• Sansole's Home destroyed by Chinotimba-led Zanu PF gang
• Mayors get hefty exit perks
• State fails to pay for rural electrification
• EU freezes aid to Africa
• Chimanikire charged
• ZCTU calls on government to quit
• Whither Zimbabwe?
• Once the people’s trust is lost, the writing is on the wall
• Shortage of cheque paper emerges
• Money supply growth soars to 160 percent
• Homeland insecurity
• Inflation Puts Basic Foods Out of Reach
• Zimbabwe's fuel crisis deepens as Libya deal falters
• Zimbabwe churches apologize for not helping nation
• Council Acts On Fuel Woes
• Zimbabwe Judge Delays Key Ruling in Tsvangirai Treason Trial
• Sense of humour failure
• Mbeki denies Mugabe exit report
• Tsvangirai: No proof of plot

     Gweru Executive Mayor James Bwerazuva and his Kwekwe counterpart
Johnson Mawere will each get their official Mercedes Benz car and a brand
new Nissan Hardbody vehicle as part of their exit packages.

     A Nissan vehicle of the type to be bought for the departing mayors
costs around $43 million.

     The two mayors, whose final terms expire at the end of next month,
will also each receive a piece of land and undisclosed amounts of money from
their cash-strapped councils.

     Local Government Minister Ignatius Chombo, who must approve such
packages for mayors, could not be reached for comment on the matter.

     Both Bwerazuva and Mawere confirmed that their councils had approved
golden handshakes for them but the two refused to give the details of their
packages.

     Ratepayers in the two municipalities will have to fork out several
millions of dollars more to buy new vehicles for incoming mayors who will be
elected at the end of next month.

     Bwerazuva yesterday said that he deserved the hefty package approved
by the council.

     He said: “If my employer feels that I deserve such a package, what’s
wrong with that?”

     Mawere said after serving Kwekwe for more than a decade he was also
entitled to a massive package on leaving.

     “Yes, it is true that the council is working out such an exit package
for me, but I don’t have the specific details of that package yet. Do you
think I do not deserve such a send-off considering that I have served in the
council over the last 14 years?” Mawere said.

     Residents in Gweru and Kwekwe yesterday described the mayors’ packages
as extravagant and insensitive given the two municipalities did not have
cash.

     The cash-strapped councils have had to hike tariffs and rates almost
every month in order to keep up with skyrocketing inflation, representatives
of ratepayers in the two cities said.

     Gweru Residents and Ratepayers’ Association chairman Willie Muringani
said: “Do we have that kind of money to buy him a new car just to say
goodbye and then buy another one for the incoming mayor?

     “It is very unfortunate that we cannot reverse the decision, but let
it be known that the residents are angry over the decision to buy another
mayoral car for Bwerazuva who already has another council vehicle at his
disposal.”

     Muringani added: “The residents have been pressed against the wall by
the high tariff charges the council is charging, so adding another burden on
their backs might result in dire consequences.”

     Kwekwe residents’ leader Esoph Esat described Mawere’s package as
“insensitive”.

     Esat said: “Just recently they announced plans to introduce a
supplementary budget because they have no money for service delivery but on
the other hand they want to buy a new car for a mayor who is leaving office.
Where will they get that money from?

     “Any right-thinking person would see that this is a luxury that we
cannot afford at the moment. As residents we want to present a formal
objection to the proposed package.”

     According to council sources Bwerazuva’s package, which was approved
at an executive committee meeting last week, consists of a brand new motor
vehicle, a commercial stand and money equivalent to one-and-a-half times his
annual salary.

      He will also take with him his official mayoral Mercedes Benz car,
which he wrecked in a road accident last year. The vehicle is back on the
road after the council repaired it. The sources said councillors had
initially resisted the move but were later whipped into line by the town
clerk, Godfrey Nhemachena, who presented a government circular outlining the
mayor’s benefits. The circular stipulates that an outgoing mayor’s exit
package comprises a one-off payment equivalent to their annual remuneration
at the date they vacate office, a residential stand in either a low or
medium-density area, a cellphone handset and a vehicle to be decided by
council. The Kwekwe City Council’s executive committee chaired by deputy
mayor Noah Charinya approved for Mawere to drive off with his official
Mercedes Benz vehicle, a new twin-cab Nissan Hardbody truck and a one-off
payment of a pension equal to his annual salary. The Kwekwe mayor will also
get either a residential or commercial stand and a cellphone. From Zerubabel
Mudzingwa Bureau Chief

     Most parts of Harare could be plunged into darkness because ZESA is
unable to pay for 18 transformers it needs to keep power flowing to 12 of
the capital’s residential areas, well placed sources told the Daily News.

