By Dumisani Muleya
RESERVE Bank governor Gideon Gono has escalated his fight against
government's price reduction blitz which has left shops empty and the
economy crumbling as divisions within President Robert Mugabe's embattled
Gono intensified his unprecedented resistance to the blitz this week,
warning the authorities the crackdown could lead to "unintended
consequences" such as the collapse of businesses, worsening economic decline
and suffering of the poor.
Gono likened the state-sponsored crackdown to the United States'
invasion of Iraq in which a military campaign was launched into a dangerous
territory without an exit strategy. He further said government must avoid
creating a scenario similar to the biblical situation in which the
Israelites ended up thinking it was better to go back to Egypt during their
long journey to the promised land.
After telling the government and Zanu PF early last week that their
campaign was ill-advised, Gono last Friday warned the Cabinet Taskforce on
Price Monitoring and Stabilisation that while the price-slashing policy
might have been well-intentioned, it has inadvertently created problems that
have worsened the situation. Gono again put his thoughts in writing this
week, raising the political stakes in the crackdown clearly designed to win
votes in next year's parliamentary and presidential elections.
Zanu PF officials fear defeat at the polls because of the economic
crisis and a crippling power struggle currently rocking their party.
Mugabe has been saying the price blitz was triggered by his regime's
fears that business wanted to use economic pressure to ensure his defeat at
The crackdown was apparently driven by the Joint Operations Command
(JOC), which comprises the army, intelligence, prisons, and police. Sources
said JOC, which was accused of being the architect of Operation
Murambatsvina that displaced at least 700 000 people in 2005, was anxious
that unless the government did something dramatic to change the situation,
Mugabe would lose next year's elections, leading to the collapse of his
regime and his 28-year rule.
Gono warned the government this week that authorities must guard
against "the law of unintended consequences" via which the blitz could lead
to economic implosion and attendant problems such as further political
instability and social dislocation.
"Let's avoid the law of unintended consequences in the action
government has taken which will leave the country in a worse-off position
than now; avoid the trap of temporary victory and instant gratification that
backfires with consuming return-fire from both the business community and
consumers alike," Gono said.
"It is critical that urgent steps be taken to, once and for all, deal
with the supply side imperatives without which, or failure of which, will
leave the country in a worse-off situation."
He said authorities risked fulfilling doomsday prophecies like
"government will collapse within six months" through such policies as the
"Let's avoid the 'take me back to Egypt syndrome' as done by the
Israelites when they suddenly developed disillusionment during their arduous
journey to the promised land," Gono said.
"Soon they started thinking that it was better where they were coming
from; and us we risk having the same mentality when suddenly our shops
become empty, with foreign exchange inflows into the central bank drying up,
among many other backlashes, leading us to needlessly draw spears against
Gono also said government must avoid getting bogged down in the
current situation like the US in Iraq by choosing wrong policy strategies
that can easily backfire.
"Let's avoid what in contemporary strategy has become known as the
US/Iraq syndrome where the US, backed by its allies, went into Iraq without
an exit strategy," Gono said. "We need to define clearly at what point we
will exit from the current blitz. Alongside the exit strategy, there is also
a mechanism that needs to be put in place: monitoring the monitors. This is
particularly so against a background of reported cases of corruption,
looting and general waywardness by some stakeholders."
Gono said a holistic package of measures which include the need to
reduce government expenditure, reduce the budget deficit and ensure fiscal
discipline were needed to reduce inflation, not just a blitz. He said price
controls without production do not work. Gono made recommendations on the
protection of property rights and how to attract investment to revive the
He said everyone was battling for survival and government must not
make the situation worse for everybody, including itself.
"Our backs are against the wall and to survive as a people (labour and
consumers) we must survive, as the business community they have to, and
survive as a government we also must," he said. Gono said government would
still be able to implement its policies without threatening the survival of
business, the economy, the people and itself.
RULING Zanu PF hardliners supporting the price blitz want Reserve Bank
governor Gideon Gono's "wings clipped" or get him dismissed for resisting
the campaign which has bankrupted businesses.
Inside sources said cliques of Zanu PF diehards - who are opposed to
political and economic reforms - who include Elliot Manyika and Nicholas
Goche, want President Robert Mugabe to cut Gono's "prime ministerial powers"
because he was now opposed to government policies.
The sources said the coterie of hawks, including politburo member
Obert Mpofu, feel that Gono must be dismissed if he persists in his
opposition to the crackdown. Manyika and Mpofu have been at the forefront of
the blitz endorsed last week by the Zanu PF politburo, central committee and
national consultative assembly.
Mugabe has come out in full support of the clampdown, a position which
situated him at odds with Gono. Vice-President Joseph Msika has also
publicly backed the blitz, leaving Gono - who is a bitter political rival of
Vice-President Joice Mujuru, in the firing line. The price war is said to be
the brainchild of the Joint Operations Command (JOC), which comprises the
army, intelligence, prisons and police.
This means that Gono is vulnerable from many fronts in the system. The
sources said Zanu PF hardliners feel that Gono is becoming like his
predecessor, Leonard Tsumba, who during his tenure was accused of
technocratic and bookish considerations in the execution of his duties and
needed to be pushed out.
During the course of the week, the diehards warned in private
meetings - one of them a lunch meeting at a restaurant in Harare - that Gono
would suffer the same fate as former Information minister Jonathan Moyo, who
was dismissed against a backdrop of serious fighting within Zanu PF and
While Gono is very close to Mugabe and has access to him more than all
cabinet ministers, he has no support among ministers and within the party,
especially in the wake of the price reduction blitz, a vote-grabbing
strategy ahead of next year's joint presidential and parliamentary
The Zanu PF faction led by retired army commander General Solomon
Mujuru has for a long time been fighting Gono and has reportedly joined the
current campaign to push him out. Gono is also not particularly popular with
the other main faction led by politburo member Emmerson Mnangagwa.
Although the Mnangagwa faction has not overtly been fighting Gono, it
is said to be rather unfriendly to him due to the ongoing power struggle
over Mugabe's succession. Gono is being touted by some as a potential Mugabe
successor because of his strategic position in government. Through the
central bank, Gono virtually controls the financial levers of the state and
hence the treasury. He has huge influence over economic ministries such as
Finance, Industry and International Trade, Economic Development and
Agriculture. Besides, he is also seen as a close Mugabe ally and some say he
is a family friend and this provides him with a springboard to challenge for
power. This has brought him into conflict with leading Zanu PF luminaries
fighting to win power in the party. Zanu PF's central committee last Friday
adopted a resolution backing Manyika and Mpofu who are spearheading the
prices crackdown. Prior to that the politburo also supported the blitz.
Gono clashed with government last week over the crackdown following
the campaign which led to the looting of shops and supermarkets in a doomed
bid to curb spiralling inflation.
Official inflation is now 4 500%, although analysts say it is double
In an unprecedented move, Gono wrote to Zanu PF and government,
distancing himself from the campaign and warning it would collapse the
remaining pillars of the economy and spell more trouble for Mugabe's
regime. - Staff Writer.
Augustine Mukaro/ Loughty Dube
RESERVE Bank governor Gideon Gono's cattle restocking programme could
face hurdles as government forces cattle producers to sell their livestock
to the Cold Storage Company (CSC) at sub-economic prices in its ongoing
Government this week revoked licences for private abattoirs and
ordered all cattle producers to send their slaughter stock to the CSC. The
CSC is offering between $4-$5 million a beast, much lower than the $45
million the farmers had been receiving.
Sources said government officials have been dispatched into the rural
areas to armtwist farmers into selling all their cattle to the CSC. One of
the blitz teams yesterday stopped a cattle auction in Mashonaland East,
saying all cattle should be sold to the CSC. Nearly all farmers took their
animals back in protest.
In Matabeleland, price reduction teams moved into the rural areas and
stunned villagers by ordering that they should only sell livestock to the
CSC since it was now the sole authorised buyer.
Villagers in Matobo district told the Zimbabwe Independent that a team
moving around with police told them that cattle should be sold for not more
than $5 million a beast.
Previously a beast was selling for $45 million before government
ordered the price of beef to be reduced to $80 000 a kg. Slaughter stock is
normally penfed, which is very expensive.
Over the past two years Gono has availed more than $1,5 trillion under
the Agriculture Sector Productivity Enhance Facility (beef cattle support
scheme) to rebuild the national herd. The national herd is estimated at 80
000 animals, down from the nearly four million in 1999.
All major privately owned abattoirs confirmed that they had stopped
cattle slaughter and are applying for the renewal of their licences. They
said they were likely to send their slaughter stock to the CSC in line with
the government directive if their application for licence renewal failed.
"All I can say is that we have stopped cattle slaughtering," an
official at Surrey Abattoir said. "We are in the process of applying for the
renewal of our licence so that we can resume our operations."
Officials at Montana Meats said they had met Industry and
International Trade ministry officials over the revocation of their licence.
Failure to secure the licences would push the abattoirs out of
business and render billions worth of equipment redundant.
"Our primary function has been taken away, leaving our facilities
idle," the abattoir said. "We are going to incur serious losses and it won't
be viable to supply meat outlets by buying beef from the CSC."
MDC MP for Matobo, Lovemore Moyo, confirmed that police had ordered
businesspeople in the village to slash prices. He said people were following
the price teams from as far as Bulawayo hoping to land a bargain.
"The main problem with the teams is that they are travelling with
people from Bulawayo who buy everything after prices are reduced. The
lowering of prices should benefit villagers in the area and not 'foreigners',"
THE government will next month ban the import and export of various
goods, among them groceries, for resale or disposal without a permit.
This is meant to kill off cross border trade in basic commodities
which has largely kept shops supplied in the absence of locally manufactured
According to statutory instruments 137 and 138 of 2007 gazetted last
week, the importation of goods such as beef, butter, cooking oil, milk,
cheese, sugar, tea, wheat flour, ice-cream, fertiliser, cotton lint and
hides and skins without a permit will be outlawed with effect from August 1.
The exportation of meat, millet, milk, poultry, sorghum, soya beans,
sunflower, tea, vegetables and wheat will also be banned. Families are
allowed to import goods worth US$250 a month for domestic consumption only.
Individuals and companies wanting to import goods will have to apply
for a permit from the Ministry of Industry. The ministry's secretary can
revoke the permit if the holder fails to comply with its conditions. The
permit is not transferable.
Legal experts said the ban on the importation of groceries would
mostly affect cross border traders who have been buying an assortment of
groceries from countries such as Botswana, South Africa, Mozambique, Zambia
and Malawi for resale back home.
The traders, most of them women, have managed to keep the country's
markets alive by supplying various goods such as cooking oil, soap and
margarine in times of shortages of locally manufactured brands.
Their goods were sold at affordable prices as compared to locally
Cross border trading had also become a major source of employment,
income generation, improved food security for households and a means for
improving living standards.
MANUFACTURERS and retailers have started to quantify their losses amid
fears that companies could shut down in the coming weeks as government this
week intensified its blitz on businesses, the Zimbabwe Independent has
Government reneged on its promises to business to subsidise fuel and
other vital inputs as part of efforts to control prices. This forced
business to continue sourcing fuel on the black market where it was selling
for as much as $200 000 per litre this week.
Shortages of basic commodities worsened this week as the effects of
government's order for producers and retailers to slash prices by 50% took
effect. At the same time government stepped up its campaign to arrest
industrialists perceived as working against the order.
Major casualties of the blitz include National Foods (Natfoods), TM,
OK, Lobels, Circle Cement, National Tyre Services, Star Africa, Schweppes
Zimbabwe, Net*One and Makro Mega Centre, a wholesale giant.
The number of companies which face bankruptcy is much higher but
business executives have been unwilling to give estimates of the losses they
have suffered so far, fearing arrest and victimisation by government.
It has been established that TM has suffered a loss of between $35
billion and $40 billion in the past two weeks while OK lost $38 billion.
Natfoods incurred a loss of $18 billion after importing an unspecified
quantity of salt from Botswana, only to be forced to sell it at below cost
at the old price of $34 000 a kg. Natfoods has also suffered losses on its
other product lines.
"It is correct that we have incurred losses on some product lines due
to pricing. However, these are not quantified at this time," said Linda
Musesengwa, Natfoods' public relations consultant.
NTS on the other hand suspended a lucrative contract to supply tyres
to listed giant Delta for its entire fleet of vehicles. A company official
confirmed the developments but refused to disclose the value of the
transaction, referring all questions to managing director, Mark Vickery, who
was said to be out of the country.
