The Zimbabwe Situation

Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

Dictatorships must forfeit African solidarity
Mad Dog Manheru in rabid attack
War vets throw weight behind BBC documentary
Get over the illusions
Zim proposes 49% black ownership for its mines
Tackle corruption, vote Zanu PF out
Chaos in the financial sector counter-productive
New absentee landlords slammed
'Too early to talk about economic recovery' - Kuruneri
Insurance sector on verge of collapse
Govt mortgages tobacco over debt
Have you heard, Cde President?
Govt sidelines trust, takes charge of water project
IMF team/MDC discuss Restart
Gata runs ZESA single-handedly
Another communist country changes course
Throw Out Visas, Says Diplomat
Zim, DRC Joint Commission in Two Day Meeting
Border Alters Modus Operandi As US Timber Market Falters
Trevor Ncube: Publisher, Mail & Guardian

Zim Independent Dictatorships must forfeit African solidarity By German president Johannes Rau I RECALL the important part played by Julius Nyerere in the North-South Commission alongside Willy Brandt. Both were convinced that overcoming the North-South divide was just as important as overcoming the East-West conflict. It is nearly 15 years now since the East-West conflict ended, heralding a new era that allowed our nation to regain its unity and people in eastern Germany to regain their freedom. In this new era we have clearly been on the winning side. The huge economic and social disparities between Africa and the industrialised countries of the North remain as striking as ever, however. Peace and a decent standard of living for people in many parts of Africa remain a dream. The gap between rich and poor countries is growing wider. To close this gap is, in my view, the major challenge facing us in the years ahead. The end of the East-West conflict opened up new prospects and opportunities for Africa. But the hopes of an African renaissance have so far not been fulfilled. The triumph of democracy in South Africa and Nigeria was followed with keen interest by people all over the world. Those are inspiring achievements that have given people new faith in the future. Nevertheless, we are bound to admit that no one can be truly satisfied with the current state of affairs in Africa. There are still millions of people living below the poverty line or whose lives have been blighted by civil wars and failing states. Africa's share of world trade is around 1% and its share of global investment even lower. There are still millions of Africans eking out a living on less than US$1 a day. And in some countries in southern Africa whose economies have been doing well, the dramatic spread of HIV/Aids is not only causing untold human suffering but also undermining much of the economic and social progress they have achieved in recent years. In practical terms, Germany's policies are designed to realise the goals agreed at the United Nations Millennium Summit of September 2000. We have therefore opted to concentrate our efforts on the following: * human rights and good governance; *strengthening the rule of law, democracy and civil society; *food security and the fight against poverty; *crisis prevention, peaceful conflict resolution and post-conflict rehabilitation; *activities to help groups threatened with economic or technological marginalisation; *the fight against HIV/Aids. The causes of the continent's problems are to be found both inside and outside Africa. In his book, The Burden of Memory, Wole Soyinka, the great Nigerian writer, sought to come to grips with these underlying causes. He reminds us of what a devastating impact colonialism and slavery had on Africa. But he points out, too, that brutal military regimes that rob people of their dignity and deny them a decent livelihood have been a feature of the post-colonial era. Germany was certainly not one of the classic colonial powers. Nevertheless, we, too, need to explore our colonial past and its wrongs in an honest and critical light. Africans and Europeans have a joint responsibility for our past and present. By the same token, it is only by harnessing our efforts and working together that we can build a better future. What can, what should be Germany's and Europe's contribution to this joint endeavour? There are five points to which I would like to draw attention: l Our cooperation needs a stronger political focus. It is becoming ever more important to defuse latent crises before they break out and, when they do erupt, to take joint action in response. Over recent years Africa have experienced more wars and armed conflicts than any other region in the world. Every war brings death, suffering and misery. It puts at risk everything that entire generations have worked to achieve. Germany is keen to help African countries develop their own conflict prevention and resolution capabilities. The best way forward is for African regional organisations and the African Union to assume greater responsibility than in the past for peace and security in Africa. Germany is already supporting the Kofi Annan International Peacekeeping Training Centre in Accra and a second such centre in Nairobi. * Given the immensity of the challenge, there is clearly a limit to what we can do on our own to make a real difference. We therefore closely dovetail our Africa policy and our development cooperation with other international efforts. Such activities will in future take place under European auspices. As Tanzania's cooperation with European partners has shown, by the way, coordinating the contributions of different donors is not only feasible and sensible, it also enhances their impact. * Europe and all OECD countries need to do more than in the past to open up their markets to Africa's agricultural products and to eliminate their own agricultural subsidies. We cannot call on our African partners to open up their markets and liberalise their economies and at the same time keep our own markets closed. Free access to the markets of OECD countries would mean for the developing countries an estimated US$100 billion in additional revenues. To grasp the true significance of this, we need only recall that the annual sum currently spent on development aid around the world is about US$50 billion. The heated debate over whether Africa stands to gain or to lose from globalisation remains academic as long as agricultural products from the continent are denied fair access to OECD markets. *Over 30 years ago, in 1970, the governments of virtually all industrialised countries made a voluntary commitment to allocate at least 0,7% of GNP to development assistance. The fact that we are still a long way from achieving the 0,7% target should not be taken to mean that people in the industrialised countries are reluctant to share their prosperity with others. Many people in Germany also pose critical questions. They ask, for example, why debt relief should be given to oil-exporting countries that surely ought to be rich? They query whether it makes sense to fund infrastructure projects that stand little chance of surviving the next armed conflict? They ask why we should support countries that spend more on arms than on schools and hospitals? People arguing in favour of development aid must be able to give convincing answers to such questions. * We Germans have decided to concentrate our support on those countries whose governments and political, corporate and community leaders are clearly focused on their country's welfare and building a better future for all its citizens. To determine whether this is the case, we have established a number of benchmarks, namely: *respect for human rights; *the rule of law and all that entails; * participation of citizens in the po-litical process; * a market economy framework that pays attention to social needs; * government policy and action that are geared to building a better future for everyone. If these criteria are met, there is a high probability that development cooperation will be effective. If these criteria are met, political leaders in Germany and Europe will be able to convince their publics that development cooperation is not just an ethical duty and an act of solidarity but also in their own best interest. People's readiness to help will be all the greater when they see our African partners also making determined efforts to tackle their problems. That is precisely the thinking behind what is known as the New Partnership for Africa's Development (Nepad). With this initiative the countries of Africa have acknowledged their own responsibility for combating poverty and exclusion. Nepad recognises that it is up to Africa's political leaders to put in place the conditions necessary for economic growth, sustainable development and combating poverty effectively. Peace, stability, good governance, democracy and the rule of law: Nepad offers a ground-breaking vision that charts a bright future for Africa. What is needed now, however, are practical steps to make that vision reality. The G8 countries have responded to the Nepad initiative with their own Africa Action Plan. Over the past two years Germany has made support for Nepad its funding priority. That demonstrates that African efforts receive both recognition and practical backing. If Africa can mobilise its own strengths and capabilities and take charge of its own destiny, that will send a powerful message to those who at present remain unconvinced that the dream of a buoyant, modern Africa will ever come true. Let me add a brief comment at this point. I can well understand that some African leaders find it hard to criticise neighbours and partners with whom they once fought side by side against colonialism, racism and oppression. But those who - like President Mugabe - have nothing but contempt for democratic and rule-of-law principles and who bring their countries disaster and ruin have in my view forfeited any claim to the solidarity of their neighbours. Misconceived solidarity takes a terrible toll on millions who find themselves the victims of new injustice that destroys their hopes, their livelihoods and even their lives. We in Germany will continue to do our utmost to ensure that people on our neighbouring continent can live in peace, prosperity and dignity. To help where help is needed - that is not just a moral imperative. A politically stable and economically prosperous Africa is also in our own interest, rightly understood. A real breakthrough in the fight against international terrorism can only be achieved, however, if we tackle not just its symptoms but also its root causes. Factors such as poverty, inequality and lack of hope as well as disregard for cultural values can all make people susceptible to the credos of religious or political fanatics who espouse violence in pursuit of their ends. The most reliable way to put a stop to their activities is to give people real confidence in a better future. Seen in this light, development policy is the best and surest investment we can make in the world's future. As we are all aware, achieving sustainable development in Africa still requires major obstacles to be overcome. That is also the tenor of the report on the social dimension of globalisation presented a few weeks ago by President Mkapa and President Halonen of Finland. In their introduction the authors of the report wrote: "We seek a process of globalisation with a strong social dimension based on universally shared values and respect for human rights and individual dignity; one that is fair, inclusive, democratically governed and provides opportunities and tangible benefits for all countries and people." That, I believe, is the right approach. Those who want to accomplish something for their fellow men and women must have confidence in what they are doing, and must be able to inspire the same confidence in others. That is why I advise people to keep on talking about the successes and advances that are happening in Africa. I am thinking of the progress democracy has been making since the early nineties, the growing sense that Africa can and should take charge of its own destiny and the increasing willingness of the international community to support Africa's efforts in this direction. Africa is no longer the forgotten continent. True progress, progress that brings people tangible benefits, is indeed possible. Let us work together to make this progress a reality. *This is the text of a speech given by Federal President Johannes Rau at the invita-tion of the Mwalimu Nyerere Foundation, Dar es Salaam, on Tuesday.

