Mail and Guardian
Angus Shaw | Harare, Zimbabwe
24 May
2007 07:18
Momentum is building to start South
African-brokered talks to
resolve Zimbabwe's deepening crisis, opposition
officials said on Wednesday.
But the opposition Movement for
Democratic Change has again
refused demands that before talks proceed, it
recognise President Robert
Mugabe as the nation's legitimately elected
leader. That condition stalled
two previous initiatives.
The opposition alleges it has been robbed at parliamentary and
presidential
by violent intimidation of voters and ballot rigging.
The
opposition also has demanded the repeal of sweeping media
and security laws,
electoral reforms and an end to state-orchestrated
political
violence.
Both main opposition parties were now considering
setting aside
their demands in a bid to get to the negotiating table, where
the demands
could likely be tackled later, said opposition
officials.
"There must be an environment where there are no
conditions and
no issue is taboo in negotiations," said one official who
asked not to be
identified.
South Africa has insisted
none of any likely participants in
talks, including representatives of civic
groups, air their negotiating
positions through the media and has enforced a
news blackout, saying the new
initiative will not be conducted through the
media.
President Thabo Mbeki of South Africa, appointed in
March by the
Southern African Development Community to mediate on Zimbabwe,
was given
until the end of June to return with concrete proposals on
narrowing the
wide differences between President Robert Mugabe's ruling
party and the
opposition Movement for Democratic Change.
"The pressure is on. The situation here is impacting on the
whole region and
President Mbeki has a deadline to meet," said the official.
Mugabe's fellow African leaders have heard repeated calls to do
more to
press Mugabe to embark on reforms. But at the summit at which
Mbeki -- who
has longed advocated quiet diplomacy over confrontation with
Mugabe -- was
appointed to mediate, the Southern African Development
Community voiced full
support for Mugabe.
At another regional summit in Kenya on
Wednesday, Mugabe had
harsh words for his opposition and his critics in the
West, and was
applauded by fellow African leaders.
Earlier this month, Mbeki sent a delegation headed by Sydney
Mufamadi, a
Cabinet minister, to Harare for talks with Mugabe.
Mufamadi
did not meet with opposition leaders in Harare, but
several top aides of
Morgan Tsvangirai, leader of one opposition faction,
and rival faction
leader Arthur Mutambara have shuttled to and from South
Africa in recent
weeks.
Mutambara, his secretary general Welshman Ncube and
Ncube's
opposite number in the Tsvangirai group, Tendai Biti, have met with
South
African officials in South Africa.
In line with the
South African news blackout, none has confirmed
reports of a meeting in
South Africa with Mugabe's Justice Minister Patrick
Chinamasa, the ruling
party's chief negotiator in previous failed
inter-party talks, when he was
en route to the just-ended gathering of the
continent wide African Union in
the West African nation of Ghana.
Opposition officials
dismissed as "rubbish" media reports that
secret talks were already on
track.
But "something has to be done to find a way forward
and it has
to be done urgently" said one official.
There
were suggestions for at least initial talks in June for
Mbeki to deliver to
regional leaders, he said.
No comment was immediately
available from Chinamasa or the
ruling party.
Ronnie
Mamoepa, South African Foreign Affairs spokesperson,
would not confirm any
details of the mediation process.
"There will be to-ing and
fro-ing between Pretoria and Harare.
Mediation is a process
not an event. We are not going to comment
except to say that mediations
remain on course," he said.
Zimbabwe's economic meltdown
worsened this month as inflation
spiraled out of control to a record 3 714%,
the highest in the world.
Consumer prices doubled in April,
according to the official
Central Statistical Office, putting many basic
goods out of the reach of
ordinary Zimbabweans.
In formal
businesses, unemployment has soared to more than 80%.
Scores of businesses
have closed down and most main factories operate at
around or less than 30%
of their capacity.
Power failures and water shortages occur
daily and shortages of
food, hard currency, gasoline, medicines and other
essential goods are
acute.
Health and social services
have crumbled in a nation with one of
the world's highest rates of HIV/Aids
infection. An estimated 3 000 people
die each week from Aids-related
illnesses.
Mugabe blames the crisis on successive years of
drought and
Western economic sanctions, but critics say corruption,
mismanagement and
the often-violent seizures of thousands of white-owned
commercial farms
since 2000 disrupted the
agriculture-based
economy in the former regional breadbasket. -
Sapa-AP
Business Day
24 May 2007
Dumisani
Muleya
--------------------------------------------------------------------------------
Harare
Correspondent
THE Zimbabwean government is desperate to revive its
collapsed agriculture
sector, the economy's mainstay, after spending the
past seven years ruining
it through a policy of chaotic seizures of
white-owned commercial farms.
The country's reserve bank has been tasked
to come up with a project to set
up technical colleges that will produce at
least half a million ox-drawn
carts and ploughs.
Central bank
governor Gideon Gono, President Robert Mugabe's point man on
the economy,
said the latest project was part of government's mechanisation
programme
designed to resuscitate the crumbling sector.
Gono has been central in
trying to revive agriculture, although his past
schemes such as command
agriculture and winter crops have failed.
This has left the country
facing chronic food shortages. Three-million
Zimbabweans, about a quarter of
the population, face starvation.
"We are going to set up the institutions
in 62 districts of the country as a
way of creating employment for youths as
well as bolster agricultural
production," Gono said.
Zimbabwe's
highly mechanised agricultural sector was destroyed by the farm
invaders and
equipment worth millions of dollars was vandalised.
Most the farms seized
were given to Mugabe's cronies and top government
officials.
Most of
black communal farmers given farms have failed to use them bec-ause
of lack
of capital and inputs. Gono said the new project would avail farming
implements to communal farmers.
"Communal farmers contribute to the
country's national food security so we
decided to recognise them and improve
their traditional way of farming," he
said. "We will provide them with
working capital and equipment for them to
start running
businesses."
Zimbabwe has remained a net importer of maize and wheat
although it used to
be a leading exporter before the farms were confiscated
by Mugabe in a
populist drive to cling to power.
Gono has constantly
said it was unacceptable that Zimbabwe has to beg for
food with all the land
and capacity to produce more than its needs.
On Tuesday he repeated this,
showing his worry about food security.
"It's time now we stop importing
maize and even wheat, wasting the little
foreign currency we have. We have
to produce and this we can do as we have
the capacity," he
said.
Zimbabwe is importing maize from Malawi and SA, among other
countries.
Gono said the government would put more than 350000ha of land
under the
Accelerated National Irrigation Development Programme in a bid to
mitigate
food shortages.
The reserve bank has already started
disbursing the funds earmarked for the
programme, with Z$27bn already
released for the project.
FinGaz
Clemence Manyukwe Staff
Reporter
lNational security threatened lTraining to be shelved
ZIMBABWE'S
soldiers are starving and may have to suspend training if the
army does not
immediately get additional government funding, a parliamentary
committee has
heard.
Soldiers are disgruntled over poor salaries, Defence Secretary
Trust Maphosa
told the parliamentary committee on Defence and Home Affairs
on Tuesday.
Committee chairman Claudius Makova (ZANU PF, Bikita West)
immediately warned
of the consequences on national security if the situation
is allowed to
continue.
Maphosa said because of inadequate funding, the
Zimbabwe Defence Forces
(ZDF) is fast running out of food, and training may
have to be suspended if
government does not avail more funds.
According
to Maphosa, pilot training at the Air Force of Zimbabwe, an
exercise that
used to be completed in two years, now takes five years
because of lack of
financial resources.
The ZDF has also been hit by a shortage of spare parts,
while the Zimbabwe
National Water Authority has disconnected water supplies
to military
instalments due to non-payment of bills.
In a bid to ease the
food shortages, the army had formed a farming company,
Sunpillar, but
funding problems had bogged down its projects.
Funds that had been allocated
in the national budget to build houses for
soldiers were exhausted before
completion of the surveying stage.
Maphosa said soldiers had signed a
contract with the government to provide
peace and stability, in return for
government meeting their basic needs such
as accommodation. But while the
force is loyally honouring its end of the
bargain, the other side was
not.
Maphosa told Members of Parliament (MPs) that a private in the army
takes
home $300 000 per month.
"We were allocated $134.85 billion for
salaries for the whole year, and 85
percent has already been spent. We have
15 percent to take us to the end of
the year," Maphosa said.
Committee
chair, Makova, a retired army colonel, expressed concern at the
low
salaries. The MP, who owns a security company, said the guards working
for
him were getting double the soldiers' earnings.
Makova said the guards earned
$611 000 per month and, because he raises
their salaries every month, they
will be earning $800 000 soon. Makova said
the low army salaries had a
negative bearing on national security.
"You, the leadership should act as
their trade unionists. The youngsters in
the army are different from you who
cling to patriotism even when the going
gets tough," Makova said.Force of
Zimbabwe, an exercise that used to be
completed in two years, now takes five
years because of lack of financial
resources.
The ZDF has also been hit
by a shortage of spare parts, while the Zimbabwe
National Water Authority
(Zinwa) has disconnected water supplies to military
instalments due to
non-payment of bills.
In a bid to ease the food shortages, the army had
formed a farming company,
Sunpillar, but funding problems had bogged down
its projects.
Funds that had been allocated in the national budget to build
houses for
soldiers had been exhausted before completion of the surveying
stage.