Bakers have been incurring losses of between $15 000 and $20 000 a
loaf. A Schweppes official said they had been bearing losses since the order
was issued by government and had only started compiling the extent of their
losses on Wednesday.
Government has threatened to nationalise defiant companies and also
arrest officials at the helm of these companies. So real has been the threat
that over 1 000 individuals having been arrested so far under the blitz.
OK's boss, Willard Zireva, was arrested on Tuesday as the retail giant
closed its Gweru branch. He appeared in court yesterday. Other retail giants
and manufacturers refused to disclose their losses fearing retaliation from
Gutsai Convenience Stores management said while they would comply with
government's order, they would be in serious trouble once current supplies
Meanwhile, Net*One is in financial dire straits and could fail to pay
salaries for July if Transport and Communications minister Chris Mushohwe
does not intervene with a cash injection.
The Cabinet Taskforce on Price Monitoring and Stabilisation ordered
all network operators to revert to the old prices. Econet Wireless managing
director Douglas Mboweni refused to comment.
Western Union Transport had 2 000 litres of its company fuel seized
yesterday morning by price control officers, a company official said.
"They just descended on us and threatened to arrest us if we did not
give them the fuel. It was sold for $60 000 a litre. One officer said we
were working with (US ambassador Christopher) Dell for regime change in six
months and that we were going to suffer as a result," said the official.
Wholesale giant Macro Mega Centre was mobbed yesterday as Zimbabweans
rushed to buy groceries whose prices had been slashed.
When shoppers yesterday morning descended on a South African-owned
wholesaler, police forced the shop to slash prices in line with the
presidential decree. But prices were reduced to ridiculous levels with
television sets going for $3 million and refrigerators for $20 million.
Shoes that cost $4 million were sold for $57 000 while pairs of
trousers were sold for a fifth of the original value. During lunch hour, at
least 500 shoppers - a number of them in top of the range vehicles -
besieged the wholesale's entrance hoping to land bargains.
They however drove off disappointed as soldiers and police sealed off
the access gate. Occasionally though, members of the blitz team emerged from
the wholesale carrying white goods and garden tools.
On Wednesday, Grant Pattison, chief executive of SA retail giant
Massmart, the major shareholders in Makro, told Fin24 that police had
detained the shop's assistant manager and forced him to close the store.
Elsewhere across Harare government's price police ordered retailers to
comply with the directive. The price of television sets fell from around $50
million to $2 million, sparking pandemonium in downtown Harare, while DVD
players were selling for a $1 million.
Bata Shoe Company outlets were stripped bare as customers jostled to
buy shoes whose prices had been reduced.
Portland Holdings, a wholly owned subsidiary of Pretoria Portland
Cement and Circle Cement, are faced with trying times after the price of
cement was slashed from $1,5 million to $120 000 for a 50kg bag.
THE proposed composition and functions of the Senate in the
Constitutional Amendment (No18) Bill are aimed at extending and further
buttressing the government's power of patronage, legal experts have said.
The Bill, among other things, seeks to change the composition of the
House of Assembly and Senate by increasing the number of legislators to 210
and 84 from 150 and 66 respectively.
Under the Bill, the Senate will comprise 18 chiefs, 10 provincial
governors, six presidential appointees and 50 elected members.
The legal experts said under the amendment the Senate would simply
rubber-stamp President Mugabe's decision to appoint key people like service
chiefs, pubic service commissioners and the Chief Justice because most
senators would be ruling party loyalists.
"The pushing of 18 chiefs, who have openly declared their support for
President Mugabe and unanimously endorsed his candidature for next year's
scheduled presidential elections means 18 Zanu PF loyalists already in the
"The 10 provincial governors already appointed by the president are
obvious loyalists who will again be pushed to the Senate including six other
presidential appointees which will make 34 out of the proposed 84 Senate
members already loyal to the president," said MDC chief whip Innocent Gonese
who is a lawyer by profession and a member of the parliamentary legal
"On the other hand, the Delimitation Commission which will be
responsible for determining the boundaries of the senatorial constituencies
will deliberately ensure that Zanu PF strongholds get the largest chunk as
opposed to opposition party-dominated areas like what happened in the 2005
Fortune Charumbira, the president of the Chiefs Council, this week
said chiefs had endorsed President's Mugabe's candidature in next year's
election at a two-day seminar in Harare.
Charumbira this week said Mugabe was the only leader they wanted to
contest and win next year's presidential election.
Traditional leaders are custodians of culture and are held in high
esteem in their communities which respect and adhere to their rulings and
guidelines as authoritative.
However, Gonese said chiefs are supposed to be apolitical and should
represent their respective communities regardless of individuals' political
"That is why we are saying we need a new constitution to correct all
these problems. We do not want continued piecemeal amendments to the
Constitution. How can we have chiefs who are expected to be apolitical
openly declaring their support for a particular political party when they
are members of the Senate?" asked Gonese.
Clauses 11, 14, 16 and 18, 22, 26 and 28 provide that where
recommendations of either the Judicial Service Commission or Public Service
Commission on the appointment of the chairperson of the Zimbabwe Electoral
Commission, Secretary to Cabinet or a ministry are not adopted by the
president, the president "will cause the Senate to be informed of this fact,
and not both houses".
"This creates an impression," said Gonese, "that the Senate would make
ultimate decisions but the president will merely inform the Senate. Even if
the Senate were to make a decision, it would simply endorse the president's
decision by virtue of most members being loyal to him. So in essence, the
Bill gives the president much more power. There is no democracy or checks
and balances expected of the upper house."
Gonese added that in the event of having a balanced lower house, the
partisan Senate would then be used to rubber stamp executive decisions, thus
putting paid to any efforts to promote expected parliamentary democracy.
Lovemore Madhuku, the chairman of the National Constitutional
Assembly, echoed Gonese's sentiments adding that Bill was all about
consolidating Mugabe's power and continued rule.
"Essentially the proposed Senate is meant to rubber-stamp the
president's will on the people," said Madhuku. "It is a useless amendment
which must simply be rejected by the people of Zimbabwe. The Delimitation
Commission will deliberately ensure that boundaries cover Zanu PF areas.
Already there will be 34 senators aligned to the ruling party and this
figure almost constitutes a quorum. Its quite clear this amendment is meant
to consolidate existing executive powers."
Commenting on appointments of personnel to key public offices, Gonese
said parliament should have a well-balanced appointments committee which
should generate names of suitable candidates for such posts and recommend
the to the president.
"The current scenario we have where service commission members and
chairpersons appointed by the President being the ones who also recommend
candidates for public offices is not impartial," said Gonese.
In its analysis of the Bill, the Zimbabwe Election Support Network
(Zesn) legal unit said the proposed composition and expansion of the Senate
was unjustified, expensive and meant to extend the government's power of
"So far as presidential appointees are concerned, what the House of
Assembly loses, the Senate will gain. Any reduction in the number of members
of parliament who owe their seats to the president is welcome, but the
precise number is unimportant. The fundamental point is that the executive
should not be allowed to appoint any members of the legislature and
governors at all. The only exception to the rule should be chiefs, who have
a legitimate role to play in the Senate even though they owe their initial
appointment to the president," said Zesn in a statement.
Zesn said chiefs should remain outside politics and play an advisory
role as was the case in Lesotho and other countries.
The election monitoring organisation recommended the system of
proportional representation to elect members of the Senate for inclusivity
and broadening representation of special interest groups, women, the
disabled, the youth and other disadvantaged minority groups.
THE Morgan Tsvangirai led faction of the Movement for Democratic
Change (MDC) this week said it will boycott next year's harmonised polls if
there are no significant electoral law reforms.
Addressing hundreds of supporters in Mabvuku on Sunday, Tsvangirai
said the South Africa president Thabo Mbeki-mediated talks between the MDC
and the ruling Zanu PF should come up with resolutions that guarantee free
and fair elections if the opposition party is to participate in the polls.
Mbeki was in March mandated by the Southern Africa Development
Community (Sadc) to mediate between the two protagonists.
"We want real electoral reforms. Posa (Public Order and Security Act)
must be abrogated, Zimbabweans in the diaspora must vote, international
monitors and observers should be allowed into the country three or four
months ahead of the polls and we should be guaranteed space in the public
media," Tsvangirai said. "If these minimum conditions are not met, why will
we participate in fraudulent polls? We will allow (President Robert) Mugabe
to have a walkover."
Tsvangirai said if the government goes ahead with the polls minus his
party, that would be "the endgame" of the Mugabe regime. He said "rigging"
of the 2008 poll was already in motion with thousands of perceived MDC
supporters being refused voter registration, while police have turned down
over 800 planned rallies by the opposition party.
"Out of the over 1 000 rallies we intended to hold throughout the
country, only 200 were sanctioned under Posa. Zanu PF is holding rallies
without even notifying the police as per provisions of Posa.
"Thousands of prospective voters are being turned away. Is this not
rigging?" asked Tsvangirai.
He said if these problems were not ironed out during the Mbeki talks,
his party would see no reason in participating in the polls.
However, political analysts this week questioned the efficacy of such
a move as Zanu PF would go ahead with the polls and "win convincingly".
University of Zimbabwe political science lecturer Eldred Masunungure
said boycotting the elections would work against the MDC.
"Zanu PF will not lose sleep if they boycott," said Masunungure. "It
will proceed with the polls and I can assure you that new opposition parties
will be created to give an aura of legitimacy to the elections," Masunungure
said. "I also foresee some members of the MDC rebelling against such a
decision and contesting the polls as independents."
He said the boycott would signal the demise of the party.
"The boycott would be costly to the party. They will not be able to
remain credible outside parliament. Currently they are visible because of
their participation in parliament," Masunungure added.
He said there was nothing wrong with the MDC pushing for minimum
requirements to be met before next year's polls, but boycotting them would
Michael Mhike, another political scientist, said boycotting the
elections by the MDC would not stop Zanu PF from forming a new government,
even though the country's relations with the international community will be
"Mugabe will form a new government," said Mhike. "The Tsvangirai camp
should learn from previous encounters. They boycotted the senate elections
in November 2005, but they were held and Zanu PF won convincingly. In my
view, boycotting is not the way to go. They must participate and expose the
weaknesses in the electoral process and then challenge the legitimacy of the
government formed from the results of the polls."
A political analyst who preferred anonymity said the only route for
the MDC to unseat the Zanu PF government was the ballot and as such the
party must contest.
"Their concerns are genuine, but it is my considered opinion that they
must fight it out with Zanu PF. What they must strive to do is to mobilise
every voter to go to the polls and I do not think the ruling party will be
able to rig under such circumstances," the analyst said.
OUTGOING United States ambassador to Zimbabwe Christopher Dell says he
will not bid farewell to President Robert Mugabe whose government has been
highly critical of the envoy's three-year tour of duty in the country.
Dell is accused by government of working with opposition parties and
civic organisations to effect regime change in Zimbabwe.
He leaves for Afghanistan where he will be deputy chief of mission.
In an exclusive interview on Wednesday, Dell - a career diplomat -
said he considered it inappropriate to say goodbye to Mugabe.
"Unfortunately I cannot do that (bid farewell to Mugabe) for reasons I
have communicated to the president privately," Dell said. "In the current
circumstances, it would be inappropriate for me to bid farewell to President
Dell - who has served as chief of mission in Angola, Kosovo, Bulgaria
and Mozambique - said the government was yet to accept his successor's
"You ask the government (about acceptance of the credentials). They
haven't communicated to us. At the moment I am the accredited ambassador to
Zimbabwe and even if I leave (before the acceptance of my successor's
credentials), I will remain the accredited ambassador to Zimbabwe," Dell
Turning to Zimbabwe's crisis, Dell said recent price cuts by
government would result in the spiralling of inflation and precipitate
"What the price controls have done is to force businesses to sell
their stock at a loss," Dell said, adding that soon shelves would be empty,
forcing the central bank to print money and buy foreign currency for
The envoy insisted that inflation would hit the 1 500 000% mark in the
next six months and that in history no government ever survived such a
He said independent statistics indicated that inflation in June was 28
000%, contrary to the official 4 500%.
The ambassador said the price cuts were a populist move by a desperate
"This is classic Robert Mugabe," Dell said. "When he is scared and
desperate, he lashes out.From a tactical view, the strategy (of price cuts)
will work, but it is a short-term populist strategy."
