew up half of that amount if shareholders
are to resuscitate
the bank.
Trust Bank, placed under curatorship after a number of
failed attempts
to resuscitate it, will require a minimum capital injection
of $1.47
trillion to restore normal operations.
The bank, whose
closure came soon after a botched takeover by South
Africa's Nedbank after a
due diligence exercise unearthed a massive hole,
ran into trouble after
investing in fixed assets using short-term funds.
The huge tab to be
picked up by sitting shareholders to resuscitate
the operations of the
failed financial institutions will be over and above
the minimum capital
injection since all deposits held by the institutions
are now due and
payable.
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono revealed
yesterday
that Intermarket Banking Corporation would require an $18.15
billion cash
injection by shareholders, while Intermarket Discount House
would need
$172.53 billion. Intermarket Building Society, which has been
allowed to
operate on limited business, will require $5.6 billion.
The three financial institutions were part of the Intermarket Holdings
Limited group.
Barbican Bank, an insolvent institution with a
capital deficiency of
$46.6 billion when it was placed under curatorship,
will require $37.87
billion to restore normal operations.
Rapid
Discount House, placed under curatorship in March after
experiencing a
severe liquidity crunch and solvency problems, has been
allowed to
collapse.
CFX Bank Limited, the latest financial institution together
with its
sister operation CFX Merchant Bank, will chew up at least $132.9
billion
because of the magnitude of its capital deficit, while the merchant
bank
will require just under $75 billion.
CFX Merchant Bank was
placed under curatorship due to its exposure to
CFX Bank Limited, which
faced a serious liquidity problem soon after its
takeover by the merchant
bank.
Directors at Century Bank had concealed accumulated and other
losses
through manipulation of management accounts and the systems-generated
balance sheet, which carried fictitious assets in order to mask losses
created by illegal foreign currency deals.
Royal Bank, whose
shareholders stand accused of recapitalising the
financial institution using
depositors' funds, had a capital deficit of
$27.6 billion when placed under
curatorship last year, and could do with an
injection amounting to $226.75
billion.
Time Bank, whose management and shareholders have taken the
RBZ to
court for placing the bank under curatorship, will require a $269.5
billion
injection to salvage it from a serious liquidity and solvency
crisis.
The RBZ has said its investigations indicate that loan
facilities
purportedly availed to various companies to fund peri-urban
agriculture and
property development projects had been designed to disguise
the abuse of
depositors' funds by the bank.
Trust Bank, whose brand
had become very reputable in the sector, is
said to have faced hard times
due to an over-reliance on wholesale deposits,
inadequate risk management
systems, undercapitalisation, as well as weak
lending and credit risk
management practices.
Fingaz
Culture of democracy still a long way off
Charles Rukuni
1/27/2005 7:38:01 AM (GMT +2)
"THE most
painful consequence of democracy is often losing in public.
That is
humiliation, a defeat that you need democratic experience to handle,
personally as well as politically," a book on democratic elections and
independent journalism, entitled And the Winner Might Be . . .,
says.
This is the stark reality Zimbabweans are currently facing as
some
candidates from both the ruling ZANU PF and the opposition Movement for
Democratic Change (MDC) who lost primary elections are refusing to accept
the results. Some are even threatening to quit their party or to urge voters
to decampaign the winning candidate.
Senior party officials who
have questioned results of primary
elections include Kenneth Manyonda,
Gibson Munyoro, Irene Zindi and Rugare
Gumbo from ZANU PF and Silas Mangono,
Tichaona Munyanyi, Justin
Mutendadza-mera and Dunmore Makuwaza from the
MDC.
Manyonda, a former deputy minister and provincial governor, was
beaten
by William Mutomba in Buhera North. Munyoro, a former MP for Makoni
West,
lost to newcomer Joseph Made, the Minister of Agriculture.
Zindi, a former MP, was defeated by former provincial governor Oppah
Muchinguri, while politburo member and Minister responsible for Parastatals
Gumbo had been beaten by little-known Godwill Shiri.
Primary
elections in Mberengwa East had to be rerun and Gumbo
eventually
won.
The story was the same for MDC sitting MPs Mangono of Masvingo
Central, Makuwaza of Mbare West, Mutendadzamera of Mabvuku and Munyanyi of
Mbare East.
Though only elected officials vote for candidates in
primary elections
in the MDC, there was still some disgruntlement.
Mutenda-dzamera, who lost
to Timothy Mubhawu, was quoted as saying he was
going to bar Mubhawu from
campaigning in Mabvuku.
"We are going to
treat Mubhawu worse than we would ZANU PF,"" he was
quoted as
saying.
Munyanyi, who lost to the party's deputy secretary-general Gift
Chimanikire by only four votes, claimed that there had been a lot of
vote-buying.
"The MDC is no longer different from ZANU PF,"
Munyanyi was quoted as
saying.
Complaints by losing candidates have
raised questions about whether
politicians have really embraced democracy or
not, because there has to be
winners and losers in any election.
They have also raised another fundamental question: How genuine are
complaints about fairness and rigging that are raised by losing
candidates?
Historian Pathisa Nyathi said the refusal by candidates to
accept
defeat in elections was more to do with the political legacy of the
people
of this country.
"Traditionally, we did not have an elective
process. We had chiefs and
kings and these were usually a right by birth,
and once there, you were
there until death. We even had a saying: Kaliphumi
elinye lingakatshoni (The
sun does not rise until the other has
set)."