Maphosa said soldiers had signed a contract with the government to
provide
peace and stability, in return for government meeting their basic
needs such
as accommodation. But while the force is loyally honouring its
end of the
bargain, the other side was not.
Maphosa told Members of
Parliament (MPs) that a private in the army takes
home $300 000 per
month.
"We were allocated $134.85 billion for salaries for the whole year,
and 85
percent has already been spent. We have 15 percent to take us to the
end of
the year," Maphosa said.
Committee chair, Makova, a retired army
colonel, expressed concern at the
low salaries. The MP, who owns a security
company, said the guards working
for him were getting double the soldiers'
earnings.
Makova said the guards earned $611 000 per month and, because he
raises
their salaries every month, they will be earning $800 000 soon.
Makova said
the low army salaries had a negative bearing on national
security.
"You, the leadership should act as their trade unionists. The
youngsters in
the army are different from you who cling to patriotism even
when the going
gets tough," Makova said.
Around November each year, the
government comes under severe criticism for
allocating a huge chunk of the
national budget towards the Defence Ministry.
Despite the substantial
resources allocated in the 2007 vote, inflation,
ranked the highest in the
world, has eroded the government's purse and
incomes to a point where
salaries in the civil service are now meaningless.
Last month, inflation
reached 3 714 percent, a record high.
Zimbabwe is in the throes of a
seven-year recession characterised by chronic
foreign currency shortages and
abject poverty ravaging 80 percent of the
country's population.
FinGaz
Njabulo Ncube Chief
Political Reporter
THE FRACTURED Movement for Democratic Change (MDC) is
closer to agreeing on
a coalition for next year's elections, with both
factions ready to endorse
Morgan Tsvangirai as a sole opposition candidate
to challenge President
Robert Mugabe at the presidential polls, The
Financial Gazette can reveal.
However, there is still bickering over
candidate selection for the general
election, sources involved in the talks
say.
Presidential, parliamentary and local government elections are scheduled
to
be held in March next year and insiders in both camps of the MDC said
yesterday there was now agreement on the need to tackle President Mugabe and
his ruling ZANU PF party as a united front.
The sources said in the event
of Tsvangirai, who controversially lost to
President Mugabe in 2002 in an
election marred by violence, winning, Arthur
Mutambara's rival faction would
nominate a vice president.
Mutambara, who was brought in to lead the
pro-senate faction at the expense
of Gibson Sibanda, a founder member who
had been Tsvangirai's deputy,
drafted the proposal to have Tsvangirai as the
sole candidate for the
opposition next year. He had previously made public
comments that implied he
would back Tsvangirai.
However, while consensus
has emerged on Tsvangirai's candidature and on the
need for the opposition
to field single candidates in the other polls, the
sticking point in the
"unity accord" is over the procedure to be used in
selecting
candidates.
A source said: "The only outstanding issue in the whole
unification
negotiations is the selection of candidates. How do we do it
without
antagonising each other after coming from an almost three-year
split? We are
trying to find common ground, and this should be solved in the
next round
(of talks)."
The option many appear to support would give each
camp the right to choose a
candidate for constituencies where it already
holds a seat. The sitting
Member of Parliament would, however, still be
subjected to confirmation
through primaries.
An October 2005 split over
participation in the Senate elections has left
the opposition severely
weakened and unlikely to pose a serious threat to
ZANU PF.
Officials said
the holding of S elections in 2010 would have given both
parties time to
discuss total reunification. There had been talk of the
factions holding
separate congresses, leading into a single, joint congress.
But with local
elections now only eight months away, a coalition, the
sources say, is the
best option.
"With the harmonised polls less than eight months away, time is
not on our
side. We cannot have the luxury of having three congresses. So
what we have
achieved is to go in as an opposition coalition to fight
Mugabe. We will
then attend to full unification when we deliver freedom and
democracy,"
added a senior MDC official privy to the talks.
Gabriel
Chaibva, spokesman for Mutambara's camp, said: "What I can confirm
is that
indeed the two MDC formations have been talking in terms of
strategies for
next year's elections. Our national executive council
resolved to adopt a
principal philosophy of one candidate for local,
mayoral, parliamentary and
presidential elections. We have called upon all
democratic forces to endorse
the principle."
Nelson Chamisa, the spokesman for Tsvangirai's faction, also
confirmed
on-going talks
"The national executive council sat on Friday
last week and discussed
several issues, among them the need to ensure that
there are synergies of
efforts and unity of purpose," said Chamisa.
"I am
glad to say that, as a party, our focus is to make sure that all
Zimbabweans
unite against poverty, misery and injustice."
FinGaz
Staff Reporter
THE
Zimbabwe Union of Journalists (ZUJ) has locked horns with Zimbabwe
Newspapers, the largest employer of journalists, after the company's
management stopped remitting workers' subscriptions to the union.
It
is feared the publishing company made the decision after being
pressurised
by the Ministry of Information and Publicity, whose Permanent
Secretary,
George Charamba, has over recent weeks, been publicly hostile
towards
ZUJ.
The union fears a similar order will be issued to other government media
houses, whose journalists reportedly constitute about three quarters of the
300-strong ZUJ membership.
The union, led by Matthew Takaona, has
incensed Charamba over its support
for a voluntary media council.
ZUJ is
part of a coalition of media groups, which constitute the Media
Alliance of
Zimbabwe, which plans to launch an independent media council
next Tuesday.
The government sees the move as a threat to Tafataona Mahoso's
Media and
Information Commission (MIC).
Charamba has accused ZUJ and media rights
groups such as Misa-Zimbabwe of
being part of a Western plot to topple
President Robert Mugabe.
Subscriptions from the Zimpapers Harare branch have
now been in arrears for
three months.
The ZUJ executive council has filed
an urgent High Court application
challenging Zimpapers' cancellation of
subscriptions of about 60 of its
journalists and other media workers from
the Harare branch of the Zimbabwe
Stock Exchange-listed company.
ZUJ
lawyer, Rodgers Matsikidze, said Zimpapers had yesterday filed a notice
to
oppose the union's action, arguing the matter was not urgent.
"The company's
argument is that the workers have refused to be members of
ZUJ, although
there is no evidence to that effect. It is my belief that the
company is
putting pressure on the ZUJ branch to claim that all members do
not want
anything to do with ZUJ. I personally think it's part of a bigger
plan to
weaken ZUJ. We will meet in court because there is more to it than
meets the
eye," he said.
As a sign of government's growing opposition to ZUJ, it has
introduced
separate awards for its journalists so they do not compete in the
industry-wide National Journalistic and Media Awards (NJAMA), run by ZUJ.
FinGaz
Dumisani Ndlela
Business Editor
THE increase in the inflation rate announced last week
was phenomenal,
considering it was benchmarked against a higher base last
year.
But the rise was expected: inflation has maintained its upward
trajectory,
and people remain mindful of the fact that inflationary
pressures remain
entrenched in the crisis-ravaged economy.
But there was
shock and awe.
The rise in the inflation rate astounded even the most
pessimistic analysts,
and left the market convinced of a gloomy outlook for
the rest of the year.
According to highly placed sources, there was disquiet
at the Central
Statistical Office (CSO), the government agency that collects
data on price
increases for the inflation rates.
A senior CSO official
was overhead asking a cabinet minister if they could
release the new
statistics, to which the minister reportedly retorted
unkindly to the
official that the information was compiled for public
consumption.
There
were attempts to manage the dissemination of the statistics by
releasing
them exclusively to the state press, which squashed a tiny report
on the new
inflation figures between unattractive "adverts".
But as soon as news
filtered into the market that the inflation rate had
burst past 3 000
percent and was on the verge of breaking the 4 000 percent
mark, consumers
joined dealers in the scramble for scarce foreign currency
on the parallel
market.
The year-on-year inflation rate for April increased by 1 513,7
percentage
points, the highest margin since Zimbabwe slipped into
hyperinflation, to 3
713,9 percent.
The month-on-month inflation rate
went up 50,2 percentage points from 50,5
percent in March to 100,7 percent
in April.
The stampede on the parallel market pummelled the defenceless local
unit to
an unprecedented low against the United States dollar on increased
demand.
The Zimbabwe dollar, which had been trading at 30 000 to the
greenback,
weakened to $38 000 to the US unit last week.
It weakened from
$60 000 and $3 900 to $65 000 and $4 500 against the
British pound and South
African rand respectively on announcement of the new
inflation
figures.
Parallel market dealers said the local unit was still taking a
drubbing from
sustained demand.
It further fell to $45 000, $85 000 and
$6 000 against the US dollar,
British pound and South African rand
respectively in morning trade
yesterday.
"There is just too much demand,"
a dealer told The Financial Gazette.
"Everyone wants foreign
currency."
The equities market also got a major boost from the stampede for
assets.
Essentially, people have lost faith in the local currency because of
the
hyperinflationary environment.
To preserve their wealth, they are
buying assets and foreign currency.
The inflationary cycle has made it
unattractive to hold the local currency
when costs of goods and services are
increasing on a daily basis.
In other words, people are now making sure they
spend their little incomes
as fast as they can on goods rather than
save.
The population, in order to avoid the inflationary effect, flees the
domestic currency as a store of value, and instead shifts their wealth into
hard currencies and durable goods.
Increasing shortages in the
crisis-sapped economy have also caused the rush
for foreign currency.
Low
capacity in the productive sector has resulted in dwindling output,
resulting in shortages.