However, the diplomat said the failure of the policy would hurt the
He cited the land reform programme of 2000 that destroyed the
agricultural sector, and the 2005 Operation Murambatsvina which almost
killed the informal sector, as having hurt ordinary people most.
Dell said the government should participate seriously in the South
African president Thabo Mbeki-led mediation between Zanu PF and MDC if a
lasting solution to the country's crisis is to be found.
The Southern African Development Community appointed Mbeki in March to
mediate in the Zimbabwe crisis.
Dell said it was disappointing that government's negotiating team made
up of Justice minister Patrick Chinamasa and Social Welfare minister
Nicholas Goche failed to travel to South Africa at the weekend for the
"I think this is another area where the president is making serious
miscalculations," Dell said. "He thinks he can continue to treat Thabo Mbeki
He said if Mugabe continues along this path, he would force the region
to have a new thinking on him.
"The Sadc initiative is the only way for Zimbabwe to come out of this
crisis," Dell added.
MORE than 40 computers, most of them destined for constituency
information centres, were recently stolen at Parliament House in what is
suspected to be an inside job. The theft exposed the inadequacy of security
at the august house. Clerk of Parliament Austin Zvoma on Tuesday confirmed
"It is correct that computers were stolen. The thieves got away with
hard drives and other accessories. The machines were to be allocated to
constituency information centres in the country, while some of them were to
be given to various parliamentary departments," Zvoma said.
A source told the Zimbabwe Independent this week that the computers
were housed in parliament's information technology department and their
disappearance was discovered last month.
"Most of the computers were to be dispatched to constituency
information centres across the country and others were destined for various
departments. It was only discovered last month that the computers and other
accessories were missing," one source said. He added that soon after the
discovery of the theft, an employee in the information technology department
has not been reporting for work amid suspicion that he skipped the country.
"The biggest question was how the computers were stolen given the
security at parliament. It is clear that the theft was an inside job," the
source added. "After the theft, efforts were made to keep the case secret.
One of the employees in the information technology department disappeared
after the discovery." - Staff Writer.
A FORMER ZB Bank official - Tendai Chimhini, now running a haulage
company - was last week arrested alongside at least 10 other transport
operators, drivers and clearing agents at Chirundu border post by Reserve
Bank officials and police detectives for allegedly using fake CD3 forms to
evade forex remittance, the Zimbabwe Independent has learnt.
Several haulage trucks laden with various goods for export were also
impounded pending the outcome of investigations.
The arrests followed the unearthing of a syndicate involving bank
officials, haulage companies and clearing agents who are buying stolen
genuine CD 3 forms from bank officials and using counterfeit bank date
stamps to effect transactions, prejudicing the central bank of millions in
It has also emerged that the arrest of Chimhini could suck in a police
senior assistant commissioner (name supplied) who is his friend, for
allegedly attempting to interfere with investigations, while the net is
reportedly closing in on top officials in various commercial banks.
The CD 3 forms issued to haulage companies on behalf of the central
bank are used to record freight charges that should be paid in foreign
currency to local transporters by foreign companies.
Chief police spokesman Assistant Commissioner Wayne Bvudzijena
yesterday confirmed the arrests, adding that the operation launched at
Chirundu had since been extended to border posts countrywide.
"I can confirm that Chimhini was arrested and is still in police
custody while investigations are continuing. The operation has been spread
to all ports of entry where these forms are used. However, I am not in a
position to give you details at the moment as we are still to receive
updates from the centres," he said.
GOVERNMENT has lined up another economic blueprint, the Zimbabwe
Economic Development Strategy (ZEDS), to succeed the National Economic
Development Priority Programme (NEDPP) that was unilaterally terminated by
the Joint Operations Command (JOC) last week amid a blazing price war with
Business was strongly involved in the formulation of the NEDPP.
Businessdigest understands that there was suspicion within JOC that
captains of industry could orchestrate the downfall of President Robert
Mugabe's embattled regime through price hikes designed to foment social
JOC, which comprises the country's security chiefs, was also riled by
industry's refusal to back down on directives to reverse prices to June 18
levels by government.
Economic Development minister Sylvester Nguni did not respond to
questions faxed to him last week.
Sources however told businessdigest that ZEDS, which was originally
pencilled in to be launched early next year, could be brought forward "to
salvage the country's ailing economy".
It is part of several economic policies government will implement in
the next four years under the revived Vision 2020.
Under the Vision 2020 programme, government says its drive towards
economic revival will be spearheaded by "good governance and political
stability, sustainable macro-economic growth, regional and provincial
development, employment creation and elimination of poverty and the
management of human and natural resources".
The document says government will work towards the provision of
adequate, affordable, and accessible social services, and promote culture,
sport and strong families.
"The essence of this aspiration is a democratic, well-governed and
just society characterised by transparency and accountability," says the
economic blueprint, signed by Mugabe in January.
"For Zimbabwe's manufacturing products to successfully compete on the
domestic and international markets, the country needs to enhance its
technological capacity. There is need to create a critical mass of
scientists that will carry out research and developmental work," the
"ZEDS and other national policies are vehicles through which the goals
and aspirations contained in Vision 2020 and the MDGs (Millennium
Development Goals) will be realised," the paper said.
But analysts this week said the new policy was a regurgitation of
previous documents government has tabled as panaceas to the burgeoning
crisis, and could face the same fate as its predecessors.
For instance, under the National Economic Recovery Programme (NERP) of
February 2003, several measures were proposed to deal with the crisis.
The measures were supposed to be implemented under strict deadlines
but NERP was shelved without achieving its objectives and replaced by NEDPP
Dairy industry players were to "introduce a dairy development
programme aimed at reviving distressed dairy farms" by March 2003.
The Ministry of Economic Development was instructed to speed up the
irrigation development programme by March 2003, government promised to
develop industrial clusters for manufacturers while plans to review the
industrial development strategy to address de-industrialisation were also
proposed. But as evidenced by the worsening economy crisis, NERP failed to
live up to its targets.
WHEN government launched the National Economic Development Priority
Programme (NEDPP) last year, it was greeted with optimism by the Ministry of
Economic Development that rated it as a formidable plan for economic
The architects of the NEDPP said Zimbabwe had to forget the sad
memories of a cocktail of other failed blueprints that preceded the NEDPP
because government had finally crafted a plan to reverse, within nine
months, the severe effects of 10 years of recession also driven by bad
"It is a quick-win strategy," said former Economic Development
minister Rugare Gumbo at the launch of the NEDPP in April last year.
He said the "highest office" had taken a keen interest in the
programme and, unlike in the past, strict deadlines would be followed.
"Past policy documents were brilliant but we did not have the
institutional framework to drive them. I have been trying to find a formula
of implementing our programmes. This one has an implementation framework,"
Inflation, described as the country's enemy number one, was forecast
to decline from 1 092% in April last year to a three-digit figure by
NEDPP had to raise US$2 billion to beef up capacity, stabilise the
economy, reduce inflation, increase agricultural coordination and ensure
adequate supply of inputs and food security.
Snaking fuel queues, government claimed, would be history.
A US$50 million fuel deal involving the Reserve Bank of Zimbabwe, MBCA
Bank and Bindura Nickel Corporation signed in May 2006 was billed as the
work of the NEDPP.
But as NEDPP entered its 15th month last week when the Joint Operation
Command terminated it due to swelling hostilities over controversial price
controls, it was clear that the programme had failed to achieve the
objectives for which it was put in place.
Inflation, which was at 1 092% surged to 4 530% at the end of May.
Interest rates are still hovering at uneconomical levels of between
500% and 600%, an indication of havoc in companies dependent on borrowings.
According to the Confederation of Zimbabwe Industries (CZI), Zimbabwe's
manufacturing sector could collapse due to a growing level of unutilised
capacity in industries.
"Players in the manufacturing sector risk being swept aside if they do
not re-group and strategise," the CZI said.
"The manufacturing sector is estimated to have declined by 7% in 2006.
"This compares to a growth of 3,2% that has been registered a year
The manufacturing sector had perennially been the backbone of the
country's economic development.
But economists this week said in its present state the country's
manufacturing sector is missing out on a potential market of 420 million
people with an estimated gross domestic product of US$267 billion because
capacity utilisation has plunged to 33,8%.
About nine out of 10 manufacturing companies are unable to cover their
costs and make full use of their standing capacities.
Major mines have closed leaving 40 000 on the streets and 3,4 million
have fled the economic crisis.
Four in every five people are unemployed and 60% of the country's
estimated 13 million people are living on less than US$1 per day and
Zimbabwe has been going cap in hand to other countries praying for food to
replenish its dry reserves.
About four million people are in dire need of aid.
Economic commentators have forecast a gloomy picture of all
Inflation is projected to hit 100 000% by the end of 2007.
The Zimbabwe dollar traded at $2 700 to the greenback in January but
was trading above $140 000 to US$1 this week.
In fact, government had indicated during the launch of the NEDPP that
the project was a joint effort with the private sector.
But events in the past few weeks, including the unilateral termination
of the NEDPP itself, exposed the hypocrisy in government.
Contrary to pledges that it would engage industry in good faith,
government took a confrontational approach over prices.
A crackdown on business to slash by 50% their prices has left the
"It is the first time that I saw Zimbabweans queuing for shoes,"
commented ZABG head of treasury Andy Hodges this week.
"Government is not going to back down on this. The measures taken by
government were in response to market fundamentals but price controls will
not work," he said.
Economic analysts said the controversial price controls were the
latest indications of the failure of the NEDPP.
They said during the launch, there was convergence of thinking that
market forces should determine prices if complete recovery is to be achieve
within a reasonable time.
But the near collapse of the economy now evident across all sectors,
the power cuts, streams of sewerage in high density suburbs, unscrupulous
dealings and the deteriorating situation in schools, universities and health
institutions are a clear indication that the NEDPP was another futile effort
by government to correct its blunders.
The other efforts included the Growth with Equity in 1981, the
Economic Structural Adjustment Programme (1991), the Poverty Alleviation
Action Programme (1994), the Zimbabwe Programme for Economic and Social
Transformation (1996 to 2000) and the National Economic Revival Programme
WHILE insurance companies are raking in huge profits, workers and
pensioners have been handed a raw deal and are left with little to look
forward to on their pensions.
Most employees can no longer afford to pay monthly premiums that will
guarantee them adequate returns upon retirement. Some pensioners on the
other hand are earning as little as $100 000 per month.
Zimbabwe's hyperinflationary environment has pushed up insurance costs
but insurance premiums, which have risen sharply, have failed to keep pace
The number of people subscribing to pension funds has gone down, while
most of the remaining policy holders are now undersubscribed.
Investigations this week revealed that teachers and most members of
the civil service are paying between $200 000 and $400 000 a month as
This is far below the minimum required to assure them of real value
monthly pension payments in tandem with the Poverty Datum Line (PDL) of $5,5
million for May 2007.
An official with a leading life assurance company said while it was
his job to sell pensions plans to the current workforce, he was finding it
difficult to convince workers to subscribe to pensions.
"Frankly I would not encourage one to take on a pension. The
hyperinflationary environment has made it difficult for workers who are
earning far below the poverty datum line. Trying to convince them to take on
a pension is almost impossible," he said.
The revealed that the largest premium his company was receiving was
$50 million a month while teachers paid the lowest average premium of $200
000 a month.
"To try and protect our market against inflation, if someone is
contributing $5 million a month, we usually find it necessary to increase
the premium to $10 million two months down the line. At the rate inflation
is rising the next two months will see the premium raised to about $25
million," he added.
A 49-year old business executive recently took out a pension plan
which will guarantee her $1,8 trillion upon attainment of 69-years.
Her current contribution is $1 million a month but will automatically
be reviewed upwards to hedge against inflation.
If the inflation trend continues unabated, her $1,8 trillion
retirement nest egg will have had most of its value eroded. While official
inflation is 4 530%, unofficial estimates say it is over 10 000%.
Most insurance companies replaced policies that attracted low and
unsustainable contributions with new ones matching prevailing rates of
At the same time insurance companies have played the stock market
ruthlessly where returns have been much higher than interest rates which
have been maintained at around 500% by the central bank.
The industrial index has gone up by 7 400% since the start of this
year and has offered more returns than the parallel market rate for the
greenback which has been 5 862%.
But there have been concerns amongst workers and pensioners alike that
while the premiums match the CPI, the returns are far below that.
The National Social Security Authority (NSSA) recently claimed it paid
better benefits than any other pension scheme in the country, including
state pension schemes.