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Zim Independent Muckraker Mad Dog Manheru in rabid attack WAS it something we said? We are accustomed to Mad Dog Manheru's attacks on this newspaper but last Saturday's snarling and foaming in the Herald laid down new benchmarks - or is it teethmarks - in rabid journalism. It could of course have been a number of things that set him off. There was a report on lawyers slamming the use of the state media to attack members of the judiciary, Thabo Mbeki's statement that Zanu PF and the MDC were about to go into formal talks, an article on the murderous Obiang regime whose sovereignty Zimbabwe has been vigorously defending, and an opinion piece on the Media Commission's attempts to extract foreign exchange from locally-based foreign correspondents for their accreditation fees. But Mad Dog's vitriol, extending over a record 11 paragraphs, was chiefly directed at our editor, Iden Wetherell. His crime, it would seem - apart of course from being white - was to puncture the cherished illusion that US Assistant Secretary of State Walter Kansteiner was working in cahoots with the local independent media. There was no evidence for such a claim, Iden inconveniently suggested. Anybody challenging the state's inventive propaganda can expect this treatment. In particular, the suggestion in this column that Zimbabwe was not sheltering any American asylum-seekers because the US didn't force its citizens to become political and economic refugees appears to have provoked Manheru's wrath. Such "impudence is what would drive any worthy and self-respecting Zimbabwean mad", Mad Dog frothed. At least he didn't call it blasphemous! But we did get one useful admission in all this. "I am the politician Iden made, the patriotic anger that now burns incandescent," Manheru told Herald readers. "I use my scalding circumstantial pen to defend Zimbabwe, to defend her children, to defend her personality by scalding her white Rhodesian tormentors." The disordered personality behind this racist ranting is all too clear. But thankfully he doesn't speak for the majority of Zimbabweans who long ago saw his bootlicking and shallow opportunism for the mercenarism that it really is. Sunday Mail political editor Munyaradzi Huni wants to play holier-than-thou politics about Zimbabweans in Botswana. On Sunday he had a long story purporting to detail abuses suffered by Zimbabweans at the hands of "Botswana authorities". Among other abuses, said Huni, Zimbabweans are being "subjected to wanton torture and harassment by Botswana security forces", denied access to bank loans, and used as cheap labour. All this was part of a campaign by the Botswana government to "demonise the Zimbabwean government" for embarking on a land reform programme which Botswana allegedly views as "undemocratic and a sign of bad governance". That's strange. We thought the region, and indeed the whole of Africa, fully endorsed President Mugabe's "bold stance" on land reform. Evidently we have been misled. But anyway, as we have said before, if everything is OK back home why are those Zimbabweans subjected to abuse unwilling to return home? Why are we not being told their side of the story? What made them decide that it was better to suffer in a foreign country than be ill-treated by the same people who claim to have brought democracy and human rights to Zimbabwe. Huni claims his "investigations" revealed that "a number of legislators and ministers in Botswana helped fuel the hatred for Zimbabweans". He gave as an example Harare's failure to repay the US$6 million for fuel that Zimbabwe got in 2000. So why is Zimbabwe failing to pay back such a paltry sum? Perhaps as an African country Botswana is not expected to demand what is due to it because that does not show solidarity with an "African brother". But what Huni doesn't want to reveal to his readers is that he is engaged in a long propaganda war against President Festus Mogae because he was one of the few Sadc leaders to see through the thin veneer of lawlessness disguised as land reform. As he put it, the problem of Zimbabwe was not about land but a "crisis of governance". Mogae again refused to swallow the lie that Zimbabwe's suspension from the Commonwealth was all the work of an unrepentant "white Commonwealth". He refused to be part of the so-called Sadc statement condemning Zimbabwe's continued suspension. In fact the gripe with Botswana goes further than that. There was the noise about Botswana allowing the United States to set up military bases in that country. Despite spirited denials, the Zimbabwean government seems to harbour suspicions that there are such bases which the US wants to use to effect a regime change. Allegations about illegal immigrants and the West Bank fence have served to only worsen frosty relations. Unfortunately we are not always able to choose who our neighbours are. Muckraker wishes government would decide on when this land-grab thing will be over. There are those allocated land who want to get on with the business of farming and then there are the greedy Zanu PF chefs always fighting over who occupies which rich farm. At the weekend VP Joseph Msika warned those "war veterans" who allocated themselves land that they would be brought to book. "As the chairman of the land redistribution committee, I determine the policy we will follow in distributing land," said Msika. "We have plenty of farms that have not been allocated and no one has the mandate to dispossess someone of their allocated piece of land even if they are white." We would readily believe the VP were it not for his often intemperate and contradictory messages. He recently said whites were not people, news that is sweet music to psychopaths such as Manheru who believes that the mere fact of being white makes one naturally an enemy of Zimbabwe. On the other hand the Sunday Mail quoted Msika as saying the government "believed in fostering a multi-racial society, pointing out that Zimbabwe is for both blacks and whites". This news must have gone down badly in some official circles. Who for instance is Manheru speaking for? And why is he allowed to spread his poison through state-controlled media when government policy, according to Msika, is for a multiracial society? Msika's voice, it seems, is drowned out by others! Police will need to be more circumspect when dealing with overzealous reporters from the state media. The Herald reported on Saturday that a motorist had been arrested in connection with the death of five CAPS United players and fans travelling from Bulawayo last week. It appears Augustine Hwata and his editors have already tried and convicted the driver of the Norton-bound vehicle for the simple reason that he didn't die. While initial reports of the tragedy said the ill-fated vehicle from Bulawayo "collided" with a pillar on the Manyame River bridge, by Saturday a scapegoat had been located and there was gleeful rubbing of hands. CAPS United president Twine Phiri allegedly said "the arrest will at least show that our boys were not to blame for the cause of the accident. The involvement of the other car somewhat exonerates our players of having been involved in the accident alone and being drunk." So now there is somebody to blame we can safely "exonerate" the pillar on the bridge? And we didn't know there had been claims that the players were drunk. Why was that information withheld and who has since proved that they were not drunk? Phiri could not be bothered by these questions once it was revealed that the other driver didn't have a driver's licence. He was guilty as charged. "Now we want to see justice being done," declared Phiri, "and the justice should come now while the memories of losing the players and fans are still fresh in the minds of their families and friends. We appeal to the police to handle the matter very efficiently and effectively so that justice takes its proper course." We are used to that form of journalistic activism in political reporting in the state media. We did not expect this level of reckless incitement to punitive action where guilt had not been proved, especially in sport. The dangerously tendentious reporting is telling the police only one outcome would be acceptable. God help us! Meanwhile, the state's propaganda machine continues to mislead the public. It keeps repeating that the BBC "backtracked" on its claims about National Youth Service training, saying they could not be substantiated. In fact, what producer Hillary Anderson said was where claims could not be substantiated, they were not used in the Panorama documentary. Now that's not the same thing is it? But we did admire Herald columnist Sifelani Tsiko's loyalty in repeating official claims long after they had become redundant. He said of the so-called mercenaries being held at Chikurubi: "Zimbabwean authorities say the terrorists are mostly white." And that was on Wednesday after ZTV had proved the "authorities" wrong!. Some of you e-mailed last Friday to say our front-page picture of suspected mercenary Simon Mann was taken from the film Bloody Sunday. Indeed it was. Mann played an SAS officer in the film and was a technical advisor. In our column of March 5 we included Rex Mphisa among those fired from the Herald for working for VOA. In fact Rex was not among those accused of moonlighting for VOA. He was booted out for other reasons. Sorry for that. Rumours circulating that the Boeing 727 detained earlier this month at Harare airport will soon appear in Air Zimbabwe livery are entirely mischievous. We're sure the state had a good reason for detaining the plane even though it cannot immediately think of one! Finally, it would appear nobody, not even Zanu PF's closest allies, are safe from the current round-up of "mercenaries". Last Friday the Herald ran a front-page picture of Cuban doctors arriving at Harare airport. It was captioned "Some of the Cuban health professionals captured soon after their arrival".