Nyathi said the refusal by most candidates to accept defeat was
therefore based on historical fact, and not a fallacy.
"Our values
are at variance with our pretentions towards democracy and
democratic values
that were imposed on us by our colonisers," Nyathi said.
"The truth of the
matter is that Africans would rather do without elections.
Once you are in
there, it should be permanent."
Reggie Moyo of the National
Constitutional Assembly said most
politicians had not yet embraced the
concept of democracy.
"There is a lot of unfairness going on. People
who go into the
elections know the rules of the game, but they still
challenge the results
because they know that there is a lot of "isitsotsi".
They want to win by
hook or crook," he said.
Moyo said what was
happening at the local level was a reflection of
the situation at the
highest level.
"The situation is the same even in civic
organisations.
"Once you are there, you don't want to leave. We are too
egocentric,
so we will not accept any defeat."
What was baffling,
in the case of the ruling party, was that its
national elections
directorate, and even Vice-President Joyce Mu-juru,
accepted that these ills
existed, but said people should have pointed them
out before the election
results.
The ruling party even set what could be a bad precedent. It
re-ran
elections in some constituencies where candidates had complained
about
anomalies.
People are now asking whether the government,
which is essentially the
ruling party, will do the same in the forthcoming
national elections if
losing candidates complain about rigging.
But
as one observer noted, ZANU PF and the MDC are the same. The only
difference
is that one is in power and the other is not.
Fingaz
Writing on the wall for ZANU PF?
Charles
Rukuni
1/27/2005 7:38:39 AM (GMT +2)
BULAWAYO-While ZANU
PF is playing down the low voter turnout in its
just-ended primary polls
that were widely covered by the state media,
perhaps even better than some
national elections, some analysts say the
apathy shown by voters,
particularly in Matabeleland, was a reflection of
their disenchantment with
the electoral system.
The ruling party's national political
commissar, Elliot Manyika,
attributed the low voter turnout, which saw less
than 400 voters pitching up
in at least each of three major constituencies
in Matabeleland, to
logistical problems such as polling officers getting to
the stations late
and lack of transport.
In Mangwe, which was won
by ZANU PF politburo member Eunice Sandi,
only 375 people voted. Manyika
said he did not understand why polling had
not been postponed to the next
day since officers had only arrived at
4.30pm.
He did not explain
what the problem in Makokoba or Bulawayo South was.
Only 369 voters turned
up in Makokoba and 390 in Bulawayo South.
Party publicity secretary
Nathan Shamu-yarira argued that voter
turnout in primary elections was
always low. This had no implication,
whatsoever, on the forthcoming national
elections, he said.
Political commentator Lawton Hikwa agreed with
Shamu-yarira that voter
turnout was generally low in primary elections, but
said this time it could
be a reflection of the people's disenchantment with
the way the elections
were being conducted.
Gorden Moyo of Bulawayo
Agenda, a non-profit organisation that has
been carrying out a debate series
on the coming elections in Matabeleland,
said there were at least three
theories for the low turnout.
One was that voters were disenchanted by
the way the leadership was
conducting the elections.
"Some voters
are simply asking themselves: why bother when the
candidate they elect may
be rejected by the leadership?" Moyo said. "This is
active apathy. People
are expressing a point."
Moyo said another reason was that people were
not happy about the way
their popular candidates had been barred from
contesting the primary
elections.
"These people that were excluded
had their own following. You cannot
expel six provincial chairmen and expect
things to remain the same.
"Their exclusion and the systematic
exclusion of all those that were
involved in the Dinyane School saga
(Tsholotsho Declaration) had some ripple
effects," he said.
Moyo's
argument seems to be backed by what happened in Gwanda and
Insiza, where two
of the popular candidates were barred from contesting
because of their
involvement in the Tsholotsho meeting but that decision was
reversed the
following day.
Abednico Ncube of Gwanda subsequently won the primary
elections. He
polled 4 603 votes, the highest number of votes for any
candidate in the
region. Some 5 448 voters turned up for the
primaries.
In the case of Andrew Langa of Insiza, who was unopposed, at
least two
chiefs, Maduna and Sibasa, are reported to have travelled to
Harare to
persuade the party to allow Langa to stand.
ZANU PF
secretary for education Sikha-nyiso Ndlovu, once a darling of
Mpopoma,
admitted that squabbles within the party could have led to the
apathy.
"I feel strongly that the party must do more to end the
squabbles
within the province (Bulawayo) because such an environment
demoralises party
supporters," he was quoted as saying by a local
daily.
The ZANU PF Bulawayo provincial executive was dissolved only two
days
before the primary elections that had already been postponed, and an
interim
one was imposed on the people.
The executive claimed it had
resigned en masse.
Ndlovu also seemed to concur with Moyo's argument
that people were not
happy with the candidates that had been put
forward.
Ndlovu, who was ZANU PF's deputy political commissar before
his
elevation to education secretary, said research he had done on electoral
patterns in the country had shown that people in the 17 to 40 age group were
crucial for one to win an election because they constituted 62 percent of
the population.
"They have their own expectations. They want jobs
and want to see that
there is light at the end of the tunnel," he was quoted
as saying.
Ironically, these are the very "Young Turks" the party has
barred from
contesting the elections.