NSSA said pensioners would have been getting much less than they had
bargained for had it not invested in several high rise buildings, shopping
centres, the stock market and the money market.
The minimum invalidity pension was increased from $5 700 in January
this year to $110 000 a month. However, NSSA only reviews all benefits twice
a year - in January and July.
At the same time, month on month inflation has been increasing by over
100% in the past two months.
AON general manager for pensions Emmanuel Matina said workers should
take pensions despite all their shortfalls.
"Pension funds are benefiting because they offer returns above
inflation rate and the US dollar on the parallel market," said Matina.
"Pensions remain the only form of saving. They are the only benefit
one looks forward to on retirement."
Matina also said the value of a pension on retirement depended on the
pension fund and whether it was being actively managed.
An official with Old Mutual said while pensions still made economic
sense for workers and pensioners alike, public perception based on political
and economic factors.
"We have noticed that when one gets money, they tend to think that in
this environment it is a lot better to buy a bar of soap or tangible asset
to preserve the value of their money. They don't realise that pension funds
can store their value for them," he said.
A TOTAL of 46,6 million kg of flue-cured tobacco valued at US$108
million (about $26,9 billion at the interbank rate) have gone under the
hammer at the country's three auction floors on day 53 since the beginning
of the selling season on April 24.
The sales are 33,4 million kg less than the 80 million kg projected
this year with about two months of trade left.
Figures obtained from the Tobacco Industry and Marketing Board (TIMB)
yesterday revealed that the deliveries were 61,43% more than the 28,8
million which were sold at the same period last year.
In monetary terms last year's sales for the same period were 374,25%
less at US$56,2 million ($5,6 billion) in Zimbabwe dollar terms due to
Inflation which is currently at 4 530% for May was 1193,5% during the
corresponding period last year.
A total of 513 031 bails have gone under the hummer so far compared to
339 509 last year a 51,11% increase the TIMB said.
Of Zimbabwe's three auction floors, Burley Marketing Zimbabwe (BMZ)
has sold 6,1 million kg worth US$14,4 million ($3,6 billion). Tobacco Sales
Floor (TSF) sold 6,6 million kg valued at US$14,4 million ($3,6 billion).
Zimbabwe Industry Tobacco Auction Centre (ZITAC) accounted for 5,8 million
kg worth US$13,9 million ($5,8 billion).
Contract tobacco farmers have so far sold 27,9 million kg valued at
US$64,2 million ($16 billion).
The current season has also witnessed an increase in the selling price
that has averaged US$2,32c compared to US$1,94c which prevailed during the
corresponding period last year.
The increase in the selling price has been attributed to a better
quality crop on offer compared to last year and an attractive special
Last year's crop was affected by low rainfall and late planting which
resulted to the leaf fetching lower prices.
The waste percentage during the period under review is 4,14%, 47,15%
less than 7,83% recorded during the same period last year.
Over the last few years, production of the crop has been on the
decline owing to recurrent droughts and unavailability of essential inputs.
Government has so far disbursed a support price of $2,8 trillion
compared to $1,9 billion.
Year Output Year Output
(million kgs) (million kgs)
1980 -125 038 1994 -182 466
1981 -71 812 1995 -198 380
1982 90 602 1996 - 208 716
1983 98 956 1997 - 215 369
1984 124 872 1998 - 215 000
1985 107 957 1999 - 193 183
1986 116 456 2000 - 236 130
1987 121 320 2001 - 202 540
1988 114 736 2002 - 165 842
1989 130 361 2003 - 81 812
1990 130 394 2004 -69 112
1991 178 565 2005 - 73 392
1992 211 394 2006 - 55 553
1993 204 790 2007 Projection 80 000
Total output of tobacco since 1980
THE industrial and mining indices fell by 30% and 23% respectively
over the past three weeks as the market responded to price controls which
have resulted in most investors shying away from the stock market.
The two indices which had risen by 7 400% and 5 862%, respectively
during the first half of the year, retreated from 47 917 408,12 points and
24 596 700,52 points respectively on June 25 when the directive was made, to
37 450 803,21 points and 20 002 858,26 points yesterday.
Analysts yesterday said investors were engaged in panic selling,
pushing the market further down. This has resulted in 89% of the listed
counters trading negatively since the crackdown.
Counters mostly affected are CFX, Zimpapers, Border Timbers, Natfoods,
OK Zimbabwe, Pelhams and Interfresh whose share prices have dropped by over
Analysts said a bear market would prevail in the short-term as
retailers, manufacturers and government fail to find agree pricing measures.
Kingdom Bank economist, Patrick Saziwa said the affected counters were
unlikely to declare a dividend as they preserve cash for future operations
as their future was uninviting.
"The retail counters led the losses as uncertainties persisted on the
continued viability of the sector. The other counters were affected by the
contagion effect," Saziwa said.
ZB Bank chief economist, Best Doroh said the rate of growth of the
equities market will continue to slowed down somewhat, given the challenges
faced by retailers and manufactures especially of basic foodstuffs.
"Nevertheless, the market still expects the equities market to give
investors real returns on their investments up to the end of the year as
other alternative investment markets, outside of property, are not
attractive at the moment," said Doroh.
Zimbabwe Allied Banking Group group economist David Mupamhadzi said
counters in the manufacturing, retail and services sector were likely to
struggle in the short to medium-term.
"The stock market's performance will largely depend on the impact of
the price reductions on the viability and survival of companies," said
Paul Koning, a stock market researcher, said the current stock market
performance demonstrates how changes in stock prices can be driven by
monetary conditions, and not changes in gross domestic product.
In Zimbabwe's market there are limited investment alternatives
resulting in stocks benefiting.
"Keep Zimbabwe dollars in your pocket, and you've already lost a chunk
of its value by the next day. Putting money in the bank, where rates are
pitiful, is not much better. Investing in government bonds is the equivalent
of financial suicide. Converting wealth into foreign currency is difficult;
hard currency is scarce, and strict rules limit exchangeability," said
Analysts yesterday said the growth on the stock market during the
first half of the year had been on the back of depressed money market rates
and spiralling inflation.
There however were temporary episodes during the six months when the
stock market retreated briefly as small time speculators took profit.
During the period under review, growth in the consumer price index was
about 800%. This means investors were able to gain real returns on their
investments on the stock market.
Doroh said the stock market's performance during the first half of the
year outperformed the parallel foreign exchange market whose returns were
about 3 000% during the same period.
Mupamhadzi said the stock market recorded remarkable growth during the
first half of the year, largely driven by negative real returns on the money
market and negative inflation projections.
"Conglomerates emerged as the best performing counters rising by 18
995%, while the telecommunications were the worst performers, only realising
a growth of 5 237%," said Mupanhadzi.
PRICES of commodities have risen by an average of 9 200% during the
first half of the year driven by high inflation and the fall of the dollar
against major trading currencies.
The biggest movers were bread which rose by 5 669,2% from $780 in
January to $43 000 in June, while 2 litres of cooking oil rose by 7 274,6%
to $500 000 from $6 780 during the same period.
A 2kg packet of sugar rose 25 900% to $130 000 from $500, while a 10kg
bag of mealie meal rose by 7 004% to $120 000 from $1 689.
Two litres of Mazoe orange and 1kg of economy beef were beyond the
reach of many after being increased to $550 000 and $380 000 from $6 800 and
$4 500 respectively.
Most basic commodities have however disappeared from shop shelves
sparking fears of long-term scarcities after government ordered that they be
reduced by half.
Since last week shoppers have been in stampedes in supermarkets,
heaping trolleys with groceries after government ordered that prices be
slashed by half in a bid to curb inflation.
While analysts said a number of retailers had gone over board as they
were profiteering much from unjustified increases, some believe the latest
move by government was being done to win the hearts of consumers ahead of
presidential and parliamentary elections scheduled for March next year as
was the case in 2005.
"Government could be forced to go through the back door to offer
subsidies to manufacturers in order to subdue the upward movement of prices
but it will be short-lived as they cannot sustain it since all major sectors
of the economy are depressed," said a shop owner who spoke on condition on
The business community faces collapse as government's price blitz has
forced most producers, wholesalers and retailers to shut shop while
commodity shortages persist because of panic buying and non production.
ZIMBABWE could face a serious corporate leadership crisis within the
next five to 10 years as most experienced chief executive officers (CEOs)
and other managers running major companies leave their positions through
retirement and other reasons, a senior banking executive has warned.
At a recent presentation of a research in Harare, Kingdom Financial
Holdings (KFHL) human resources director, Lynn Mukonoweshuro fired a
broadside at what she described as "the fat cat syndrome" where CEOs are
reluctant to groom successors.
Chamber of Mines president, Jack Murehwa has already said the
leadership crisis has caught up with the mining industry where "second rate
and mediocre" managers have taken over.
"In the next five to 10 years we are going to run out of the crop of
seasoned professionals," Mukonoweshuro said in the report, presented to CEOs
and human resources managers from more than 30 major companies.
She added: "The succession debate should not be confined to politics
"The traditional process of executive development will not take us
there (to the turnaround) quickly because those in the CEO's post have no
interest in who will become CEO when they leave. But in five to 10 years
they will be gone."
The report was entitled "Zimbabwe's Corporate Picture in 2015."
Experts say the corporate leadership crisis will be compounded by the
current wave of emigration by thousands of professionals such as chartered
accountants who have fled Zimbabwe's deteriorating economic crisis.
Zimbabweans living in the Diaspora have increased from about one
million in 1999 to 3,4 million during the first quarter of the year and
researchers say most of them have left to pursue their professions due to
shrinking opportunities at home.
Painting a rare positive picture of Zimbabwe's economy by 2015, the
KFHL manager took a swipe at those she called "prophets of doom" who have
predicted a gloomy future for the country arguing the time to work on the
anticipated recovery was now.
This should be done by grooming "the right people" to lead companies
in the future, or Zimbabwe will be hit by more "bitter ENG experiences".
In other countries like the US, succession plan policies have turned
into a hot corporate governance issue which is closely watched by
shareholders and potential investors.
By Obert Gutu
ODIOUS debts are defined as those debts incurred by the state, which
debts are not for the needs or interest of the state but merely to
strengthen the state's despotic power as well as to repress the population
that fights against despotism.
Such debts are referred to as odious debts simply because they are in
extremely bad taste.
It is a notorious fact that most developing countries have a
complicated web of debts resulting in innocent citizens having to
continuously pay debts while corrupt and negligent borrowers and lenders get
Put alternatively, the third world debt is a debilitating yoke around
the necks of the majority if not all developing countries particularly on
the African continent. One always wonders why the third world countries'
debt continues to balloon simultaneously with the escalation of poverty and
destitution; especially amongst the ordinary people.
The third world debt trap can hardly be divorced from some of the
controversial lending policies of the Bretton Woods institutions - the World
Bank and the International Monetary Fund.
Most of the economic policies that are dictated to developing
countries by the said institutions are hardly appropriate to the individual
needs of the developing nations. You have a situation where the Bretton
Woods institutions adopt a one-size- fits-all approach to solving the
developmental challenges of developing nations.
All of us acutely recall the debilitating side effects that were
brought about on the ordinary people of Zimbabwe after the adoption by the
government of the Economic Structural Adjustment Programme (Esap) in 1990.
It is my argument that the World Bank as well as the International
Monetary Fund are hardly the best friends of developing nations.
The doctrine of odious debts was defined by the world's eminent legal
scholar on public debts, Alexander Sack, as far back as 1927. Sack's theory,
several decades since its conception, remains the rallying point for the
moral justification to cancel most if not all of the developing countries'
It is hardly disputable that the overwhelming majority of the third
world's foreign debts are odious in law. One of the conditions that
determines the legality of the debts of the state is that such debts must be
incurred and the funds from them employed for the needs and in the interest
of the people.
What is particularly puzzling is the fact that most developing
countries continue to borrow money, especially from the World Bank and the
International Monetary Fund, while at the same time the living conditions of
the average person in developing countries continue to deteriorate.
One therefore wonders where all the money from these debts is going
to! Isn't the money lining the pockets of corrupt bureaucrats in both the
public and the private sectors?
It is humbly submitted that when a despotic and corrupt regime is
pushed out of power, lenders of money to such a regime should not expect
that a nation freed from a despotic power should assume the odious debts.
Countries which lend money and other resources in a corrupt and
underhand manner, to an unaccountable and corrupt regime, should bear the
consequences of colluding with a repressive and corrupt government.