     “The power utility is struggling to raise enough foreign currency to
import transformers,” a ZESA source said yesterday.

     The source, who spoke on condition he was not named, added: “In May,
an order was placed with Southwales but we have failed to pay them. This is
a serious threat to general lighting.”

     ZESA executive chairman Sydney Gata this week dismissed as utter
rubbish reports that the power utility was failing to pay suppliers of
equipment and that the power corporation’s cash position had been worsened
by the government’s failure to honour its debt commitments to ZESA.

     Gata said: “What you are asking me about is utter rubbish. We have
better things to do than discuss such rubbish. That is trash. OK.
Musatinetsa mhani imi (please don’t trouble us).”

     However ZESA spokesman Shepherd Mandizvidza confirmed the parastatal
was experiencing difficulties in raising hard cash to pay for transformers
that are manufactured outside the country.

     He said: “The authority sources transformers from external sources.
Such a scenario, coupled with a serious shortage of foreign currency, has
impacted negatively on the power utility’s turn-around period to contain
some of the electricity faults.”

     The state power company’s manager for Harare, Stephen Pieron, said
ZESA was losing transformers through vandalism, adding that the company’s
stocks of the vital transformers were running low.

     Pieron said: “There has been a lot of vandalism and this has increased
the demand for transformers.”

     The sources said ZESA was failing to recover about $26 billion used to
implement the government’s rural electrification programme and as a result
the power company was failing to pay suppliers of transformers and other
equipment.

     A spokeswoman of a Harare company that supplies ZESA with equipment
and spares, Tsitsi Mbabvu, confirmed that the power company was experiencing
problems in meeting some of its debt commitments.

     Mbabvu, who is executive director of Southwales Electric, said: “We
have had a long-standing relationship with ZESA.

     “The amount they owe us and the quantities we deliver to them is
privileged information on our part.

     “But it’s not a secret that like other companies in the country, ZESA
has its own cash-flow problems. As a result we have created a managed
payment plan with them. We acknowledge their problems.

     “Probably when they started the year, they had their projections but
due to economic hardships they are struggling like others. ZESA constitutes
about 60 percent of our business,” Mbabvu said.

     The rural electrification programme was launched by the government in
the run up to last year’s presidential election in a move analysts said was
meant to win support for President Robert Mugabe in the tough ballot against
opposition leader Morgan Tsvangirai.

     The sources said ZESA had agreed to implement the electrification
programme on the understanding that the government would reimburse it.

     According to the sources, the ZESA board had in April finally ordered
that the rural power programme be stopped because the government had not
honoured its commitment to repay ZESA.

     “The ZESA board and management in April rejected all new appeals from
the people running the rural electrification programme,” a top ZESA
official, who spoke on condition he was not named, said yesterday.

      He added: “Actually the board stood firm and cancelled all orders it
had placed with our suppliers of transformers for the programme following
government’s continued reluctance to repay our $26 billion. “We desperately
need foreign currency to fund our own projects but the government’s refusal
has thrown our plans into jeopardy,” said the top official. Mugabe has
threatened to dissolve the ZESA board allegedly because he believes it had
failed to expedite the rural electrification programme. By Precious Shumba
Senior Reporter

     A meeting to try and solve the problem was held at the African Union
(AU)’s leaders meeting in Maputo on Friday, but the matter was not resolved.

     The discussions followed the stance taken by African countries in
April this year to refuse to attend a Euro-African meeting in Lisbon if
Mugabe wasn’t allowed to attend.

     Mugabe is forbidden from travelling to Europe in accordance with EU
sanctions, but African leaders said Europe couldn’t dictate who should
attend meetings.

     Senator Alfredo Mantica, the Italian deputy minister of foreign
affairs and leader of the EU delegation, says the Euro-Africa meeting, where
the implementation of development plans would have been discussed, still
couldn’t take place.