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Zim Independent War vets throw weight behind BBC documentary Loughty Dube THE Zimbabwe Liberators Peace Initiative (ZLPI), a grouping of former freedom fighters, has thrown its weight behind the Panorama documentary screened by the BBC earlier this month on the country's youth militia camps. ZLPI president Max Mnkandla this week told the Zimbabwe Independent his organisation agreed with most of the details contained in the BBC documentary which was also screened in Zimbabwe this week. "We have interviewed and spoken to some of the youths who deserted these camps and what we have established is exactly what was highlighted in the BBC programme," Mnkandla said. The screening of the documentary by the BBC earlier this month angered local authorities who lashed out at the broadcaster and charged that the documentary contained false information aimed at tarnishing the image of Zimbabwe. Mnkandla said the ZLPI was disturbed by the course content at the youth militia camps and said the camps were designed as a recruitment base for the army and other state security institutions. "As a peace-building organisation we understand that some of their lessons include re-orientation in Zanu PF history, jogging, toyi-toying drills and long distance running and all these subjects fit well to prepare someone who will be joining any division of the armed forces," Mnkandla said. Last year a dozen youths who deserted the training camps told harrowing tales of events at the camps during a prayer session led by the Bulawayo Catholic Archbishop Pius Ncube. Mnkandla said the subjects taught at the camps were not related to any vocational education that would be put to good use by the youths after completing their so-called "vocational training". "The subjects taught at the Border Gezi institutions have nothing to do with building, farming, and motor mechanics, and the question we always ask is who is a better person to teach history between a trained school teacher and a war veteran instructor who cannot even write his own name?" Mnkandla said. He said Zanu PF has turned the National Youth Service into a military youth wing to terrorise opposition members and said the youths should stop using military uniforms while government should disband the youth camps.

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FinGaz COMMENT Get over the illusions 3/25/2004 7:23:07 AM (GMT +2) The euphoria touched off by what were then prospects for negotiations between Zimbabwe's two main political parties had since lapsed into scepticism and outright depression. This was after it became increasingly clear that both the ruling Zanu PF and the Movement for Democratic Change were not singing from the same song sheet insofar as the talks were concerned. Despite calls for the two parties to proceed with a modicum of sensitivity given the deteriorating situation and the heat under the suffering people's feet, they repeatedly put a damper on the talks. But now, the spotlight once again falls on Zimbabwe's political jigsaw puzzle, with the man at the sharp edge of this delicate and confusing arbitrage, President Thabo Mbeki of South Africa, having once again repeated that Zanu PF and the MDC are close to going back to the negotiating table. But Zimbabwe should not hold its breath. It is now time for a reality check. There is the real danger that just like before, when the country's disillusioned citizens were taken for a ride - their expectations could run ahead of what the major players in the stalled talks will and can deliver. Indeed expecting anything better from these talks or that they would even take off will be hopefulness bereft of any realism. Chances are they could be stillborn and, frankly speaking, we do not have any hopes for the largely sterile talks. We have our doubts - doubts not without foundation - that anything will come out of the talks if ever they eventually take off. Protracted efforts to bring the parties to the negotiating table after the talks were put in deep freeze have so far drawn a blank. Despite what Mbeki, whose credibility as regards the Zimbabwean crisis is, to all intents and purposes on the line may say, it is safe to conclude that both political parties do not want the talks. That is if the time it has taken to bring them to the negotiating table, despite the depressing situation in the country, is anything to go by. Forget their public posturing to the contrary. For all the fine words about the talks, the reality is that the political parties' deeply irresponsible entrenched positions cast a huge shadow over prospects for negotiations. In any case, these people have always and will always ignore the voice of reason and the influence of realities despite the consequences for the people they have disdainfully treated as children - only to be seen and never to be heard. They hear but do not listen and like cream, they have tended to stiffen with every whipping. They hate compromise. It is something alien to them. Their signature is a high degree of political intolerance which in all fairness should belong to history's septic tanks! As it turns out, they have not yet mustered the political will to push ahead with the talks. There is ill-feeling over their sincerity and they seem to have very little respect for each other. Hardly a conducive backdrop for sincere and successful negotiations. Quite bluntly, the ruling Zanu PF, under whose stewardship the country has been reduced to a basket case is, despite the heavy moral pressure it is under to seek a solution to the country's political crisis, not interested in the talks and is therefore the major stumbling block. It has since shown some clear signs of its nervousness about a negotiated settlement. Leading hawks in the party who do not have a political power base of their own and who obviously fear that they could be rendered irrelevant in a new political dispensation are on record as having categorically stated their opposition to the talks. As for the MDC, one cannot really tell - the answer can only be assumed. The painful truth is that the usually upheaval-loathing and compliant Zimbabweans, who are used to neither good words nor actions by the ruling clique of politicians, threw their weight behind the talks hoping that breaking the political impasse would, to a certain extent, help tackle the increasingly complex socio-economic situation which is now as confusing as a crossword puzzle with only half the clues and no black squares. Even though there doesn't seem to be any morality in Zimbabwean politics, the people wanted that rare breed of flexible and evolutionising politicians to sacrifice, if we might call it that, for the benefit of this great nation. They yearned for someone to make this country a much better place. A true Zimbabwean hero we can all be proud of. Sadly, this was a delusion of expectation because it was tantamount to asking the politicians to look and search into something they do not have - conscience!

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Mining Weekly Zim proposes 49% black ownership for its mines -------------------------------------------------------------------------- Zimbabwe has proposed a law requiring foreign mining companies to sell up to 49% of operations there to local blacks, South Africa's Implats said yesterday, but most of its mines would probably be exempt. Government officials in Harare were not immediately available to comment, but Reuters was given a copy of a document entitled 'Mines and Minerals Amendment Bill, 2004' in which the proposals are laid out. "This draft was an internal paper prepared as a basis for discussion with the mining industry," said Les Paton, executive director at Implats. Impala Platinum Holdings (Implats), the world's second-biggest platinum producer, has an 82% stake in Zimbabwe Platinum Mines. The draft says in order for private companies to hold a mining title, 49% of total shares must be held by 'historically-disadvantaged persons' within three years. The requirement is 25% for public firms. "We agree with the principle of indigenisation ... however, what is of concern to us is the quantum, the 49%, and the timing," Paton told Reuters. Zimplats, however, holds a special mining lease, which appears to exempt the company's current operations and first phases of expansion from the requirements in the draft legislation, he added. Implats has big plans to expand production in Zimbabwe, but it was unclear whether future expansions might be exempt also. Implats' platinum output from Zimbabwe is due to total around 80 000 oz in 2004, rising to 140 000 oz by 2006. The Mimosa joint venture, in which Implats and Australia's Aquarius Platinum each own half, would probably require 25% black ownership, Paton said. A plan is underway to sell a 15% stake in Mimosa to a local black group. The mine is producing 65 000 oz/y and an expansion could double the figure by 2007. Paton said Implats has requested a meeting with the mining minister, but no date has been set. Other mining firms that have operations in Zimbabwe include the world's biggest platinum company, Anglo American Platinum, which is planning to develop the Unki project with production of 58 000 oz of platinum a year. Ghana's Ashanti Goldfields, due to be acquired by AngloGold, owns the Freda-Rebecca gold-mine in Zimbabwe, which produced 98 255 oz in 2002. In South Africa, the government's empowerment programme is pressuring firms to increase black participation in the mainstream economy that is still largely controlled by minority whites a decade after the fall of apartheid. A leaked draft of a South African mining bill in 2002 that proposed firms sell half of local mines to blacks spurred a sell-off of South African mining shares. The final mining legislation, due to be passed in May, demands that 15% of local mining operations are held by black within five years and 26% after ten years. - Reuters.