This has triggered imports, and, consequently, a
rush for foreign currency.
The acute shortages in the economy have compounded
the inflationary woes.
Scarcity, by nature, generates inflation.
Fuel is
in short supply, as is maize meal, the country's staple food, and
basic
commodities such as sugar and cooking oil.
Foreign currency is also in short
supply.
These shortages have invented informal markets for fuel and foreign
currency.
The fear is that increased money printing this year to import
cereals to
cover local production deficits will worsen the inflationary
situation.
Huge sums of cash are likely to be printed to raise money for
grain and fuel
imports, as well as for other offshore fiscal
obligations.
The outlook is gloomier than many expected.
FinGaz
Charles Rukuni Bureau
Chief
BULAWAYO - The ZANU-PF leadership in Bulawayo is in denial. Though
the
leadership says there are no factions within the province sources say
the
restructuring of the party, which will pave the way for elections will
not
be completed by this weekend.
National chairman John Nkomo said
two weeks ago that a taskforce chaired by
deputy national political
commissar, Richard Ndlovu, would supervise the
restructuring exercise and
should complete it by Sunday, May 27.
He said the taskforce's brief was to
define structures and not conduct an
audit. The audit has already been
completed.
Political commissar Elliot Manyika said the audit had revealed
that some
cells and wards were not well structured and did not have enough
membership.
Ndlovu said on Tuesday he could not comment on the restructuring
exercise as
he was just "settling in".
Sources, however, said members of
the politburo from Bulawayo were trying to
paint a rosy picture by
pretending there were no divisions when they were
quite aware that there
were two distinct factions, one loyal to them called
"petition" and the
other loyal to younger war veterans called "godhi".
The current interim
executive was reportedly behind the politburo members
and was pressing for
elections when it did not have enough members to set up
the structures
required. The other faction claimed to have more members.
The sources said
the structure of the taskforce that had been proposed by
Nkomo made it
difficult for it to complete the exercise on deadline. Nkomo
said the
taskforce should comprise party leaders from Matabeleland North and
South as
well as Bulawayo itself.
It had been agreed that Matabeleland North and South
should each be
represented by one member of the politburo and the provincial
chairman. In
Bulawayo, however, each "faction" was to be represented by four
members,
clearly indicating that there were divisions.
Bulawayo has been
a divided province since the death of former
vice-President Joshua Nkomo and
the formation of the Movement for Democratic
Change, which drew a lot of
support from the region.
The younger war veterans, who have swept all
provincial elections only to
see the elected executive suspended, claim that
the local leadership is
against them because they want to bury the past,
while the older generation
want to keep the fires of ZAPU burning.
The
divisions have now spilled into the succession issue with the younger
war
veterans allegedly backing another term for President Robert Mugabe.
FinGaz
Clemence Manyukwe Staff
Reporter
THE government will soon evict former workers that are still
living in
compounds on acquired farms, and has set up a team tasked with
restoring
order on the farms.
This is despite a court ruling two
years ago, which declared that such
evictions were illegal.
Public
Service, Labour and Social Welfare Minister Nicholas Goche told the
House of
Assembly last week that ex-farm workers still living in farm
compounds, who
are unwilling to work for the new owners, would be required
to
leave.
Goche was responding to the first report of a joint committee on
lands,
agriculture and labour, on the plight of farm workers.
The
committee found that workers formerly employed by white farmers were
reluctant to work for the new farmers, citing low wages and poor working
conditions.
"Apart from paltry wages, your committee was not happy with
the generally
appalling conditions of service for farm workers, especially
as regards
housing, employment contracts, late and non-payment, denial of
lunch breaks
and sick and compassionate leave," the joint committee said in
its report.
The report, tabled in Parliament in March, urged Cabinet to
formulate clear
policy guidelines on former farm workers unwilling to work
for new property
occupiers.
Goche said the government had set up an
inter-ministerial committee
comprising officials from his ministry, the two
deputy police commissioners
Innocent Matibiri and Godwin Matanga, and
officials from the Ministry of
Local Government to restore security on
farms.
"At the end of last year, the committee came up with a programme to
visit
farms to explain to workers government's position that those workers
who
stay at farms but do not want to work for the new farmers should move
away
to make room for those who want to work," said Goche.
He said the
programme had, however, failed due to "financial constraints",
but that
funds could soon be made available to complete the task.
"My earnest hope is
that the necessary funding will be set aside for this
exercise for it is
predicated on the restoration of productivity in this
important sector of
our country."
In 2005, a magistrate issued a court order barring the eviction
of workers
at Chabwino farm after they had argued that the houses they
occupied had
been built using their own funds.
FinGaz
Continued from last
week
IN this second part of the presentation made to the Forum of Energy
Ministers in Maputo, Engineer Simba Mangwengwende and contributing author Dr
Njeri Wamukonya analyses the weaknesses in regulation and the reforms
instituted so far to avert a seemingly inevitable power crisis in
Africa.
In its annual report for 2006 the Southern Africa Power Pool
(SAPP)
Coordination Centre shows that only the National Electricity Utility
of
South Africa (ESKOM), the largest utility, had satisfactory financial
results for the year ending March 2006.
ESKOM achieved a rate of return
of 8.4 percent and had an impressive cash
collection performance with an
average of only 22 days of revenue
outstanding. Other utilities had
negligible or negative rates of return as
low as -23 percent and revenue
outstanding as high as 207 days.
A study by the African Energy Policy
Research Network (AFREPREN) in 2005
also highlighted similar poor financial
performance in utilities in East,
Central and West Africa (AFREPREN,
2005).
In Uganda revenue outstanding was 369 days in 2000 before the utility
was
unbundled. Performance subsequently improved to 194 days in 2003 after
the
introduction of a new management.
The other utilities that provided
financial information showed modest
profits but poor cash collection with
revenue outstanding being six months
to over a year.
As will be dealt
with in more detail later, the reasons for the poor
financial performance is
due to weaknesses in regulation where many of the
companies are not run as
the self-financing businesses which they can be but
as providers of a
state-subsidised social service.
ESKOM, whose bonds are listed on the stock
exchange, performs well as it is
subject to the efficient regulation of the
financial markets.
Power Sector Reforms
Since the early 1990's almost
every country in Africa has been undertaking
reforms in the power sector
designed to improve operational and financial
performance as well as attract
investment from the private sector into a
sector that has been dominated by
state-owned monopolies.
Many of the reforms were triggered by power crises or
difficulties in
mobilising funding from traditional multilateral and
bilateral development
agencies. These traditional sources cannot provide the
huge financial
resources required to finance power sector investments over
the next 20 to
25 years (Table 5).
Based on the generally-held assumption
that the poor performance of the
power sector is due to the history of
having vertically-integrated, state
owned and state-managed monopoly
utilities, the conventional reform and
restructuring strategies that have
been adopted usually involve the
unbundling of the utility, privatisation
and setting up independent
regulatory agencies.
Assessment of the impact
of the reforms on the performance of the power
sector in Africa has been the
subject of a number of studies. One of the
more recent studies (AFREPREN,
2005) made the following findings:
n Reforms were primarily designed to
bridge short-term generation shortfalls
and enhance the financial health of
state-owned power utilities; most of the
generation projects by IPP's have
been fossil-fuel based and have not been
using sustainable energy sources
such as hydro, solar, wind, geothermal or
bagasse.
n Electrification of
the poor has not been significantly addressed; the
removal of subsidies has
led to disconnections of the poor; rural
electrification funds and boards
have little to show in terms of
electrification of the poor.
n Reforms
have marginalised local private sector investment in the power
sector; in
the medium term the state is effectively handing over the entire
electricity
industry to non-national operators.
n Performance of regulatory agencies has
been constrained by lack of skill
or experience and lack of independence;
consequently they have done little
to ensure the power sector's
sustainability and to promote environmentally
sustainable
options.
Attracting the private sector has not resulted in the significant
investment
flows into the African power sector that had been hoped (Table
6). A year by
year breakdown of these investments is given in Annex
C.
Out of US$251.346 billion invested over the period Sub-Saharan Africa only
got US$5.883 billion, which is just over two percent.
Consistent with the
findings by AFREPREN, more than three quarters of the
investments, US$4.476
billion went into power generation driven mainly by
short-term emergency
needs rather than long-term economic requirements.
In contrast to the poor
electrification results that have so far been
achieved under current
reforms, it is interesting to note that the
impressive electricity access
rates in North Africa (Table 3) were achieved
before the recent power sector
reforms. South Africa is the other country
with an impressive
electrification program that was driven by the
state-owned utility, ESKOM,
from 1991 before the present restructuring in
the country. There are
important lessons to be derived from the North
African and South African
experiences and these are highlighted later.
Although power sector reforms
have not yet achieved the expected quantum
leaps in performance they have at
least served to firmly establish the
agenda of power sector performance
improvement among the policy makers and
other stakeholders. This is an
important achievement as the continent
prepares to deal with the challenges
facing the power sector.
Summary of Challenges
The poor operational and
financial performance of the power sector that
continues to persist despite
the reforms is often blamed on external factors
such as droughts and
shortages of investment resources. The standard
explanation for the
non-implementation of known priority projects is lack of
funding. However,
these are just the effects of deficiencies in strategic
planning and
regulation. Although extended droughts and rapid increases in
oil prices for
importing countries have contributed to the worsening of the
crisis in the
power sector, these are not new phenomena that could not have
been
anticipated.
