The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.
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I had difficulty formatting this - the last column shows percentage increase from 16/5/2003 to 28/6/2003.
PRICES AND THE PERCENTAGE OF THEIR INCREASE
ZIMBABWE
PRICES AND THE  PERCENTAGE OF THEIR INCREASES
   % Increase
 April 1998($) ($)   April 2000 ($)   %   Dec 2001($) ($)   %   28/08/02 ($)  %   April 98 - Aug 02 %   Ave/month %  09/11/02($) 06/12/02($)  03/05/03 ($))   16/05/03($)($)   28/06/03($)       16/5 -28/6 28to28/6 28/628/6
Steri milk  $             5.74                 17.45     204.01            39.50     126.36            130.00     229.11  2,164.81      41.63          180.00            186.00        450.00        522.50      550.00 5.26
Bacon (500g)  $           35.56                 91.20     156.47         410.40     350.00         1,161.00     182.89  3,164.90      60.86        1,960.00         2,335.00     3,377.00     3,377.00    7,003.00 107.37
Potatoes (2kg)  $           14.69                 41.10     179.78         130.00     216.30           326.00     150.77  2,119.20      40.75          600.00         1,126.00    1,499.00     1,540.00    1,657.00 7.60
Sunlight dishwasher (750ml)  $           29.28                70.60     141.12          310.00     339.09            630.00     103.23  2,051.64      39.45         608.00           897.00   1,168.00     1,168.00    2,810.00 140.58
Red Seal Rice (2kg)  $           29.40                 79.95     171.94          496.00     520.39            850.00      71.37  2,791.16      53.68          720.00         2,000.00     1,835.00     1,835.00    4,500.00 145.23
Mince meat (500g)  $           23.20                 65.00     180.17         247.00     280.00           311.00      25.91  1,240.52      23.86       1,080.00         1,080.00     2,300.00     2,300.00    2,300.00 0.00
Cold Power (1 kg)  $           33.58                 64.60      92.38          510.00     689.47            734.00      43.92  2,085.82      40.11          900.00         1,440.00     1,549.00    1,549.00    3,090.00 99.48
Cake Flour (2 kg)  $           24.39                 65.00     166.50          183.00     181.54            242.00      32.24     892.21      17.16  n/a             420.00        560.00       560.00    1,725.00 208.04
1 dozen eggs  $           15.47                 36.00     132.71          108.00     200.00           342.00     216.67  2,110.73      40.59          346.00            480.00        864.00        864.00    1,500.00 73.61
Pork Sausages  $           21.44                 55.00     156.53          240.00     336.36            667.00     177.92  3,011.01      57.90          980.00         1,124.00     2,086.00     2,068.00    3,462.00 67.41
Daybreak coffee (200g)  $           32.08                 55.60      73.32         476.00     756.12            465.00       (2.31)  1,349.50      25.95          700.00            805.00     1,040.00     1,040.00    2,225.00 113.94
Herald  $             3.00                 10.00     233.33            30.00     200.00             60.00     100.00  1,900.00      36.54            60.00              70.00       100.00       150.00       150.00 0.00
Coke (300 ml)  $             2.00                   8.00     300.00            20.00     150.00              60.00     200.00  2,900.00      55.77           70.00              70.00          70.00        300.00       300.00 0.00
White bread  $             3.00                 15.30     410.00            48.40     216.34              60.00      23.97  1,900.00      36.54          130.00            130.00        300.00        350.00       500.00 42.86
Fine Table salt (1kg)  $             3.68                 11.30     207.07            45.80     305.31              45.13       (1.46)  1,126.36      21.66   n/a            306.00        352.00        352.00       760.00 115.91
Stork Margarine (500g)  $           26.76                 52.90      97.68          116.63     120.47           265.00     127.21     890.28      17.12  n/a             663.60        780.00     1,120.00    1,640.00 46.43
White sugar (2 kg)  $           14.80                 32.05     116.55            76.30     138.07            115.00      50.72     677.03      13.02  n/a             114.70  n/a         332.00       440.00 32.53
Totals  $          318.07                771.05 ########       3,487.03 ########         6,463.13 ######## ########  $ 622.60        8,334.00       13,247.30    18,330.00   19,427.50   34,612.00 78.16

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Daily Nation, Kenya

Comment
Thursday, July 3, 2003
----------------------------------------------------------------------------

Here they die to collect garbage
By CHARLES ONYANGO-OBBO
As Kenyans wait for the 500,000 jobs promised by the Narc Government (there’
s no shortage of people who think the jobs are just another political pie in
the sky), it might help to know that the unemployed are not alone in their
suffering.

The other day, Brazilian police had to swing into action and clobber a crowd
that had turned riotous over jobs. The State-owned company that cleans the
city of Rio de Janeiro advertised 2,000 vacancies for rubbish collectors. A
staggering 40,000 people turned up and the scene became chaotic.

Some of the job-seekers had waited for two nights to apply. The queue was
eight kilometres long. In other words, in a single line, they would have
stretched from Nation Centre on Kimathi Street to Sarit Centre.

Before you whistle in amazement, consider this. Unemployment in Rio is
"only" 14 per cent. It gives a sense of the situation in Zimbabwe where the
economic hardships have sent unemployment to about 70 per cent, and
inflation is around 300 per cent.

A report in The Times of London illustrates rather dramatically how dim the
prospects are in Mr Robert Mugabe’s land. When opposition leader Morgan
Tsvangirai was released from jail recently, the court ordered him to pay
Zim$110 million in bail. Of this, Zim$10m was supposed to be in cash.

Because the Central Bank has even run out paper on which to print money,
Tsvangirai’s people had difficulty getting the money. When eventually they
did, they brought it in Z$50 denominations. They had to carry it in three
huge cardboard boxes, and it took more than one hour to count! Tsvangirai
must be a truly brave man to still want to be president and have to sort out
such mess.

Someone who’s well employed already, and seems like a good candidate for a
big job in Iraq, is our Tourism Minister Raphael Tuju. If I were US
President George Bush, I would be asking for Tuju’s cellphone number.

The Americans are facing a real danger of a guerrilla war in Iraq as
resentment against their occupation (and casualties of US soldiers) mount.
They also seem hopelessly lost about how to deal with the potentially
explosive Sunni-Shia political rivalries in the region.

Last Friday, Mr Tuju waded into religious waters. He visited the Jamia
Mosque to reassure Islamic leaders the Government was not targeting Muslims
in its anti-terrorism campaign. He charmed the sheikhs enough for them to
call off a planned demonstration.

Many people who get their international news only from the dominant Western
media probably think Muslim clerics the world over don’t like democracy.
They should hear this one.

Last week, an article in the opinion pages of The Independent by Patrick
Cockburn had some intriguing revelations. He watched a demonstration outside
the headquarters of the US-UK occupation body, the Coalition Provisional
Authority (CPA). The leader was Sheikh al-Zirjawi al-Baghdadi, a Shia cleric
"looking very much like Hollywood’s idea of an Islamic fanatic [shouting]
anti-American rhetoric", he observes.

But there was something different. Sheikh al-Baghdadi was not carrying a
poster proclaiming "American Devil Go Home". He said: "We are not asking for
American troops to go home, but free elections".

America went to war partly to bring democracy to Iraq, but Cockburn observes
that it is delaying elections because it fears that Shia representatives,
who comprise about 55 per cent of the Iraqi and were persecuted by Saddam
Hussein, will win. Because of that, the US is doing as their foe Saddam
did - even in Shia strongholds, it is appointing Sunni governors!