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Zim Independent Letters Tackle corruption, vote Zanu PF out WHILE some Zimbabweans viewed the appointment of a minister to deal with corruption in Zimbabwe as a major development, the responsible minister made it very clear in a phone-in ZBC programme last week that members of the cabinet will not be affected by the anti-corruption operation. A week or so later, we are told that the court has gagged the press from revealing the identity of a high-ranking politician named as one of the beneficiaries of some illegal gold dealings. What does this tell us about the sincerity of the Mugabe regime in dealing with corruption? James Makamba, a member of the central committee, is languishing in custody as we speak. Philip Chiyangwa, chairperson of Zanu PF Mashonaland West province, was locked up for some weeks. Who then is this "high-ranking politician" involved in this scam? I can hear many whispering names. They may be right or wrong but the truth is that that person is a top Zanu PF official. It is obviously not an MDC official because if it had been one, police and the courts would have been very quick to ask for the disclosure of "a puppet of the white man" as the MDC leadership is labelled by Mugabe's bootlickers. If the Mugabe regime is serious in its pronouncements that it intends to deal with corruption, Mugabe should tackle all culprits. The mere fact that there have been efforts to conceal the identity of the person involved speaks volumes. Progressive Zimbabweans should read into this development and decide on the next course of action. March 2005 is not very far off. The only way to weed out corruption in Zimbabwe is to remove Zanu PF from power. Vote all the Zanu PF MPs out of office and Mugabe will automatically resign. How can he operate with 120 parliamentarians who are not Zanu PF, with only 30 of his own appointees? I appeal to all Zimbabweans to join hands and deal with corruption once and for all. Benjamin Chitate, Harare.

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Zim Independent Comment Chaos in the financial sector counter-productive ZIMBABWE'S financial services industry is in a state of panic as banks go to the wall, their executives flee abroad because they cannot trust the professionalism of the investigations process, and depositors lose a lifetime's savings. Since Reserve Bank governor Gideon Gono introduced his monetary policy in December all hell has broken loose in the banking sector - especially at those banks owned by indigenous entrepreneurs. Several indigenous players are now in trouble after their hitherto unassailable empires were forced to adhere to new RBZ regulations as well as increasing their liquidity cover. When he introduced the new policy Gono told the nation that a stable monetary policy could not be easily transmitted in an unstable financial system. These are not entirely new words as the International Monetary Fund (IMF) said almost the same thing when it released its last report on Zimbabwe. The Fund said the country's financial sector was in a shambles and needed serious surgery. "The economic crisis reflects to a large extent inappropriate economic policies," the IMF said last July. It itemised these as loose fiscal and monetary policies, the maintenance of a fixed exchange rate in an environment of rising inflation, and administrative controls. "Increased regulations and government intervention have driven economic activity underground and contributed to the chronic shortages of goods and foreign exchange," it said. Meanwhile, investor confidence has been eroded by concerns over political developments, weak governance and corruption, and problems related to the implementation of the government's fast-track land reform programme, the IMF added. Nothing has changed since then. Gono has pointed out that liquidity support is one of the factors behind money-supply growth and therefore inflation. He told bankers that persistent use of the liquidity support window suggested that the banking institution concerned was not making adequate efforts to address underlying challenges in their asset-liability management practice. While the rest of the economy was in crisis with unemployment reaching record levels of almost 80%, the banking sector had become accustomed to reaping billion-dollar profits. It had even begun to determine the salary levels of the private sector. Luxury vehicles became the hallmark toys of the new plutocrats. "History has yet to produce a turnaround case without pain and we should thus not expect a painless journey towards our vision of a healthy economy," Gono said. It now seems the financial sector is choking to death - thanks to the governor's policies. ENG Asset Management Company, Century Discount House, Intermarket Holdings, and Barbican Holdings have all been forced to shut their doors to the public, a move that has hurt genuine customers and investors. Pensioners and others on meagre savings have become the unwitting victims of the crackdown. Insiders say while it is noble for Gono to try and restore sanity to the financial services sector, he should not cause unnecessary panic and disorder by acting haphazardly - or allowing his officials to do so. Hardly a day passes without the public learning of this or that institution being shut down for liquidity problems and banks are scurrying for cover as their resources are not sufficient to meet customer demands as the public stampedes to withdraw funds. While all this is happening the nation has been hoodwinked into believing all is well as far as the country's economy is concerned. In fact, as the latest fuel queues show, the situation continues to deteriorate. Bankers say one of the most fundamental requirements for economic recovery for Zimbabwe lies in agricultural output, not only to ensure food supplies but also the supply of essential raw materials for the country's manufacturing sector. Ultimately, the successful turnaround of the economy will depend on a number of factors, most of which lie outside the monetary realm. Kingdom Financial Holdings chairman Richard Muirimi was quoted this week as saying: "The most important non-economic factor is political will by government to be integrated into the global world. We need to rebuild the confidence of all our productive-sector participants by stabilising the economic and political environment. It is necessary to improve the country's sovereign risk, which is essential to attract foreign direct investment. Political will enables the macro-economic policies that have been announced by the government to be implementable." Is anybody listening? The prospect of the Minister of Finance investing seven million rand in property development in Cape Town is hardly designed to instill confidence in foreign investors including Zimbabweans in the Diaspora. Why is he not investing in Zimbabwe, they will likely ask? What is needed here - and Gono should be the first to understand this - is a climate of predictability. Reform in the business and banking sectors needs to be even-handed, transparent and professional, not calculated to cause maximum havoc or become an instrument of politicians who are themselves hardly unblemished!

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Zim Independent New absentee landlords slammed Munyaradzi Wasosa ABSENTEE landowners, especially government officials, have been criticised for failing to fully utilise the land they acquired under the land reform exercise. Zimbabwe Farmers Union (ZFU) Vice President, Wilfanos Mashingaidze, made the criticism at a tobacco field day organised by the Zimbabwe Fertiliser Company (ZFC) in Chiweshe last Friday. The comments follow countrywide reports that many government officials and politicians are underutilising vast tracts of land they grabbed from white commercial farmers since 2000. "The land reform programme is being pulled back by absentee landlords," Mashingaidze said. "Those people like government ministers in the party, who have offices in town and live there, should employ managers to ensure full land usage," he said. Some small-scale tobacco farmers said they were not benefiting from government loans to finance their farming activities. A small-scale burley tobacco farmer in Chiweshe, Kahma Mukawu, who won the 2003 burley tobacco grower of the year award, said government was not providing funding to small-scale farmers. "The government is preferring to help large-scale farmers instead of uplifting us, yet we are doing well," he said. "The land reform programme in my area was carried out by corrupt officials, as a result we did not get (much) land." Agribank loans to farmers fall under three categories. For communal farmers, a loan of up to $5 million is granted subject to a letter from the district administrator as proof that the farmer is indeed the owner of a piece of land and that the farming venture is viable. Farmers who fall under the A1 model can get loans of up to $10 million, while A2 "key" farmers can access loans of up to $30 million. Government loans attract 30% annual interest, while an Agribank commercial loan attracts a prohibitive 92% annual interest. Despite the introduction of government-supported agrobills, the agricultural finance system continues to marginalise small-scale farmers. Large-scale farmers use their implements and machinery as collateral security for loans, and banks can repossess them if farmers default in debt servicing. Communal farmers, most of whom do not own essential implements like tractors, are thus unable to access these loans. One small-scale farmer at the field day criticised the local MP for Mazowe East, Chen Chimutengwende, for neglecting his constituency. "We last saw him in 2000 during the elections. If election was all he was after, next time we will not vote for him," said the farmer.