Moyo said the third reason
for the apathy was that some people in
Matabeleland simply saw no point in
going to vote because, in their view,
the ruling ZANU PF was going to be
clobbered by the opposition Movement for
Democratic Change (MDC).
The ruling party won only two seats in Matabeleland in the 2000
elections
but increased these to four through by-elections in Insiza and
Lupane.
"People could simply be asking themselves: why bother when
we are
going to lose anyway?" Moyo said.
"In other words, they have
already surrendered their constituencies to
the opposition."
Moyo,
however, said he was not sure whether the opposition would
capitalise on
this because it was not active. People were not even sure
whether it was
going to contest the elections or not.
Besides, he said, the change
that had been promised by the MDC had not
been realised. Things were just as
bad as they were in 2000.
The MDC has argued that there is no way it
can effect meaningful
change since it is not in government.
Hikwa
had another theory on the low voter turnout, especially in
constituencies
that had been reserved for women. He said there could have
been apathy
because this was a new phenomenon and people were slow to accept
change.
"This was a major policy change, a paradigm shift, which
could have
left the electorate shell-shocked, especially since, in some
cases,
constituencies had not only been reserved for female candidates but
the
candidates themselves had also been imposed."
Fingaz
Comment
Land debacle: govt should get
serious
1/27/2005 7:59:08 AM (GMT +2)
IT is often
said that a novelist must know what his chapter is going
to say and one way
or the other work towards that last chapter. In our own
estimation, the same
principle should have applied when the Zimbabwe
government identified
agrarian reforms as one area of intervention to
achieve food
self-sufficiency and economic empowerment for the historically
marginalised
blacks.
It is our considered view that government should have come
up with a
vehicle of plan upon which it should have acted vigorously to
achieve this
worthy goal. Even if it meant marshalling the lion's share of
national
resources towards agriculture - it should have been done, for
admittedly, in
agriculture lies the seed of economic prosperity and
self-sufficiency
waiting to germinate. Sadly there doesn't seem to be such a
plan if the
chaos in the sector is anything to go by.
Despite the
fact that the land reform raised partisan shots from both
sides of the
aisle, particularly from those suffering from historical
hangover, given the
explosive nature of the emotive issue, the general
consensus is that there
was need to redistribute land to deal with poverty
and inequality. Indeed,
far reaching positive effects could have been set in
motion by the land
reform were it not for government's failure -despite its
recognition of the
significance of agriculture to the country's economy - to
walk the talk. All
the government did was rev its engine but never moved
into a higher gear, so
to speak.
It is rather not a case of planning and then failing but that
of
failing to plan. And as said by Victor Hugo, where no plan is laid, where
the disposal of time is surrendered merely to the chances of incident, (in
this case sloganeering at political rallies where the magic influence of
populist phraseology is very strong), chaos will soon reign. So it is with
Zimbabwe's agriculture.
It goes without saying that in such a
radical change there were bound
to be casualties. But it is important to
note that the people might have had
the ability to bear the disillusionment
and deprivation wrought by the chaos
in the agricultural sector in the early
years of the land reform programme
in the interest of longer purposes. It
would however seem like they have
endured enough with no silver lining
breaking through the dark cloud
ominously hovering over the faltering
agricultural sector - leaving Zimbabwe
with the spectre of what might be the
biggest sectoral failure in the
history of the country.
Indeed,
that we are mystified by the goings-on in the critical
agricultural sector
is an understatement of significant proportions, to say
the least. The
centre does not seem to hold anymore. This, despite official
rhetoric,
brings into question whether there is sufficient political will
and
commitment within the government to shape the land reform process so
that it
becomes a genuine avenue of redress for those negatively affected by
historical injustices.
For what else can we say given the
persistent crippling shortages of
agricultural inputs the country has
experienced since five years ago? This
should be blamed squarely on the
shoulders of those tasked with running the
country's agriculture who do not
seem to realise that their policies and
operations have severe and long-term
consequences that are not borne by the
government but by the
people.
It is clearly lost on the seemingly unfazed responsible
ministry and
particularly its head Dr Joseph Made, who continues to
sermonise the nation
about the obvious need for food security, that while
considerable progress,
albeit erratic, has been made in redistributing the
finite resource,
optimism must be tempered with the realisation that just
giving people
tracts of land should not be the be-all end-all for ensuring
food security
and economic empowerment, especially if they can not use the
swathes of land
due to lack of inputs. Put simply, redistributing land is
not a goal unto
itself.
The most disappointing thing is that
Minister Made and company joined
the government on the strength that they
were supposed to be technocrats.
But their intellect is of no more use than
a pistol packed in the bottom of
a trunk if one were attacked in the
robber-infested Hillbrow (Johannesburg)
or Brooklyn (New York). Isn't it
ironic that someone (Made) once hailed as
the oracle on agricultural matters
will carry the stigma of having hammered
in the last nail in the coffin of
the once vibrant sector?
In fact as intellectuals, Made and company in
the Ministry of
Agriculture have proved beyond reasonable doubt that noone
in Zimbabwe ever
knew so much that was so little to the purpose! They have
left most people
wondering whether some of the men and women in government
are human beings
or diseases - because everything they touch falls sick.
That is why noone in
Zimbabwe who wants to express distaste with Dr Made and
his lieutenants
should never be at a loss for words which are both
opprobrious and apt.