The writer perceives odious debts as basically personal debts of the
despot. These debts should not be obligations of the new dispensation.
Odious debts include loans incurred by members of the government or by
persons or groups associated with the government to serve interests that are
manifestly personal; interests that are totally unrelated to the cause of
the majority of the people.
In Zimbabwe, for instance, a new and accountable government is
required to prove that all the debts acquired by the state served the public
interest and that the creditors were bona fide lenders who knew, exactly,
the intended beneficiaries of their loans.
Further, I also humbly submit that odious debts are not enforceable
and that they should simply be cancelled.
In Africa, we always hear about the debilitating effects of foreign
debts. We know that there are hundreds of US dollar billionaires in Africa
while the average African remains pauperised and continues to wallow in
This clearly shows that the doctrine of odious debts can never be
divorced from the subject of corruption. Most, if not all, odious debts are
intricately linked to graft and corruption.
In Zimbabwe, it is disheartening to note that some well-placed public
officials have managed to amass unbelievable and obscene ill-gotten wealth.
These corrupt officials have even managed to buy properties and to build
villas and holiday homes in countries such as Malaysia and Australia.
And all this happened while the Zimbabwe economy is tottering on the
verge of collapse! Where did these public officials get all this money?
Odious debts have pauperised the ordinary African.
Former Zambian president Fredrick Chiluba has been mired in corruption
scandals and court trials since the time he left office in 2001. Chiluba's
Institute for Democracy and International Studies, through a Lusaka High
Court decree of August 2002, was repossessed by the government after it was
proved that it had been built by funds acquired through graft and
It is against this background that the doctrine of odious debts is now
gaining momentum and, throughout the world, activists are calling for the
cancellation of most, if not all, developing countries' debts.
Odious debts should not be honoured because they are morally
repugnant. The funds from these debts never benefit people but they simply
line up the pockets of well- placed and well-connected officials.
Despite the grinding poverty faced by more than 90% of the Swazi
people, a few years ago King Mswati III proceeded to purchase a private jet
worth R450 million or USD$65 million. Surely, this is tantamount to theft of
public funds. Little wonder therefore that donors were immediately called
upon to cut any funds directed to the Swazi monarch.
A few years ago, the Canadian-based engineering giant Acres
International, was convicted of corruption in the Lesotho dam-building
scandal. This scandal involved the construction of one Africa's most
advanced and sophisticated water works.
The former chief executive of the Lesotho Highland Water Project was
also convicted of accepting huge bribes from Acres International and he was
sentenced to 10 years imprisonment by the Lesotho High Court in Maseru.
The Lesotho Highland Water Project was bank-rolled by the World Bank.
There is need therefore to come up with effective systems in Africa to
ensure that public officials are not bribed by multi-national companies
whose main motivation is the generation of huge profits and not the
upliftment of the living standards of the ordinary African. These
multi-national companies are notorious for nourishing corrupt governments in
Odious debts are not a monopoly of African countries. There is already
serious debate regarding the financial commitments inherited from the
executed former Iraq dictator, Saddam Hussein.
The Iraq Central Bank has stated that it will only honour those debts
that were legitimately incurred by Saddam's regime.
It is contended that Saddam exploited the United Nations oil-for-food
programme to steal US$10 billion of Iraq public funds. While the United
Nations thought that the oil-for-food programme was meant to benefit the
ordinary Iraq citizens, Saddam used this programme to plunder resources and
to establish his own global network of finance.
It is a pity that although the oil-for-food programme in Iraq was the
largest humanitarian aid programme ever undertaken by the United Nations,
this programme provided the biggest opportunity for corruption - even among
top UN officials.
Odious debts should not be enforceable as a clarion call to all
corrupt lenders and borrowers that they can not have their cake and eat it.
* Gutu is a Zimbabwean lawyer based in Harare and he can be contacted
THERE has been jubilation in the market by consumers following
government's order to producers and retailers to reduce commodity prices by
But the major question is: Did government not learn anything from the
disastrous effects of price controls between 2003 and 2006?
Government has provoked the perennial question once more: Should
business be allowed to charge prices in line with their costs of production
or should it step in to shield the poor from profiteering business
Analysts say it makes economic sense to allow companies to charge
viable prices, but government, facing strong criticism over its actions, has
argued that it is duty bound to cushion low-income earners against
"unscrupulous business practices".
According to the Confederation of Zimbabwe Industries (CZI), the
manufacturing sector is operating at below 30% of capacity due to high input
costs and lack of foreign currency for imports.
The business community might agree to the forced reduction, "but who
is going to shield us against rising input costs?" questioned a manager with
a leading supermarket chain this week.
Past events in 2003, 2005 and 2006 have shown that such directives
have forced a massive rift between business, government and the consumer. It
created a thriving black market for sugar, bread, washing soap, cooking oil
and fuel, with controlled foodstuffs disappearing from supermarkets shelves.
Market watchers said history was repeating itself although this time
around it was likely to have a more disastrous impact on the economy.
In 2003 it was fuel, in 2005 it was mealie meal, cooking oil and
sugar. Last year it was bread; a fortnight ago it was almost every basic
"Such a situation is not healthy because it retards economic growth,"
independent economist, John Robertson, said "Worse still, neither of the
warring parties' initial objectives have been fulfilled. At the end of the
day, the consumer is the biggest loser and will continue to suffer."
On Sunday, a truck offloaded flour at a shop in Mabelreign and
shoppers streamed into the shop to buy the commodity. Some soon left
disappointed after they could not get the commodity.
Flour, although appearing to be scarce, seems not to be making it onto
shop shelves, but is instead mysteriously resurfacing on the black market.
Following government's directive that fuel be sold at $60 000, the
commodity is now in short supply, but readily available on the parallel
market where it is being sold for between $400 000 and $500 000 a litre.
In 2003, government ordered service stations to sell fuel at the
gazetted price, resulting in the commodity disappearing on the formal
market, but it was readily available on the black market at an exorbitant
After realising that it was shooting itself in the foot, government
two years later allowed private importers to import fuel through the direct
fuel import scheme.
In 2005, ahead of the parliamentary elections, government ordered that
shops stick to gazetted prices. The then Minister of Finance, Herbert
Murerwa, reduced Value Added Tax from 17,5% to 15% to justify the call for
An increase in VAT results in the simultaneous increase in the price
of taxable products and vice versa.
Manufacturers responded by reducing production as they were operating
at a loss. Most goods were readily available on the parallel market and the
effect is still being felt today.
Last year government ordered bakeries to reduce the price of bread to
$200 from $335 despite the cost build of bread being above $320.
About 14 managers accused of ignoring the directive were arrested. The
decision by government resulted in a massive shortage of bread for about two
"Government should first deal with the manufacturers before imposing a
price slash," Robertson said. "Forcing prices to go down when production
costs continue to rise will only result in shortages. Government might only
be successful in this project if it subsidises manufacturers in such a
hyperinflationary environment," he added.
Manufacturers and service providers have been accused of inducing
inflationary pressures on the economy through unwarranted price adjustments.
Striking a balance between salaries and prices has proved to be a
major challenge in the country as product and service adjustments continue
to accelerate while salaries lag behind.
Almost everyone from the informal trader right up to middle-income
earners are complaining of diminishing purchasing power.
Government has crafted a Statutory Instrument that empowers it to
arrest and imprison companies and individuals for "profiteering". But its
bid to operate outside the bounds of basic economics is doomed to the same
fate as previous market interventions.
About 1 400 companies and 300 managers were reportedly arrested last
week for allegedly failing to obey government's directive to reduce prices.
The controversial National Incomes and Pricing Commission Act allows
government to "monitor price trends of goods and services through
comprehensive surveys and inspections, producing periodic price monitoring
reports and initiating corrective measures in case of unscrupulous business
practice affecting Zimbabwe's pricing system".
The Act also allows government regular reviews and updates on capacity
utilisation in various sectors of the economy, promote public understanding
and disseminate information on matters related to prices and wages, compile
regular reports on the status of incomes and conduct stakeholders training,
education and awareness campaigns on pricing and income issues.
Analysts this week said the National Incomes and Pricing Commission
had done nothing tangible to ensure that manufacturers and retailers remain
The establishment of the cabinet taskforce on price monitoring and
stabilisation will not improve the situation either as it will be a mere
duplication of duties.
By Nyasha Nyakunu
WITH the 2008 presidential and parliamentary elections only a few
months away, the question of equitable and equal access to the public media
as envisioned under the Sadc Principles and Guidelines on the Conduct of
Democratic Elections will inevitably be of intense interest and debate among
political parties and freedom of expression activists.
The issue should also feature prominently during the ongoing South
African-mediated talks between the opposition MDC and ruling Zanu PF as
central to the holding of free and fair elections in 2008 among other
critical items on the agenda of the Southern African Development Community
However, the Sadc principles and guidelines risk being confined to the
region's mausoleum of protocols, charters or declarations that member states
ignore but only pay lip service to when questioned about their dubious
This will be the stark reality, more so in the absence of enforcement
codes and mechanisms if the guidelines continue to be viewed in isolation of
the need to transform state broadcasters into truly independent public
Their long-term successful implementation and credibility rests in
transforming state broadcasters such as the Zimbabwe Broadcasting
Corporation (ZBC) into a public broadcaster through sustained media law
reforms that will expunge existing restrictive media laws such as the
Broadcasting Services Act (BSA) and the Access to Information and Protection
of Privacy Act (Aippa).
To argue otherwise will be pretentious hypocrisy that has seen many an
African government including Zimbabwe paying scant regard to the Windhoek
Declaration and the African Charter on broadcasting which both call for
respect of media freedoms including a transparent and representative public
The Sadc standards stress the full participation of citizens in the
electoral process, press freedom and equal access by all political parties
to state media, freedom of association and political tolerance and
independence of the judiciary among its other 10 fundamental tenets for the
holding of free and fair elections.
It is in that regard that the transformation of the ZBC into a truly
independent public broadcaster among other contributory factors will
therefore go a long way in securing a free and fair environment ahead of the
2008 elections and thus render the Sadc guidelines meaningful and
By subscribing to the guidelines and principles, as well as the Sadc
initiatives, the assumption is that the Zimbabwean government understands
that it needs to democratise to realise its full development potential and
regain its lost esteem and privilege among progressive nations.
Media freedom is therefore paramount to the establishment and
continuity of democracy as it is the primary indicator of the existence of
The very existence of repressive and restrictive laws such as Aippa,
BSA, the Zimbabwe Broadcasting Corporation Commercialisation Act, the Public
Order and Security Act (Posa) and the Interception of Communications Act
(ICA) is a mockery of the government and ruling Zanu PF's claims to
Laws such as Aippa, Posa, ICA and the BSA as it relates to the state's
control of the ZBC are designed to regulate free speech thereby muzzling
citizens' right to freely formulate and air their beliefs and political
attitudes through open discussions and platforms, more so through the ZBC
which is funded by the taxpayer.
Public service broadcasting therefore plays a critical role in meeting
the citizens' hunger for the broadest possible information, advice, debate
and analysis to enable them to make informed decisions on issues that affect
their daily lives.
The prevailing regulatory environment as dictated by the ZBC
Commercialisation Act, BSA and the ZBC's governance, ownership and
management structure chokes its editorial independence, allowing the
Ministry of Information and Publicity free rein over the appointment of its
board of directors, chief executive officer and editorial decisions.
It is political fraud and painful for the taxpayer to continue funding
the operations of a broadcaster which they cannot freely access thereby
limiting the views and ideas broadcast to those who have been vetted and
cleared by the ruling Zanu PF as "super patriots".
ZBC has remained biased in favour of the government and the ruling
Zanu PF as it has centred more on serving as the public relations arm of the
ruling elite in contravention of the Sadc Principles and Guidelines on the
Conduct of Democratic Elections, the African Charter on Broadcasting and the
Banjul Declarations on the Principles of Freedom of Expression in Africa.
The editorial stance of the ZBC as a public media should therefore
change as it has failed to meet its public service mandate and conform to
the Sadc guidelines. Free and fair elections including freedom of the press
and access to national radio and television are not achievable under the
existing constitutional and legislative environment which has seen the
government tightening its grip on the ZBC.
The legal framework under which the ZBC operates is anathema to media
freedom and the concept and principle of public service broadcasting.
For the ZBC to be respected as a truly independent broadcaster, there
is need to repeal the BSA and ensure that the new legislation surrenders the
appointment of its board of governors to a transparent public nomination and
The new democratic Act should include provisions that allow for the
expansion of the public broadcaster into communities that are currently not
receiving its signals, promotion of local languages and artistic talent and
the imperative need to cover elections fairly and equitably.