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Zim Independent 'Too early to talk about economic recovery' - Kuruneri Dumisai Muleya FINANCE minister Chris Kuruneri says it is too early to draw conclusions about economic recovery and the impact of the monetary policy measures being implemented. Kuruneri said it would take time before it could be said what the effect of government's economic recovery efforts have been. He said there was need for more cooperation among stakeholders and a greater national resolve to pull Zimbabwe out of the economic morass. "We are implementing a monetary policy to address issues like pricing - as you know inflation is number one enemy - and indications so far, I want to underline that, are that there has been some positive impact," Kuruneri told the Zimbabwe Independent in an interview. "But it's too early to make any conclusions and confirm the sustainability of that. We however believe it can be sustainable if there is greater resolve." Kuruneri said people should be open-minded in dealing with Zimbabwe's multi-faceted problems. He said he was prepared to listen to anyone with sound ideas. Last Friday Kuruneri met the visiting International Monetary Fund (IMF) delegation to exchange notes on economic issues. He said the Bretton Woods team voiced concern about Zimbabwe's macro-economic fundamentals, including inflation, which he described as "the highest in the world". "The IMF is here for its Article IV annual meeting to consult with us in terms of our membership of the fund. They are not here to give us money," he said. "It is in our interest to engage them and try to benefit from their wider experiences as they have dealt with many economies globally." Zimbabwe, Kuruneri said, needed balance-of-payments support from the IMF because its lines of credit have dried up and foreign currency shortages were serious. "We need ways to make or get foreign currency inflows. We have been putting resources into productive and export sectors to generate the foreign currency," he said. "We have the resources and if they are properly harnessed we can be able to generate it. We now have the land and although we are still correcting some mistakes made during the land reform process, agriculture can be our salvation." Kuruneri claimed that if Zimbabwe put 200 000 hectares under summer and winter maize it could produce 2,4 million tonnes. "This is more than our annual national consumption of 2 million tonnes and we can have a surplus for sale," he said. "During our peak we used to produce 237 million kg of tobacco on 120 000 hectares. This can still be done if we utilise the infrastructure that may still be there and needs only rehabilitation." He further claimed Zimbabwe was losing 650 cubic metres of water a minute into the Indian Ocean through the Zambezi River and that this was enough to irrigate a million hectares of tobacco annually and earn Zimbabwe US$5 billion. "If you then factor in things like soyabeans, cotton, paprika, and several horticultural products, as well as manufacturing, mining and tourism it is not inconceivable for us to raise between US$8 billion and US$9 billion annually," he said. "But all this requires greater resolve." Kuruneri said he would complement the monetary policy by dealing with fiscal policy issues vigorously. He said he would not tolerate unbudgeted expenditure for consumption under any conditions unless it was for "national disasters and other emergencies". However, he proved less forthcoming when asked about problems such as government misrule, incompetence, corruption and lawlessness and their impact on the economy, saying: "I don't deal with political issues."

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Zim Independent Insurance sector on verge of collapse Dumisani Muleya A NUMBER of insurance companies are facing collapse or forced mergers following a recent dramatic increase in paid-up share capital requirements. Companies have been given a March 31 deadline to register under the new conditions prescribed by the Commissioner of Insurance. Under the new requirements, re-insurance companies now need $2 billion in paid-up share capital, short-term insurance companies $800 million, long-term firms $800 million, funeral assurance $750 million, insurance brokers $250 million and multiple agents $150 million. These new capital regulations are very high compared to the few millions that were needed by insurance companies - short and long-term firms including mutual societies - in the past to operate. Documents to hand say the new regulations were designed to ensure the security of policyholders and protect the broader financial system from bogus operators. "The paid-up share capital should not include working capital injected as administrative expenses in setting up the project," the documents say. "The investor shall produce audited accounts for the previous financial year or a bank statement showing proof of capital." The companies will also pay new application, registration and renewal fees for licences. The licences will have a lifespan of between two and three years. Insurance brokers and multiple agents would be compelled to open up a trust account where all the premiums would be kept before passing them on to the relevant insurer. This account would be monitored by the Commissioner of Insurance from time to time. "Brokers and multiple agents are to submit name of independent bank and provide reconciliation statements or cash-in cash-out report on a monthly basis," the documents say. "More emphasis is placed on the security to policyholders and hence the requirement for professional indemnity cover and insurance/bank guarantees and trust accounts (to protect) policyholders." Insurance brokers who are already trading need indemnity cover or bank guarantee of $100 million or 50% of net brokerage income, while multiple agents need $20 million or 50% of net brokerage income. Insurance companies are also required to meet stipulated requirements on the margin of solvency. Non-life assurance companies would be considered as having a sufficient margin of solvency if the total value of their assets in respect of such business exceed the amount of their liabilities by $200 million or 25% of the net premium income of the preceding year. With regard to life assurance business, firms would be considered as having a sufficient margin of solvency if the total value of their assets exceeds the amount of their liabilities under unmatured life policies by $200 million. Insurance companies are currently in the same situation as banks with regard to capital adequacy issue. Commercial banks now need $10 billion in capital compared to $500 million last year. Merchant banks and finance houses require $7,5 billion, up from $300 million. Building societies now need $7,5 billion compared to $300 million, while discount houses require $5 billion, an increase from $200 million. As a result some banks face the prospect of either closing down or merging.

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Zim Independent Govt mortgages tobacco over debt Shakeman Mugari IN a desperate bid to pay off its US$273 million debt to the International Monetary Fund (IMF) the government has mortgaged this year's tobacco crop to a tobacco marketing company, Mashonaland Tobacco Company (MTC). Sources said this week the government has made a forward sale of 35 million kg of tobacco worth US$86 million, more than half this year's expected yield. Between 45 million and 60 million kg is expected this year. The US$86 million, sources said, would be used as part payment of government's mounting debt to the IMF. Agriculture minister Joseph Made is understood to have signed the deal on behalf of the government. Also present at the series of meetings that culminated in the deal were officials from the Ministry of Finance and the Reserve Bank of Zimbabwe (RBZ). Contacted yesterday, Made would neither confirm nor deny the deal. He switched off his mobile phone as soon as the Zimbabwe Independent put the question to him. The Independent heard this week that the arrangement also allows MTC to purchase tobacco directly from farmers. Highly-placed sources say the government and the MTC signed the sale agreement on March 10 and finalised the logistics at a meeting held this week. MTC sales and administration director Rob Hacker could not confirm the transaction but said the company had been issued with a "special licence" two weeks ago. "We have been awarded a special licence to purchase tobacco directly from farmers. Unlike other licence holders, MTC does not need to have supported the farmers in order to buy from them," said Hacker. Asked for details of the deal and what it entailed, Hacker said his hands were tied and he would rather wait for a statement from the Tobacco Industry Marketing Board (TIMB) before commenting. "Those figures (US$86 million) are substantial," he said. "We have an arrangement with government but surely we would not want to buy all that tobacco. It's unfair to other merchants. We would rather have the TIMB comment first." He however confirmed that talks between the company and government over "some arrangements" had been going on for some time. But he could not say whether the deal represented a mortgage on the national tobacco crop for this year. Experts in the industry say the deal means government has already ensured that MTC becomes the biggest buyer of tobacco this year. TIMB general manager Stanley Mutepfa was evasive. "We will be issuing a statement on that today (yesterday) or Friday," he said. "That statement will explain the issue better. Phone me then," said Mutepfa. Analysts see this as part of government's attempt to entice the IMF to give the country financial support. Zimbabwe urgently needs balance-of-payments support from the IMF. The IMF team is in the country for annual consultations. But analysts are sceptical about it yielding much due to government's poor governance record. Economist John Robertson said the system of forward purchase has been used in Brazil but it hinges on guarantees of quality and the track record of both buyer and seller. "The forward sale will only bring in money sooner but it will not change the debt situation," he said. "That situation is likely to be the same." The figure of US$86 million for 35 million kg was quite a "brave" figure to attach, he said, because it was based on the assumption that the quality of Zimbabwe's tobacco was going to be high enough to fetch US$2,39 a kg. "Judging by the quality this year it is highly unlikely they will get that amount," Robertson said. Last year tobacco sold for an average US$2,30 a kg.