It seems this is the age of the big religious issues. Christendom too, is
sorting out its affairs. That brings us to the matter of Canon Jeffrey John,
who’s been appointed the first openly homosexual bishop in the Church of
England. As if the fact of a gay bishop wasn’t controversial, the Archbishop
of the Anglican Church of Nigeria, Peter Akinola, has added fuel to the fire
as only a Nigerian could.

"This [the move to consecrate Canon John] is – a Satanic attack on God’s
church", Akinola said. "Homosexuality is so unnatural. Even in the world of
dogs, cows, and lions, we don’t hear of such things", he finished like a
true African.

Many European bishops, even those who are opposed to the consecration of
gays as bishops, are shocked by the venom of the Archbishop’s manner of
speech. But both The Guardian of Nigeria and The Observer in London tells us
that our man in Lagos is not backing down.

You might wonder why an African should be lecturing the Europeans about
their church, which they brought to the continent barely 100 years ago. It’s
because the Anglican (and indeed Catholic) church, as such, is dying in the
land where it was born.

The Anglican congregation in the UK and US combined is just 2.3 million. The
Nigerian church is a whopping 17 million, the largest in the world, with a
whole 81 bishops and 10 archbishops. Akinola has hinted at a possible
breakaway, something the Anglican establishment isn’t keen on, naturally. In
other words, Akinola has something very few Africans have in the world
today - clout.

It’s too soon to forget the comedian Aaron Barschak who embarrassed the
British security services by gatecrashing Prince William’s 21st birthday
party at Windsor Palace - dressed as Osama bin Laden.

Barschak pulled the stunt as publicity for his upcoming performance, Osama
Likes It Hot, at the Edinburgh Fringe show next month. The publicity has
been so huge, and tickets for Barschak’s show are, for all intents and
purposes, now sold out.

Other performers, though, are angry because Barschak has stolen all the
limelight. In a jealous fit, they are planning to wreck his show, and have
even opened a web site to co-ordinate the guerrilla war against Barschak. So
where do you think that keeps Barschak, if not in the spotlight, which they
want to take away from him?

When Russian President Vladmir Putin visited Barschak’s Britain recently, he
made headlines because, apart from being the first Russian leader to drop in
on London on a state visit since 1874, he also kept the Queen waiting for 15
minutes.

Yes, that was considered too late to arrive for an appointment. We can only
remark that Britain certainly isn’t Africa. A president from an East African
country kept villagers waiting for him to arrive for an important event for
two weeks – 20,160 minutes. Honest, I didn’t make that one up.


----------------------------------------------------------------------------
  Mr Onyango-Obbo is Nation Media Group’s managing editor for media
convergence and syndication.
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FinGaz

      No pay for diplomats

      Sunsleey Chamunorwa Editor-in-Chief
      7/3/03 4:03:43 AM (GMT +2)

      BANKS were this week scurrying to beat the deadline set by the
government which, in an unusual step meant to help it wriggle out of awkward
scrapes, last week directed banks to pay overdue salaries for staff at
Zimbabwe’s foreign missions in a development that gives a rare glimpse into
one of the more bizarre episodes in Zimbabwe’s tragicomic history.
      The government directive, issued through the Reserve Bank of Zimbabwe
on June 18 2003, caught most banks by surprise.

      Although they acknowledged that the government was strapped for hard
currency, authoritative banking sources were unanimous that the latest
government directive was emblematic of everything wrong with the country’s
economic direction.

      Week-long investigations by this paper revealed that although several
banks had complied with the June 30 2003 deadline, a handful could not beat
the deadline because they did not have the money.

      This means that Zimbabwean diplomats at some of the country’s foreign
missions will go without pay, a situation that could prove another deeply
embarrassing debacle for the government which observers say is threatened
with imploding under its absurdities.

      Standard Chartered Bank, impeccable banking sources said, was required
to pay US$2.2 million to the country’s three High Commissions in London,
(United Kingdom), Paris (France) and Geneva (Switzerland). "We have
fulfilled our obligations and I cannot say anything more than that," said a
bank official who spoke on behalf of the bank’s chief executive officer,
Washington Matsaira, who was said to be out of the country.

      The Commercial Bank of Zimbabwe was directed to chip in with US$165
000 for the Zimbabwean High Commission in Havana (Cuba) while banking giant
straddling the southern African region, African Banking Corporation, would
pay US$663 000 to the country’s United Nations mission in New York (United
States of America), High Commission in Pretoria (South Africa) and some
diplomatic staff in Beira (Mozambique).

      Trust Bank was asked to pay US$670 000 to Accra (Ghana), Addis Ababa
(Ethiopia) and Windhoek (Namibia). New Delhi (India) and Tripoli (Libya)
would be accounted for by acceptance house ReNaissance Merchant Bank while
Barclays Bank would pay US$600 000 to the country’s envoys in Washington
(United States), Toronto (Canada) and part of the Pretoria mission’s
requirements as well.

      Kingdom Bank would pay US$478 615 to Zimbabwean envoys in Stockholm
(Sweden), Abuja (Nigeria) and Maputo (Mozambique). It is understood that
Stanbic and First Banking Corporation would pay US$600 000 apiece to three
High Commissions each. The foreign missions could not be ascertained at the
time of going to press.

      Time Bank is understood to have been asked to pay the least amount of
US$50 000 to the country’s High Commission in Vienna, Austria. Interfin was
spared, sources said, because it had last week provided US$2 million towards
the payment of external government commitments. These figures add up to $5.5
billion at the official exchange rate.

      All bank chief executives refused to comment citing confidentiality
and instead referred all questions to the central bank.

      bed.

      Efforts to ascertain the sum total of what the government required for
this purpose were fruitless as Foreign Affairs Minister Stan Mudenge was not
available for comment while the ministry’s spokesperson, Pavelyn Musaka was
attending a workshop in Kadoma.

      With the economy mired in recession which has seen the country’s
foreign missions also feeling the sharp edge of the economic melt-down back
home, the government is in a desperate and tough situation that could expose
its isolation as probably the only southern African country failing to pay
embassy staff alongside renowned banana republics elsewhere.

      The government had hoped that the current tobacco selling season could
 uncork a new source of hard currency to pay embassy staff. Tobacco has been
traditionally Zimbabwe’s premier export earner with the single biggest
sectoral contribution to the country’s gross domestic product. It has
however since lost its glitter.

      "The payment will be against the 50 percent and tobacco proceeds
normally remittable to the Reserve Bank in terms of current Exchange Control
directives", the central bank, which controls the country’s financial
levers, said in its letter to bank chief executives.

      "With regard to tobacco, however, only 80 percent of the proceeds
should be applied towards the embassy payments. The remaining 20 percent
will continue to be remitted to the Reserve Bank to go towards the Tobacco
Growers Fund. It would, therefore be appreciated, where tobacco lines are
available, if draw-downs could be accelerated for purposes of meeting these
payments," said the letter signed by Stewart Kufeni, the central bank’s
director of financial markets.

      On payment, Kufeni said, the central bank would arrange to credit the
individual banks’ accounts in the RBZ books with the Zimbabwe dollar
equivalent.

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FinGaz

      Rot in Chegutu council exposed

      Brian Mangwende Chief Reporter
      7/3/03 3:39:52 AM (GMT +2)

      A TEAM tasked to probe operations at Chegutu Town Council has produced
a damning report that brought to light serious abuse of ratepayers’ money
including the siphoning of $150 million from the council’s drying coffers,
The Financial Gazette can reveal.
      The government-appointed internal audit team has since made
recommendations to Local Government, Public Works and National Housing
Minister Ignatious Chombo to dissolve the entire council and call in the
police to investigate the matter further.