In short, ZBC should be accountable to parliament to foster openness
about its mandate and activities.
Sadc should therefore insist and impress upon the ruling elite during
their forthcoming summit in August that the transformation of state
broadcasters into truly independent entities that reflect the plurality and
diverse views of society is a pre-condition to the holding of free and fair
Without that the Sadc Guidelines and Principles on the Conduct of
Democratic Elections will remain hollow and utopian in outlook.
* Nyakunu is Misa Zimbabwe's research and information officer.
THE Herald carried a story on Monday claiming a white farmer had
ploughed under 30 hectares of wheat "as revenge to the land committee that
had acquired his farm".
It is difficult to know who used the expression about "revenge"
because, as is often the case in the state media, the quotation could well
be the invention of the journalist writing the story. It certainly doesn't
sound like the farmer, Doug Taylor-Freeme, even though it is designed to
What is significant about this episode is that Taylor-Freeme was among
those paraded recently as beneficiaries of the state's largesse in
distributing tractors and agricultural equipment. He has often been regarded
by his more radical colleagues as somebody who was prepared to work with the
government in its resettlement programme.
Now he has learnt the hard way that there are no rewards for
collaborators. The government has no regard for farmers wanting to assist
the resettlement process and will evidently target every single white farmer
And do you remember all those statements by President Mugabe and
ministers in 2000 that "we just want to share the land"? They were designed
to impress international opinion. Any white farmer who had more than one
farm would be asked which one he wanted to keep.
But we feel sympathy for Taylor-Freeme, a transparently decent man who
like CG Tracey and all the others, has seen the real face of "land reform".
You would have thought that given the precarious situation the country
is in, any leader would want to find solutions. He or she would seek
national dialogue and engage the various interests that make up our economy
so there is consensus on the way forward. But instead we have a situation
where the ruling party is mobilising its followers against those engaged in
legitimate business so it can claim to be championing the people's needs.
This is populist demagoguery at its worse. The people will not be
served by shortages and a raging black market, nor will they be helped by
measures that destabilise the economy and scare off investors.
The international press has been full of reports of gangs of
"consumers" arriving at stores in the immediate wake of the price inspectors
and filling up their trolleys with goods.
Many of those items, we can safely assume, will now appear on the
black market. The international media has also been drawing attention to the
injuries suffered by supermarket managers, including a broken jaw in one
case, when they didn't respond quickly enough to the commands of
Gideon Gono appears to understand that price-fixing won't work. But
what do Obert Mpofu, Didymus Mutasa and Sithembiso Nyoni know of how a
modern economy functions? They must be held accountable when the economy
goes down the tubes in a few weeks time.
Just as land was seized to provide electoral advantages ahead of the
2002 poll, so businesses will be taken and redistributed to the vulturine
class that cares not what damage it inflicts on the economy so long as it
retains political power.
The only difference with land redistribution and the current campaign
is that the farms were destroyed after they were taken. Currently businesses
are being wrecked before they have been seized. Predatory scavengers like
State Trading Corporation officials are advertising their interest in any
carrion that might be available.
It is extraordinary when you think of it that the same ruling class
that has crippled Air Zimbabwe, brought the railways to a grinding halt,
sabotaged Zisco and orchestrated power blackouts, now believes it can manage
Dairibord, Lobels, National Foods and Innscor. This is another disaster
waiting to happen.
Let us be clear about this. What we have here is the same military
campaign supported by Zanu PF's auxiliaries that we saw with land invasions
and Operation Murambatsvina. It is reportedly being masterminded by the
Joint Operations Command and represents a vicious assault upon law-abiding
individuals and their constitutional right to carry out their business free
of harassment and plunder by the state.
We were pleased to see Mugabe responding to our front page story last
week about price-slashing measures being illegal. There was a sudden
realisation in the government camp that there was no legal instrument to
underpin the attacks on businesses. The state rushed that day to provide a
Statutory Instrument legalising the intervention.
But that didn't cover all the assaults on businesses over the previous
two weeks. Those measures were manifestly illegal and, contrary to the
advice of the mealie-mouthed Callisto Jokonya, businesses should claim
against those who authorised the pillaging of their stock. This was theft,
whatever ministers might call it.
A source at a big international company in the industrial sites says
his employees watched as a coach with about 40 ruling-party price enforcers
aboard arrived last Thursday and began to impose reductions on products. But
their attention was soon diverted to easier pickings. They quickly
discovered the company's staff canteen and devoured the entire contents. The
company's staff had to go without their lunch that day!
By the way, what is the significance of June 18, the day that became
the benchmark for all price determinations? We are not sure. Usually the
beginning of the month is the date authorities use for pronunciamentos of
this sort. The Herald no doubt got wind of the impending change as it hiked
its cover price from $15 to $25 on June 14, just four days ahead of the
And why didn't Zimpapers CEO Justin Mutasa in his little homily on the
cost of inputs disclose that his company gets subsidised fuel from Noczim to
run its fleet of vehicles? Other newspapers could do with that sort of
Muckraker is sickened by the chorus of praise for Joshua Nkomo in the
state media. Is this the same Joshua Nkomo who was forced to flee into exile
in 1983 because his life was under threat from the same gang who now claim
he was their patriotic hero?
The Standard has been serialising Judith Todd's autobiography.
She narrates how his driver and two others were shot dead in cold
blood at his Pelandaba home.
"The killers then rampaged through his home destroying all they could,
smashing the windscreens of three cars with their rifle butts and slashing
Mugabe's subordinates were evidently making good on his injunction to
"strike the cobra at its head"!
Shortly afterwards the Zapu leader escaped into Botswana. Once he was
safely settled in the UK, he wrote The Story Of My Life, an account of the
Fifth Brigade terror that stalked the land with its blood-soaked footprints
in 1982/3. It is an instructive memoir and should be read by all those
currently pretending they were his admirers.
Incidentally, what is the significance of the emphasis on his
non-tribal pedigree which earned him nicknames like Father Zimbabwe and
Chibwe Chitedza? Is this an indirect comment on somebody not fit to be
Father Zimbabwe? It is tribal to the core.
The Sunday News had a moment of triumph last weekend. Following a
police investigation, the paper was able to proudly announce that two
individuals claimed by the MDC to be casualties of Zanu PF violence in fact
died of natural causes.
This discovery, prompted by diplomatic inquiries, was paraded by the
paper as "liars exposed". This referred to organisations like the Crisis
Coalition and Zimbabwe Human Rights NGO Forum who have been documenting
human rights abuses.
The death of Edward Chikomba was referred to in passing at the end of
the story. "Recently some media representative bodies locally and
internationally claimed that a cameraman who was found dead in Mashonaland
East was murdered by security agents."
The implication was that this was another opposition "lie".
If that is the case, perhaps the author of these "ruling party
exonerated" stories could tell us who the killers of Chikomba were and what
has happened to them?
And by the way, what progress have the police made into the assault on
Nelson Chamisa at Harare Airport?
We were intrigued by comments made by Caesar Zvayi in his Herald
column on Wednesday. He suggests that "a certain African government appears
to have bought all copies of New African's May edition that had a splash on
"The jury is still out," Zvayi said, "on whether the government in
question bought the copies because of an unflattering article therein that
questioned its cosy relationship with the West, or whether it had to do with
an attempt to obliterate the truth about the situation in Zimbabwe."
So what do we have here? A fellow African government buying up all
copies of the May edition of Baffour Ankomah's propaganda vehicle containing
a highly deceptive "splash" on Zimbabwe? The world has thus been deprived of
the "truth" about Zimbabwe, Zvayi suggests.
You can imagine hordes of Africans roaming the continent complaining
bitterly how disappointed they were not to hear the "truth" about Zimbabwe
from New African's pages!
But the plot thickens. While many Ghanaians may have greeted President
Mugabe on his recent visit to Accra as a leader in the mould of their great
Redeemer, African governments, it is now clear, are giving him the cold
Zvayi, whose opinions often emanate from the Office of the President,
expressed open disappointment that "the AU failed where it matters most,
that is in condemning the illegal Western siege on Zimbabwe".
ZTV by the way carried excerpts from Mugabe's solidarity rally in
Accra. His inspirational presence didn't appear to prevent members of the
audience from talking loudly among themselves during his speech!
As for Zvayi's theory that travellers who want to go to Francophone
West Africa from Anglophone Southern Africa have to first pass through Paris
or through London if travelling from Francophone West Africa to Anglophone
East Africa, he should look at a Kenya Airways route map. They have dozens
of flights from West Africa to East Africa every day. Passengers can then
reconnect in Nairobi to Southern Africa or to other African destinations.
Ethiopian Airways offers a similarly diverse routing system. It is Air
Zimbabwe that is caught in the colonial nexus of its London route.
Have you noticed how we like our acronyms? No Zimbabwean organisation
is complete without one. There is Noczim, Zesa, Telecel, Econet, Nango, and
Potraz among a host of others.
But now we have a new set of words to add to our PC vocabulary thanks
to the Ecumenical Peace Initiative of Zimbabwe, Epiz.
Epiz has invented a new species of church workers called DOFs or
district outreach facilitators who are charged with promoting Epiz's
national vision process. Below them is a raft of WOFs or ward outreach
But the most senior ranks of outreach facilitators are provincial
outreach facilitators - POFs!
Let's just hope the WOFs don't DOF the POFs!
And how's this for NGO-speak: There will be "training of Epiz officers
in effective group leadership and interpersonal skills to enable them to
maximise on their strengths, minimise on their weaknesses and function
effectively in group settings"? This will require three
"sensitisation/awareness workshops", we are told. Among those being
"sensitised" are several DOFs, WOFs, and POFs. Also attending, we gather,
will be their "para-church partners".
All very liberating. Anybody gate-crashing will of course be told to
By Eric Bloch
FOR more than 20 years, the Roman Empire was ruled autocratically (and
verging on tyranny) from 284 AD by Emperor Gaius Aureluis Valeruis
Diocletianus, known as Diocletian.
Authoritative historians cite him as having been a dominating ruler,
who demanded absolute loyalty and unequivocal submission and compliance from
his ministers, subordinates, and all others. He ensured this by having a
strong, ever-increasing military infrastructure, notwithstanding that that
necessitated almost continuous imposition of taxes, enabling him to
remunerate his forces in cash and in kind (his troops receiving
distributions of foodstuffs and other commodities in addition to their wages
Emperor Diocletian is recalled in history for the extent of his
pronounced controls over every facet of the Empire's economy, and for the
devastating consequences of most of those controls. His controls, and
policies behind them, were supposedly formulated by his vast array of
officials and numerous ministers. These included two ministers responsible
for fiscal and economic issues (shades of Zimbabwe!), and diverse others,
including a barrage of provincial governors. Two of his economic measures
for which he remains recorded in most historical works relating to his era
* The Empire's currency had, over the years of rule by Emperor
Diocletian and his ministers, almost continuously declined in value. The
silver denarii had been withdrawn from circulation, as had also gold, with
denarii being replaced with silver-washed copper, known as nummi. The
Emperor then issued gold coins (initially at 70, and subsequently 60, to the
pound). However, he was unable to issue a sufficiency of gold and silver
coinage, much of that which he issued disappearing rapidly from circulation,
as hoarding became more and more pronounced on the part of much of the
population, so he then flooded the market with nummi. In consequence, the
nummi very rapidly depreciated, and this caused an almost continuous rise in
* Concerned at the intense escalation in prices, in 301 AD, Diocletian
issued an edict (for which he became famous - or, was it infamous?)
prescribing prices that could be charged for all types of goods, and maximum
charges for services. Concurrently, he imposed a penalty upon any who
disregarded his edict, be that disregard by charging in excess of the
specified maximum, or by withholding goods from the market. That penalty was
death! Despite the severity of the penalty, and its imposition becoming the
order of the day, there being numerous executions, the edict proved to be
grossly ineffective. Traders disposed of those goods that they had at the
time of issued of the edict, but they did not replace them. They simply
could not afford to sell the goods at prices lower than cost or, even where
the prices exceeded cost, that excess did not suffice to fund operating
expenses, let alone any livelihood for the traders. As a result, the
hardships experienced by the populace, who had initially been enthralled and
exhilarated by the issuance of the edict, intensified exponentially.