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FinGaz Have you heard, Cde President? 3/25/2004 7:21:25 AM (GMT +2) EDITOR - So President Robert Mugabe will deal with corrupt people in his government no matter who they are? Hmmm . . . very, very interesting. Say, has anyone whispered to him about the still-unresolved National Oil Company of Zimbabwe saga, or the Grain Marketing Board, or the Zimbabwe Electricity Supply Authority, or Air Zimbabwe, or the National Social Security Authority? Has anybody mentioned to him the ministers' wives who were buying the United States dollar at Z$824 and selling it at Z$6 000 last year, or a certain fitness trainer who took foreign currency from Zimbos desperate to go to the United Kingdom, or a certain army general's wife who took over a white farm, sold the proceeds to a British company and pocketed the foreign currency? Has anybody told him about the junior minister who sold his South African mansion and forgot to declare the foreign currency? And what about the boxing promoter who had a tuckshop in London? Or the musicians who go on tours overseas and in the region but never declare their foreign currency? Why victimise journalists only? I think I'll shut up . . . Chimedzanemburungwe,

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Zim Independent Govt sidelines trust, takes charge of water project Loughty Dube THE government has taken full responsibility for the Matabeleland Zambezi Water Project (MZWP) sidelining the trust that has been running the affairs of the project, it emerged this week. But analysts quickly dismissed the move as a political gimmick ahead of the 2005 parliamentary election. Infrastructure Development minister, Joyce Mujuru, last week told Zanu PF and traditional leaders in Lupane that the government had taken full responsibility for the ambitious programme that is now expected to cost $30 billion to complete. A by-election is pending in Lupane where Zanu PF and the MDC are expected to lock horns in a battle to fill the seat left vacant by the death of the MDC's David Mpala while parliamentary elections are due in all constituencies in March next year. Mujuru told the leaders that the government would inject $2,5 billion seed money into the project as a matter of urgency as it did not want to wait for external funding. However, when contacted for comment, Mujuru said she was on leave. "I shall not comment on any business matters as I am on leave. I am not feeling well," she said before switching off her mobile phone. Matabeleland Zambezi Water Trust chairman, Dumiso Dabengwa, said he was not aware of the decision. He said he does not comment on issues raised by Mujuru. "At the moment I am not clear on this matter but besides that I do not comment on matters raised by the minister," said Dabengwa. The MZWP involves the construction of the Gwayi-Shangani dam and a 450-kilometre pipeline from the Zambezi River to bring water to Bulawayo and surrounding areas.

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Zim Independent IMF team/MDC discuss Restart Munyaradzi Wasosa THE International Monetary Fund (IMF) delegation currently in the country this week held a meeting with the Movement for Democratic Change (MDC) to discuss among other issues, the opposition's economic revival blueprint - the Reconstruction, Stabilisation, Recovery and Transformation (Restart) programme. The MDC's secretary for economic affairs Tendai Biti confirmed that they held a two-hour meeting with the IMF delegation on Tuesday night. "We met the IMF people and presented to them the Restart programme which they did not criticise," he said. Biti said his party's economic revival policy was not a neo-liberal document in which an MDC government would concentrate on balancing figures. "It is rather a people-driven agenda that will address the issues of poverty, ownership and inequalities in Zimbabwe." The IMF team, led by Doris Ross, asked the opposition party to give its assessment of Zimbabwe's economic situation. "Our party's position is that the economy is in a serious structural crisis which needs to be corrected by people with the interests of the country at heart," Biti said. The country has endured six years of negative growth. Only about 8% of the total population are in full formal employment with more than 70% living below the poverty datum line. Savings are less than 4% of GDP and inflation is hovering around 600%.

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FinGaz Gata runs ZESA single-handedly 3/25/2004 7:32:52 AM (GMT +2) THE Minister of Energy and Power Development, July Moyo, will soon appoint a new board of directors to run the affairs of the Zimbabwe Electricity Supply Authority (ZESA), which has been operating without one for almost a year. The only remnant of the old board, executive chairman Sidney Gata, is running the affairs of ZESA, which is being transformed into a holding company with at least five subsidiaries. Gata is doubling as both the de-facto chief executive and chairman of the power utility, a situation which has raised questions about serious corporate governance breaches. "We are working on the finer details of the appointment and the board will be in place before June, but I cannot give you the exact date," said Moyo in his terse response to inquiries from this paper. The ZESA board, which had been appointed in 2002 to oversee the privatisation of the parastatal and the speedy implementation of the rural electrification programme, was sacked in 2003. Eyebrows have, however, been raised on the ability of Gata to run the affairs of the strategic parastatal without the assistance of a board. Confederation of Zimbabwe Industries (CZI) president Anthony Mandiwanza told The Financial Gazette recently that the lack of a board at ZESA was a sign of lack of corporate governance. The CZI boss scoffed at what he termed "pathetic one-man efforts to run a strategic parastatal" to the detriment of the economy. "Developments at ZESA are very worrisome. How can a strategic institution such as ZESA be run by an individual? At the moment, industry is having problems with increases in tariffs and meeting electricity bill payments, but there is nobody to communicate with," he said. It has been reported that the permanent secretary in the Energy Ministry is now approving ZESA accounts in the absence of a board. The Comptroller and Auditor-General, Mildred Chiri, said it was difficult to believe the integrity of the accounts. "If the structures are not in place, then there is no transparency. Should we believe the integrity of those accounts?" she asked. "What ever happens to the finances of such parastatals without boards like ZESA is left to anyone's speculation, but efficiency is certainly compromised." - Staff Reporter

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FinGaz Another communist country changes course 3/25/2004 7:23:59 AM (GMT +2) China, one of the world's few remaining communist countries, has amended its constitution to provide protection to property owners. The importance of this major change cannot be over-emphasised because it goes right to the heart of communist beliefs. The most basic pillar holding up the entire structure of the philosophy is that the state should own all the factors of production. But from now, individuals will not only be able to claim ownership of economic assets; they will also have their rights to that property protected by the Chinese constitution. The amendments on private property were the first since China's 1949 communist revolution. They were put to the 2 904-member National People's Congress, which held its 10-day annual meeting in the Great Hall of the People on Beijing's Tiananmen Square. A staggering majority passed them on Sunday March 14 2004 - 2 863 voted in favour, 10 against and 17 abstained. If we were to ask a basic question - that is, is China still a communist country? - the precise technical answer would have to be "no", because the basic definition of communism no longer applies. The revised constitution might be said to have brought individualism back and relegated collectivist thinking to a much lower order, at which level this central-planning concept will probably not receive enough official backing to keep it alive for long. Perhaps the Chinese government will hold onto enough of the other levers of power to make the communist label seem still to be appropriate. However, this will be mainly to keep the country's vast population under control. But in essence, the recognition of the need for property rights is an acceptance of the need to empower people and to effectively empower the whole population. The real changes started quietly after 1978 when Deng Xiaoping introduced market-related reforms and brgan to decentralise the government's economic controls. Households and villages were given responsibility for improving agricultural output in place of the old collectivised farming schemes and in the factories, party officials were displaced and plant managers were given authority to carry out their responsibilities without political supervision. The changed approach gave rise to thousands of new small-scale manufacturing enterprises and service-sector companies and opened the economy to huge inflows of investment capital. So the revolution started some time back with these changes, but it soon gathered momentum with the formation of enterprise zones that attracted massive levels of investment. China's constitution was amended in 1999 to give recognition to the importance of private businesses and soon millions of Chinese were able to acquire their own companies and to trade shares on the country's two stock exchanges. These measures very effectively transformed China into a rapidly developing country and one of the most successful exporting nations on earth. By 2003, it became the second biggest economy after the United States and its exports had reached US$1 billion a day. By contrast, Zimbabwe's exports reach little more than US$1 billion a year. Even though China's successes were already extremely impressive, the start of this latest process of empowering the people by giving them formal individual property rights might soon be seen to be the start of the real revolution. This is because, quite simply, individual property rights unlock individual initiative. Protected ownership rights make everybody try harder. When a whole nation is inspired to channel its inventiveness, resourcefulness and creative abilities into better levels of performance by the certain knowledge that the state will not dispossess the owners of their hard-won earnings, remarkable levels of success are almost automatic. This simple but powerful fact is all that separates the rich capitalist countries from the poor socialist or communist states. Of course, die-hard communist fundamentalists would say that the population delivering this vigorous response was succumbing to the profit motive. In their vocabulary, there is no word that is more laden with invective or more likely to bring forth a response of disgust than the word profit. They consider the quest for profit to be giving in to excessively base instincts and that the mere inclusion of the word in an argument proves their point. Their intellectual ammunition comes directly from Karl Marx. In his theory of surplus value, Marx described profits as money that was owned by the workers, but stolen from them by employers, and his promise that a communist government would recover this stolen wealth and return it to the workers was the most powerful of all the promises in Marxism. On the strength of this promise, a large proportion of the world's population was drawn into a developmental cul-de-sac. China's population has become one of the last to make the decision to reverse out of it properly and move onto the road to genuine prosperity. By 2000, the vigorous supply response that followed had quadrupled industrial output, and by 2003, after further relaxations of controls, its 1,3 billion people were enjoying a purchasing power-based gross domestic product per head equivalent to US$5 000, which is more than 10 times the gross domestic product per head in Zimbabwe. With this new step to formally recognise and protect property rights, China's development is certain to become broader and deeper, and the change might soon be recognised to be the most important of all. With the USSR having made similar decisions some time ago and the eager adoption of market economic principles by every one of its former satellite states, very few countries are now left behind in that philosophical trap. North Korea, Myanmar, Cuba, Vietnam and Zimbabwe make up almost the whole list now. And what an unhappy bunch we are. If we look at the basics of what has happened in Zimbabwe in the last few years, in just about every respect we have been moving in the opposite direction to that chosen by China. Privately-owned land has been nationalised, ownership rights have been deliberately eroded away by constitutional amendments and investment flows have been arrested by the growing uncertainty. As controls on interest rates, exchange rates and access to foreign currency have been tightened, every facet of productive activity has come under more direct government control. Even labour relations have become more deeply influenced by the state. Exporters have to surrender one-quarter of their export earnings for less than 20 percent of their value and the need to qualify to bid for foreign exchange at our new foreign currency auctions has kept the strength of the Zimbabwe dollar high enough to destroy exporters' ability to compete. When the most populous country in the world is abandoning controls, embracing market forces and rebuilding property rights and in the process, generating the most rapid growth rate recorded in recent years, why would Zimbabwe choose to move against the tide? All the evidence suggests that the controls are for the sake of control. Rights of occupation have displaced ownership rights, not to empower the masses, but to disempower those who might dare to challenge questionable decisions. The measures are not being generated to create wealth, but to control who will be allowed to generate wealth. It is as simple and corrupt as that. *.. John Robertson is a past president of the Zimbabwe Economics Society.