Effective planning can anticipate and provide for growth in
electricity
demand and for the adverse impact of droughts on availability of
hydropower.
Steep increases in prices of inputs such as oil are also not new
and should
have been planned for. Effective planning creates the bankable
projects and
programs required to facilitate the mobilisation of human,
financial and
other material resources.
Regulation is a concept that has
come to be associated with the regulatory
agencies that are being set up in
the various countries as part of power
sector reforms.
While such
institutions are an important aspect of regulation it is
important to note
that the issue involves both policy and institutions.
Regulatory policies,
more than institutions, are the critical issue. Simply
defined, regulatory
policies are the rules by which business is done.
There are two fundamental
rules for doing business. A business, whether
publicly or privately owned,
can be set up to make money in order to provide
products and services or it
can be set up to provide products and services
in order to make money. The
overriding purpose of the business is either to
provide products and
services or to make money. As long as a business is
making both products and
services and money there is really no significant
difference in the rules of
business. The difference comes when there has to
be a choice between making
money or providing products and services.
In the power sector we are dealing
with an essential service that has to be
provided whether money is made or
not. Under state ownership the business
rule for the utility was to make
money in order to provide a service. If the
money could not be made, the
state provided a subsidy to ensure that the
service continued to be
provided. Under private ownership the business rule
changes to provision of
a service in order to make money. If money cannot be
made the business would
normally stop providing the service. Since the
service is essential and
cannot be stopped, the regulatory challenge in
attracting private sector
investment is to ensure that both the service and
money can always be made.
The private sector will not invest unless they can
be assured of this.
In
summary challenges for the African power sector are as follows:
n Planning -
the challenge is to develop bankable policies and projects
instead of the
current wish lists of "priorities" that remain unimplemented
for years.
n
Regulation - the challenge is to attract investment by developing policies
and rules of business that ensure that efficient investors can always make
money when providing safe, secure and reliable electricity products and
services.
n Institutions - the challenge is to establish national,
regional and
continental institutions with clearly defined roles for the
development and
implementation of policies and plans.
The rest of the
paper is devoted to the further elaboration of these issues.
2. Planning:
Challenge of developing implementable projects
Wish Lists versus Bankable
Projects
Highly summarised lists of proposed priority programs and projects
in the
various regions of Africa are given in Annexes D, E, F, G, and H as
part of
the information on the current status of the power sector in Africa.
Details
of individual projects are available on the websites of the various
power
pools, utilities and ministries of energy and finance.
The New
Economic Partnership for Africa's Development (NEPAD) Energy
Initiative
(Zhou, 2003) has generated a number of projects that have been
made
available at investment conferences.
Through the World Bank's PRSP
initiative, the United Nations Millennium
Project and regional and
continental bodies such as ECOWAS and FEMA, an
attempt has also been made to
define electrification targets for poverty
reduction and to meet the 2015
MDGs. Some of the more ambitious targets
envisage achieving universal
electricity access in Africa as early as 2030.
FinGaz
Njabulo Ncube Chief Political
Reporter
THE Movement for Democratic Change (MDC) has lodged an
application in the
Supreme Court challenging the legality of sections of two
key electoral laws
the main opposition says President Robert Mugabe has used
to maintain his
hold on power.
The Morgan Tsvangirai faction of the
MDC, which is yet to decide on whether
it will participate in next year's
elections, is challenging sections of the
Zimbabwe Electoral Commission
(ZEC) Act and the Zimbabwe Electoral Act, in
what will turn political
temperatures to boiling point in the build up to
the March 2008
elections.
Five sections of the ZEC Act, namely Sections 3 (1) (a) (chapter
2:12),
section 3 (1) (b) (chapter 12:2), section 15, Section 15 (1) (d) and
15 (2)
(chapter 2:12) and section 15 (3) (chapter2: 12) are being challenged
by the
Tsvangirai faction.
These give President Mugabe the prerogative to
appoint the chairperson of
the ZEC and four other commissioners, and
prohibit political parties from
providing voter education to the
electorate.
Tsvangirai's party is also contesting Section 16 of the Electoral
Act,
regarding the appointment of the registrar of constituencies and
polling
officers. The officials are supposed to be drawn from the public
service,
but the MDC charges that the provision allows the veteran
Zimbabwean leader
to stuff the system with party activists.
The MDC says
the two electoral laws make President Mugabe the "referee,
player and
supporter" in elections, in violation of the Constitution.
Legal experts said
the timetable for the 2008 elections would be in shambles
should the Supreme
Court endorse the MDC's arguments.
With less than 10 months to go before the
crucial elections in which
President Mugabe is likely to square up with
Tsvangirai for the second time
in as many years, the ZANU PF strongman will
have little time on his watch
to revamp the electoral processes, the legal
experts say.
In his founding affidavit, the opposition leader says the MDC
views the
cited sections as being inconsistent with the provisions of the
Constitution, and must therefore, be declared null and void.
He said the
opposition party had a vested interest in the matter, as it
would field
Tsvangirai as the opposition's presidential candidate in the
event that the
MDC decided to participate in the presidential polls next
year.
"The
applicant (MDC) will also participate in the parliamentary and
senatorial
elections in the event that these are held in 2008 as has been
reported in
the government-controlled media," reads part of Tsvangirai's
affidavit. "It
is therefore, important that all legal instruments, which
regulate the
elections comply with the provisions and spirit of the
Constitution of
Zimbabwe for there to be free and fair elections."
He said section 3 (1) (a)
of the ZEC Act contravened section 61 (1) (a) of
the constitution, in that
the Act limited the appointment of the chairperson
of the commission to "a
person qualified to be appointed as a judge of the
High Court or Supreme
Court."
The constitution provided that the chairman of the Commission "shall
be a
judge of the High Court or a person qualified to be appointed as a
judge of
the High Court or Supreme Court.
"Given that the chairman is
appointed by the President who, under the
current set up, is the President
and Secretary of the ruling ZANU PF party,
the section, as appears in the
Act, leaves room for the President to appoint
party activists from his
political party merely because that person might be
qualified to be
appointed as a judge having regard to his educational
qualifications and
experience after being admitted as a legal practitioner."
He said Section 3
(1) (b) of the Act contravened section 61 (1) (b) of the
constitution in
that the constitution provided that in addition to the
chairman, there shall
be six other members of the commission, at least three
of whom shall be
women, appointed from a list of nine nominees submitted by
the Committee of
Standing Rules and Orders. The Act, he argues, gives a
total of four other
members of the Commission, in addition to the Chairman,
at least two of whom
shall be women. The Act also reduced the number of
nominees to be submitted
to the Committee of the Standing Rules and Orders
to seven.
Section 61
(8) of the Constitution stipulates what shall or may be provided
for in an
Act of Parliament. Among the functions of the Zimbabwe Electoral
Commission
as laid out in section 61 (4) of the constitution is "to conduct
voter
education".
However, in section 15 the Act dealt with voter education by
persons other
than the Commission or political parties. Tsvangirai said
section 15 of the
Act was invalid as its provisions were not included in
section 61 (8) of the
Constitution. The MDC wants the section declared null
and void, saying they
contravene the provisions of section 61 (8) of the
Constitution.
Tsvangirai argues in his affidavit that section 15 (1) (d) and
15 (2) of the
Act should be declared null and void because they contravene
section 20 of
the constitution which protects freedom of expression.
"The
requirement that other persons or organisations involved in voter
education
must furnish the commission with a programme for a approval by the
same
commission offends against both principles of natural justice and
hinders
enjoyment of freedom of expression. The commission must have its own
programmes. The constitution does not allow it to approve voter education
programmes of other persons or organizations."
Section 15 (3) of the Act
contravenes section 61 (8) of the constitution, as
the constitution does not
call for criminal or penal provisions to be
included in the Act. The Act
says anyone who violates these provisions is
liable to a custodial sentence
or a fine.
Section 16 of the ZEC Act makes the commission the sole and
exclusive
recipient of all foreign contributions or donations for the
purpose of voter
education. The MDC argues that that scenario is not
provided for in section
61 (8) of the constitution.
Tsvangirai's
challenge is the latest in a series of legal battles that his
party has
fought against ZANU PF.
After the tightly contested 2000 general election,
the MDC mounted court
challenges against results in 39 constituencies that
had been won by ZANU
PF. The High Court nullified the results in half the
constituencies, citing
violence and intimidation by the ruling party.
However, ZANU PF appealed,
drawing out the battle into the 2005 election.
FinGaz
Dumisani Ndlela Business Editor
THE
Zimbabwe dollar tumbled on the parallel market following an
inflation-sparked explosion in demand for foreign currency as investors took
flight from a struggling domestic currency.
The local unit weakened
dramatically on Thursday on new inflation statistics
that indicated the rate
had climbed up by the biggest margin ever in a month
to touch a record high
of 3 713,9 percent year-on-year for April.
The Zimbabwe dollar, which had
been trading at $30 000 to the greenback on
Wednesday last week, plunged to
a low of $38 000 to the United States dollar
and slid further to $45 000 to
the US unit yesterday.
Dealers said buyers were scrambling for inadequate
foreign currency on the
parallel market and rates were moving daily on
increasing demand.
"There is huge demand and everyone is looking for foreign
currency," one
parallel market dealer said.