     “The reasons for the suspension of political ties have still not been
resolved.”

     He said though, that the two parties had decided to have talks on an
informal level so that assistance for some matters, such as peace operations
in Africa, could be made available.

     Africa is exploring all avenues to get financial support from Europe
for peace operations in war-torn Burundi.

     An AU commission official involved in the process says the failed
Lisbon meeting followed on the first Europe-Africa meeting held in Cairo,
Egypt, two years ago.

     An eight-point plan for co-operation between Europe and Africa was
drawn up and it included assistance for the fight against Aids, food
supplies, Africa’s debt and support for peace operations in Africa.

     The official says there’s about 200 million euros (Z$186 billion)
available for peace operations, of which 10 million is already available.
Development aid of several more million euros for, amongst others HIV/Aids,
can become available if the deadlock is resolved.

     At Friday’s meeting in Maputo, the EU was represented by Mantica,
because Italy now has the presidency of the EU, a representative of Ireland,
who takes over the chair next, and a commission representative.

     Africa was represented by South Africa, Mozambique and an AU
commission member.

     A senior South African official says African countries didn’t have
high hopes of the Euro-Africa meeting, because the implementation of
European development aid is “always very complex”.

     He said the money promised at the Cairo meeting was in any case “a
re-channelling of money already promised to Africa at bilateral level or at
other regional forums”.

     Liesl Louw

      – News24

     Under POSA it is an offence to insult, criticise or ridicule Mugabe.

     Chimanikire was yesterday afternoon summoned to Harare Central Police
Station where he was made to sign a warned and cautioned statement.

     He was accompanied to the police station by his lawyer, Innocent
Chagonda.

     Chagonda said the police alleged that Chimanikire contravened Section
16 (2b) of the Act when he authorised the MDC’s information department to
publish the adverts in the private Press.

     “Yes, I can confirm that Chimanikire was charged under POSA. The
police are alleging that he authorised the publication of adverts that
insulted the President,” said Chagonda.

     Chimanikire yesterday said he was not responsible for the running of
the MDC information department which placed party adverts in newspapers.

     “I denied the charge and they said they will proceed by way of
summons,” he said.

     Under Section 16 of POSA, one can be jailed for a year or fined $20
000 for making abusive or indecent statements about Mugabe.

     During the run-up to last month’s mass action, the MDC ran adverts in
various newspapers depicting an old man fleeing from an angry mob that
accused him of being a senile thief and a murderer.

     The crowd also accuses the old man of raping their children and
trampling on their rights.

      Police contend that the old man is Mugabe.

     In the last two weeks police have also charged Associated Newspapers
of Zimbabwe (ANZ) chief executive officer Samuel Sipepa Nkomo, commercial
director Moreblessings Mpofu and Daily News editor Nqobile Nyathi over the
same adverts, which were published in the paper early last month. The ANZ
officials deny the charges levelled against them.

     Chimanikire becomes the fifth MDC leader to be charged by the police.
The opposition party’s treasurer, Fletcher Dulini-Ncube, is already on trial
facing charges of murdering Bulawayo war veterans’ leader Cain Nkala two
years ago.

     MDC leader Morgan Tsvangirai, party secretary-general Welshman Ncube
and legislator Renson Gasela are all on trial for treason for allegedly
plotting to assassinate Mugabe ahead of last year’s presidential election.

     The opposition leaders deny the charges.

     Staff Reporter

     ZCTU secretary-general Wellington Chibhebhe said in a Press statement
yesterday: “If it were any other democracy, (Finance) Minister Herbert
Murerwa and the entire government would have resigned for presiding over the
mess that this economy is in.

     “The ZCTU, therefore, calls on the Zimbabwean government to do the
most honourable thing under the circumstances – resign en masse and spare
the innocent people of Zimbabwe the unnecessary problems they have to face
on a daily basis.”

     Chibhebhe, whose ZCTU has in the past called mass job strikes to press
for better living conditions for workers, however did not say what action
the powerful umbrella union would take to ensure workers were cushioned from
the worsening hardships.

     Murerwa could not be reached for comment on the matter by the time of
going to print last night.

