The ZIMBABWE Situation
An extensive and up-to-date website containing news, views and links related to ZIMBABWE - a country in crisis
Return to INDEX page
Please note: You need to have 'Active content' enabled in your IE browser in order to see the index of articles on this webpage

IMF revises Harare economic growth forecast

by Own Correspondent Friday 23 April 2010

HARARE - The International Monetary Fund (IMF) has revised downwards growth
projections for Zimbabwe's economy, which the fund has maintained remains
fragile despite showing signs of recovery last year.

According to the IMF's World Economic Outlook report released on Thursday,
Zimbabwe's economy is now expected to post a 2.2 percent growth down from an
initial 6 percent.

The report said for next year the fund is projecting that Zimbabwe's economy
would register 0 percent growth.

In February, the IMF restored Zimbabwe's voting rights ending a seven-year
suspension, but ruled out any financial assistance until Harare clears about
$140 million in arrears and shows consistent economic reforms.

The grim outlook by the Bretton Woods institution comes on the backdrop of
rising annual inflation for March that has spiked to 3.7 percent up
from -0.7 percent.

Zimbabwe's Finance Minister Tendai Biti last week also said the government
was likely to revise economic growth forecast from the 7.7 percent to 4.8
percent - still an optimistic target compared to the IMF's figures.

Biti blamed the slow down in economic growth on political uncertainty which
he said had kept away foreign donor support, with government having to date
received only US$2.9 million out of the US$810 million it expects from
donors this year.

The southern African country's economy registered its first growth in a
decade last year after a new coalition government between President Robert
Mugabe and Prime Minister Morgan Tsvangirai implemented measures, including
the adoption of multiple currencies that doused hyperinflation.

Gross Domestic Product (GDP) last year grew by 5.1 percent compared to an
earlier projection of 4.7 percent, but the economy has since then suffered
because of unending political disputes between Mugabe's ZANU PF party and
Tsvangirai's MDC that are holding back badly needed foreign investment and
donor support.

A controversial plan to force foreign-owned firms to transfer majority stake
to local blacks is expect to inflict further damage to the limping economy.

Zimbabwe Stoke Exchange (ZSE) chief executive Emmanuel Munyukwi this week
said economic empowerment plan has sacred off investors with many putting
transactions on hold until there is clarity on the empowerment scheme.

Under the plan, foreign-owned firms have until May 15 to submit plans of how
they intend to transfer 51 percent stake to blacks over the next five years.

ZANU PF backs the plan and wants it implemented immediately, while the MDC
wants the scheme suspended to allow for more consultation and the drafting
of new empowerment regulations that will not scare away business - living
investors caught in the middle. - ZimOnline

Click here or ALT-T to return to TOP

Mugabe, Ahmadinejad rail against Western sanctions

Apr 23, 2010, 2:44 GMT

Harare - Zimbabwean President Robert Mugabe and Iranian President Mahmoud
Ahmadinejad both lashed out at the West Thursday night in Harare.

The two leaders spoke during a state dinner to mark the first day of
Ahmadinejad's two-day state visit at Mugabe's invitation, and the Iranian
president was received with full honours including a 21-gun salute and a
military flyover.

Prime Minister Morgan Tsvangirai's Movement for Democratic Change has
protested Ahmadinejad's visit as an 'insult to the peace-loving people of
Zimbabwe and Iran.'

Earlier, Mugabe met Ahmadinejad on arrival at Harare international airport.
Tsvangirai, the elderly Mugabe's partner in a 14-month-old unity government,
was noticeably absent.

Mugabe blasted the targeted sanctions that the United States and Europe have
imposed on both governments: 'Because of the principled position we have
taken, Iran and Zimbabwe have been unjustly vilified and punished by Western

Both countries were 'the victims of illegal and unjustified sanctions
imposed by Western countries who want to undermine our sovereignty,
independence and territorial integrity,' he said.

Zimbabwe supported Iran's right to pursue the peaceful use of nuclear
energy, Mugabe said.

Ahmadinejad took aim at countries that 'raise fears of injustices and
corruption yet they are plundering the resources of other countries to
expand their international domination.' He described Mugabe's leadership
style as 'a lesson for all nations.'