Moreover, the rampant inflation had driven Diocletian's government to
pay its employees in general, and its military in particular, very
substantially in kind, it sourcing the required foodstuffs, clothing and
other items by requisitions which had to be fulfilled by the oppressed
commercial sector. Diocletian systemised the requisitions (known as
indictions). All landed property, other than urban, was classified in fiscal
units, as also the population of animals and people. Thereafter, government
would annually estimate the quantities of goods required by the state, and
would thereupon issued indictions correlated to the assessed fiscal units.
So, as the hardships of the populace intensified, so too did taxation
obligations of the people.
Neither of these measures of Emperor Diocletian and his government
achieved the declared objectives, and the economic state of the Roman Empire
continued upon its accelerating, cataclysmic decline, ending only after
Emperor Diocletian reluctantly abdicated and, together with many of his
ministers, retired to Croatia to grow cabbages. His successor, and a new
government, thereupon revoked the foolhardy, destructive edict, and embarked
upon a constructive, successful, programme of economic recovery, founded
upon realisation that only effective inflation containment measures were
governmental frugality, facilitation of productivity, and stimulation of
market competitiveness, in an environment of minimal controls.
The catastrophic consequences of the endless production of money, and
of the devastatingly disastrous edict, was succinctly summarised by a
historian of that era, known as Lactantius, who said: "Then much blood was
shed for the veriest trifles; men were afraid to expose anything to sale,
and the scarcity became more excessive and grievous than ever."
It is an old maxim that "history repeats itself", and that which
occurred in the Roman Empire more than 1 700 years ago is undeniably being
mirrored in the Zimbabwe of today. Admittedly, government has not gone so
far as to apply the death penalty to those manufacturers and traders as fail
to comply with its price control directives, but over and above arrests and
prosecution, there are countless instances of recourse to brutal beatings,
in total disregard for international standards of respect for human rights,
and in complete abuse of prevailing Zimbabwean law. And many are being
subjected to financial death, being forced to incur unsustainable losses.
Supermarkets made to sell goods at below their costs have been subjected to
losses of billions of dollars, as have filling stations throughout the
country. Those filling stations had purchased petrol and diesel at prices
ranging from $130 000 to $150 000 per litre, none being available at lesser
prices, and yet were threatened, bullied and forced by the police to sell
that fuel at $60 000 per litre. Losses sustained by them ranged from $500
million to over a billion dollars, but this was of no concern to government
and to its so-called crack units of law enforcers.
It is ironic to refer to them as enforcers, for the reality is that
they are enforcing that which is not law. The current price control regime
is in terms of a directive issued by a cabinet task force, but the Zimbabwe
constitution, and its underlying parliamentary-legislated law, does not
empower the cabinet to issue unilateral directives. Not that that is of any
concern to the government, as evidenced by statements made by President
Mugabe, Vice-President Msika, Elliot Manyika, Obert Mpofu and various of
At a funeral a fortnight ago, the president unhesitatingly warned the
private sector of dire consequences if prices were not reduced in alignment
with governmental directives, as did Vice-President Msika, at another
funeral, less than a week later. And last Friday, following upon his return
from Ghana (where he claimed to be a disciple of former Ghanaian President
Nkrumah, despite the harm Nkrumah had inflicted upon his country and
people), President Mugabe said that his government would not be deterred in
its price stabilisation moves by business people and opposition politicians
who were clamouring that the prices were illegal. In other words, government
is above the law!
He continued that: "Factories must produce. If they don't, we will
take over. We will take over those factories if you don't want to produce.
We will seize the factories." Clearly, it is irrelevant that there is no law
enabling government to seize the factories. Equally clearly, it is
irrelevant that government has neither the expertise or the resources to run
the factories (as irrefutably evidenced by the recurrent failed performance
of almost all parastatals, and the ever-greater deterioration and failure of
infrastructure. The proud Zimbabwe, born in 1980 and then destined to
overturn the evil oppressions of the past, is now more oppressive than that
which it abhorred. Rule of law is no more, for it is now rule by decree.
Democracy is no more, for the role of parliament has been usurped, and
domination by a few now reigns supreme. The Zimbabwean government appears to
be as resolutely set upon the national destruction as was Emperor
Diocletian, with the same abysmal consequences for all but a few of the
By Vincent Kahiya
SINCE government launched the current war on prices, awestruck
stakeholders have been gazing into the horizon to see where this rush of
blood into government's head will take us to.
Already we have seen arrests of company executives, empty shop
shelves, retrenchments and reduced productivity in industry. But the impact
of this madness is going beyond that. The government of President Mugabe is
once again travelling a well-beaten path: that of converting national assets
into dead capital.
Increasingly, national assets can no longer be used to their full
potential. These are institutions that give life to an economy and
facilitate the creation of wealth. They are fast diminishing.
Two events this week aptly demonstrate how our government is
shamelessly strangulating instruments that should be creating wealth for the
country. There was a report on Monday that thousands of tonnes of harvested
sugarcane at the state-run Arda Chisumbanje estate were left to rot in the
fields and hundred of hectares of the crop was wilting in the fields due to
moisture stress. This is the same parastatal responsible for another blunder
which saw 500 hectares of wheat failing to germinate.
On Tuesday, the Cabinet Taskforce on Price Monitoring decreed that it
had cancelled licences for all abattoirs, making the ramshackle state-owned
Cold Storage Company the only firm allowed to slaughter cattle. This means
that abattoirs such as Montana Meats, Pama Meats, Carswell Meats, Mutasa
Meats, Lishon and so on were overnight transformed into dead capital because
they could not avail meat at the government controlled price of $100 000 a
The smaller abattoirs entered the industry because of the degenerating
state of affairs at the then Cold Storage Commission which hopelessly failed
to service export quotas as well as the domestic market. The company was
only rescued from the scrapyard following President Mugabe's declaration in
Marondera last year that the company should reopen its closed abattoirs.
This is the same contraption that is now being entrusted with providing meat
to the country. Last week in this column, I questioned where President
Mugabe had learnt this form of destructive economics. More traits of these
disastrous tendencies are becoming clear. In Zanu PF's scheme of things, the
only way they can create business for the corrupt and shoddily-run
parastatals is to use heavy handed tactics to push private sector
competitors out of business.
We have seen this in the transport sector where private operators are
daily hounded by the police to give Zupco leverage. Despite its massive
advantages, Zupco's depots today are littered with broken-down buses only
recently launched onto our roads with much pomp and ceremony. The story is
the same with the GMB whose monopoly in grain trade killed the Zimbabwe
Commodity Exchange which afforded producers competitive prices. Today, GMB
silos have also become dead capital because farmers have resisted selling
their crop to the parastatal for a give-away price.
The flagship citadel of destruction remains Kondozi Farm in Odzi which
after rape by the state was reduced to a wasteland. This piece of land used
to produce vegetables and fruit for export to Europe and South Africa. It is
now dead capital together with vast swathes of farmland seized under the
The same goes for scores of parastatals presided over by the state.
They are not producing wealth for the nation but they instead rely on the
handouts from the fiscus for their survival.
This is where the current price blitz is heading. It is rendering
retail outlets, butcheries, abattoirs, factories and buses dead capital.
The closure of abattoirs this week could be a harbinger of worst
things to come for this already floundering economy. Contemplating the
Kondozi pretext in the case of the abattoirs would be ghastly. After the
forced takeover of the estate, the state looted equipment in the name of
transferring it to Arda Estates - whose exploits on the land are a scandal.
The equipment never got to Arda. It was stripped of key assets like
tractors, lorries and pack yard infrastructure. The government brought in
soldiers to till the land and they failed dismally in this endeavour. This
is how the state killed that vital asset and private abattoirs could befall
the same fate. The lunacy is most likely to be extended to other sectors of
the economy with disastrous consequences because the government does not
have a post-blitz plan to ensure that manufacturers continue to produce and
retailers remain open.
With a whole mortuary of non-performing assets, this economy will be
much harder to revive. For a government that has presided over so much death
and destruction the current exercise is routine business.
THE image of President Mugabe addressing ruling-party supporters last
Friday must have made an impression on all who saw it. Here was the head of
state inviting his followers to back government's campaign to dispossess
business people who are victims of his own damaging economic policies.
People were being asked to take the law into their own hands, which they
A fig-leaf of legality was only placed over this shameful episode
after this newspaper was told by prominent lawyers last week that enforced
price reductions were illegal.
"Which law are you talking about.?" Mugabe asked. He referred to
"extreme greediness" among the business community. "They want to get richer
at the expense of the poor," he claimed.
These remarks would have been more accurately directed at his own
supporters for whom greed has become a way of life. And the whole point
about the law is that it should be obeyed by rulers as well as ruled. But
once again we have the president choosing which laws he is going to respect
and which he will ignore because "people are struggling".
They are struggling largely with the fallout from policies he has
pursued in the teeth of advice from every economist in the country.
Inflation is being fuelled by incontinent state expenditure; by government's
appetite for funds; by a bloated administration that offers no value for
money; and by the absence of political will.
Then there is the destruction of forex-generating revenue sources such
as tobacco and horticulture, money-spinners just a few years ago.
Meanwhile, the seizure of farms has reduced agricultural output by 60%
and tourists have been scared off by scenes we witnessed last week at
supermarket tills. So have investors. Nobody will invest in a country where
the head of state threatens to seize factories because he needs to court
popular support in the run-up to an election.
The current campaign against the business sector will be just as
damaging as farm seizures and Operation Murambatsvina. Again we see the
involvement of the military through the Joint Operations Command. Again we
see Zanu PF's Green Bombers and Youth League being unleashed against the
citizenry. Again we witness violence and looting of private property.
This is Mugabe's idea of helping the poor. On his watch the economy,
once the pride of Africa, has contracted annually since 2000. Per capita GDP
has shrunk to levels not seen since the 1950s. By any standard Zimbabweans
are immeasurably poorer today than they were at Independence in 1980.
This is a novel approach to helping the poor! More accurately he is
pauperising the nation. Now he wants to do to manufacturing what he did to
commercial agriculture. And then he will offer himself to the country as
How indispensable is somebody who cannot stop ruining a once thriving
economy? How indispensable is a leader who instead of calling for national
dialogue and well-considered policies to tame inflation provides no example
of restraint in patterns of public spending and unleashes gangs of
undisciplined youths to mete out punishment to business people who have
struggled against the odds to remain in business; whose taxes and
expenditure keeps tens of thousands in employment and Mugabe in the manner
to which he has become accustomed.
By crushing the business sector because he believes it to be in league
with Anglo-American imperialists Mugabe is destroying the nation's means of
What signal does this send to Sadc executive secretary Tomaz Salomao
who is attempting to craft a regional recovery package for Zimbabwe? He will
first need the support of Sadc's international development partners. And
they are unlikely to throw good money after bad when they see a regime
determined to pursue damaging policies and heedless to calls for
by Joram Nyathi
IT was the same in business, the media and the opposition. The
response to government's crackdown on business for hiking prices of basic
foodstuffs last week was notoriously familiar: Hang Mugabe. The results were
equally predictable: empty shelves and a burgeoning black market. Nobody was
bothered that the galloping prices were themselves stoking inflation faster
than government spending and the printing of money by the Reserve Bank.
Nobody in the media bothered to ask the all-important question why
business was suddenly in this frenzied bout to increase prices, all as if
acting in concert.
On June 1, government, labour and business signed the protocol on
price stabilisation. The social partners agreed to act in good faith and
create a conducive business environment. Government would cut expenditure,
business would maximise productivity and make reasonable profit margins
while labour would exercise restraint in its wage demands.
Prophets of doom were already at the altar telling us the social
contract would not work before they had even read it. Government later
raised the non-taxable benefit without forcing companies to increase workers'
wages. It has resisted calls for a supplementary budget, which Eric Bloch
believes is long overdue.
Business' response was a price madness without precedent in Zimbabwe.
In two weeks, prices of some basic goods went up four-fold, wiping out
overnight the tax benefit I hadn't yet received. Those in the know told you
prices were being pegged to the black market exchange rate of the US dollar.
The major fuel of the price spree was the so-called "replacement cost" of
stocks. It was as if everyone wanted to be counted as having contributed a
sterling effort to the attainment of 1 500 000% inflation by year-end. How
much of this "replacement cost" went into the pocket of the toiling worker?"
Government might have overreacted in reversing all prices to June 18
levels. The cut in prices of 50% is irrational and therefore unsustainable,
but that doesn't take away the fact that business gave a hostage to fortune.