The defenceless Zimbabwe
dollar traded at $85 000 to the British pound, from
$60 000 on Wednesday
last week. It hit a low of $6 000 against the South
African rand, from $3
900 against the rand on Wednesday last week.
Dealers said the market was in
critical shortage - sellers were not willing
to dispose hoping to take
advantage of even higher rates on future
disposals.
Buyers were bidding
aggressively, pushing the rates higher.
"It looks like everyone is coming to
the parallel market because they can't
get the foreign exchange from the
official market," a dealer said,
indicating that he was failing to meet
orders from a list of buyers.
Dealers from the official market said foreign
currency inflows remained very
limited, and the bulk of transactions were
being made on behalf of the
central bank, which was paying $15 000 or more
for the US dollar from those
selling through the official channels.
The
exchange rate for non-central bank transactions on the official
market
remains fixed at $250 to the US dollar.
FinGaz
POLICE have banned a planned protest
by bank employees, saying they feared
unruly elements would hijack the
protest and cause mayhem in the capital.
This immediately sparked a
go-slow at POSB yesterday. Reports swirled in the
market a crippling strike
could take place in the sector soon.
Bank workers had sought permission to
stage work protests against their
employers for refusing to award them 165
percent salary increments. An
independent arbitrator determined the
increments for the bank employees.
The increment would have raised the
minimum income for bank workers to $626
725, from $86 000. The workers, who
are affiliated to the Zimbabwe Banks and
Allied Workers Union (ZIBAWU), also
won the right to bi-monthly transport
and housing allowance
reviews.
However, the Banking Employers Association
of Zimbabwe, which
represents the banking institutions, refused to implement
the judgment by
the arbitrator, forcing ZIBAWU into mobilising its members
for the planned
protest.
Police wrote in a letter to ZIBAWU last week signed by officer
commanding
the Harare central district, I.M Tayengwa: "For security reasons,
your
application has not been approved. Unruly elements are highly likely to
join
your march and create chaos for them to loot . . . and destroy property
and
buildings."
- Staff Reporter
Last year bank employees staged a
crippling work boycott, which paralysed
operations at the country's
financial institutions. Police had to intervene
at some banks after the job
boycotts became riotous.
FinGaz
Clemence Manyukwe
Staff Reporter
A PARLIAMENTARY report has opened the lid on the rot in
government's
much-touted National Youth Service programme, revealing how
youths and
soldiers are fighting over food, and how female recruits live in
constant
fear of sexual abuse by their instructors.
The report,
tabled in Parliament last week, recommends the temporary closure
of the
camps, underscoring the legislators' "horror" at the living
conditions at
the centres. The report was compiled after tours of the
national youth
service centres and vocational training centres by Members of
Parliament
(MPs).
Youths frequently go to bed hungry, the MPs established, and at one
youth
camp, there had been "an upheaval" over food.
"The committee was
disturbed by the diet offered at the National Youth
Service Centres. At Guyu
National Youth Service Centre in Matabeleland
South, the committee was
horrified by the state of the barracks. They had no
doors or windows and the
students complained about finding cats and snakes
in the
barracks."
Trainees get a cup of porridge with no sugar each morning, and
lunch is
always sadza with either beans or boiled cabbage.
At Magamba
Vocational Training Centre (VTC), which the MPs visited in March,
students
said they had been on a monotonous diet of sadza and cabbage every
day since
the centre opened in January.
"The committee was dismayed by the state of
hostels at Magamba VTC. The
hostels were old and falling in and doors had no
handles. The ceilings were
badly affected by termites and the students were
crowded in small rooms, as
some hostels had become inhabitable," the report
said.
"The condition of the ablution facilities at Magamba was quite
appalling as
well. In some hostels only one out of six toilets was in
working order and
showers were rusted and leaking."
At Kaguvi VTC, the
report reveals how a fight erupted between soldiers and
the youths.
"The
committee was informed of an incident of violence involving army
personnel,
a unit of the operation Maguta programme based at the centre, and
National
Youth Service students. An upheaval arose over the issue of delays
in the
serving of food and one student had his arms broken."
The report says the
administrators of the youth service centres have not
been forthcoming with
information regarding life at the camps. The MPs have
recommended that cases
of violence and abuse be reported to the police and
be fully
investigated.
"Since the inception of National Youth service, there have been
some
worrying reports that female trainees were sexually abused by male
instructors or by fellow male trainees," the report says.
Zanu PF Gutu
South MP Shuvai Mahofa chairs the 17-member committee,
dominated by the
ruling party.
FinGaz
THE Reserve Bank of Zimbabwe
(RBZ) is pushing for reforms to enable it to
achieve greater autonomy and
change the way it decides on monetary policy.
The central bank has
recommended the enactment of legislation drastically
curtailing credit to
government, saying demand for lending to government is
undermining its
ability to effectively pursue its policies.
The bank has also proposed laws
establishing a Monetary Policy Committee
(MPC) to determine monetary policy,
and wants to be allowed to market other
minerals in addition to gold.
The
proposals are contained in a document submitted by the central bank
during a
meeting last Thursday between RBZ chief Gideon Gono and
legislators.
"Section 7 (2) of the (RBZ) Act provides for lending to
government. The
worldwide trend is to discredit extending credit to
government," the central
bank document says.
"Lending to government
should be prohibited and, in the exceptional case
where it is permitted, be
severely limited by statute."
Although the law says the central bank shall
"not be subject to the
direction or control of any other person or
authority", it is felt that this
provision is undermined by the requirement
"for consultation and/or consent
of/by the Minister of Finance".
The bank
has recommended a constitutional provision, as well as an amendment
to the
RBZ Act, providing for greater operational independence .
"Section 45
(Monetary Policy provision), requires the bank to consult the
Minister in
the formulation and implementation of the monetary policy of
Zimbabwe.
Consultation may compromise the Bank's independence in formulating
and
implementing monetary policy," the document says.
Another area in which the
RBZ is seeking autonomy is in the registration and
deregistration of banks.
It wants the requirement that the Registrar of
Banks should consult the
Finance Minister when registering or deregistering
a financial institution
to be dropped.
The central bank says the existing law does not specify
prohibited lending
activities.
The RBZ has also proposed an amendment to
the Minerals Marketing Corporation
of Zimbabwe Act, which bestows the right
to market all minerals, except
gold, solely on the parastatal. The RBZ,
through Fidelity Printers, has the
monopoly on all gold purchases and sales.
It wants to be mandated to buy and
sell other minerals perceived to be
"strategic".
Another proposal is for the formation of the MPC for purposes of
making
monetary policy decisions.
MPCs - a panel of experts that decides
and votes on key monetary policy
issues such as interest rates - have become
the norm in modern economies.
Current Zimbabwean law, however, does not
provide for the establishment of
an MPC, and does not state clearly who is
responsible for monetary policy.
"Several arguments have been advanced for
and against the establishment of
MPCs. An argument in favour of the
establishment of an MPC includes the
pooling of knowledge in the monetary
policy decision making," the RBZ says.
FinGaz
Staff
Reporter
ZIMABABWEAN non-governmental organisations (NGOs) attending the
African
Commission for Human and Peoples' Rights (ACHPR) meeting in Ghana
have
refused to address the Commission on the human rights situation in the
country because of concerns about their security in the face of threats made
against them by Justice and Parliamentary Affairs Minister Patrick
Chinamasa.
At least five NGOs from Zimbabwe, including the Media
Institute of Southern
Africa (MISA-Zimbabwe), the Human Rights Trust of
Southern Africa and the
Zimbabwe Lawyers for Human Rights (ZLHR), had been
expected to deliver
separate statements last Saturday. Instead, the groups
released a joint
statement through the Civil Liberties of Nigeria in which
they expressed
grave concern over Chinamasa's utterances.
In a live radio
interview in the Ghanaian capital Accra, Chinamasa branded
Zimbabwean civic
society organisations as regime change activists, singling
out MISA-Zimbabwe
Legal Officer Wilbert Mandinde as one such "British
funded" activist.
FinGaz
Staff
Reporter
FEARING a ban on ivory trade would worsen the foreign currency
crisis facing
the country, Zimbabwe will next month take its lobby to the
Netherlands
where opponents, who accuse the country of opening game areas to
poachers,
are digging in their heels.
Leading the campaign against
trade in ivory are Kenya and Mali, who are
arguing that trade in ivory will
escalate poaching of elephants on the
continent.
George Pangeti, the
Parks and Wildlife Management Authority chief executive
officer, said the
authority, one of the major revenue centres for the
country, was ready to
fight Zimbabwe's case in the Netherlands.
Outlawing ivory trade would cost
Zimbabwe between US$100 million and US$120
million at a time when the
country's economic fortunes have taken a turn for
the worst.
With
inflation hovering above 3 700 percent, the highest in the world,
Zimbabwe
has battled crippling foreign currency shortages for seven years
blamed on
government mismanagement of scarce national resources.
The government denies
the charge and lays the blame squarely on targeted
economic sanctions
imposed by the United States of America and the European
Union.
Kenya and
Mali, said to have won the support of many members of the
Convention on
International Trade in Endangered Species of Wild Fauna and
Flora (CITES),
whose meeting is scheduled for next month, also have the
support of the rich
animal rights and environment lobby, which is expected
to rally behind the
proposed ban.
They will formally present their proposals and arguments for
the ban at the
CITES meeting in the Netherlands.