     Chibhebhe criticised the central Reserve Bank of Zimbabwe (RBZ)’s
failure to ensure there was enough local currency in circulation in the
country, saying workers were unable to receive their paltry wages because
there was no cash at banks.

     Zimbabwe, which is battling with its worst economic crisis since
independence in 1980, is in the grip of a cash shortage because the RBZ has
no hard cash to pay for imports of special ink and paper used to print
money.

     Banks are limiting cash withdrawals to about $5 000 per client, which
is a very little amount given Zimbabwe’s surging inflation of more than 300
percent.

     The union leader said: “Workers cannot afford to be denied access to
their salaries every month because of a macroeconomic problem that the
government has created and is failing to solve.

     “Even after queueing for hours one is not guaranteed to get enough
cash as banks have resorted to giving small amounts which are not adequate.”

     Chibhebhe spoke as it emerged this week that the government had failed
to pay some of its workers a total of $110 million in salaries because of
the serious shortages of cash.

     The cash crunch has spawned a new black market for the Zimbabwean
dollar. For the last four years foreign currency has been readily available
only on the illegal but flourishing black market.

     Meanwhile the Movement for Democratic Change (MDC) yesterday said it
was concerned that workers earning the minimum wage were now being taxed by
the government following the hiking of the minimum wage by the government to
about $47 000 a month.

     The chairman of the opposition party’s Economic Affairs Committee,
Tapiwa Mashakada, said a worker earning the minimum wage was now paying over
22 percent of total earnings in tax.

     Previously minimum wage earners were exempted from paying tax.

     Mashakada said: “Workers on the minimum wage paid no tax at the start
of the year but they are now in the ‘super tax bracket’ of 40 percent.

     “A worker on the minimum wage now pays over 22 percent of his total
earnings in tax before he gets his pay packet. This must constitute the
highest level direct income tax in the world.”

     Mashakada, who is also the MDC shadow minister of finance and the
Member of Parliament for Hatfield, called on Murerwa to review the tax
threshold, which was increased during the 2003 fiscal year from $90 000 to
$180 000.

     Staff Reporter

     The wage negotiations are being done in a hyper-inflationary
environment that threatens the very survival of local companies and the
livelihood of workers.

     Even as companies award whatever cost of living adjustments they can
afford, prices are shooting up and making a mockery of the new salary
increments.

     The prices of basic food commodities such as mealie-meal, bread, sugar
and a host of other products are reported to have shot up by more than 600
percent in the past two weeks.

     Yet workers are only being awarded salary increases averaging 40
percent.

     To make matters worse, there have been steep hikes of school fees,
commuter transport fares, rates, rent and medication. Most service sectors
have also increased their tariffs in an attempt to keep pace with inflation.

     This is coming at a time when most Zimbabweans are already having to
do without many basic necessities because of high prices and severe
shortages of food and other commodities.

     Many families are already reported to be surviving on only one meal a
day, a meal that in most cases does not even deserve to be called that.

     It is hard to imagine how people who have already resorted to such
measures will continue to survive in a worsening environment.

     It is becoming clear that to keep body and soul together under this
harsh environment, workers would need a cost of living adjustment every
month.

     But of course this is not feasible under an economy in which many
companies would collapse if they were to award their employees salary
increments that take into account the consumer price index.

     According to figures from the Central Statistical Office, Zimbabwe’s
year-on-year inflation rose 300.1 percent in May.

     Wage increases of this magnitude would make it impossible for most
local firms to continue operating.

     Zimbabwean businesses are already battling severe shortages of fuel,
foreign currency, raw materials and spare parts, which have forced most of
them to scale back their operations and lay off staff.

     So what options do workers have in such a situation?

     Certainly, they can resort to industrial action, already witnessed at
several private companies and in the public sector.

     Teachers, doctors, Zimbabwe Electricity Supply Authority employees and
workers in the banking sector have embarked on strikes in the past few weeks
and some of their demands have been met.

     But even as they receive promises of better pay, the cost of living is
rising, meaning they will soon be back before their employers demanding
more, potentially poisoning industrial relations at a time both workers and
employers should be pulling together to ensure that local firms make it
through this difficult patch.

     But as all this happens, there is no discernible solution in sight.