And the story does not end there. There is the
unresolved issue of
multiple farm ownership. The deceit by those who own
more than one farm in
flagrant violation of the government's one-man
one-farm policy borders on
criminality in the court of public opinion. To
the people, who remain
marginalised in dust bowls, owning more than one farm
is an egregious sin.
Yet the multiple farm owners continue to do so with
impunity as the
authorities are blinded by either the prominence, wealth or
power of the
culprits.
Indeed government's inaction is even more
extraordinary and extremely
perplexing given the numerous audits done so far
and its own admission that
in excess of 300 influential people have more
than one farm. The obvious
question is: Why are the culprits not being
brought to book? Are they more
equal than the deserving cases in the dust
bowls dotted around the country?
Does the government feel that the issue is
too sensitive to be handled in a
routine manner? Is it proving to be
politically sticky? These questions are
crying for answers.
Fingaz
RBZ sets new inflation targets
News
Editor
1/27/2005 8:14:59 AM (GMT +2)
THE Reserve Bank of
Zimbabwe (RBZ) will maintain its hugely successful
policy of inflation
targeting throughout 2005, projecting a year-end rate
between 20 percent and
35 percent, governor Gideon Gono revealed yesterday.
Gono said
inflation would continue to decline steadily throughout the
year, through
tight liquidity management interventions by the central bank.
"In 2005
the inflation rate is projected to continue to decline to end
the year
between 20 percent and 35 percent, a revision from the 30 percent
to 50
percent we had made in our October 2004 monetary policy statement and
in the
fiscal budget," Gono said.
He added that the central bank was now
aiming at reaching single digit
inflation levels in the first half of
2006.
Zimbabwe's rate of inflation, among the highest in the world,
peaked
at 622.8 percent in January 2004 but slowed down to 132.7 percent by
December 2004 as the RBZ adopted a tight monetary policy stance, introduced
a measure of exchange rate stability through the foreign currency auctions
and similar methods of encouraging inflows into the formal economy and
sought to improve capacity utilisation, which had plummeted to 30 percent
but is now around 60 percent.
"We wish to emphasise the need for
elevation of the
inflation-reduction strategy, to focus more on the
structural side, so as to
complement fiscal and monetary measures," Gono
said.
To this end, the RBZ announced a landmark programme of parastatal
reform, which will see quasi-government institutions getting a massive $10
trillion capital injection, to be raised through medium to long-term
government stock.
The ambitious project will also see parastatals
being weaned from the
fiscus in 2006.
Annual money supply growth, a
major inflation driver, was also tamed
and has trended downwards from 490.9
percent in January 2004, to 219.4
percent in November. Gono said the
December money supply figure was expected
to come at an outturn of about 150
percent, beating an RBZ target of 195
percent. Gono said the central bank
had set new targets for annual broad
money supply growth - 60 percent by
year-end and 14 percent by mid-2006.
The RBZ will also pursue its tight
money market liquidity mangement
programme, which saw the bank coming to the
market with several money
mopping instruments, such as such as RBZ
Bills.
Fingaz
Agriculture ministry's use of funds under
scrutiny
Staff reporter
1/27/2005 8:15:28 AM (GMT
+2)
THE Reserve Bank of Zimbabwe (RBZ) will soon institute a probe
into
how $1.5 trillion allocated the Ministry of Agriculture for capital
expenditure was used, central bank governor Gideon Gono said
yesterday.
The funds were committed to the agriculture ministry for
procurement
of agricultural equipment, upgrading of irrigation facilities
and
procurement of fertiliser last year.
Gono, in his fourth
quarter monetary policy review statement for 2004,
indicated that an
"exhaustive audit" was in the pipeline to ensure that
funds were put to
proper use.
"Within the turnaround framework of promoting transparency
and
accountability in deployment of public funds, the Reserve Bank will be
conducting an exhaustive audit on how these resources were used, including
deployment of agriculture equipment that was acquired under the agricultural
equipment scheme," said Gono.
Fingaz
New currency for Zim next year
Staff
Reporter
1/27/2005 8:17:00 AM (GMT +2)
ZIMBABWE, which
went through an unprecedented bank note crisis that
forced the authorities
to introduce higher denominated bearer cheques in
2003, will have a new
currency next year.
Reserve Bank of Zimbabwe (RBZ) governor Gideon
Gono made the
revelation as he presented his fourth quarter monetary policy
statement in
Harare yesterday.
Gono, said the progressive reduction
in the country's inflation, from
a peak of 622.8 percent in January 2004 to
a projected 35 percent in
December 2005 and single digits thereafter, had
necessitated currency
reforms" to strengthen and lock in low inflation
expectations, as well as
build general public confidence in local
currency."
"Commendable progress has been made towards preparatory work
for the
design and production of new currency that would replace the
existing
denominations, including bearer cheques, in 2006," Gono
said.
The Zimbabwean dollar is made up of 100 cents and comes in $1,
$2, $5,
$10, $20, $50, $100, $500 and $1 000 denominations.
Galloping inflation has rendered minted coins virtually worthless
along with
the lower denominated notes.
The bank note crisis in 2003 saw the RBZ
introducing bearer cheques
worth $5 000, $10 000 and $20 000 to satiate the
need for higher denominated
notes.
Fingaz
Parastatal reform in the offing
Staff
Reporter
1/27/2005 8:17:51 AM (GMT +2)
THE Reserve Bank of
Zimbabwe (RBZ) yesterday unveiled an ambitious $10
trillion reform plan for
parastatals and local authorities, whose
inefficiency has long drained the
fiscus and hampered economic growth
through structural
deficiencies.