Environmental and animal
rights lobby groups have prepared dossiers to
support the ban. These include
cases of increased elephant poaching in
Zimbabwe's game areas as well as the
reckless slaughter of the beasts by
poachers, some of whom are alleged to be
conniving with well-connected
politicians owning vast tracts of game areas
in the country.
Kenya and Mali want a ban on both raw and manufactured ivory
trade.
Environment Minister, Francis Nhema, told The Financial Gazette that
the
country would fight to retain its right to ivory trade, saying its
conservation policies were among the best on the continent.
"It is
imperative for us to keep fighting and all stakeholders in this issue
should
join hands in the fight," Nhema said.
He said Zimbabwe could lose billions of
dollars in potential revenue from
ivory sales if the ban came into
force.
He accused Kenya of fronting a political agenda against
Zimbabwe.
"We know that the ban is not a brainchild of Kenya. We are certain
that
there is a non-governmental organisation (NGO) that is behind the
proposed
ban," Nhema said without revealing the identity of the
NGO.
Zimbabwe is battling an overpopulation of elephants, with an estimated
annual population growth rate of five percent.
A recent survey conducted
by the World Wide Fund for Nature showed that
Zimbabwe's elephant population
stood at more than 100 000, against a
carrying capacity of 47 000.
Hwange
National Park alone has an elephant population of about 45 000.
FinGaz
Staff Reporters
ALTHOUGH
miners elsewhere are smiling all the way to the bank owing to high
mineral
prices on the world market, their Zimbabwean counterparts have a sad
tale to
tell and are battling to survive, Chamber of Mines president Jack
Murehwa
said last week.
Murehwa told delegates at the chamber's Annual General
Meeting (AGM) that
Zimbabwe had not benefited from the boom in mineral
prices currently
benefiting mining houses internationally.
He said
high
inflation, a skewed exchange rate and
foreign currency and power
shortages had devastatingly affected mining
operations in the
country.
Nickel, platinum and gold had continued to fetch good prices on the
international market, buoyed by strong demand in China.
"While prices of
metals are currently
so good, with a lot
of investment being made in other
African countries, we in Zimbabwe have not
benefited from this boom . . .
Surely, our government has control over
issues such
as exchange rate
management, inflation control, provision of foreign
currency, approval of
correct tariff structures to enable utilities like
ZESA to sort out its
power generation and supply, so that the mining sector
and other businesses
can thrive," said Murehwa.
"Unfortunately price booms like we are
experiencing today are not a long
term feature and once we miss them they
are unlikely to return in the short
term," said Murehwa.
Murehwa said
both government and the chamber had not achieved their goals as
set out at
last year's meeting, especially regarding empowerment in the
mining
sector.
"We achieved neither the growth nor the empowerment to the extent we
had
anticipated and it is sad to note that our industry experienced and
continues to experience declines in volumes in the production of most metals
and minerals despite the very buoyant metal/mineral prices which prevailed
throughout the past 18 months," he said.
"Sadly, the metals and minerals
that have survived the decline also risk
stagnation or decline as policy
frameworks continue to change," said
Murehwa.
The mining sector is now
the country's largest foreign currency earner after
agriculture's collapse
and contributes five percent to the country's Gross
Domestic
Product.
...but CAG boss sees potential 'mining paradise'
GREG Hunter,
the chief executive officer of the London Stock Exchange
(LSE)-listed
Central African Gold (CAG), says Zimbabwe can be Africa's next
mining
paradise after the Democratic Republic of the Congo (DRC) if it
addresses
its political and economic woes.
The CAG boss said Zimbabwe, reeling from
mounting economic hardships, had
been
disregarded as a source of large
gold deposits in Africa, though the country
offers large and valuable
resources, which are hard to find elsewhere on the
continent.
Hunter said
his African oriented company chose to set up operations in
Zimbabwe because
of its exciting geology.
"Zimbabwe could become mining's next Democratic
Republic of the Congo, if
the political situation here improved and in the
meantime business in
Zimbabwe was hard but not unmanageable," he said in an
interview with an
online mining website.
"Factors that make Zimbabwe
appealing to mine in are the country's good
infrastructure, a highly
qualified workforce proficient in English and the
proximity of South Africa
to Zimbabwe from which consulting skills can be
quickly and easily sourced.
It is not impossible to find skilled miners in
the country, despite the fact
that mine industries in Botswana and the DRC
have attracted some experienced
mining workers," said Hunter.
CAG is a mining and exploration company
established to identify, acquire and
develop gold projects in Africa. It
aims to build it into a mid-tier African
focused gold exploration and
production company. CAG, which is also listed
on LSE as Alternative
Investment Market (AIM), currently has an extensive
exploration portfolio in
Mali, Botswana and Ghana.
CAG moved into the country about two months ago
when it acquired Falgold
(84.7 percent) and Olympus (100 percent) mines for
US$6.2 million that
produced about 21 000 ounces last year.
Hunter said
the mining regulatory environment in Zimbabwe was still
functioning and
mining tax rates of 15 percent with no royalties payable by
gold companies
made operating in the country more attractive.
This is despite the fact that
the Minister of Mines and Mining Development,
Amos Midzi, issued a warning
last week to mining companies telling them to
develop operations in the
country or risk their mines being seized.
Hunter added that the company has
not experienced more problems due to power
cuts currently gripping the
country than it has in Ghana, where it is
operating the Bibiani gold
mine.
"Zim (Zimbabwe) works, the relative ease of registering mining permits
is
evidence of this," he said.
Hunter said competition in the country had
intensified with new mining
companies moving in, a number of smaller deals
being done by private
companies, and private individuals and funds
increasingly trying to invest
in Zimbabwe by buying into the Zimbabwe Stock
Exchange.
Hunter said CAG had had some success in adding value to its
resource base in
the country. The company started a high level exploration
programme that
will soon be followed up by a confirmatory drilling programme
on known areas
of interest.
"We have initiated an exploration programme
and continue to produce gold in
Zimbabwe, while we wait for the political
situation to
normalise. If the situation improves and the size of the company
reaches a
certain critical mass, we will raise capital externally and
maximise the
value of the company in Zim (Zimbabwe)," said Hunter.
FinGaz
LOCAL engineers are engaging government in the resort town of
Victoria Falls
on the need for a regulatory framework to govern the
activities of the
profession.
Zimbabwe Institution of Engineers (ZIE)
president Engineer Martin Manuhwa
said the institution would take advantage
of interactions during its
congress, which opened in Victoria Falls on
Tuesday, as is being held
jointly with the World Council of Civil Engineers
to push its agenda.
"We need an act of parliament and we will be discussing
this with government
representatives who will attend the congress. By the
end of the congress, we
should have the government's view and position on
the proposed act of
parliament for the profession," he said.
The congress
ends on Sunday.
Engineers have left the country in droves due to an economic
crisis now in
its seventh year.
"Our profession has been hit by a number
of problems but the major issue
that has (bothered us) is that of engineers
opting for the exit route to
other countries like South Africa and
Botswana," said Manuhwa.
He said there was need to reduce "the risk factor"
caused by the current
economic crisis.
"No one wants to invest his or her
money and resources in a risky
environment," he said. "We are concerned at
the continual decrease in the
standards of living of professional people,"
he added.
Experts attending the conference raised fears that the brain drain
in the
engineering sector was likely to leave the country without qualified
engineers.
- Staff Reporter
FinGaz
Comment
THAT Zimbabwe's
educational system is in the same bed as other
once-promising sectors of the
economy now battling for survival in the
country's overcrowded intensive
care unit is beyond debate.
While the authorities might not admit it
openly, choosing to look at it
through rose-tinted glasses, the truth of the
matter is that a lot can be
said by the unsaid.
Nothing however, can be
more telling of the desperate depths of despair in
government today to find
a cure for the skills haemorrhage than the latest
attempts to limit
widespread human capital flight from all facets of the
economy to greener
pastures. As a result, poor Zimbabwe has been reduced to
a dual role of
being the training ground for the world's bustling economies
and a dumpsite
for the chaff failing to meet the grade in the competitive
world.
With
effect from next month, all university and college students receiving
government grants and loans will be compelled to join the civil service -
not long ago a much sought after job market before years of under-funding
reduced it to one of the least paying sectors - for specific periods before
they can be allowed to find work elsewhere, ostensibly to stop the
unprecedented brain drain. That is if reports in a weekly government
mouthpiece are anything to go by.
Revelations of the cadetship scheme
came hard on the heels of reports
carried in this publication revealing that
the public service is losing an
estimated 40 employees daily for reasons
varying from poor working
conditions and pathetic salaries to the HIV/Aids
pandemic decimating the
country's most productive age groups. The vacancy
rate in the Mines
Ministry, a top contributor to the Gross Domestic Product,
stands at an
alarming 52 percent, impairing the resource sector's ability to
plug rampant
leakages costing the crisis-riddled economy between US$40
million and US$50
million weekly. The situation in the Home Affairs Ministry
is equally
depressing. The vacancy rate for the ministry, which presides
over the
police, has been put at about 45 percent, once again, a recipe for
disaster
given the inverse relationship that exists between crime and
manning levels.
Figures yet to be endorsed by government suggest that 4 500
teachers have
resigned from the civil service since January, meaning to say
900 teachers
are leaving the noble profession every month. The situation is
even more
terrifying in the health sector where nurses, pharmacists,
radiographers and
doctors are leaving in droves for Europe, Asia, the United
States and
Britain, where per capita income is high. Government has had to
recall
experts in this field from retirement in order to save lives.