     Indeed, the only future that most Zimbabweans can look forward to is
one of increased food insecurity and worsening poverty.

      The government – which in the past has kept a tight lid on prices in
what it said was an attempt to protect Zimbabweans from the soaring cost of
living – seems to have either thrown in the towel or lost whatever interest
it had in the welfare of its people. Donors and humanitarian agencies have
millions of other needy people to worry about as well and many are even
scaling down their involvement in Zimbabwe. Where is Zimbabwe heading, does
anyone even care anymore?

     Yet when a politician is caught in a lie, the consequences are often
dire, at least in democratic countries.

     Indeed, proving that a politician is a liar is just about the only way
to get rid of him or her quickly and terminally, which is why the attempt is
so attractive to political opponents.

     But what, exactly, is a lie in politics? Few cases are as clear-cut as
that of Anneli Jaatteenmaki, whose short-lived stint as Finland’s first
woman prime minister recently came to an end.

     She had attacked her predecessor during the election campaign for
being fork-tongued about Iraq, saying one thing to United States President
George W Bush and another to the Finnish people.

     Her knowledge was based on Finnish foreign office records. Had she
seen them?

     She began to equivocate and in the end said that she had not. When the
opposite was proven and a secret document was found in her possession, she
had to go.

     Another campaigner under investigation by his parliament for being
“economical with the truth” is German Chancellor Gerhard Schröeder. But his
case is very different. The opposition, still smarting from its narrow
defeat in last autumn’s election, accuses him of not having told the truth
about Germany’s weak economy and the consequences for the national budget.

     Almost a year after the election, a parliamentary committee of inquiry
is still interviewing “witnesses.” But it does not look as if it can get
very far. At most, deputies will be able to offer the public a fresh example
of a favourite trick in politics: to tell people the truth was told and
nothing but the truth, but not exactly the whole truth.

     The most serious current case concerns President Bush and British
Prime Minister Tony Blair.

     In fact, the charges of lying concern only Blair, for Bush has (so
far) been absolved of all possible sins in view of the apparent success of
the Iraq campaign.

     But Blair is under heavy fire from his parliament’s Foreign Affairs
Committee for having overstated the threat posed by Saddam Hussein.

     Intelligence dossiers (it is claimed) were “sexed up” by Blair’s
underlings. More particularly, there was no evidence for Blair’s claim that
the Iraqi dictator could have launched “WMDs”, as weapons of mass
destruction are now called, “within 45 minutes”.

     Does it matter whether this claim was strictly true or not? Don’t we
know from past evidence that Saddam was prepared to develop WMDs and to use
them if the occasion presented itself?

     Are not the reasons for the war overtaken by its reality? In the end,
is this really a question of lying?

     In the British case, the answer is not so simple.

     In the middle of his second term, Blair is going through a bad patch.

     Opponents within his own party are increasingly replacing the
ineffectual Tory opposition.

     Blair is much more vulnerable than he was a year ago, and he must
tread softly if he does not want to lose further support.

     But there is another point.

      The reasons given for the war in Iraq were never entirely clear. WMDs
in Saddam’s possession were but one in a sequence of arguments. There was
also, at least in the US, the desire to avenge the terrorist attacks on New
York and Washington, as well as geopolitical interests. Blair also expressed
moral outrage at the way the Iraqi dictator had behaved toward his own
people in making the case for regime change. Supporters of the war – often
reluctant in any case – had picked up one or the other of these arguments,
and if they focused on WMDs, they now feel betrayed. The two cabinet
ministers who resigned over the affair, Robin Cook and Clare Short, want
their own revenge and thus continue to attack Blair for his “lies”. So far,
Blair has proven his resilience to such charges. Indeed, he has gone on the
counter-attack, notably against the BBC, which had not exactly supported the
war with enthusiasm. But does the uncertainty now circling Blair like a
vulture now smell the appetisingly foul scent of a lie? Or is it more a
question of a prime minister losing the trust of his people, including some
his erstwhile friends and allies? Trust is a vital commodity for all
politicians. Once lost, it is difficult to regain. Blair has used the “Trust
me!” pose often, not least in the case of the war in Iraq. In any case, one
does not have to be found out as a liar to lose such trust. It is sufficient
that clouds of doubt develop. Indeed, a politician’s reputation can be
damaged even if no one doubts the truthfulness of his statements. It
suffices if people feel that he is trying to mislead them, or even that he
has not got things clear in his own mind. A leader can tell the truth,
nothing but the truth, but less than the whole truth and yet still be
trusted. Once a politician has lost trust however, people will no longer
believe him even if he tells the truth. By Ralf Dahrendorf Ralf Dahrendorf,
the author of numerous acclaimed books, is a member of the British House of
Lords, a former Rector of the London School of Economics and also a former
Warden of St Anthony’s College, Oxford. – Project Syndicate/Institute for
Human Sciences