RBZ governor Gideon Gono announced that the central
bank had finally
managed to craft a blueprint, with the government's
blessing, to embark on a
turnaround programme for the quasi-government
institutions.
The plan will see the government weaning the parastatals
and local
authorities from the fiscus in 2006.
Explaining the
central bank's interest in the parastatal sector, Gono
said: "Radical
restructuring and re-orientation of the country's parastatal
and local
authorities is an indispensable prerequisite for the achievement
of the
objectives of monetary policy, as well as government's recently
launched
macroeconomic policy framework for 2005/2006."
The Parastatal and Local
Authorities Re-orientation Programme (PLARP),
to be financed to the tune of
$10 trillion expected to be raised through
medium to long-term stock will
galvanise the sector, dubbed the "missing
link" by Gono, into playing an
ancillary role in the economic turnaround
programme.
"Intense
analysis of the country's supply side impulse response rates
has clearly
shown monetary authorities that the fight against high inflation
and
productivity reversals can be much longer if there is no radical
transformation in the parastatal and municipal sectors.
"A radical,
necessary and long-overdue shake-up of the parastatal and
local authorities,
as already indicated, to remove the costly supply-side
bottlenecks which
they continue to induce in the production and distribution
chains, as well
as to the general quality of our peoples' lives," Gono said.
The $10
trillion would be channelled towards uplifting worn-out public
enterprise
capital, human resource rationalisation and development, as well
as other
infrastructural development needs.
Beneficiary institutions would
qualify for funding o0n the strength of
stress-tested comprehensive
turnaround programmes to be implemented over the
2005/2006 period, with
government ceasing to provide individual parastatal
or local authority
allocations from the fiscal budget from 2006.
The thrust of PLARP would
be to ensure that the sector provides world
class service in energy and
transport supply, agricultural and
infrastructural development, water
reticulation, health and social services
as well as information
management.
The National Railways of Zimbabwe (NRZ) and Air Zimbabwe
will receive
$1.1 trillion each, while the Grain Marketing Board (GMB), the
Agriculture
and Rural Development Authority (ARDA) and the District
Development Fund
(DDF) will receive a combined $1.1 trillion.
Power
utility ZESA Holdings and Zimbabwe Iron and Steel Company
(ZISCO) will
receive $1 trillion each. Hwange Colliery Company stands to
receive $400
billion, Zimbabwe United Passenger Company (ZUPCO), $300
billion, Zimbabwe
Broadcasting Holdings, $100 billion, Zimbabwe National
Water Authority, Cold
Storage Company, $350 billion, $200 billion and the
profit-making Industrial
Development Corporation, $800 billion.
Local authorities will be
allocated a combined $1 trillion, while $600
will be committed to the
establishment of a fertiliser and allied
agricultural chemicals
manufacturing unit and $500 billion will be set aside
for energy
development. A national milk production programme will be
allocated $150
billion and $200 billion will go towards land surveying.
The proposed
energy, housing and infrastructure bank would take over
the PLARP portfolio,
once it comes into being.
Fingaz
Tobacco farmers to retain 100% sale proceeds in
forex
Staff Reporter
1/27/2005 8:18:15 AM (GMT
+2)
THE government, whose controversial policies have been blamed
for the
collapse of the tobacco industry, will from next month allow tobacco
growers
to retain 100 percent of their sale proceeds at the ruling foreign
exchange
rate in a bid to restore long lost lustre to the golden
leaf.
Presenting his fourth quarter monetary policy review
yesterday,
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono said the
existing blend
rate valuation would fall away and the new framework come
into effect from
February 1.
Previously, tobacco farmers earned 75
percent of their proceeds at the
auction floor rate of $5 700 to the
greenback. The 25 percent balance was
paid at $824 and the government
offered a support price of $750 per kg.
Gono also said that the
government's support price to the tobacco
farmers had been increased to $2
000 per kilogramme and draw-downs on
tobacco pre-financing facilities by
merchants would be sold at 100 percent
at the ruling auction rate. The blend
rate valuations of drawdowns also fall
away.
The government has
also introduced a pooled Foreign Currency Account
for tobacco growers in its
bid to retain glory to the sector, which is
arguably the country's single
largest foreign currency earner.
"Furthermore, those tobacco growers
wishing to retain foreign exchange
for importation of chemicals and other
inputs, will be entitled to a 15
percent retention threshold, which would be
held in a pooled tobacco growers
FCA fund, managed by the Reserve Bank of
Zimbabwe," Gono said.
The growers would, however, access the funds
against "authorised,
authentic import invoices".
The new framework
comes in the wake of the global threat against
tobacco and countries such as
Zimbabwe, whose economies are heavily
dependent on the sector, are under
threat. The government has set its sights
on a target of 160 million kg of
tobacco for the 2004/05 season, but Gono
admitted that the crop estimates
would only register a success rate of 60
percent, with yields coming to
around 100 million kg of the golden leaf.
Tobacco output has nose-dived
during the past four years from a peak
of 300 million kg in 1999 to 64
million kg this year because of a myriad of
viability problems including
lack of inputs, finance, erratic weather as
well as low international
prices.