Any government would have responded. Zanu PF is making political capital
which may force some companies to close down and hurt the poor more. But
business was putting the same basic commodities that are now in short supply
beyond my reach. Whether they were available in the supermarket, I was still
denied their enjoyment because somebody felt they couldn't forego a huge
profit margin for the sake of the social contract. ZNCC president Mara
Hativagone admitted as much this week.
Nobody doubts the cost of foreign currency. Nobody doubts the
detrimental effects of pricing distortions on the market. Indeed, nobody
questions government's culpability in the entire economic mess.
Unfortunately, that doesn't diminish business' failure to act with
circumspection and in good faith. They knew the rate of inflation at the
time of signing on June 1. They also knew that the social contract would not
flood the country with foreign currency overnight.
Speaking in a radio programme soon after the contract was signed,
Confederation of Zimbabwe Industries president Callisto Jokonya said with
commitment from all partners, economic recovery was possible within three
months. So what caused the price panic so soon after the signing? To me the
social contract was never given a chance purely for political reasons, not
because it was futile. We have grown to prefer foreign interventions ahead
of local initiatives.
In any case, what is the value of business operations which our
businessmen risk losing relative to the profit margins they could have
foregone to meet their side of the bargain?
What I often find interesting is that while most of our businessmen
will tell you in conversation that we are dealing with a mad government,
they still go for a head-on collision. Land seizures and Operation
Murambatsvina seem to have made no impression about the political leadership
they are dealing with.
For opposition parties, the price escalations were celebration time.
They served three purposes:
· As a demonstration of Zanu PF's failure to run the country.
· Exposed Zanu PF's failure to manage the economy.
· That the opposition was indispensable in the economic recovery.
None showed any sympathy for the starving worker. All waited
breathlessly for food riots and chaos that would force Mugabe out. I was
left wondering whether our nation still has a soul at all. Nowhere was this
soullessness more evident than in a labour-based party failing to balance
the interests of business with those of workers. Nothing was said about the
gap between wages and the PDL as prices skyrocketed.
At the end of the day, what has been exposed is the myopia of both
government and business. Government's harsh response has predictably left
supermarket shelves empty. On the other hand, relentless price escalations
were a classic time bomb. They were bound to lead to a more catastrophic
end. A starving nation staring at well-stocked shops will likely be tempted
to loot before any political considerations. This could lead to the
destruction of property and even loss of lives.
Nobody can deny the resentment among shop assistants as they are made
to put fresh price mark-ups daily on goods they need for their families but
can't afford. Witness how they have been the first to provide incriminating
evidence against their bosses to the price monitoring taskforce about hidden
merchandise. It is what Mahatma Gandhi termed "commerce without morality".
Instead of trying to "fix" each other, isn't this time for a sober
reflection among the stakeholders in the national interest? There is a
certain belligerence that is as futile as it is ill-conceived.
Zanu PF manipulated land issue to hold onto power
WHAT I am going to do in this letter is set out as clearly as I can
the reasons why it is in the best interests of all Zimbabweans that large
scale-commercial agriculture is rebuilt. It is also in the best interests of
all Zimbabweans that commercial investment takes place in the communal
lands, thereby enabling the peasant farmers to enter the cash economy as
small-scale commercial farmers.
Historically, the land holding configuration in Zimbabwe was based on
race, this discrimination was enforced by the Land Apportionment Act and
later on the Land Husbandry Act. This divisive legislation caused resentment
and anger among the indigenous population, understandably and justifiably
It is this longstanding resentment that President Mugabe has made use
of to promote the notion that most of the ills and injustices of the
colonial era can be made right by the removal of white farmers from the land
and make that same land available to the peasant population.
The term "land reform" became, by means of propaganda and repetition,
the battle cry of the Zanu PF government in its fight to retain political
power. This cry had resonance amongst a large proportion of the Zimbabwean
population, taking from the "haves" and giving to the "have-nots" is a cheap
way of generating empathy and support.
In reality, production and prosperity was destroyed without any
commensurate benefit accruing to the peasant population. The real reason for
the destruction of commercial agriculture was it had become a hotbed of
support for the MDC. For land reform, one should read, "Murambatsvina No 1".
The much advertised land hunger was a deliberate misrepresentation of
the true feelings and aspirations of the people who live in the communal
lands. The true cry of the people is they want to free themselves from the
poverty and drudgery that subsistence farming imposes upon them. The 1995
Poverty Assessment Survey endorses what I have just said.
This survey was government-led in close collaboration with the donor
community and civic society, it was a countrywide survey and 19 173
households were interviewed. Only 2% of those interviewed believed that more
land or better land would help them out of poverty. As always the voice of
the common people was drowned out by government hyperbole and propaganda.
Today, most of the once productive commercial farms are empty and abandoned.
Large-scale commercial agriculture was introduced during white rule.
The direct benefits flowing from this advance were not available to the
peasant farmers because they did not hold title to the land they occupied.
This denial was wrong, but not the principle of large-scale commercial
Large-scale commercial agriculture went on to become one of the
pillars on which our modern economy was built. Similarly, China's modern
economy was preceded by a 117% expansion in commercial agricultural
production in the 1970s. A modern industrial economy is always urban-based
and to exist an urban-based population must be assured of a reliable flow
and range of competitively priced food products. Only large-scale commercial
agriculture can fulfil this role, by producing in large volumes and being
able to exist on tight profit margins. There is no third way.
The post-independence racial imbalance in large scale commercial
agriculture cannot be blamed on white farmers. This imbalance was
deliberately maintained by the Zanu PF government as a weapon in it's
re-election war chest. Re-igniting old resentments and whipping up ant-white
feelings was a cheap and easy way of bringing in the votes. For the future,
any young person of any race who wishes to make his or her career in
commercial agriculture should be helped and encouraged.
Recently, MDC faction leader, Arthur Mutambara, said he wants to see
Zimbabwe become the first tiger economy in Africa. Also at the inaugural
meeting of the MDC, MDC leader Morgan Tsvangirai said "we want to get people
off the land not on the land". Both these statements are wise and prophetic,
meaning we must develop a modern industry-based economy to succeed the
present (albeit crippled) agrarian economy.
If in addition to the many economic and social problems we face in
this country, if we factor in climate change, then a modern industry-based
economy is the only hope if we are serious about achieving a civilised
standard of living for the people of Zimbabwe.
Come clean Prof
I WANT to ask Jonathan Moyo who seems to criticise the government at
every opportunity how he feels about his time in government?
Moyo suddenly finds what the government is doing totally unacceptable,
but it was during his stay in office that we had some of the most violent
events in the country. And to his credit, he used to sing in the loudest
voice that that was the best for the country.
It was under him that the repressive laws such as Aippa among others
were formulated and passed as law. He made it clear to all of us that this
was the best thing for the country and made public media a Zanu PF tool.
I want to ask Moyo to come out in the open and tell us whether he was
just singing for his supper or not; else he was part of what went on? Did he
sincerely think that the violent seizures we witnessed were moral, legal and
Does he regret what he did while in government, and any lies he might
have told the nation? Did he believe then that Zimbabwe's problems were
caused by Tony Blair and George Bush? Was he or wasn't he part of the
corruption within Zanu? I am still to hear him tell us exactly how he feels
about putting us where we are right now.
Responsibility is an honourable thing and how much does he take for
the mess we are in?
I find it interesting that he was one of the biggest critics of the
government, then suddenly became the most ardent fan, and then again a big
critic. If he doesn't come clean about his responsibility when he was in
government, he is nothing more than the hypocrite and the biggest
opportunist Zimbabwe has ever had.
At least with the rest of Zanu members, hate them or like them, we
know exactly where their loyalties lie and that they are a corrupt bunch of
useless people who are not even ashamed of it.
Remedy for economic mess
I THINK three things should be reduced to address the economic woes
the country is facing: government expenditure, the level of unemployment and
By reducing the size of the cabinet, government will be showing its
propensity to save and will be able to divert funds to production.
Those cabinet members made redundant will at least be forced to
venture into real economic business where they feed from. That way they will
see the real impact of their policies.
As long as the unempolyment rate remains as high as it is, it becomes
increasingly difficult to restore sanity because all and sundry are feeding
on money obtained otherwise. We have people surviving just from hoarding
commodities and selling at a margin. As long as this level of unempolyment
persists, illegal deals will be the order of the day.
Inflation should also be addresed. Economists say where there is high
inflation and it is coupled with high unemployment rates, it's a disaster.
However, if the level of unemployment is low, we can mass produce and export
as much as possible.
Why not excommunicate him?
The word excommunication is from the Latin ex (out of) and
communicatio meaning communion. It is a banishment from the Catholic church
and it is the most serious penalty that the church can inflict.
Excommunication is not so much to punish the culprit as to correct him
and bring him back to the path of righteousness. Such exile can have an end
as soon as the
offender has given suitable satisfaction.
Meanwhile, his status before the church is that of a stranger. He may
not participate in public worship, nor receive the "body of Christ" or any
of the sacraments.
Why is it that the Catholic church has not exercised this right of
censure against their fellow member and worshipper Robert Mugabe?
I would appreciate comment from Fr Oskar Wermter SJ, the spokesperson
for the Catholic church in Zimbabwe.
Surrey, United Kingdom.
Prisoners of ignorance
THANK you for a newspaper that allows us to see evil, speak about evil
and hear evil.
The supporters and members of Zanu PF are prisoners of ignorance. They
are victims of their own environment. They have created a culture in which
they think alike. Look at Joseph Chinotimba, Tafataona Mahoso and Claude
They have different education levels but they think alike. It's like
they read from the same textbook. I term it "groupthink". This means
deterioration of the decision-making processes because of in-group pressures
to think alike.
The leaders of Zanu PF think silence of its members means consent or
agreement. What they don't know is that their supporters and other party
members engage in self-censorship, failing to mention a legitimate idea
contrary to the party's decision. Any person who thinks differently will be
seen as a sellout or alien. Look at Simba Makoni. The party members also
suffer from illusion of unanimity; that is noone wants to break up the
cohesiveness of the faulty ideas in the party.
The other problem in the party is that of shared stereotypes. Any
person who thinks differently is treated as an enemy. "Groupthink" generates
the illusion of invulnerability. After all, we have been in power for 27
years why should people not accept our ideas? The idea that party members
cannot think differently leads to feelings of grandeur and infallibility.
Zanu PF thinks that it is immortal.
In short "groupthink" inhibits thinking hence whenever you hear Zanu
PF members speak ,you really know that you have heard that thinking
somewhere. What one has to do after interviewing a Zanu PF member is ask,
"So what do you think?"
The height of cruelty
THE Student Christian Movement of Zimbabwe (SCMZ) notes with great
shock and concern the abrupt and ill-timed de facto closure of the
University of Zimbabwe barely a week before examinations were set to begin.
This week, UZ vice chancellor Professor Levy Nyagura, unilaterally
issued an eviction order that all students were to leave the campus in 30
This effectively means that more than 4 500 resident students have
been left stranded without any alternative place to stay. This is because
more than 75% of them come from poor peasant backgrounds outside Harare.
We have also established that students were forced out of lecture
rooms and from the library. Heavily armed riot police and the army were
summoned to implement these forced evictions.
This directive came in the wake of student protests against being
denied food for failing to pay top up fees of $1 million. The top up fees
were announced last week, leading the Zimbabwe National Students Union to
file an urgent court application at the High Court challenging the top up
The basis of the challenge is that it is the University which reneged
on its part of the bargain by unilaterally extending the semester following
protracted industrial action by the university staff.
The High Court is still to make a determination on whether the top-ups
are justified or not. These developments obviously pre-empt the court's
findings and will render whatever court ruling insignificant which
undermines the independence of the judiciary.
What is more disturbing is that most students neither have funds nor
means to go back to their homes having been given barely sufficient time to
source funds from their homes for such purposes.
Regrettably, the UZ administration has used a sledge hammer to crack a
nut. In simpler terms, it has used the axe to kill a mosquito on the
university's neck. Helpless students have been placed in a vulnerable
situation. At the height of winter, this is a situation reminiscent of the
shameful Operation Murambatsvina.
Students now face various problems including starvation, HIV and Aids,
rape, sexual and/or psychological abuse and greater health hazards.
SCMZ calls upon all stakeholders to join hands and assist the needy
students who have been made more vulnerable by these developments. We call
upon the UZ to refrain from attacking the right of students and to uphold
the right to quality and affordable education.
SCMZ national office.