As
it is, the public service is literally deserted and this explains the
shoddy
service Zimbabweans have to put up with every day despite parting
with a
significant portion of their incomes in pay-as-you-earn taxation. The
passion, commitment and dedication to duty is just not there anymore in the
civil service. A good number of those still hanging in there are a
disgruntled lot, simply waiting to seize the opportunity to join the Great
Trek, while in the meantime moonlighting to supplement their meagre incomes.
It doesn't end there.
At the very top, senior civil servants hardly spend
time in offices as focus
has shifted to the farms wrested from former white
commercial farmers and
other private business interests that have nothing to
do with their brief in
government. Unfortunately, the trend extends right
across the army, the
police and members of the secret service, and yet this
is an unforgivable
offence in other countries.
With a third of the
country's population (four million people) living
outside its borders, the
rapid pace of the brain drain is impeding efforts
to right the country's
shrinking economy. The situation is just not
sustainable. Losing US$200 000
invested in training a medical practitioner
alone is, by any measure, beyond
what any Third World country can afford.
What more for Zimbabwe, neck-deep
in the throes of a recession now in its
seventh year!
And yet it is
difficult to fault the poor civil servant. Most civil servants
earn monthly
salaries of not more than $480 000, a far cry from the
breadline quoted at
$1,7 million. With inflation steeped at 3 714 percent,
the brain drain can
only get worse. True, investments and remittances from
the country's sons
and daughters in the diaspora have helped lessen the
economic bleeding, but
again, at what cost?
We have said it before and we will say it again,
legislation alone cannot be
the panacea to the country's multi-faceted woes.
As opposed to treating the
symptoms, the government should swallow its
pride: close ranks with its
perceived enemies and address the root causes
without delay and before the
ailment mutates into a full-blown crisis.
One-size-fit-all measures to limit
mobility might further inhibit
development, not to mention violating the
rights of those concerned.
The
net effect of the cadetship scheme will only be felt among the country's
poor. Children of the country's nouveau-riche, including high-ranking civil
servants and politicians, will continue to enrol at some of the world's most
expensive schools and colleges, never mind the source of funding.
FinGaz
Matters Legal with Vote Muza
SINCE the promulgation of
Statutory Instrument 80A of 2007, more fully known
as the Customs and Excise
(Designation of Luxury Items) Notice 2007, there
has been a lot of debate on
the legality or otherwise of the state's
intention to charge duty on certain
designated goods in foreign currency.
Some legal experts have
labelled the law illegal based on various reasons.
This highly charged
debate on the state's controversial and somewhat
objectionable move
culminated in a report carried by the Herald recently
stating (against
comments by several legal experts) that indeed, there is
nothing wrong in
the state charging certain imported goods in foreign
currency.
To be more
precise, the Herald quoted a high ranking Zimbabwe Revenue
Authority
official stating before a Parliamentary Committee that the
government's move
had support in law.
Out of my desire to know more about the law on import
duty, and also by way
of attempting to enlighten readers, I decided to carry
out my own research.
My first port of call was the Finance Amendment Act
number 10 of 2003. (The
Herald's source incorrectly cited the Income Tax
Act). Section 44 of this
Amendment Act repealed section 115 of the Customs
and Excise Act (Chapter
23:02).
The heading of the new section 115 to the
Customs and Excise Act reads as
follows; "conversion of foreign currency and
payment of duty in foreign
currency in certain cases". For the benefit of
readers I shall also cite in
full Section 115 (2), which reads as follows:
"The minister may,
notwithstanding Section 41 of the Reserve Bank of
Zimbabwe Act (Chapter
22:15) or anything provided in or under the Exchange
Control Act (Chapter
22:05), require every person, including a resident of
Zimbabwe who imports
any item of goods (hereinafter in this section called
luxury item)
designated by the Minister by notice in a Statutory Instrument
to be a
luxury item, to pay any duty and value added tax payable on such
item in
United States Dollars, Euros, or any other currency dominated under
the
Exchange Control (General) order 1996 (Statutory Instrument 110 of
1996)."
An Act of Parliament introduced this clause in 2003, close to four
years
ago. Due to the apparent pervasive ignorance, or confusion about this
law, I
am left to believe that its passing may have been secretive, and
devoid of
any parliamentary debate.
I also have strong doubts if this
controversial law was presented to the
public for their views. The evident
shock and disgust by individuals and
groups put paid to the fact that this
law might have been introduced without
a wide public consultation
process.
Our finance and legal regime is a hard-hat area that is not for the
faint-hearted. It is made up of a plethora of laws, whose presence may
bemuse even the best of judges and advocates. That there was ignorance about
the above cited law is no one's fault, but primarily that of the authorities
whose tendency to over-regulate and bulldoze laws without the public's
approval is well documented.
Statutory Instrument 80A of 2007,
controversial as it may be, was passed
lawfully. It exists by virtue of an
Act of Parliament, and its content
creates no inconsistency with other
existing laws like the Reserve Bank Act
or the Exchange Control Act. The
crafters of this law knew what they were
doing, especially when one observes
the manner in which the provisions of
the Reserve Bank Act were ousted and
rendered irrelevant.
In the circumstances of our economy and our foreign
policy, the
justifiability of this law may be debatable. Government argues
that its sole
intention is to discourage the public from spending scarce
foreign currency
on "luxuries". On the other hand, members of the public who
are prisoners to
the dictates of a hyperinflation economy see value in
investing their wealth
in imports. The solution, in my view, lies in
government introducing
policies that allow for a normal flourishing of our
economy, and not to
attempt to save itself by extorting currencies of
foreign states from
citizens.
lVote Muza is a legal practitioner with
Gutu and Chikowero. He can be
contacted on Email:
gutulaw@mweb.co.zw
Shooting from the hip
EDITOR -
Featured on BBC World's Hard Talk and interviewed by Stephen Sackur
on
Sunday May 13, Tokyo Sexwale, one time Robben Island inmate, now Mr
Moneybags as well as a political hopeful to replace Thabo Mbeki as the ANC
president at elections slated for later on this year, does not mince
words.
Asked to use a morality stick to measure President Robert Mugabe's
regime
against the dismantled apartheid state, he stops just short of
lumping the
two together ". . . Mugabe is one of us, he is a freedom fighter
. . ."
Pressed to elaborate he explains: ". . . He (Mugabe) used to be one of
us,
he used to be a freedom fighter, a democrat but it does not mean he will
remain like that . . ."
On Mbeki's failed quiet diplomacy and recent
regional consent to give it
another shot,Tokyo does not rule out regional
sanctions against Zimbabwe
should the current Mbeki effort falter. Given the
collegiate political
processes at the ANC, it is unlikely that the sanctions
option is one that
has not been fully ventilated within the party.
The
leader of the opposition MDC, Morgan Tsvangirai, interviewed on the same
programme by the same reporter on Monday May 14, comes out soft spoken as
usual but credible, humorous and articulate.
Pressed on why the Southern
African Development Community has prolonged
Mbeki's quiet diplomacy mandate,
he remarks: ". . . Privately they (regional
leadership) reminded him
(President Mugabe) he does not live in China . . ."
Clearly though, the MDC
could never win a free and fair election in Zimbabwe
as long as President
Mugabe remains afflicted with the political neurosis
that causes him to
forcibly deny Zimbabweans the right to be ruled by a
government of their own
choice, a most basic universal human right.
By putting Zimbabwe's
democratisation constraints on the international
agenda, exposing the
violent and corrupt manifestations of ZANU PF, the
courageous activists in
civic organisations, the churches through the
Zimbabwe Council of Churches,
the Catholic Commission on Justice Peace, the
student bodies and all
concerned Zimbabweans have won.
Jacob
Mungoshi
Canada
----------------
Read writing on the wall,
Betera
EDITOR - I would like to respond to the letter by
Mordecai Betera, (The
Financial Gazette, May 17), which was quite
depressing. First, Betera needs
to be reminded what we learned in primary
school that if you want to quote
someone, do it correctly.
A close
scrutiny of Kadungure's letter reveals that he said, ". . . the MDC
sought
intervention predominantly from the region, vesting monumental trust
in the
post-apartheid South Africa", not as Betera put it. In our context,
region
means in and/or around Zimbabwe. South Africa is a black country, so
I do
not see any racial bias in trying to engage Thabo Mbeki to resolve our
crisis.
However, it is clear that Betera needed the obvious answers for
everything,
although our political and economic status is enough writing on
the wall.
Recently, human rights lawyers were arrested on spurious charges.
Peaceful
demonstrations by their counterparts were crushed. The inflation
rate
reaches 3 700 percent, beating the world record.
All these factors
should suffice to give Betera a clear picture of a
Zimbabwe which was
painted by Innocent Kadungure. Thank you Kadungure, we
definitely 'need a
new civilisation'. As to Betera, please look at the wall
and stop talking
gibberish.
E.B.G. Zvandasara
Harare
------------
The way to
go
EDITOR - I applaud the article by Terence Zimwara and I'm
convinced that his
proposal is the only way for the government and the
Reserve Bank of Zimbabwe
to go. A free market will just about dismantle the
structures of the
parallel market that we see today.
One might argue that
players on the parallel market will in turn increase
their rates but I can
assure you that parallel marketers deal for value thus
if the official rates
are determined by the market, parallel market dealers
will be driven out of
business.