The two leaders signed a number of agreements on trade and tourism.

On Friday, Ahmadinejad is scheduled to open an international trade fair in
the western city of Bulawayo.

Later Friday, he will continue his African tour in Uganda, where he is
seeking support from President Yoweri Museveni's government against
increased sanctions threatened by the United Nations Security Council, in
which Uganda is currently a member.

In a statement Thursday, the MDC accused Ahmadinejad of being 'a war monger,
a trampler of human rights, an executioner of those with dissenting voices
and a leader of questionable legitimacy' - a reference to his disputed
re-election victory last year.

Some MDC members said that the Iranian election mirrored what the MDC
suffered in a presidential runoff in 2008, when scores of its supporters
were killed by Mugabe loyalists to avenge the MDC's victory in parliamentary

Mugabe claimed victory in the second-round election, which he alone
contested after Tsvangirai withdrew from the race to protest the violence.
But African leaders refused to endorse Mugabe's win and coerced him into
sharing power with Tsvangirai.

Click here or ALT-T to return to TOP

Biti says incompetent bureaucrats running CSO

April 23, 2010

By Our Correspondent

HARARE - Zimbabwe's Finance Minister has said he is instituting
wide-sweeping changes at the Central Statistical Office, which he alleges is
being run by incompetent bureaucrats.

The CSO has previously been accused of falsifying inflation data through
using State-dictated "controlled" prices, at a time the populace had to
source scarce commodities on the "Black Market", at markedly higher price.
At the height of hyperinflation, the "consumer spending basket" on which CSO
determined the inflation rate did not realistically reflect the pattern of
spending of the average consumer.

Economists also accuse the CSO of bungling socio-economic data collected
from different sources in Zimbabwe.

Finance minister Tendai Biti says the country needs a competent CSO that
allows an overall, up-to-date view of the socio-economic situation, and
facilitates the use of data for analysis by policy makers and others.

The Finance Minister, credited with turning around the economy after a
decade of economic decline, has said the CSO was supposed to generate
tables, graphs, maps, and reports that enhance monitoring of the
socio-economic situation in Zimbabwe.

"We are not happy at all with the Central Statistical Office," Biti told The
Daily News. "We think there is no craft competence there.

We have to make sure we invest in the same."

At the height of hyperinflation, the chief statistician Moffat Nyoni stopped
issuing inflation data saying it was impossible to work out the country's
latest inflation rate because of the lack of goods for sale in the shops.

Even key multilateral partners have cast aspersions on the integrity of the
CSO estimates.

Just last year, the World Bank refused to use the CSO's Zimbabwe population
estimate of 12.2 million people. The World Bank used 11 million as a
planning figure and the UN's FAO/WFP have adopted this figure for the
purposes of estimating the number of people in need of food aid in

Biti says he wants the Zimbabwean government to transform the CSO into a
semi-autonomous body, but a project of this magnitude requires huge
financial resources to make it succeed.

The Finance Minister said it was crucial to have credible data for purposes
of economic planning, so crucial to the revival of an economy that suffered
10 straight years of economic recession.

Last week the CSO reported that Zimbabwe's annual rate of inflation for
March surged to 3.5 percent, a four fold increase from the February figure
of - 0.7 percent.

Eight years of economic turmoil mean most Zimbabweans are unmoved by the new
inflation figures. But the latest figure represents a huge jump which Biti
says he needs to closely monitor.

"We need credible data," he said.

Click here or ALT-T to return to TOP

War veterans lobby for more compensation

by Tendai Maronga Friday 23 April 2010

HARARE - A splinter group of the Zimbabwe National Liberation War Veterans
Association (ZNLWVA) has a started lobbying for more compensation for taking
part in the 1970s liberation war that led to the country's independence in

The group on Thursday placed adverts in newspapers to launch what it dubbed
the "Heal Our Wounds Campaign", claiming that over "27 000 comrades were
massacred during the liberation war by the Rhodesian security forces".

Rhodesia was Zimbabwe's name before independence.