      ZANU PF councillor and deputy mayor for Chegutu, Phineas Mariyapera
who could not be reached for comment at the time of going to press
yesterday, was cited as the brains behind the loss of $150 million.

      Mariyapera, the report said, usurped the powers of the town’s
executive mayor Francis Dhlakama of the Movement for Democratic Change.

      The ZANU PF councillor played a key role in the recruitment and
dismissal of staff and the use of council funds.

      The special report titled "The Municipality of Chegutu Investigation
Audit Report 2003" alleged that there were no proper books of accounting for
the 2001/2002.

      Management of council’s affairs was in shambles with no personnel
management system in place, while employees were now answerable to
councillors.

      "Employees have been recruited into cash collection points in the name
of the party to facilitate the stealing of money from council. Councillors
think that they are above the law and consider themselves a government
within a government.

      "Employees who try to toe the professional line, hence frustrating the
interests of the councillors or their agents are threatened with unspecified
action.

      "Due to the chaotic situation prevailing, Chegutu Municipality has
become a hunting ground for thieves," read part of the report.

      The investigating team recommended that Mariyapera be stopped from
interfering with the management of council finances forthwith and that the
treasury department be overhauled or dismissed.

      "If administrative and political stability is to be achieved at
Chegutu Municipality, the minister is advised to dissolve council and
appoint commissioners … The current crop of councillors is not fit to run
council affairs and should be barred from contesting future elections. The
councillors are too corrupt to the extent that they are running council
business like a tuckshop," read part of the recommendations.

      Council also failed to explain how it used about $54.1 million meant
for journals and over $2 million paid out in advances to councillors and
employees.

      Over $802 000 reimbursed to council for overpaid allowances by
Mariyapera was never receipted and could not be accounted for.

      The report said there were no standing policies on issues relating to
administration, finance, human resources and development, hence the
arbitrary hiring and firing of staff — especially those in the treasury
department.

      It also noted a serious mismatch between revenue generated by council
and expenditure.

      Monthly expenditure averaged $32 million, while only $21 million was
collected, creating a deficit of $11 million.

      Capital funds that were meant for repairing roads were diverted to pay
wages and salaries, resulting in a serious collapse of infrastructure.

      Payments of vouchers worth $2 million had no supporting documents.
About $302 012.72 collected between January and February last year 2002 was
not accounted for.

      Over $10 million in over-expenditure on salaries, wages and overtime
allowances was incurred without council approval.

      Another $8 692 358.05 in cheques was not receipted but posted to
consumer accounts using fictitious receipts, which appeared on the daily
receipts pre-listing and validation schedules.

      The figures were not tallying with deposits attached to support the
daily summary collections.

      Neither Chombo nor his permanent secretary, Vincent Hungwe, could be
reached for comment as they were said to be in Angola.

      Dhlakama said he was aware of the report, but was not at liberty to
discuss its contents.

      He said: "This is still not a public document. We can’t run away from
the fact that you have it in your possession, but nevertheless I can’t be
seen to be making a comment at this juncture. I wouldn’t want my comment to
contradict the measures we would have decided to implement with the
minister."

      Officials in Chombo’s ministry alleged in their report to the minister
that employees were telephoned by councillors at night during the
investigations and threatened with death after being accused of providing
information to the audit team.

      Unemployed youths were allegedly mobilised to act as vigilantes during
the probe.

      "This culminated in the break-in into council offices by some
sponsored employees who removed documents that had to be investigated by the
audit team. Such barbaric actions at the instigation of deputy mayor Phineas
Mariyapera and councillor Mubayiwa Chikazhe are common," the report said.

      Council meetings were never recorded, while wrong minutes were
deliberately passed as a correct record of the proceedings.

      Five of the 11 wards in Chegutu have not been represented since the
suspension of four councillors two years ago and the perpetual absence of
the other since 1999.

      The council has also not established an audit committee as required by
the Urban Councils Act.

      Problems started in 2001 following reports of rampant corruption at
Chegutu Municipality.

      It was believed then that corruption had crept into council because
most key positions had been vacant for at least four years.

      Chombo responded by seconding Christopher Shumba as acting Town Clerk,
I. Mhaka (acting treasurer) and E. Gandanga (acting engineer/treasurer) to
the council in December last year.

      However, problems continued, resulting in the appointment of the probe
team
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FinGaz

      Lack of cohesion dogs govt economic policies

      Staff Reporter
      7/3/03 3:43:31 AM (GMT +2)

      GOVERNMENT economic policy interventions have failed to extricate the
country from the economic doldrums because they lack the requisite
coherence, analysts have charged.
      At a time when critics have begun to doubt the ability of the much
publicised New Economic Revival Programme (NERP) to deliver a panacea to the
ailing economy, it is now being argued that lack of coherence, not political
will, has hamstrung recovery efforts.

      Industry players and analysts are in agreement that the biggest
letdown has been the apparent penalising of exporters and the glaring lack
of an export policy.

      Paul Matamisa, of the Zimbabwe Council for Tourism, said the sector
had borne the brunt of seemingly contradictory policies.

      "The tourism sector struggled for years to get export status and
finally got it, but no sooner had we got it than the value added tax system
was mooted and we learnt that tourism would not be zero-rated as net
exporter."

      "The Zambian and Kenyan tourism sectors enjoy zero-rating, while South
Africa is currently considering it," Matamisa said.

      Zero-rating under VAT entails exemption from paying tax, a move which
industry players have said is necessary to enhance price competitiveness in
a sector ravaged by unprecedented adverse publicity in the post independence
era.

      Mining has not been spared either and Chamber of Mines economist David
Matyanga lamented the economic policy schizophrenia, saying it had cost the
industry, whose existence was already under serious threat.

      "Government sought to alleviate the problems bedevilling the mining
industry through, for instance, the gold support price, which ensured a
break-even position for mining houses, but it is ridiculous to extract a
non-renewable resource at a break-even position.

      "What is more, the foreign currency remittance policy is fraught with
problems and there have not been foreign currency payments from the Reserve
Bank of Zimbabwe(RBZ) in the past eight weeks now," Matyanga said.

      Two of the country’s leading gold producers, Falcon Gold and Rio
Tinto, have not received a combined US$1 million in payment for gold
deliveries to Fidelity Printers, a RBZ subsidiary.

      The financial sector, which has benefited the most from exploiting
policy blunders such as the gross over-valuation of the local currency, has
suddenly found itself at the mercy of an imminent policy on interest rates
by the RBZ.

      Rongai Chizema, an economist with a leading financial institution,
said despite its boom, the financial sector was not immune to sudden and
costly policy changes.

      "The shrinking real sector means that banks will one day hit a
ceiling, which is why it is important for fiscal and monetary policy to be
geared to revitalise the real sector on which banks are dependent.

      "The sector is, however, exposed to policy changes with respect to
interest rates spreads as well as service charges," Chizema said.

      He added that misdirected economic policies characterised by a
propensity to control and regulate everything, were largely responsible for
the emergence of "two economies in this country — the grey or black market
economy and the official one."

      Finance and Economic Development deputy minister, Christopher Kuruneri
last week admitted that the latest economic blueprint, NERP, had not
achieved its intended objectives thus far.

      He, however, blamed industry for not taking the government up on the
deliverables set out in the document, while industry itself blames the state
for the sluggish implementation of the programme.

      It is a widely held position in industry and commerce that for any
economic programme to work, external support is needed.

      This means the government has to take urgent steps to end the country’
s isolation and engage the international community for crucial balance of pa
yments support.

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FinGaz

      Government mum on food requirements

      Staff Reporter
      7/3/03 3:47:47 AM (GMT +2)

      DONORS have pledged US$203 million (Z$167.3 billion) towards the
purchase of 404 218 tonnes of food aid needed to take the nation through to
the next harvest.