Zim Online
CENTRAL BANK GOVERNOR PEDDLES RECOVERY GOSPEL WITH RENEWED
ZEAL
Thur 27 January 2005
HARARE - Reserve Bank of Zimbabwe (RBZ)
governor Gideon Gono yesterday
predicted Zimbabwe's inflation will tumble to
between 20 and 30 by year-end.
Although conceding that Zimbabwe was
still in the woods, Gono still
sounded optimistic in his monetary policy
review statement yesterday,
telling Zimbabweans that inflation, pegged at
132 percent at the moment,
would drastically drop in the year.
"Our inflation is still the highest in the world and this remains a
scar in
our face - in 2005 we expect inflation to end at between 20 and 30
percent,"
Gono said in his statement broadcast live on national television
across the
country.
Gono, who battled inflation from 600 percent in January
2004 to 149.7
percent by December the same year, had at the beginning of
this year
forecasted inflation to drop to between 50 and 60 percent by
December 2005.
Describing his policy statement as a roadmap to
resolve major
socio-economic challenges confronting the economy and to
establish a robust
productive system, Gono claimed that the price of fuel
will also drop in the
year owing to improved efficiency in distribution
channels for the product.
Fuel is in short supply in Zimbabwe at
the moment.
Gono, who also forecasted foreign currency inflows to
surpass US$3.9
billion in 2005, scrapped off a special foreign currency
exchange retention
scheme for the tobacco sector, the country's single
biggest hard cash
earner.
Tobacco producers, who had a higher
rate of exchange for part of the
hard cash earnings, will convert 100
percent of their forex earnings at the
ruling rate at the government's hard
cash auction floors.
Telecommunications companies will also be
registered as exporters and
required to account for forex earnings on
outgoing and incoming traffic,
said Gono.
The RBZ chief
adjusted the gold price from $92 000 to $132 000 per
gram in an attempt to
inspire recovery in an underperforming but key hard
cash earning gold
sector.
In a bid to account for all foreign currency generated by
the country,
platinum producers will now be required to open foreign
currency accounts
with local banks under the close supervision of the RBZ,
said Gono.
But economists, business analysts and the opposition
dismissed Gono's
statement as fundamentally flawed, inaccurate and dishonest
and said it fell
far short of addressing "basic problems of
yesteryear."
Harare-based independent economic analyst John
Robertson said: "The
reform (monetary) statement has failed. The governor's
words do not admit
that there are fundamental flaws in the economic
structure. He has failed to
address the economic pointers that he himself
put across."
For example, Robertson questioned where Gono will find
an unbudgeted
Z$10 trillion he said he was going to give to the government's
underperforming parastatals to help them stay afloat.
Zimbabwe
National Chamber of Commerce president Luxon Zembe said Gono
had in his
optimism ignored the huge negative impact a fraudulent or
violence-marred
general election in March would have on economic
performance.
Zimbabweans elect a new Parliament in March but the main opposition
Movement
for Democratic Change party has threatened to boycott the poll
saying the
political playing field is heavily tilted in favour of the ruling
ZANU PF
party.
Zembe said: "Major issues of concern have not been
addressed.
Everybody is waiting on the fence guessing whether the March 2005
elections
will be peaceful and democratic.
"The monetary policy
did not mention the effect of the elections on
economic performance. It will
take us twelve months to recover from the
effects of a violent election and
this will wipe away recovery prospects."
Bulawayo-based economic
commentator Eric Bloch said: "The monetary
policy will have left many
exporters concerned because in the absence of
assurance of exchange rate
movement compensating for inflation, they still
do not have assurance of a
return to viability."
MDC shadow minister for economic affairs,
Tendai Biti, said Gono's
statement was an attempt to paint a rosy picture
without addressing
underlying fundamental problems.
"The
statement was a ZANU PF election manifesto set to sanitise the
ruling party
without addressing economic fundamentals. The current exchange
rate is
unrealistic and means there is no hope for the improvement of the
supply
side," Biti said. - ZimOnline
Zim Online
Mayor sidelined as government steps up bid to wrestle control
of MDC-led
cities
Thur 27 January 2005
MUTARE - The government has
appointed a committee to take over the running
of Mutare city from the
opposition-controlled council.
Mutare executive mayor Misheck
Kagurabadza, whose council was elected
into office two years ago, yesterday
confirmed that a committee had been
appointed above his
council.
Sources said the government will in the next month impose
similar
committees in Masvingo and in Zimbabwe's second largest city of
Bulawayo.
The two cities are run by opposition Movement for
Democratic Change
(MDC) party-led councils.
"They (the
government committee) say they are here to oversee our work
and help us run
the city," said Kagurabadza, who won the city's mayorship on
an MDC ticket
in 2002.
He added: "They also say they will audit council's work
and will pay
particular attention to myself, councillors and other senior
staff. We are
still consulting as council on the way forward."
According to sources, the government, which in 2002 fired Harare's
opposition executive mayor, Elias Mudzuri, and last year appointed a
commission to run the capital, wanted to regain control of all major cities
ahead of the March general election.
"The government wants to
wrestle back control of these towns because
they view the MDC mayors as a
problem," said one government official, who
did not want to be
named.
The official added: "The opposition mayors have rejected
some
recommendations by the government and they have also been employing MDC
supporters and in the process boosting support for the opposition party in
these towns."
Both Local Government Minister Ignatius Chombo
and his permanent
secretary David Munyoro could not be reached for comment
on the matter
yesterday.