The former fighter's group said the government and the country's political
leadership had done nothing to ensure that parents, children and relatives
of fallen freedom fighters were compensated for loss of their loved ones.

 "The Mau-Mau in Kenya was compensated why not ZANLA and ZIPRA?" asked the
war veterans in their advert placed in a local weekly newspaper yesterday.

One Fred Mutanda, also a war veteran, sponsors the ex-combatants' group.
Sources said the splinter veterans group is also strongly aligned to Joseph
Chinotimba, who led farm invasions. Chinotimba has been fighting to seize
control of the ZNLWVA.

"Some of the Rhodesian forces who perpetrated the atrocities are now Cabinet
ministers and policy advisors today," the full-page advert read in part.

The advert, which is attributed to the war veterans coordinating committee,
and with no logo also asks who is "healing the widows, widowers and children
of the fallen heroes who are living in abject poverty".

In November 1997 President Robert Mugabe bowed to similar pressure from the
former fighters and paid off Z$50 000 plus monthly pensions of $2 000 each
to the more than 50 000 war veterans triggering the crash of the Zimbabwe
dollar on the stock exchange.

The payouts were not budgeted and the economy responded with a bang,
resulting in the infamous "Black Friday" crash of 14 November 1997 when the
Zimbabwe dollar plunged on a single day from $14 against the United States
greenback to $26 to the US unit.

The secondary contagion effect was a sharp 40 percent crash of the Zimbabwe
Stock Exchange. The stock market lost 46 percent of the value of shares as
investors scrambled to dump the Zimbabwe dollar. - ZimOnline

Click here or ALT-T to return to TOP

Zimbabwe Police Yet To Serve Summons on Lawmaker Probing Diamond Operations

Lawmaker Mare said he was encouraged by Prime Minister Tsvangirai's
statement to Zimbabwe International Trade Fair Participants that corruption
and smuggling in the mining sector are hindering economic recovery

Sandra Nyaira | Washington 22 April 2010

Though Zimbabwean police said Wednesday they were seeking to serve Chiredzi
South Member of Parliament Moses Mare with a summons related to his panel's
probe into Marange diamond field operations, the lawmaker had yet to receive
the summons on Thursday.

Mare told VOA that he spent Wednesday at his Chiredzi home, but no officers
came to serve a summons.

He said he was encouraged by Prime Minister Morgan Tsvangirai's statement
yesterday to participants in the Zimbabwe International Trade Fair in
Bulawayo that corruption and smuggling in the mining sector are hindering
the national economic recovery.

Political analyst Farai Maguwu of the Center for Research and Development in
Mutare said the prime minister should take stronger action against
corruption or history will judge him and his government harshly.

Click here or ALT-T to return to TOP

Iranians stranded in Bulawayo

By A Correspondent

Published: April 22, 2010

Bulawayo (ZimEye) – Iranian and South African delegates to the Zimbabwe
International Trade Fair were stranded in Bulawayo after failing to find

ZITF general manager Daniel Chigaru said Thursday in Bulawayo, a total of 76
delegates could not find accommodation after hotels and lodges were fully

The Iranians and South Africans were forced to stay in houses around the
city after the ZITF Company begged those with executive homes to accommodate
the desparate delegates.

“We were just told after Easter to scout for accommodation for 50 Iranians
but it was late. The South African embassy in Harare did the same. We had to
engage a travel agent to assist and now the Iranians staying at executive
homes in the city,” said Chigaru.

Iranians have dominated this year’s ZITF and their president Mahmoud
Ahmadinejad is expected to officially open the fair Friday mid day.

Security has already been tightened at the ZITF with Ahmadinejad reportedly
demanded to use his own security personnel.

Ahmadinejad’s close security, accompanied by the dreaded Central
Intelligence Organisation operatives, remained a common feature at the ZITF.

Click here or ALT-T to return to TOP

Governor to order Chiwewe’s eviction

April 22, 2010

By Owen Chikari

MASVINGO – Masvingo governor Titus Maluleke says he will instruct the police
to evict his predecessor, Willard Chiwewe accused of seizing a farm from
another family.