      A report produced by the Food and Agricultural Organisation and the
World Food Programme (WFP) on the crop and food supply situation in Zimbabwe
said funds pledged by international donors can meet 88 percent of the
country’s emergency food requirements.

      The government is, however, yet to make a formal appeal for food aid.

      United Nations officials said they were disappointed that the
government was delaying releasing estimates on the food supply situation yet
it was clear that Zimbabwe had run into a serious food shortage caused by
the drought and the chaotic land reform.

      The permanent secretary in the Ministry of Public Service, Labour and
Social Welfare, Lancester Museka said the government was still waiting for
information from experts in the ministry.

      "We are also worried that we do not have the estimates as yet, but
there is no way we can sideline the United Nations in this case," he said.

      The report said WFP and its partners have distributed 346 000 tonnes
of commodities in 49 districts, benefiting 4.7 million people.

      Meanwhile, WFP has appealed for US$308 million to feed 6.5 million
people in southern Africa over the next year.

      Two thirds of the food was needed for Zimbabwe, which is experiencing
political and economic turmoil, and almost the rest for Mozambique, which
has been hit by a cycle of floods, cyclones and droughts over the past four
years.

      WFP chief James Morris said the crops in Zambia and Malawi — both at
risk last year — have recovered from the drought and South Africa has a food
surplus.

      Harvest improvements are being threatened by the sheer scale of
HIV/AIDS crisis.

      In Zimbabwe, there are an estimated 3 800 deaths per week from
HIV/AIDS, compounding the economic disruption caused by President Robert
Mugabe’s land redistribution and hyperinflation.

      Morris said although crop production in Zimbabwe had improved slightly
compared with last year, it was still 40 percent below the five-year
average, with drought continuing to hit the south of the country.

      Zimbabwe, which used to be Africa’s biggest agricultural producer,
would likely depend on international aid for about half its food imports in
the coming 12 months.

      The government will have to pay for the rest despite its chronic lack
of foreign currency.

      Even though Mugabe is increasingly regarded as an international
outcast, Morris said he hoped this would not diminish aid to the struggling
country.

      "The folks we feed don’t bear any responsibility for the political
system," he said.

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FinGaz

      Massive 300% hike in fertiliser price sought

      Staff Reporter
      7/3/03 10:21:53 PM (GMT +2)

      ZIMBABWE’S sole ammonium nitrate fertiliser producer, Sable Chemicals
Industries Limited, will this month seek government approval for a 300
percent price hike, a senior executive told The Financial Gazette.

      The move is part of a bid by the company to ensure viability.

      Sable, a subsidiary of TA Holdings Limited, provides the basic raw
material in the manufacture of nitrogen-based fertilisers to the Zimbabwe
Fertiliser Company and Windmill, but is threatened with collapse owing to
the government’s restrictive pricing policies.

      TA Holdings executive chairman Shingai Mutasa told The Financial
Gazette that Sable had applied in May for a 600 percent price increase when
the product was removed from price controls to the price monitoring
mechanism.

      "Sable applied for a 600 percent increment and only got 299 percent.
Efforts are now underway to apply for another increment in July."

      The shortage of foreign currency, fuel, adjustments to electricity
tariffs and staff costs have sunk the company into a cumulative loss to the
tune of $6 billion since 2000.

      The high production costs have been compounded by government price
controls.

      The price of ammonium nitrate has been pegged at $150 000 a tonne
while the import parity at the time was calculated at $167 450 per tonne at
an exchange rate of $850 to the United States dollar.

      "We are going to be aggressive in our pursuit of economic prices for
our fertiliser," Mutasa said.

      If approved, it will result in huge increases in the prices of
fertiliser.

      Players in the fertiliser industry also indicated that they had
applied to hike the prices of their products.

      However, farmers’ organisations have condemned the proposed increase,
saying it will destroy the farming industry because the prices of
agricultural prices are reviewed annually.

      "It’s disastrous because the prices of fertilisers are already very
high. If the increases are genuine, then the government should review the
prices of agricultural products in tandem with increases in inputs,"
Indigenous Commercial Farmers’ Union president Davison Mugabe said.

      Analysts said the government should deregulate trade in the
agricultural commodities in this highly inflationary environment as annual
producer price reviews put farmers at a disadvantage.

      The government abolished open trade in grain, making the once thriving
Zimbabwe Agricultural Commodity Exchange (Zimace) dormant and giving the
parastatal Grain Marketing Board monopoly over the buying and selling of all
grain in the country.

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FinGaz

      43 starve to death


      7/3/03 3:45:40 AM (GMT +2)

      At least 43 people died of hunger in Bulawayo between April and May
this year forcing the city fathers to plead with food relief agencies to
avert continued loss of life.
      A report compiled by the city’s director of health services, Rita
Dlodlo painted a grim picture of the food situation in the City of Kings.

      Of the 43 people who succumbed to the pangs of hunger in Bulawayo, 25
were male, while 18 were female.

      Most of the affected were children in the 5-14 age group followed by
those in the 0-4 age group.

      Japhet Ndabeni-Ncube, the executive mayor for Bulawayo confirmed the
deaths.

      "It really shocked us as council. People are hungry out there and it
has claimed lives.

      "We are now out in full force in the suburbs to try and see how we can
feed people. We have approached relief agencies to help us feed people and
curb an deaths due to hunger caused by the food shortages," he said.

      The council has approached the World Food Programme (WFP) to initiate
feeding schemes in and around the city with a special focus on children.

      "Already a programme is underway to feed children up to the age of
five years, while we look for other kinds of assistance. We cannot let
people die," he said.

      Sources said the figure could be higher as some malnutrition deaths
among AIDS victims were being listed under HIV/AIDS related deaths.

      — Staff Reporter

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FinGaz

      Top SA lawyer files Tsvangirai’s papers on Mugabe’s

      Chief Reporter
      7/3/03 3:49:28 AM (GMT +2)

      A HIGH profile lawyer from Cape Town, South Africa, Advocate Jeremy
John Gauntlett, arrived in the country on Tuesday and immediately filed an
urgent application in the High Court to compel its Registrar to set a date
to hear Movement for Democratic Change (MDC) leader Morgan Tsvangirai’s
challenge to President Robert Mugabe’s legitimacy.

      The application will likely be heard today in chambers by Justice Ben
Hlatshwayo. Brian Elliot of Gill, Godlonton and Gerrands will instruct
Gauntlett.

      Earlier attempts this year by Advocate Adrian de Bourbon to have the
matter set for hearing hit a snag after the Registrar of the High Court,
Jacob Manzunzu, ignored an order by Judge President, Paddington Garwe,
compelling him to do so.

      The election petition was filed over a year ago, but to date no
specific date has been set for the hearing.

      Manzunzu has since resigned from his post.

      In his application filed in the High Court to register as a legal
practitioner in Zimbabwe, the Zimbabwean-born Gauntlett, a barrister in
England and Wales said: "I have been retained by Morgan Tsvangirai, the
president of the Movement for Democratic Change, to represent him in
challenging the legality and validity of the presidential election held in
Zimbabwe during the period 9 to 11 March 2002 in which Tsvangirai stood as a
candidate."

      But the contents of the new application were not readily available
yesterday.

      In his last application Tsvangirai reiterated that voters were
entitled to know whether or not Mugabe won the election freely and fairly.

      He said the delay only served Mugabe’s interest and was detrimental to
justice.

      David Coltart, the MDC’s shadow minister of justice, is on record
saying the opposition party had agreed that the election petition would be
two-pronged.