But in a letter to Cosmos Chiringa,
who heads the committee appointed
to take charge of Mutare city, Munyoro
said the committee was being
appointed to take charge of corporate
governance, financial and human
resources management for the
city.
The letter, a copy of which ZimOnline has, also says that the
government committee will ensure that the opposition council implemented all
directives issued by central government. - ZimOnline.
Zim Online
Two MDC activists arrested in fresh crackdown
Thur 27
January 2005
BULAWAYO - Police here arrested two more Movement for
Democratic Change
(MDC) party activists as the law enforcement agency
intensified a crackdown
against the opposition party ahead of the March
general election.
MDC spokesman for Bulawayo, Victor Moyo, said the
activists, Shepard
Chigundura and Nompilo Ncube, were picked up in
Lobengula-Magwegwe
constituency in the city while on a door-to-door campaign
to urge supporters
to inspect the voters' roll and ensure they are able to
vote in March.
The opposition activists, who were still not charged
by late last
night, were expected to spend the night in detention at
Magwegwe police
station.
"The two (Chigundura and Ncube) were
simply distributing fliers
encouraging supporters to go and inspect the
voters' roll and urging those
who are not registered to do so as we are
faced with a crucial parliamentary
election," Moyo told
ZimOnline.
Bulawayo police spokesman Langa Ndlovu refused to take
questions on
the matter.
Earlier this week on Tuesday, police
arrested MDC national youth
chairman Nelson Chamisa in Marondera city in
Mashonaland East province
accusing him of inciting violence when he
addressed party supporters last
Saturday.
Chamisa's arrest came
two days after the police had arrested 60 other
MDC activists including the
opposition party's Member of Parliament for
Makokoba constituency, Thokozani
Khupe.
Khupe, who was detained overnight in a cell littered with
human waste
and later released, was charged with meeting with her supporters
without
permission from the police. The 60 supporters were all released
without
charge.
Under the government's Public Order and
Security Act, Zimbabweans must
first get police clearance to meet in public
in groups of three or more
people to discuss politics.
The MDC,
which has had several of its meetings cancelled by the
police, accuses the
government of using the security Act to derail its
campaign ahead of the
March poll.
To date, the police have not cancelled any meetings by
President
Robert Mugabe or his ruling ZANU PF party.
Moyo said
the MDC had resorted to the door-to-door campaign to urge
supporters to
ensure they are on the voters' roll after the police on
several occasions
refused the opposition party permission to hold public
rallies to encourage
supporters to inspect the roll.
The roll has been out for
inspection for the last week and Zimbabweans
wishing to vote in March must
check the roll to ensure their names are
correctly entered.
Meanwhile Chamisa, who is also the MDC's Member of Parliament for
Kuwadzana
constituency, was released from custody yesterday after state
prosecutors in
Marondera refused to prosecute him for lack of evidence
linking him to the
alleged offence. - ZimOnline
Business Day
Marcus calls for tougher line on
Zimbabwe
--------------------------------------------------------------------------------
Stronger
government criticism of human rights abuses is necessary, says the
former
Reserve Bank deputy governor
Chief Reporter
FORMER Reserve Bank deputy
governor Gill Marcus has called on government to
be more outspoken on human
rights violations in Zimbabwe.
Her comments echo those of a variety of
prominent leaders who have demanded
stronger condemnation of the actions of
President Robert Mugabe's
government.
With Zimbabwe's parliamentary
elections scheduled for March, there is
pressure on SA to play a greater
role in ensuring that the poll is free and
fair, in contrast to the March
2002 presidential election, which was panned
by some observers as "daylight
robbery".
Marcus, who is now working in the private sector, was asked at
a breakfast
function this week for her views on Zimbabwe.
"The South
African government was pursuing a policy that it determined, but
a stronger
comment on human rights abuses was necessary," she said after the
event.
However, Marcus stressed that her comment did not amount to an
angry attack
on government's position on Zimbabwe.
"The expectation
of members of the South African public that President
(Thabo) Mbeki could
tell the head of state of another country what to do was
both ahistorical
and presumptive," she said.
It is unclear whether the opposition Movement
for Democratic Change will
contest the elections against the ruling Zanu
(PF).
Human Rights Watch said this month that, "in Zimbabwe,
parliamentary
elections scheduled for March are likely to unfold in a
climate of
repression and intimidation". It said pressure should be placed
on leaders
of the Southern African Development Community (SADC) to push
Mugabe to
ensure free and fair elections.
The organisation said "the
human rights situation in Zimbabwe continues to
be of grave concern (and)
the government continues to use (its) laws to
suppress criticism of
government and public debate".
There have been indications recently that
the African National Congress
(ANC) is turning up the volume of its "quiet
diplomacy".
Last week, for the first time, ANC secretary-general Kgalema
Motlanthe
expressed criticism of the Zimbabwean political climate. He said
the ANC
"have been concerned about several things", and had put pressure on
Zanu
(PF) to strictly adhere to the SADC election protocol.
Former
Truth and Reconciliation Commission chairman Archbishop Desmond Tutu
made
headlines late last year when he noted Zimbabwe's human rights abuses
and
asked whether government's " quiet diplomacy" approach to Zimbabwe was
working.
Other prominent leaders, including Congress of South African
Trade Unions
(Cosatu) general secretary Zwelinzima Vavi, have raised their
concerns over
reported human rights abuses in Zimbabwe.