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Throw Out Visas, Says Diplomat

Zimbabwe Independent (Harare)

March 26, 2004
Posted to the web March 26, 2004

Ngoni Chanakira

AFRICA must seriously consider throwing out visa requirements for its nationals to be able to compete effectively with its international counterparts, says a senior official from the Africa Capacity Building Foundation (ACBF).

The ACBF, an arm of the World Bank, is charged with attracting international investors to Africa as well as ensuring that money borrowed by the continent is used wisely.

The main objective of ACBF however is to build sustainable economic policy analysis and development management capacity for growth, poverty reduction and good governance in Africa.

The diplomat made the comments in Harare after a one-day meeting with politicians and business executives at a time when Zimbabwe is facing hyperinflation, unemployment, and soaring debts.

Last year Alhaji Bamanga Tukur, head of the African Business Roundtable, expressed the same sentiments when he visited Harare.

Bamanga, who is based in Nigeria, also met with local business leaders during a one-day stay in Harare.

Bamanga promised to formally present his findings to President Robert Mugabe.

The ACBF official said government, civil society, business and other stakeholders should ensure that all barriers that impede the free movement of goods, and services and persons were dismantled.

"We must just get rid of these visa requirements," he said.

He said it was worrying to discover that Africa still insisted on executives applying for visas when travelling.

"Look at my passport. I have a visa for Zimbabwe, South Africa, Kenya and Mozambique. In fact the list is endless. However I only have one visa for Europe and one for the United States of America, which are far more developed than Africa. Seriously if we are trying to attract investment we should allow our citizens to move freely within the region and sample opportunities."

He said it was disturbing to see Zimbabwe go through such a bad patch both economically and socially.

"Zimbabwe used to be the jewel of Africa and we had so much hope for you," the official said. "It is however sad to see the country go down the drain like this. Look at your infrastructure, it's crumbling. Look at the street kids all over the capital. Look at the litter. Where are the businessmen? What are they doing? Are they happy about the way things are going? This is very sad."

He said the problem with Africans in general and Zimbabweans in particular was that there was this sense of "collective responsibility" when dealing with problems even when this did not help either politically or economically.

The official said Africa had decided that Nepad was its development theme and what remained was a well-focused political will to see it through.

"This will depend on the committed leadership of both the public and private sectors in Africa," he said. "If there is any recurring unison lately on Africa's entrepreneurial future, it is on the need to fully engage the private sector in Africa towards continental development".

The ACBF official said from the huge volumes of research papers and conference resolutions, expert recommendations in the international forum, policy pronouncements in boardrooms, a consensus had been reached that Africa's economic well-being into the millennium rested essentially with its private sector.

"So, if words are to be the day's catch, the private sector in Africa should have long been the visible vanguard of our commercial life," he said. "The truth however is that indigenous African private enterprise is as weak as the African economy itself. It exhibits the same shortfalls - it is weak, fragmented, isolated, peripheral, inadequate, and fragile. In a world of major advances in technology and economic progress, Africa appears a barely tolerated drop in a vast ocean of global opportunities."

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Zim, DRC Joint Commission in Two Day Meeting

The Herald (Harare)
March 27, 2004
Posted to the web March 26, 2004
Itayi Musengeyi
Lubumbashi
THE 5th Zimbabwe-Democratic Republic of Congo (DRC) Joint Commission Meeting was expected to open here last night, with discussions expected to centre mainly on trade issues.
The two day meeting is expected to cover issues of trade, energy, mining, health, agriculture, tourism, immigration, transport and communication, free movement between the two countries, youth exchange programmes and information and broadcasting.

The Minister of Information and Publicity, Professor Jonathan Moyo, is leading the Zimbabwean delegation, which is made up of the Minister of Home Affairs Cde Kembo Mohadi, Minister of Youth Development, Gender and Employment Creation Cde Ambrose Mutinhiri, Minister of Energy and Power Development Cde July Moyo, the Deputy Minister of Finance Cde David Chapfika, the Deputy Minister of Mining Development Cde Jason Machaya, the Deputy Minister of Transport and Communications Cde Andrew Langa, Deputy Minister of Industry and International Trade Cde Kenneth Manyonda and the Deputy Minister of Small and Medium Enterprises Cde Keneth Muswekuziva.
Speaking on arrival, Prof Moyo said he hoped the discussions would be fruitful.
The Zimbabwe's Ambassador to DRC Cde Mark Marongwe said the discussions would largely focus on trade issues in line with a memorandum of understanding signed between Zimbabwe and DRC in 2002. Cde Marongwe said he hoped a number a number of agreements would be finalised at end of the meeting today

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Border Alters Modus Operandi As US Timber Market Falters

Zimbabwe Independent (Harare)
March 26, 2004
Posted to the web March 26, 2004
BORDER Timbers International says due to the significant decrease in prices in the United States market it has had to materially alter the basis on which it operates.
In its unaudited results for the period ended December 31 Border, the holding company, said an improved product mix had meant greater flexibility which had been critical to maintaining the company's position in its primary markets.

"Production of French doors has improved over the past six months with the major constraint remaining consistent and competitive in the supply of glass," the company said. "As in every other part of the operation costs have spiralled out of all proportion with the company's ability to improve the revenue flow."
Border said at the Paulington factory performance was well in the last six months with production units of multi-ply and sliced veneer exceeding targets.
"Blockboard and thin ply production was however below set targets mainly because of inadequate and erratic supply of peeler logs," the company said. "The peeler log supply problem will continue to disrupt the factory for as long as the plantations remain short of trees."
It said the market remained steady despite the strong South African rand, which rendered the South African competitors unable to export their products.
As at December 31 Radar spent $1,7 billion on replacing equipment and other capital assets.
A further $1,1 billion was spent on plantations with a further $4 billion approved but not yet committed as funding for other projects.
"The transfer of manufacturing capacity from countries like the US to soft currency regions - be they Chile, Brazil or southern Africa - are based on the premise of aggressively competitive pricing," Radar said. "It has become increasingly apparent that the rationale to export does not exist," the company said in its results.

Listed on the Zimbabwe Stock Exchange Border is the country's largest supplier of timber products.
It has a market capitalisation of $54 billion.

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Trevor Ncube: Publisher, Mail & Guardian

By: Alec Hogg

Posted: 2004/03/25 Thu 21:00 | © Moneyweb 1997-2004

MONEYWEB: In tonight’s top story we chat with Trevor Ncube, leading Zimbabwean publisher and the managing director of the Mail & Guardian, about what’s going on in his home country. Well, Trevor, you remain proudly Zimbabwean. You obviously live in South Africa driving the Mail & Guardian.
TREVOR NCUBE: I do, Alec. I spend a week in Zim and three weeks in South Africa, so I commute quite a lot.