      The first phase would be to deal with the legal aspect targeting the
Electoral Act and the second to provide the court with oral and physical
evidence.

      But Mugabe has remained adamant that he is the legitimate President of
Zimbabwe and would not be intimidated by Tsvangirai’s election petition.

      In fact, during his address to the nation marking 23 years of
independence, Mugabe said he would only talk to Tsvangirai if he recognised
him as the President of Zimbabwe and dropped the petition.

      Since Mugabe’s controversial re-election which saw commercial farmers
driven off their properties and the almost total collapse of a once vibrant
economy, the MDC, Zimbabwe Congress of Trade Unions (ZCTU) and the National
Constitutional Assembly (NCA) have embarked on peaceful demonstrations and
job stayaways.

      Recently, Tsvangirai was incarcerated for two weeks on allegations of
inciting the nation to turn against a legitimately elected head of state.

      Meanwhile, the case in which High Court Judge Justice Benjamin Paradza
is charged with obstruction of justice has been postponed for hearing to
September 15 following a request by Jonathan Samkange, Paradza’s lawyer.

      On Monday Samkange wrote to the Registrar of the Supreme Court: "Due
to the fact that Chief Justie Chidyausiku and Justice Cheda have recused
themselves from hearing the case, we suggest that you appoint one of the
retired judges."

      Paradza was arrested in his chambers at the High Court for allegedly
calling Justice Maphios Cheda in Bulawayo to ask him to handle an
application to have Russel Wayne Luschagne’s passport released by the court.

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FinGaz

      Diffident power lover


      7/3/03 1:35:14 AM (GMT +2)

      Some people just love power and everything that comes with it, but
they don’t want responsibility. Ask Didymus Mutasa why he thinks he is the
right person to be the country’s next vice-president, but not the next
president himself, he will fumble for anything like an answer.

      The simple answer is that he has never been responsible for anything
in his life so he is so diffident about his capabilities that he decides to
salve his love for power by deciding to hide in this sinecure called
vice-presidency! What a silly old-young man? And that he is a week or so
younger than some tired mandarins running (or is it walking?) this country
down, does not put him in any good stead to dream that this country still
owes him something.

      Is he so unashamed to think that his fellow geriatrics are not running
this country down enough that he make it public that he is itching to cancel
his forced retirement to take the task over from them?

      We wonder how long this Mafia gang would want to continue being a
burden to the country’s hapless taxpayer as they shamelessly continue to
draw fat pay cheques and mouth-watering feather-beddings in exchange for
nothing?

      Maybe until donkeys grow horns as Doctor Mzee once told the nation?
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FinGaz

      Traditional chiefs or Zanu PF agents?


      7/3/03 2:17:42 AM (GMT +2)

      Taking a leaf from Ian Smith’s note-book , ZANU PF manipulation of
chiefs is
      a striking, yet sad, illustration of how sometimes history repeats
itself.
      During the frightening years of the Rhodesian Front, the country’s
traditional leaders and the white regime became strange bedfellows. The
illegal regime did not need much effort towards this endeavour.

      They just saw to it that the chiefs were given salaries and the
Council of Chiefs was government-funded.

      They were also given radios so they could listen to and pass on lies
      that were peddled by the national broadcaster to their subjects.

      Appreciating the generosity of the rulers, the chiefs were reluctant
      to question the status quo. They became active participants in a
      plan to win the hearts and minds of the rural people.

      It was because of this reason that others such as Chief Jeremiah
Chakandiwana Chirau became ‘analysts’ overnight specialising in denouncing
‘terrorism’.
      Then, as now, the chiefs chose to side with people who were facing
      rising unpopularity due to the style of their rule.

      The Minister of information of that day, P.K.van der Byl, was latter
to remark that “chiefs were necessary for preventing the rural black people
from stepping out of line and getting subversive.”

      Today, Smith’s manipulation of tribal leaders has come full circle.
      Faced with the same fate of having to deal with a restive population,
the ruling party has decided to turn back the clock by revisiting a classic
case of how those who were expected to stand with the people decided to sell
out.

      Sensing imminent defeat in the last parliamentary election, the party
suddenly
      remembered the chiefs.

      By awarding them allowances, by subsequently installing electricity in
their homes, by periodically increasing their allowances without them having
lifted a finger, history began repeating itself.

      Again grateful of this generosity, chiefs have since helped in making
rural areas a no go area for the opposition.

      The rural areas have become places for political purges and
retribution, flashpoints for those considered not loyal to the ‘revolution’.
      In a recent bizarre case, Chief Chiweshe allegedly barred the burial
of a
      National Constitutional Assembly member from his home area.

      During this year’s annual meeting of the Zimbabwe Council of Chiefs
      held at Bulawayo’s opulent Rainbow Hotel, promises and demands were
made.
      The government promised to drill bore- holes and give them cars.
      Chiefs also requested phones.

      It was at the same meeting that Chief Serima of Gutu said, “VaMugabe
rambai muchitonga kusvikira madhongi ava nenyanga” to howls of misguided
approval.
      It is scary to imagine what such men will do when they get what was
      promised.

      It is not far fetched that they are sure to shut out the opposition
      from their areas regardless of the fact that the winds of change
      cannot be confined to the towns any longer.

      It is also heart-rending to note that we do not have a chief who is
prepared to distinguish himself the same way Chief Rekai Tangwena did in the
face of Smith’s tyranical rule.

      Not a single one is like Chief Mangwende who was deposed in 1960 for
‘insubordination”.

      Then, Chief Mangwende said: “If the government is honest about its
claims
      they should leave me on my father’s land. I cannot be bought.”

      Chief Mangwende did not allow any offers to distract him from issues
at hand.
      He stuck to his guns and his actions made a lasting significance to us
all. Unlike Chief Tangwena and Chief Mangwende, our chiefs today have
remained silent in the face of violence, torture and human rights abuses by
the government.

      In many instances, they have aided and abetted the regime in
committing more atrocities.

      Clemence Manyukwe is a journalism student.

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FinGaz

      International financiers tighten screws on Zim

      Staff Reporter
      7/3/03 2:05:35 AM (GMT +2)

      INTERNATIONAL financiers are taking increasing caution on Zimbabwe
after the country’s risk profile sunk to the bottom when the country was
suspended from the International Monetary Fund(IMF) early last month, The
Financial Gazette established.
      Banking and commodity broking sources dealing with offshore banks said
any Zimbabwean company borrowing offshore was now subject to punitive
interest rates by offshore banks, intent to rid themselves of any business
exposure to the troubled southern African country currently going through
its worst economic crisis.
      Sources said Zimbabwean companies borrowing from international banks
where being charged about five percent above the London Inter Bank Offering
Rate (Libor) — an international index which follows the world economic
condition, allowing international investors to match their cost of lending
to their cost of funds.
      Libor is an average of the interest rate on US dollar-denominated
deposits, also known as Eurodollars, traded between banks in London.
      The Eurodollar market is a major component of the international
market. London is the centre of the Euromarket in terms of volume.
      “Industry in Zimbabwe is not capable of paying such high interest
rates. The economic crisis has forced most foreign investors to pull out of
the country because it has become highly unsustainable,” Caleb Dengu,
project manager for the Netherlands-based Common Fund for Commodities, told
The Financial Gazette.
      A number of companies, including banking institutions which stitch up
off-shore credit lines from correspondent banks, are racing to relocate
their operations to neighbouring countries, particularly South Africa, to
circumvent the punitive rates being charged on Zimbabwean operations.
      A bank economist said Zimbabwe’s risk profile, bad since an economic
and political crisis ravaged the country in 2000, had sunk to the bottom
after the IMF, which has been bickering over suspending the country’s
membership for the past year, was finally stripped of its voting rights in
the Fund early last month.
      If the country fails to pay back the arrears to the IMF by December,
it will be totally suspended from the bretton woods institution, whose
sister, the World Bank, is also owed huge amounts by Zimbabwe over which it
has also suspended any form of co-operation with the country.
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FinGaz