Although the
tripartite alliance of the ANC, Cosatu and South African
Communist Party
says that it has reached broad agreement on issues including
Zimbabwe, this
could be tested.
Cosatu has asked permission from Zimbabwean Labour
Minister Paul Mangwana to
enter the country on a fact-finding mission early
next month to meet labour
unions.
If permission is refused, or if the
Cosatu team is booted out, as happened
during an aborted mission last year,
this could again throw the issue into
the public arena.
Business Report
Zimbabwe's stranglehold on exporter earnings
eases
January 27, 2005
Zimbabwe's central bank would allow
exporters, who previously had to
exchange all their earnings for local
dollars, to retain 70 percent in
foreign currency accounts, governor Gideon
Gono announced yesterday.
Exporters would no longer have to sell
part of their earnings at the
official rate of Z$824 to the US dollar, which
is well below the rate
reached in the bank's foreign currency
auctions.
Gono introduced new guidelines for the marketing of
platinum, seen as
a major hard currency earner for the southern African
country.
NEPAD Moves Into Action with a
Development Roadmap for Africa's Agriculture
Nepad Secretariat
(Midrand)
PRESS RELEASE
January 26, 2005
Posted to the web January 26, 2005
In a major effort to move NEPAD’s
Comprehensive Africa Agriculture Development Program (CAADP) beyond the
political commitment and framework stage and to start action on the ground, the
NEPAD Secretariat has been working on an implementation roadmap over the last
few months and is now ready to take the process to Regional Economic Communities
(RECs) and their member countries.
The roadmap, as well as the process
underlying it, reflects the respective roles of: (a) the NEPAD Secretariat as a
facilitator and a mobiliser of resources and expertise and (b) the RECs and
member countries as primary implementers. It further emphasises the
Secretariat’s role in linking African countries to the investment resources and
technical expertise that are required to implement the CAADP agenda.
The main value addition of the
Secretariat’s activities are the following:
- Use of NEPAD’s political capital to facilitate
access by African countries to a substantially larger pool of investment finance
and technical expertise than they could mobilise individually and separately;
- Facilitation of benchmarking and mutual learning and
exchange across countries in order to accelerate the spread and adoption of
successful development models and best practices.
The implementation roadmap defines
an action-oriented process which, by March 2005, would produce investment
options and institutional arrangements that would allow RECs and member
countries to prepare investment projects, and allow development partners to plan
for long-term financial assistance.
The four main steps of the roadmap
are:
- Specification of major action programs and
initiatives based on the CAADP Pillars;
- Definition of a strategy to mobilise a limited
number of lead financial partners for each of the programmes and initiatives;
- Identification of major centres of expertise,
international as well as regional and national, as lead technical partners;
- Organisation of four regional implementation
planning meetings to agree on rules and procedures for country and
regional-level project preparation, in-country resource mobilisation, access to
funding by development partners, coordination and governance, and
program/project performance review.
The critical factor
The most critical factor in moving
towards effective coordination of the CAADP agenda by RECs and direct
implementation by countries is the need to ensure empowerment and establish
ownership at the regional and national levels.
In addition to the process-centred
objective of establishing ownership, the crucial Regional Implementation
Planning (RIP) meetings also have a technical objective, which is to bring about
agreement on the main components of the CAADP investment programs and
initiatives for each region, including resource requirements, detailed
implementation action plans, coordination arrangements, and target launch
dates.
A series of RIP meetings has been
scheduled, with the first to be held in Dar-es-Salaam, Tanzania, on 25-28
January 2005. More than 200 delegates are expected from African countries as
well as from Europe, Japan and the US.
The Tanzania meeting will be
followed by meetings in the next three months, in Maputo, Mozambique; Bamako,
Mali; and Cairo, Egypt. A roundup implementation meeting will be held in
April.
NEPAD’s vision for
agriculture
The specific thrusts for improving
Africa’s agriculture that are outlined by NEPAD in the CAADP programme
are:
- extending the area under sustainable land management
and reliable water control systems;
- improving rural infrastructure and trade related
capacities for market accesses;
- increasing food supply, reducing hunger, and
improving responses to food emergency crises; and
- improving agriculture research, technology
dissemination and adoption.
NEPAD’s overall vision for
agriculture seeks to maximise the contribution of Africa’s largest economic
sector to achieve self-reliant and productive economies.
In essence, NEPAD aims for
agriculture to deliver broad-based economic advancement, to which other economic
sectors, such as manufacturing, petroleum, minerals and tourism, may also
contribute in significant ways, but not at the same level as agriculture. This
is due to the fact that nearly 75% of the African population is employed, either
directly or indirectly, by agriculture.
The NEPAD goal for the sector is
agriculture-led development that eliminates hunger, reduces poverty and food
insecurity, opening the way for export expansion.
The vision for agriculture is that
the continent should, by the year 2015:
- Improve the productivity of agriculture to attain an
average annual growth rate of 6 percent, with particular attention to
small-scale farmers, especially focusing on women;
- Have dynamic agricultural markets within countries
and between regions;
- Have integrated farmers into the market economy and
have improved access to markets to become a net exporter of agriculture
products;
- Achieve a more equitable distribution of wealth;
- Be a strategic player in agricultural science and
technology development; and
- Practice environmentally sound production methods
and have a culture of sustainable management of the natural resource
base.