Former Masvingo governor and Resident Minister Chiwewe has refused to vacate
Ganyani Farm, a year after he was served with an eviction order by the
provincial lands committee.

Chiwewe grabbed the farm during his tenure as governor.

The Masvingo provincial lands committee chaired by Maluleke last year
ordered Chiwewe’s eviction saying he had taken a farm belonging to a fellow
indigenous Zimbabwean, which was against the government policy.

However, the order was not carried out.

A visit to the farm, located about 25 kilometres east of Masvingo city,
revealed that Chiwewe was still farming on the property. His cattle and
workers were still on the property.

However Maluleke expressed shock after he heard that the former governor was
still on the property.

“I am shocked to hear that he is still on the farm,” said Maluleke. “We
ordered him to move last year and gave him an alternative piece of land in

“I am going to verify if he is still on the farm and I will instruct the
police to evict him.”

The Ganyani family has also settled on the same property and is battling to
have the former governor evicted.

A visibly angry member of the family, who refused to be named, this week
told The Daily News online that the former Resident Minister was refusing to
leave the farm.

“We have tried our level best to evict him but to no avail,” said the
spokesman for the Ganyani family.

“He was served with an eviction letter last year but is still refusing to
go. I tried sometime to chase away his workers but they resisted

“We are appealing even to the President to intervene so that we start
production on the farm which was bought by our parents in the 1960s.”

Chiwewe has more than 80 herd of cattle on the farm . He also produces
vegetables, wheat and maize among other things.

This week, a defiant Chiwewe said he would not leave the property because he
had an offer letter from the government.

He said he was prepared to name and shame senior Zanu-PF officials who owned
multiple farms owners but had not been evicted.

“I am not leaving,” said Chiwewe. “It is political, because how do you evict
me when several other government officials within Zanu-PF have more that
three farms each?

“I am prepared to go to court and I will name a shame those who abused the
land reform programme.”

Several Zanu-PF sympathisers and senior party officials grabbed vast pieces
of land under the controversial land reform programme.

Some of them have more that three farms which is against the government
policy that one man should have one farm.

Click here or ALT-T to return to TOP

Russian firm to mine at Bennett’s estate

April 22, 2010

By Our Correspondent

MUTARE – The government has given a Russian mining company special rights to
explore for minerals at Charleswood Estate, seized from MDC
treasurer-general Roy Bennett in Chimanimani.

Former Charleswood Estate owner, Roy Bennett

Diamond deposits have been found at Charleswood Estate. There are also
reports suggesting the area has other precious minerals.

The Russians are working in partnership with a former PF Zapu company
Development Trust of Zimbabwe (DTZ). The joint venture company is known as

DTZ-OZGEO is already mining gold in Penhalonga, 15 kilometres North West of

Charleswood was seized from Bennett by the government under the
controversial land reform programme.

The Russians this week toured Charleswood Estate in the company of
Chimanimani acting district administrator, Rubben Chidawanyika and
traditional leaders Chief Chikukwa, Chief Mutambara, Chief Muusha and Acting
Chief Ngorima.

They performed traditional rituals at the farm.

Chidawanyika said the special rights offered to the Russians also cover a
large portion of land in Rusitu. In all, the Russians have been given a
special rights to prospect for minerals in an area covering 21 750 hectares.

“I have to make it clear that DTZ – OZGEO has not yet started mining in the
area,” Chidawanyika said, “they are still exploring for different minerals
which can benefit the country. The company has special rights which covers
Rusitu and the Save Sub Catchment areas.”

The Acting DA said the Russian company was working with the blessing of the
ministries of Mines and Agriculture and the Environmental Management Agency.

Chidawanyika said he was happy the Russians had offered employment to more
than 30 people from Chimanimani.

Bennett, an MDC senator and nominee for the post of Deputy Minister of
Agriculture, has won several court battles to retain his farm but has been
barred from returning to the estate by the government.

He is currently facing treason charges. If convicted, he could sentence to
life in prison.

A recent charge against him for hoarding maize while at the estate in 2001
was dropped.