      War-torn Cabinet must quit


      7/3/03 2:19:17 AM (GMT +2)

      IT’S almost a year now since the announcement of an ambitious
‘economic and political War Cabinet’ but it appears the generals have lost
and continue to lose battle after battle indicative of an inapt and
inadequate war-plan.
      The economy is in shambles but someone still shamefully masquerades as
an Economic Development minister.
      The battle on the economic front is the severest not because we are on
the verge of victory but alas, on the brink of ultimate nihilism.
      What is most painful is that we have among us Zimbabweans, of stature
and substance, to administer the economy in a much better way than a
recycled Economic Development minister and his lot.
      When President Robert Mugabe appointed his now fatigued “War Cabinet”
he did the unpardonable — selecting his generals only from ZANU PF.
      As head of state, Mugabe should look further than his party. ZANU PF
is not Zimbabwe and Zimbabwe is not ZANU PF.
      The moment he sidelined other enterprising citizens from taking up
ministerial posts, he inadvertently declared war against Zimbabweans not
within ZANU PF.
      It’s probably too little too late for the ruling party to now extend a
hand of national unity with the opposition Movement for Democratic Change
(MDC).
      To be blunt, that gesture has come a year too late.
      When Nkosana Moyo quit in a huff in 2001, Mugabe should have heeded
the wisdom behind his resignation that a country divided is a weak country
thus Nkosana Moyo failed to see a more feasible way forward than
establishing a government of national unity in Zimbabwe.
      The MDC is understandably reluctant to form a government of national
unity now because the party does not want to be associated with the historic
economic demise of a once great nation.
      On the other hand, accepting to form a government of national unity
with the ruling party could afford MDC the opportunity to emancipate our
country and save it from total collapse, if only ZANU PF will allow it —
indeed, if only the leopard changes its spots.
      Mugabe’s unforgivable sin still remains that of running the country as
if he is running ZANU PF where he is esteemed as a demi-god.
      Mugabe needs to be flexible, he needs to bend over and stick by people
of intellect and charisma such as former finance minister Simba Makoni.
      Although he might feel that the likes of Nkosana Moyo would continue
to snub him, he must not lose heart but learn from their criticisms.
      There are plenty more technocrats and persons of outstanding business
acumen who have no allegiance to ZANU PF but to the nation. These people can
deliver, given half the chance.
      Not only that, several countries and monetary bodies are more than
willing to unlock sufficient funds to bail out our country provided there is
a semblance of decency on the political front.
      As the country writhes under biting inflation of 300.1 percent, the
writing on the wall cannot be clearer, the ZANU PF Cabinet is war-torn and
must quit before Waterloo engulfs us.
      The deeply embedded political and economic malady that has seeped
rapidly through and destabilised every facet of this country must invoke a
nagging conscience in the men and women in Cabinet to break the silence on
the many grave wrongs of their party or be bold enough to jump ship and
contemplate life without Mugabe or ZANU PF.
      This article would be meaningless without suggesting that Jonathan
Moyo, for instance, should rather be Sport and Culture minister (if he is to
be a minister at all) where he would be more comfortable administering ZIFA,
theatre arts and the 75 percent local content.
      His current portfolio bears a very serious consequence of error such
that it should not be mandated to an accomplished blunderer.
      Joseph Made is cynically silent revealing that he cannot endure the
mind-boggling Third Chimurenga any day longer. Elliot Manyika has failed to
live up to the energetic antics of the late Border Gezi.
      Simon Muzenda longs to retreat. He thought he would do so in April but
it seems he has been urged to withstand the battlefront to give the
impression that all is well through to the rear guard.
      Patrick Chinamasa is busy architecturing what is probably the most
frivolous legislation since the draft constitution.
      Ignatius Chombo is struggling to blot the daylight out of the sunshine
city.
      Aeneas Chigwedere can no longer contain the disgruntlements in his
regiment. Ever since his confusing chit-chat on uniforms, he neither wants
to learn nor teach.
      As for Amos Midzi . . . let’s save it!
      We hang precariously on the verge of defeat and the “War Cabinet” is
to blame for the suffering of millions of Zimbabweans.
      As was expected, the Cabinet launched a scorched-earth war against its
own people knowing that the President will always protect them.
      This reminds me of Voltaire’s masterpiece Candide in which, after a
war, generals were court marshalled, then brought before the firing squad
for not having enough dead enemies to their credit.
      Could this be what the “War Cabinet” fears most?
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FinGaz

      Economic Viewpoint

      TENDAI MAKWAVARARA
      7/3/03 1:37:05 AM (GMT +2)

      MINIMUM wages linked to the Poverty Datum Line (PDL), were gazetted
through Statutory Instrument 307A of 2001. These wages were based on the
minimum wage policy of the 1980s, with minimal amendments.

      The minimum wages policy was based on a two-tier system, namely wages
were set for the agricultural and domestic sector, and a wage was set for
the industry and commerce sectors.

      National minimum wages in 2001 were gazetted to cushion workers from
the 70 percent increase in the price of fuel. These minimum wages had been
gazetted after the ZCTU organised a two-day stayaway which resulted in the
reconvening of the Tripartite Negotiating Forum, (TNF).

      The parties agreed on national minimum wages for agriculture and
industry and commerce based on the June 2001 PDLs of Z$4 000 and Z$8 900
respectively. In 2001, wages were at least 97 percent of the PDL.

      The private domestic service and the unclassified sectors were
excluded with their wages to be determined by the Tripartite Wages and
Salaries Advisory Board.

      In 2002 and 2003, real wages have been greatly eroded. Minimum wages
for the whole economy (excluding government) stood at 40 percent of the PDL
in January 2003, which stood at Z$40 681.36, while those for the
agricultural sector were 22 percent of the PDL, which was Z$19 821.83 in
January 2003.

      Inflation continues to soar, eroding the purchasing power of workers.
Economic destabilisation continues to drive businesses into the ground,
resulting in firm closures, downsizing, retrenchments, high unemployment and
increasing poverty levels. This goes against maintaining and improving the
welfare of the working populace.

      Given these problems in the economy, the TNF reconvened early this
year to begin negotiations and drafting possible solutions to the Zimbabwean
socio-economic crisis. The TNF subsequently came up with the Prices and
Incomes Stabilisation Protocol which was signed by the three parties on
January 30 2003.

      The Protocol adopted the concept of price management based on TNF
negotiations, as opposed to price controls, and negotiated national minimum
wages. The concept tried to reach a compromise between affordability and
viability of prices and hence its preference for a negotiated outcome.

      The Protocol also allowed the social partners to negotiate national
minimum wages based on the PDL. In addition, it set out obligations for the
three social partners and the TNF. Government was required under its
obligations to bring down the budget deficit to 11 30 percent of GDP,
inflation to 96 percent by end of 2003, ‘incentivise’ exporters and earners
of foreign exchange, implement an agreed public sector and parastatal reform
programme and increase disposable incomes through tax concessions. The
Protocol was to be applied until the end of June 2003 (for six months).

      In addition, the TNF came up with immediate measures to resuscitate
the economy, which were incorporated into the National Economic Revival
Programme (NERP) announced by the government in February 2003.

      The Kadoma Declaration was also tightened and presented for signing.
However, Labour refused to sign the document until after progress had been
made in implementing the Prices and Incomes Stabilisation Protocol.