How, one might ask? There is no security on the parallel market and
people
are just going there because there is no better alternative. If the
parallel
market rates are at par with official rates, people will rush for
the more
secure transactions. If parallel market dealers raise their prices,
they are
bound to operate at a loss and, like Terence said, inflows of
foreign
curreny are bound to increase at market determined
rates.
Huddon
Harare
------------
Normalising the
abnormal
EDITOR - Tony Namate's suggestion (Readers Forum,
May 17, 2007) that ZESA
should embark on a scheme of voluntary load shedding
represents a selfish
and skewed mentality that has sadly become a norm in
our increasingly
divided society.
Namate suggests that ZESA should raise
electricity tariffs to "market"
levels so that those who can afford the
higher rates would not have to
experience power cuts, while the majority
would have to use electricity only
when desperately necessary.
Things are
difficult in Zimbabwe but this should not give people an
opportunity to
shamelessly advocate for policies that will further widen the
chasm between
the rich and the poor. Namate is right in pointing out that
almost
everything is now being bought on the black market, but that does not
mean
we should normalise the abnormal.
Rather than showing us his insensitive
side, Namate should in fact be at the
forefront of advocating for people's
rights so that everyone gets the basic
necessities of life. Unless Namate
was speaking with tongue in cheek, as he
often does in his cartoons, it is
difficult to see why he would think of
such a difficult solution to a simple
problem. It would be easier for rich
people like him to have electricity
generators installed at their homes.
Namate's ideas belong to the Stone Age
era where men derived satisfaction
from seeing their fellow beings
suffering. Next time we read his
contributions, we expect Namate to
encourage ZESA and the government to
invest more in solar energy technology
for the benefit of all people - rich
or poor.
It is bad enough that ZESA
has to use load shedding to distribute a scarce
resource because by now they
should be looking at how to bring electricity
to rural and remote areas of
the country. However, it would be a tragedy if
ZESA were to condemn a
section of the society to total darkness simply
because they are poor.
In
these difficult circumstances, ZESA has to be commended (only in this
respect) for making sure that all men are equal.
Hudson
Taivo
London
--------------
Rule of law thrown out of the
window
EDITOR - The breakdown of the rule of law in Zimbabwe,
characterised by the
callous defiance of court orders by the police, has
done enough damage to
the country"s reputation in the eyes of all right
thinking people.
It is a fact that no investor will ever commit his funds in
a place where
his investment is not safe. While the land reform programme
was a noble
idea, subsequent amendments to the constitution banning access
to the courts
by aggrieved parties whose land had been forcibly acquired
further
buttressed the view that the rule of law has irretrievably broken
down.
Access to the courts for the determination of one's rights is a
fundemental
human right in any functional democracy. The danger with this
law is that it
can be used to punish the government's percieved enemies with
impunity. The
agricultural sector is unlikely to see any major investment as
long as this
law remains in place because it scares away investors.
As
for other sectors of the economy, the situation is equally sad. The
defiance
of court orders has reached unimaginable levels in our country.
This creates
a climate of impunity, which cannot be reconciled with any
meaningful
investment into our sickly economy.
Kudzayi
Kadzere
Harare
----------
A new wave of birth pains for
Zim
EDITOR - I was sitting in the Kgale Mountain in Botswana,
looking towards
Zimbabwe and my heart sank. I felt hopeless, miserable and
weak. What is
happening to the land that should be flowing with honey and
milk?
I began to think about the inflation rate, the poverty, murders and
violence. When I thought of the widows and orphans, tears started falling
from my eyes. If it is difficult for a man, think of the widows and orphans.
They have no one to appeal to except God. Is it that God cannot see or
hear?
Very soon I was disrupted by a young couple who had a young baby who
was
crying softly on the mother's back. I could see the pride and love of
the
parents as they nursed their fruit of love. Suddenly I thought about
birth
pangs and I felt shivers running down my spine. I tell you, it's bad
when
women sweat profusely and cry when the doctors continually order "push,
push
. . ." Today I say to Zimbabwe push, push . . .
The pains of a woman
become more frequent and closer as the birth
approaches. I remembered the
situation in Zimbabwe before 1980 and suddenly
a smile like the rising sun
showed on my face.
Zimbabwe experienced birth pains towards independence -
people, including
President Robert Mugabe, were killed, maimed and tortured.
Leaders of that
era had become jail birds. Their lives were in constant
danger and it got
worse before independence. That's when bases like Chimoio
and Nyadzonya, to
name but a few, were bombed. Come 1980, Zimbabwe was born,
resulting in
great joy and jubilation.
However, we can't live for
yesterday as things are no longer the same. The
situation in Zimbabwe is
bad. The country has been riddled by poverty,
death, desolation and darkness
due to excessive power cuts. President Mugabe
and others bore the birth
pains of independence but we are now experiencing
a new wave of birth
pains.
Let us help bring about a bouncing baby (a new Zimbabwe). The process
of
delivering a baby involves some stages. Let us be patient and follow the
stages slowly and painfully. Let me warn you that you shouldn't use drugs or
alcohol to relieve the birth pains because the contractions might be
disturbed leading to the birth of a deformed child. We have gone through too
much to risk the birth of a deformed child (broken Zimbabwe). At times
doctors have to interfere so that the birth pains can come, like President
Thabo Mbeki is trying to do.
In congratulating Mbeki for being chosen as
the midwife, I want to caution
him that Zimbabweans, SADC, Africa and the
whole world are anxiously waiting
for that new baby (Zimbabwe) and history
will hold you accountable for the
success or failure of its birth.
After
all these thoughts passed through my mind, I started down the mountain
with
birth pains, but I had one thing - hope. Zimbabwe is experiencing its
second
level of birth pains after the liberation struggle and the Concerned
Africans Association and other organisations have to play the midwife's
role.
Zimbabwe is a blessed country and almost every mineral is available
-
diamonds, oil, gold and good soils for agriculture. Unfortunately some
people have taken what God has prepared for his children for their own. I
take this opportunity to tell them that they might win against the people
but the God of the weak, widows and orphans shall not be overcome. Wherever
you are every morning breath a prayer for Zimbabwe.
Simbarashe
Chirimubwe (president)
Concerned Africans Association
African Path
Kimberly Ba
May 23, 2007 11:00 PM
China is busy
wooing African leaders into economic partnerships that
will have
repercussions for many years to come. If you look at some of the
most
tumultuous countries in Africa, you will find a Chinese connection.
Sudan
and Zimbabwe are two African nations that come to mind. We all know
about
the ongoing genocide in the Darfur region of Sudan but also the brutal
regime of Robert Mugabe, President of Zimbabwe.
Let's first
look at China in Sudan. As a close ally of Sudanese leader
Omar al-Bashir,
the Chinese are supplying military equipment that allows
al-Bashir's
military to slaughter the people of Darfur. Throughout this
crisis, the
Chinese have steadfastly supported Sudan regardless of how many
people they
murder in Darfur. Depending on which source you want to believe,
between
200,000 and 400,000 people have been killed in Darfur since 2003. Of
course
any attempt by countries on the United Nations Security Council to
impose
sanctions on Sudan is voted down by China.
As a loyal friend, China
is so involved in Darfur that they might as
well be slaughtering the people
of Darfur themselves. Expecting China to
care about the plight of the people
in Darfur would like asking Hitler to
show the Jews sympathy. time not to
use it again, they can't help
themselves. At least with Sudan, China is
loyal, supportive and very
generous. Did I mention that the majority of
Khartoum's oil exports go to
Beijing? Beijing gets oil, Khartoum gets
weapons. China is not benevolent
when it comes to the Sudanese, they will
benefit if oil is extracted from
Darfur.
Secondly, China's
involvement with the petty dictator of Zimbabwe
should be scrutinized; the
last thing Robert Mugabe needs is for someone to
pat him on the back and
bail his sorry ass out of trouble. With inflation at
more than 3,200%, all
Mugabe can do is blame the British and the West for
the severe economic
trouble he has led the country into. As if Mugabe needs
anymore
encouragement, China has become the largest purchaser of Zimbabwe's
tobacco
and promises to provide $500 million in trade income next year.
What about
those starving jobless folks who live in Zimbabwe who can't
afford to buy
bread?
With a population of over one billion people, China needs
access to
the natural resources in Africa and are capitalizing off the
West's lack of
interest in Africa, particularly the US. China will benefit
the most from
reaching out to Africa but Africa's leaders should be very
cautious. China
has proven they have no regard for human rights, personal
freedom or dissent
which makes them the last country you would want aiding
and abetting tyrants
in Africa. The only thing China can do is bring out the
worst in these
struggling countries.
China is a not a good role
model for Africa, it has the world's
cheapest labor market, while the
majority of sub-Saharan Africans are
unemployed. In China, the average
worker earns $20 a day while the average
worker in sub-Saharan Africa earns
less than $1 a day. Partnering with China
will do nothing to improve the
plight of Africa's poor.
As long as African leaders cozy up to
China and buy their cheap goods,
none of them will ever be able to develop
their own natural resources,
industries and agricultural potential. Why buy
something made in Africa if
you can buy it cheaper in China? The incentive
for African companies to
produce their own goods is non-existent if their
economies are flooded with
cheap products from China. China knows better
than the West, that the
easiest way to win allies in Africa is to bring the
checkbook.