President Robert Mugabe has refused to swear him in as deput minister,
saying the MDC senator must be cleared of the treason charges by the courts
first. The MDC has listed Mugabe’s refusal to appoint him as one of the
oustanding issues following an inter-party agreement to form a coalition

Click here or ALT-T to return to TOP

Inside Labour: Malema twists the history of Zimbabwe

April 16, 2010

  By Terry Bell

The late, great American author James Baldwin once wrote: "Ignorance allied
with power is the most ferocious enemy justice can have." Based on their
experience, this is a sentiment with which many trade unionists in Zimbabwe
heartily concur.

They also feel South Africans would do well to consider Baldwin's
assessment, especially following the recent verbal display of monumental
ignorance by ANC Youth League (ANCYL) president Julius Malema in support of
the regime in Zimbabwe.

A prime source of annoyance is Malema's distortion of Zimbabwe's past and
his misrepresentation of the present situation. It is pointed out that not
even President Robert Mugabe and his ruling Zanu-PF have ever claimed a
historic unity with the ANC, something Malema loudly trumpeted, as he did
the claim that the opposition Movement for Democratic Change (MDC) was the
"creation of imperialism".

In fact, during the lengthy war of liberation, Mugabe and Zanu were
supported by the Pan Africanist Congress, while the ANC backed Joshua
Nkomo's opposition Zapu. The trade union movement that came together as the
Zimbabwe Congress of Trade Unions (ZCTU) in the wake of independence,
supported the Zanu government throughout the earlier years.

But it was the ZCTU that effectively created the MDC after establishing a
"working peoples' convention" in February 1999. The then ZCTU general
secretary, Morgan Tsvangirai became - and remains - an MDC president while
also now holding the post of prime minister in a government of national
unity (GNU).

For the ZCTU however, the GNU is another example of good intentions
derailed; of the one-party state that the unions opposed after Zanu and Zapu
united as Zanu-PF in 1987. And, as ZCTU president Lovemore Matombo points
out, it was the trade union federation that argued, from 1985, that land
redistribution - "to ease congestion in the rural areas" - be treated as a
national priority. "But the government never bothered," he says.

He notes that it was only after the formation of the MDC and the loss by
Zanu-PF of a constitutional referendum in 2000, that Mugabe "saw the writing
on the wall" and took up the land issue. But in a manner that proved
disastrous for farm workers and that "left the rural areas in the same state
they were in 1980".

It was this, along with the erosion of democratic rights, that led the ZCTU
to distance itself from the government. And, for much the same reasons, it
has distanced itself from the present regime.

The trade unions have consistently maintained that little or nothing has
changed since the formation of the GNU; that harassment, intimidation and
state-sponsored violence has continued alongside many other gross human
rights abuses. In this, the trade unions have the support of organisations
such as Amnesty International.

"But our position has now been vindicated by the ILO (International Labour
Organisation)," says Matombo, referring to the hard-hitting, but
diplomatically worded 164-page report released this month by the ILO.

The ILO inquiry was unique in that it was the result of complaints from both
worker and employer organisations.

Three leading international labour law specialists heard evidence and
compiled a report that reveals a country in crisis, where state-sponsored
violence and torture has become the norm; where farm workers have been among
the main victims of a cynical land grab aimed at the self-enrichment of an

Malema claims that, where there had once been 4 000 white farmers, there are
now 350 000 black Zimbabweans on the land, implying a mass invasion of
former commercial farms by the rural poor. All the available evidence shows
this to be simply untrue.

Says Matombo: "We are still in the same position in the congested rural
areas that we were in 1980." The ZCTU also estimates that at least 250 000
farm workers have been driven off arable farm land since the
"redistribution" programme started.

In a number of instances, including those uncovered by the ILO
investigation, workers retained on seized farms have not been paid and those
agitating for payment have often been beaten and summarily evicted. One
union investigation, not covered by the ILO, discovered a farm, now run by
members of the notorious Central Intelligence Organisation, where unpaid
workers are kept "like slaves".

Targets for repression are members and supporters of the General Agriculture
and Plantation Workers' Union (Gapwuz). "The general secretary of the union,
Gertrude Hambira, is in hiding because of fears for her safety," says

Hambira, a leading human rights campaigner, has long been a thorn in the
side of the regime, but she became a special target when she collaborated
last year in the making of a documentary film about human rights abuses in

The documentary bore out the evidence presented in a Gapwuz report about the
ill-treatment of farm workers.