      In February 2003, government unilaterally increased the price of fuel
by 100 percent. The ZCTU in particular complained against this unilateral
decision, arguing the workers were worse off following this decision.

      As a result, the parties agreed to incorporate into the agreed
national minimum wages the impact of the fuel price increase. The
recommended national minimum wages were as follows:

      lAgricultural workers, Z$23 000 based on the Food Poverty Line for a
family of five;



      lAgro-based industries, Z$41 000 based on the rural Poverty Datum Line
for a family of five;



      lIndustry and commercial workers, Z$47 000 based on the Urban Poverty
Datum Line for a family of five.

      Wages for domestic and unclassified sectors were again not included as
they were later determined by the Tripartite Wages and Salaries Advisory
Board. All these were based on January 2003 prices adjusted for the fuel
price increase.

      Before these figures were adopted in April 2003, the government again
unilaterally increased fuel prices by 300 percent. Irked by this disregard
for social partners, and the impact of such an increase on the standard of
living of workers, the ZCTU organised a three-day stayaway on April 23-25
2003 and demanded the reversal of the fuel price increase.

      The ZCTU vowed that it would not go back to the TNF until its demand
to reverse the fuel price hike was achieved.

      During the course of the stayaway, government and business met and
agreed to implement the above national minimum wages on provision that
prices would be deregulated. ZCTU rejected the announced minimum wages,
arguing that they should be updated on the basis of latest (March 2003)
prices.

      Another complication regarding the announced minimums is that the
government did not gazette them, but insisted that National Employment
Councils (NECs) were to negotiate and agree on their implementation.

      Realising the lack of a legal framework around these minimums, most
employers refused to implement them. In this regard, the announcement of the
national minimum wages in the context of the stayaway seemed to be a way to
divide the workers. A calculated hypothetical budget for a worker reveals
that a monthly wage of Z$47 000 as the minimum wage is enough for an
employee to only afford transport costs (to and from work) and five loaves
of bread per week! The Food Poverty Datum Line stood at Z$73 439 as at May
31 2003. This meant that the majority of NECs had failed to negotiate wages
linked to the PDL.

      Of the NECs that had not negotiated wages equal to or near the minimum
wages announced by government, many did not adjust wages to the Z$47 000. In
addition, the wage structure in Zimbabwe is skewed, with the gap widening
between the lowest paid workers and management employees.

      These inequities ought to be readdressed; it is not rational to
conclude that business cannot pay better wages when the wage graph continues
to be skewed unfairly.

      As the month of July begins, with many prices meant to be
decontrolled, and wage negotiations to begin outside the protocol, inflation
is surely set to rise. Increasing the wages of employees will not completely
resolve the issue of poverty alleviation of the working populace.

      There must be a serious move by the government to rein in inflation.
The value of the Zimbabwean dollar continues to decline — it dropped from
being worth 100 cents in 1990 to less than one cent (1990 prices) by the
beginning of this year, i.e what less than one cent would buy in 1990, is
what 100 cents buys at January 2003 prices!

      This increase in the standard of living ‘pushes’ workers to demand
more for cost of living adjustments. Unfortunately, the continuous demands
by workers for higher incomes can be inflationary and may become
unsustainable.

      Non-wage issues that affect the welfare of workers need to be
addressed. Reining in inflation will strengthen the purchasing power of
incomes and restore the necessary viability of business through investor
confidence.

      The supply side of the economy needs to be readdressed to promote the
supply of goods and services. The failure by the government to control
socio-economic activities is apparent through the existence of the black
market.

      The black market continues to grow with bank notes being the latest
commodity on the black market.

      lTendai Makwa-varara is an economist for the Zimbabwe Congress of
Trade Unions and a member of the Zimbabwe Economics Society.
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FinGaz


      . . . and now to the notebook


      7/3/03 1:34:18 AM (GMT +2)

      Hero worshipping
      Educated as they claim to be, and notwithstanding countless examples
before their own noses to see as proof that unless closely strait-jacketed,
all politicians behave in the same way. Zimbabweans still choose to remain
steeped in this primitive habit of hero-worshipping.

      Although we all now know too well to what extent hero-worshipping has
reduced a once promising nation, there are still some people who think that
their own heroes should still be worshipped and nothing less.

      The Great Uncle was once a really good guy, even by our own African
standards, and through our hero-worshipping culture, see what we have
changed him to.

      Instead of asking him what he thought he was doing, we composed
euphonious praise songs in his name, happily wore clothes emblazoned with
his handsome face, and nearly put this face on our currency!

      Church leaders did not want to criticise him even when they clearly
knew that what he was doing ran counter to the basic dictates of the Holy
Book.

      We all continued to praise him heaven high until only yesterday when
we suddenly realised that we could no longer travel abroad because we could
not get forex; when we started leaving our beautiful wives alone all-night
to queue for fuel because all our service stations had run dry and when
power cuts started interfering with our night-clubbing.

      But it was too late.

      In our raw anger, we decided that Morgan Tsvangirai should, pronto,
replace this Great Uncle who had suddenly turned into a skunk, but most of
us look like we are ready to start yet another praise singing competition
again.

      If Tsvangirai cannot be criticised now, if ever he gets to Munhumutapa
Building we should not pretend surprise if one morning we wake up to hear
that he has appointed his grandmother the Tradition and Culture Minister.
That’s how our present rulers run this country. If you see them attending
funerals in each other’s family, in most cases we should not be fooled to
believe that they know each other officially because some of the
relationships are personal.

      Some of them are drawn from members of extended families but because
they don’t share the same surname, we would be fooled to believe that they
are appointed on professional qualifications and solid credentials.

      Diffident power lover

      Some people just love power and everything that comes with it, but
they don’t want responsibility. Ask Didymus Mutasa why he thinks he is the
right person to be the country’s next vice-president, but not the next
president himself, he will fumble for anything like an answer.

      The simple answer is that he has never been responsible for anything
in his life so he is so diffident about his capabilities that he decides to
salve his love for power by deciding to hide in this sinecure called
vice-presidency! What a silly old-young man? And that he is a week or so
younger than some tired mandarins running (or is it walking?) this country
down, does not put him in any good stead to dream that this country still
owes him something.

      Is he so unashamed to think that his fellow geriatrics are not running
this country down enough that he make it public that he is itching to cancel
his forced retirement to take the task over from them?

      We wonder how long this Mafia gang would want to continue being a
burden to the country’s hapless taxpayer as they shamelessly continue to
draw fat pay cheques and mouth-watering feather-beddings in exchange for
nothing?

      Maybe until donkeys grow horns as Doctor Mzee once told the nation?

      ‘Journalists’

      Recently the Prime Minister of Zimbabwe announced that —after playing
God for so long — this month he would start tinkering with the law in order
to allow more broadcasters to come in.

      We don’t know what to say because we don’t know whether the mercurial
one meant half what he said. Moreso if it is announced by our own ZBC that
for years has been trying to convince us that the sky is earth and black is
white.

      Besides, any sensible Zimbo now knows too well that trusting the Prime
Minister is no wiser than entrusting one’s wallet with a pub whore. Let’s
wait and see.

      But still on this announcement by the PM, we are baffled why the
president of the National Association of Freelance Journalists, Joe
Kwaramba, did not issue a statement to praise the minister on his
intentions. We expected him to do that as has been grown to be expected of
his nebulous organisation.

      Is he still in the country? CZ wonders. Maybe he finally managed to
"escape" from Zimbabwe.