     Officials with Bulawayo-based firms involved in the printing of cheque
paper said they were facing difficulties in importing paper and machinery
spare parts for their printing presses.

     “The machines that I use to print cheques require delicate and
sophisticated equipment, which is imported,” a manager with one of the
companies said.

     The official, who spoke on condition he was not named, added: “The
shortage of foreign currency is the main reason why there is a shortage of
cheques.”

     Officials in the banking sector said local financial institutions were
experiencing delays in sending out cheque books to clients because of the
shortage of cheque paper.

     Normally, it would take 48 hours or less to collect a cheque book, but
some bank customers have complained that it is now taking up to two months
for the cheque books to be ready for collection.

     The shortage of cheque paper is coming at a time when local banks are
facing severe shortages of cash that are partly blamed on the Reserve Bank
of Zimbabwe’s failure to import the special paper and ink needed to print
bank notes. The shortage of paper and ink is also a result of the country’s
foreign currency crisis.

     Many bank clients have been forced to rely on cheques to make payments
because of the failure to secure enough cash at banks. Financial
institutions have significantly reduced their maximum withdrawal limits to
as low as $5 000 per customer in some instances.

     But Zimbabweans need large amounts of money to make their purchases
because of soaring inflation.

     Raymond Phiri, a Bulawayo-based businessman this week complained that
the shortage of cheque paper and the eight-week wait for a cheque book was
now affecting his business.

     “We have been conducting most of our transactions through cheques
owing to shortage of cash.

     “And because of the shortages of cheques, our business has been
seriously affected,” he said.

     Company executives said many local firms had resorted to bank cheques,
which are expensive to customers because they come at a fee and which also
increase pressure on banking personnel due to the high volumes of people
turning to this option.

     Own Correspondent

     In its latest monthly economic bulletin, the central bank said January
’s M3 rose 2.5 percentage points from 164.8 percent in December, underpinned
by a staggering 174.1 percent and 159.4 percent increase in narrow and
quasi-money respectively.

     Narrow money or M1 comprises notes and coins in circulation, plus
demand deposits, while quasi-money refers to instruments that act as a store
of value but are not immediately accepted as a medium of exchange. These
include savings accounts, money market investments and building society
deposits.

     “Growth in narrow money emanated from increases in demand deposits of
$181 362.7 million and notes and coins in circulation of $58 321.8 billion,”
the RBZ said in its economic report.

     Deposits with maturities of over 30 days, class C shares and other
share deposits at building societies shot up by $39 617 million in January.

     Savings deposits went up by $28 288.8 million and $24 623.9 million at
building societies and commercial banks respectively.

     Net credit to government grew by $84 690 million, largely from the
central bank.

     Analysts have warned already that Zimbabwe’s money supply growth is
now too high and is detrimental to any prospects of economic stability in
the country.

     They say the government must abstain from persistent borrowing from
the domestic sector to reduce the rate of credit creation in the ailing
economy.

     “The underlying factor is that government has resorted to domestic
borrowing to fund its domestic debt, which is currently standing at $446
billion, and this fuels the growth in money supply,” said an economist at
the University of Zimbabwe, who declined to be named.

     He added that money supply would continue to rise because the
government had few sources of revenue.

     Analysts said the slight increase of 2.5 percentage points in annual
broad money growth in January could be the result of the central bank’s
attempts to tighten its monetary policy.

     Trust Bank Corporation Limited group economist David Mupamhadzi said
the introduction of a two-tier interest regime, under which consumptive
borrowing attracted high interest rates, was aimed at discouraging
speculative borrowing that was fuelling money supply growth.

     Business Reporter