Warned by the security establishment that she "belonged behind bars" for
what she had done, Hambira fled into hiding when armed police raided the
union offices on February 24. According to evidence presented to the ILO
commission, she has good reason to fear.

As the ILO investigators heard, there are "many instances in which trade
union officials and members were severely beaten and, in some instances,
tortured, by members of the security forces and the Zanu-PF militia". The
ILO report also refers to "serious and long-lasting physical and
psychological injuries for many trade unionists, and the death of some".

The three commissioners came to the conclusion that there was "a clear
pattern of arrests, violence and torture by the security forces"; that, in
the rural areas in particular, it appeared that ZCTU officials and members
were "systematically targeted by vigilante mobs". It was also "deeply
concerned" that the pattern of victimisation was reportedly continuing.

In the face of such evidence, the proclamations of Malema seem almost

Click here or ALT-T to return to TOP

Govt revises indigenisation

Thursday, 22 April 2010 21:35

GOVERNMENT is working on a raft of amendments to the punitive indigenisation
regulations, which were suspended by cabinet last week following a storm of
protest from the business and international communities.

The latest amendments are designed to remove rough edges to the draconian
statutory instrument and devise a workable implementation mechanism of the
Indigenisation and Economic Empowerment Act signed into law a month before
the inclusive government was formed in February 2008. The indigenisation
campaign, which sometimes degenerates into a drive for nationalisation and
seizure of foreign companies, has caused panic within the local corporate
sector and international centres where most Zimbabwean-based multinational
companies are headquartered.

Official documents exclusively obtained by the Zimbabwe Independent this
week outline the amendments to the Indigenisation and Economic Empowerment
(General) Regulations, SI 21 of 2010, currently being drafted by the
Attorney-General's office for consideration by cabinet.

The cabinet committee on legislation chaired by Justice minister Patrick
Chinamasa will scrutinise the regulations before approval by cabinet and
gazetting. Chinamasa's committee's key function is to prepare and manage the
legislative programme for each parliamentary sitting as well as processing
subsidiary legislation.

Other key cabinet committees which will be involved in the process include
the committee on financial and economic affairs chaired by President Robert
Mugabe, economic coordination committee chaired by Finance minister Tendai
Biti (pictured), committees on investment and development chaired by
Economic Planning and Investment Promotion minister Elton Mangoma, trade and
international cooperation chaired by Minister of Regional Integration and
International Cooperation Priscillah Misihairabwi, and the committee on
indigenisation and empowerment chaired by Minister of Youth Development,
Indigenisation and Empowerment Saviour Kasukuwere.

The documents reveal that Kasukuwere's committee is tasked to "spearhead the
implementation of the National Indigenisation and Empowerment Policy in the
strategic sectors of the economy and to ensure broad and equitable
participation by locals in the empowerment programme".

The papers show that most of the changes to be made on the indigenisation
regulations were recommended by the Council of Ministers after a critical
meeting on March 11. The suspended regulations came into effect on March 1.

Following heated meetings on February 11 and February 25, the Council of
Ministers resolved on March 11 that the regulations - which were gazetted
without consultation within the inclusive government, business sector and
the public - would be reversed.

Mugabe and his Zanu PF ministers were last week forced to make a dramatic
climb down on the controversial regulations due to overwhelming pressure
stemming from behind-the-scenes lobbying and negotiations. Cabinet suspended
the old regulations last week on Tuesday.