      Last year, the donors in Belgravia refused to buy his story that he
needed their assistance to flee the country because his life was in danger
because of his work as a journalist. He claimed that security agents were
trailing him because of the stories he was writing. Which stories? We
wonder. Maybe the bizarre press statements accepted only at Pockets Hill,
but issuing press statements is one thing and being a journalist is another.

      At this rate, even goats could soon refuse to be called goats, but
journalists!

      Even the donors should have been surprised that a person who is a
darling of the country’s one and only public broadcaster could be tailed by
boys at Chaminuka Building. Those guys are having a full plate to do that.

      By the way, it is the same Kwaramba who threw a party at the beginning
of this year to celebrate the departure of Geoff Nyarota from the Daily
News, saying it was good for members of his organisation — if ever the
organisation has any members at all. And we now wonder how many of the
putative members have so far benefited from Nyarota’s departure more than
six months down the line.

      Recently he was at it again, this time excoriating the Editors’ Forum
for excluding editors from the public media. Imagine Francis Mdlongwa,
Pikirai Deketeke, Sunsleey Chamunorwa, William Chikoto, Charles Ndlovu Iden
Wetherell, Steven Ndlovu and Chris Chivinge sitting around the same table to
discuss areas of common interest! Perhaps only over the Prime Minister’s
dead body.

      Still on journalists, CZ is worried by the behaviour of some of his
colleagues who, after a few free beers, choose to be a nuisance to every one
including their own grandmothers.

      One senior journalist at the Parade is good example. Recently, after
taking exceedingly large potations of this free beer, he decided to be a
real nuisance even to his own benefactors.

      The event was on HIV/AIDS, but in his hopelessly drunken state, he
started interjecting every speaker who wanted to contribute anything
meaningful with such things about "balance of payment", "forex", "IMF" and
even attempts by the organisers of the event to throw him out of the
function yielded nothing as in no time he had bounced back. That is why we
are called journalists!

      cznotebook@yahoo.co.uk
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FinGaz

      Cash Injection Inflationary


      7/3/03 3:37:38 AM (GMT +2)

      As a way to alleviate the cash shortage in the country, the Reserve
Bank of Zimbabwe(RBZ) is injecting new money into the banking system with at
least $4 billion of new $500 notes have been injected into the money market
during the past few days.
      An additional $8 billion will have been issued by mid-July while a
further $12 billion would be injected into the money market at the beginning
of August. This would bring to $24 billion the money that would have been
issued by the RBZ.

      While this measure by the RBZ is a desperate one, the RBZ has
unfortunately been forced to take to oil the country’s price mechanism, it
is, however, aware of the consequences of this action — inflation.

      In fact, Zimbabwe is currently experiencing stagflation — a
combination of declining economic activity and very high levels of
inflation.

      A simple working definition of inflation is a lot of money chasing few
goods.

      With the inflation rate at 300.1 percent and money supply growing at
more than 160 percent it means the stock of money is already too much when
compared to the physical stock of commodities, which are growing at negative
rates.

      Now what will a further injection of new money that is not backed by a
corresponding increase in output do to the economy?

      This is reminiscent to the cash injection by the RBZ in 1998 to save
banks that had suffered liquidity distress as a result of the CSC bill saga.
The bailing of financially distressed banks through the provision of
liquidity was achieved with significant inflation costs.

      According to monetarists, inflation is always caused by a monetary
expansion by the monetary authorities. Although some people may say this is
textbook economics with no practical relevance, this view on inflation is a
tested one and has been found to be very real and correct and therefore can
be used to explain our situation in Zimbabwe.

      Going forward, the RBZ needs to come up with an exhaustive list of the
causes of the shortages of cash and address these causes with a view to
finding a lasting solution, not this cash injection business as it only
worsens the situation as it is tantamount to putting out a fire by pouring
fuel.

      The causes of the cash shortages include :



        a.. Inflation


        b.. Speculation


        c.. Low interest rates


        d.. Loss of confidence


        e.. Externalisation of local currency


        f.. Infomalisation of the commodity market.


      The first thing that the central bank should address is the inflation
scourge. There is a lot of empirical evidence in economic literature that
suggests that in an environment of high inflation, real monetary balances
contract as high inflation usually results in a flight of domestic financial
assets into foreign financial assets or real assets.

      In other words, inflation is to blame for the shortage of local
currency because its erosion of the real value of money has made it
difficult to use the same stock of cash to buy goods and services due to the
increase in their prices.

      This means that more notes needed to be printed and coins minted to
accommodate the rise in the demand for cash emanating from the fall in the
value of money due to inflation.

      The low interest rate policy that was introduced by the RBZ in August
2000 designed to support the productive and export sectors of the economy
has had far-reaching negative consequences in the economy. Under interest
rate controls or financial repression, negative real interest rates result
as the nominal rates would be pegged below inflation while the resultant
expansionary monetary policy would result in an increase in inflation, as is
currently the case in Zimbabwe. As a result, the hope of increasing
investment by lowering interest rates in a bid to increase investment will
not succeed because the source of these investment funds (savings) will have
been discouraged. Investment funds come from savings and for savings to be
boosted interest rates must be increased otherwise it will not be profitable
for savers to deposit their money with financial institutions. This is the
major reason for shortage of cash in banks. Since interest rates are
essentially a price for credit, their controls results in a distortion on
the market, which leads to shortages in formal credit markets, and
overpricing in parallel markets. As a hedge against inflation people will
disinvest from the money market and invest in inflation-beating investment
destinations like equity, property and foreign currency markets and this is
speculation.

      Loss of confidence and informalisation of the commodity market. The
general shortage of basic commodities and the irruption of parallel markets
of nearly every commodity has worsened the cash shortage situation as people
hoard money in anticipation of an unexpected find of some "cheap" essential
commodity like cooking oil, sugar.

      Given that, one does not know when an opportunity may arise in the
form of a reasonably priced asset like property or foreign currency, hence
it is better to be always prepared for the rainy day.

      The cash shortage has a self-reinforcing effect as difficulty in
getting money at the bank results in people losing confidence with banks as
they know that they will have problems getting it back when they need it.

      Resultantly, it is not surprising to see people moving around with
large sums of money stashed in the boot of their cars. The decree by the
government against this practice has also worsened people’s lack of
confidence in the ability of the authorities to reverse the situation such
that even if RBZ injects cash into the money market people are likely to
take all the money to their homes and have mini banks there.

      This massive movement of cash from banks to homes to satisfy
transactions demand has resulted in a phenomenon known as financial
disintermediation.

      This has an effect of weakening monetary policy, as the monetary
authorities will not be able to know the exact stock of money in the economy
due to these leakages. The RBZ should address these issues as a way of
having a long lasting solution to the cash shortage problem.
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International Information Programs
Washington File

Washington File
02 July 2003

White House Briefing Transcript

(Excerpt only...)
 
Q: Two on Africa. Will President Bush increase his pressure to oust or
overthrow Mugabe in Zimbabwe? Before, he's just called for democracy,
which isn't going to happen while Mugabe is there.

MR. FLEISCHER: Well, the President has spoken out directly on this.
The bitterly contested election in Zimbabwe, the fraudulent election
in Zimbabwe, has led to great questions about the legitimacy of
President Mugabe. And this is a matter of considerable concern.

Q: But he hasn't actually called for his ouster or overthrow. He just
called for --

MR. FLEISCHER: We question the legitimacy of this election.

Q: Also on Mbeki in South Africa, is he helping more on the AIDS
situation now?

MR. FLEISCHER: Clearly, this is going to be an issue that is discussed
when the President goes to South Africa. This is an issue that's
important throughout the continent, including South Africa, and the
President looks forward to his discussions with President Mbeki.

(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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