MONEYWEB: And you have still business interests in Zimbabawe?

TREVOR NCUBE: Yes, I have two newspapers in Zim, a business weekly and a Sunday newspaper too, in addition to the Mail & Guardian.

MONEYWEB: We’ve asked you to come in to give us some perspective on what’s going on. Maybe we can start off with the whole mining charter, or the leak of a mining charter – 49% indigenisation, As we did mention earlier, it had an awful impact on Impala Platinum’s shares, which takes some doing, taking it down from R580 to R520. What do you make of that?

TREVOR NCUBE: I think, Alec, you know with the benefit of hindsight, if we look at what they did with land – and there was a time when they announced that they would acquire 50% of the farms that were owned by whites and forcefully do so without compensating – some of us took the view that this was a ridiculous proposition in the 21st century. But they went ahead and did it, and the indications from where I’m sitting are that this is something that they’re going to do, this is something that they are determined to do, and I think it comes from the sense that we’re dealing with foreign ownership that we need to localise – but clearly it is not being done properly. One doesn’t get the sense that there’s been sufficient broad-based debate, broad-based consultation. All that I’ve heard is that the Chamber of Mines have been asked to comment, so they have not had direct input into the drafting of legislation. But, again, this is not surprising Alec, this is how this government has managed things, this is how this regime manages things – contempt for the people, contempt for the electorate and the constituency, and taking things for granted. And basically it’s going to be take it or leave it. I think that’s what it is going to be.

MONEYWEB: Well Impala is their biggest foreign investor in Zimbabwe by quite some margin. Keith Rumble, the chief executive, has been quite upbeat about his discussions with the government there and – he certainly in the interaction we’ve had with him – he felt there was no danger whatsoever to their investments being nationalised, as now appears to be the case.

TREVOR NCUBE: I think people need to be less naïve and be prepared to deal with the reality that Zanu PF is going to present to them, particularly the people in the mining sector, and begin to take positions as to how people cut their losses. And perhaps what also needs to be done is a much more aggressive process of consultation, to ensure that things don’t get worse than they are at the present moment. I think, Alec, we know the kind of role that agriculture in Zimbabwe was playing, we know the kind of role that tobacco was playing, in terms of being a foreign exchange earner. But did that stop the government of Zimbabwe taking the kind of unilateral and misdirected actions against tobacco, against farmers in general? No. I think this is a government that is so desperate that it doesn’t think through the policies that it takes, that doesn’t think through consequences of certain positions that it takes, and it is basically come what comes, that’s it.

MONEYWEB: That’s in the mining sector. An equally disturbing trend or development in the last little while was in the financial sector. Now there is a new governor of the Reserve Bank in Zimbabwe, a gentleman who has been on this programme a number of times, Mthuli Ncube. Any relation?

TREVOR NCUBE: No. A good friend, but no relation.

MONEYWEB: He’s a smart guy. He used to work at Investec Asset Management. We read now that he’s had to flee and is now living in London. What is going on?

TREVOR NCUBE: It is sad, Alec, what has taken place. Let me just put you and the listeners in the picture. Robert Mugabe says to himself that he dealt with the British and that he is victorious, he has triumphed. He has gotten the land from the British and the whites, and his next frontier is going to be the black businessmen who have made it. And he takes the view that he created the environment, the enabling environment, for people like Mthuli Ncube to emerge and create the banks that they did, and he believes that they have not been sufficiently loyal to him. He believes that they have not provided Zanu PF with the funding, with the support that he needs. But much more importantly, Alec, is the question of if you are of independent means you don’t need Zanu PF, you can do what you want – and Robert Mugabe is uncomfortable with that. And there’s a suspicion that some of those people might have been supporting MDC. It is not a crime in a democracy – you are free to support whatever party you are supporting. So he’s positioning this before the elections as a very populist grandstanding, dealing with corruption within the black community. These guys who have made it, who are driving the most expensive cars, have beautiful houses and so forth – look what they’ve done and look where you are. So he’s presenting them as a target and whipping up emotions within the black community and that is what is happening.

MONEYWEB: So do we have to look at Mthuli Ncube differently in future? Is he a man that we can no longer trust?

TREVOR NCUBE: No, I don’t think so, Alec. There is a group, there are six of them, who have been criminalised by the regime and they’ve been criminalised because we must remember that the Reserve Bank created the conditions which resulted in the banking, financial institutions, not making money from their core business. The financial institutions, to survive, had to do other things and one of the things that financial institutions did was to trade in the black market as far as foreign currency was concerned, and they traded in the black market or the parallel market to procure foreign currency for the government, for the national airline, for the President’s travels. Now they are being criminalised for having helped the state and the government, and the parastatals, Alec, most of them, the national oil procurement company had no access to forex. These people that are now running away, that are in London or South Africa, were the ones that made sure that Zimbabwe had forex to buy the fuel that was needed.

MONEYWEB: Trevor, it sounds like a government out of control, it sounds like a country that’s on the edge of the abyss. I do remember talking to Mthuli, and this is what is so interesting, on this programme a number of times, who kept saying to us “we will get through it, we will get better” and now he himself is no longer in the country. Where does it all end?

TREVOR NCUBE: One wants to be hopeful, Alec, and say we will get through it, but my own real assessment of the situation is I don’t expect anything to happen before 2007. I don’t expect Zanu PF and MDC to sit down and talk. Robert Mugabe considers himself to be in the strongest position that he’s ever been. He was weak and vulnerable three years ago, two years ago, but no more. He is now dealing with opposition internally, within his own party. He is dealing with people that he thinks are not supporting him. He is consolidating – consolidating not to get onto the negotiating table with an upper hand, but consolidating so that he vanquishes and conquers MDC. And he has dealt MDC very severe blows and MDC to a large extent has been paralysed. So he’s in a very strong position and he’s got not just the bankers running – he’s got lots of his own politicians inside of Zanu PF running, because they were involved in some of these deals, some of these foreign currency procurement deals. There’s a case, as we’re sitting here Alec, which is going through the Supreme Court, where a cabinet minister has been named in a gold-smuggling scandal. The court has instructed that the cabinet minister’s name be expunged from the records of the courts. This is clearly uneven-handed application of the law. This is selective application of the law.

MONEYWEB: But how do you, as a Zimbabwean, react to something like this? We have “quiet diplomacy” from South Africa’s perspective. It was a very important trading partner for South Africa, we are neighbours, we are partners in Nepad, supposedly.

TREVOR NCUBE: It is saddening as a Zimbabwean, Alec, to see what has taken place in Zimbabwe, particularly as a proud Zimbabwean that has seen Zimbabwe succeed. At the height of our successes in 1996, ’97, when we had a lot of Zimbabweans who had gone abroad, the so-called ex-Rhodesians coming back to Zimbabwe to make Zimbabwe work when things were working, when we thought Zimbabwe was far better than South Africa. But all that has gone. The dream has just been blown away. So it’s very sad. But I think what is even sadder, Alec, is to see how the majority of Zimbabweans have been reduced to destitution, how poverty has taken root, how a proud people that walked with their heads up high are reduced to struggling to survive. And, as Zimbabweans, we look at South Africans and say why is it that the South Africans are not doing as much as they should be doing? And I’ve heard people saying, oh it’s time for Zimbabweans to stand up and fight this man. I say to myself: “but Zimbabweans played a significant role in ensuring that South Africa has the kind of democratic dispensation. Zimbabweans were victims of bombings by the apartheid regime, and they took South African exiles from the ANC, from the PAC into their homes.” And there is a sense in Zimbabwe that we’ve been let down by our South African colleagues. There’s a sense in Zimbabwe that we’ve been let down by the South African government, that the South African government is not using its power within the region, within Africa, within the AU. And I think, much more importantly, Alec, we talk about Nepad. Nepad – what is it all about? The principles of Nepad are about good governance, accountability, the peer review mechanism, and unfortunately what is happening across the border is totally against anything that Nepad stands for, and if we’re so proud of Nepad and what it represents why don’t we deal with somebody who is trashing the principles of Nepad?

MONEYWEB: Trevor Ncube, leading Zimbabwean publisher and managing director of the Mail & Guardian here in South Africa, providing some insights into developments to the north of us.

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