Ministers have now decided that the new regulations would incorporate a
series of amendments adopted by consensus in the Council of Ministers and

Amendments to the regulations already agreed upon and are being drafted by
the Attorney-General's office include:

.    Changing of item 15.2, section 3b of the regulations which relate to
the need for companies to "cede" equities and replacing that with "sell" to
reflect that this would be a commercial transaction and not seizure;
.    Changing item 15.3 to incorporate the creation of a sub-committee
functioning as a Compliance Board to monitor conformity and ensure companies
fall into line;
.    Item 15.4 to say the asset threshold of US$500 000 for companies to
ensure 51% indigenisation is now raised to between US$3 million and US$5
million, which will be applied according to sector-specific recommendations,
.    Consideration of the peculiar situation of 26 companies listed on the
Zimbabwe Stock Exchange (regulations will aim to promote and strengthen
black-owned businesses); and
.    Recourse to the Administrative Court as an adjudicating forum for
disputes to be incorporated in the regulations.

Kasukuwere confirmed this week in a media statement that changes to his
regulations were being made. "I confirm that as we continue to refine our
regulations, we will emerge with measures that are sector-specific and
sector-sensitive as requested by our corporate bodies," Kasukuwere said.

"In respect of this matter and in order to achieve closure, government will
bring forward gazetting of sectoral thresholds from the original 12 months
to four months. This will be a consensual decision involving the affected
sectors and individual companies."

The documents show that the regulations would be refined to ensure that the
law is not manipulated for partisan interests and used as a blunt
discriminatory instrument, something which may very well be unconstitutional
and racist.

Ministers from all the parties in the inclusive government agreed at a
Council of Ministers meeting on March 11 that they did not intend to come up
with a discriminatory and racist policy which would damage the
indigenisation programme.

As a result, there would be attempts to avoid discrimination against
Zimbabweans of European and Asian origin. Zimbabweans of mixed colour
(coloureds) would also now be protected.

"The Council of Ministers of March 11 adopted these amendments and the
minister (Kasukuwere) was told to proceed to instruct the Attorney- General's
office to draft amendments although inputs from ministries and stakeholders
will continue to be considered," a senior government minister told the
Independent this week.

The amendments will now allow non-blacks who are third and fourth generation
Zimbabweans to benefit from indigenisation. Whites who are third and fourth
generation Zimbabweans will not be forced to comply with the 51%

In framing the new regulations or amendments, Asians and Coloureds who run
"model businesses" would be given protection because "they were
discriminated against before 1980", the documents say.

In instances where blacks fail to pay for their shareholding, the new plan
is to use the Zimbabwe National Indigenisation and Economic Empowerment Fund
to bail them out. It is not clear how this fund, which will also be involved
in adjudicating disputes, would be financed.

There are also suggestions that the five-year custodial sentence for company
executives who defy the regulations should be replaced with a fine. MDC
ministers say imprisonment would leave the regulations draconian but Zanu PF
ministers claim custodial sentences would force compliance.

Ministers have also proposed stringent vetting of foreigners who enter
Zimbabwe purporting to be planning to set up "high-tech business
 enterprises" but "end up running flea markets and other ventures in areas
such as the "the Gulf" in downtown Harare. Ministers say "the Gulf" should
be investigated by the Ministry of Home Affairs to establish the nature of
its operations and clear criminal elements.

In order to ensure proper consultations and amendments to the regulations,
sector-specific committees would be set-up at various ministries and
carefully examine the peculiarities of each sector.

While the Indigenisation and Economic Empowerment Act will remain in place,
the regulations - which give effect to this law - will be revised.
Thresholds on meeting the 51% indigenisation quota would now vary from
sector to sector depending on the situation and circumstances.

Dumisani Muleya

Click here or ALT-T to return to TOP

MDC snubs Ahmadinejad’s arrival ceremony

Thursday, 22 April 2010 21:32

IRANIAN President Mahmoud Ahmadinejad’s visit has exposed differences
between the country’s three main political parties after the Morgan
Tsvangirai-led MDC snubbed his arrival ceremony at Harare International
Airport yesterday.

Prime Minister Tsvangirai and senior government officials from his party did
not turn up to welcome the Iranian leader describing his visit as a
 “scandal”. Even Deputy Prime Minister Arthur Mutambara and ministers from
his MDC faction did not turn up to receive the guest of honour to this year’s
Zimbabwe International Trade Fair (ZITF).

“As a party, we feel that a country is defined by its friends,” the MDC-T
said. “We want to place it on record that judging by his record, Ahmadinejad
is coming not as a friend of Zimbabwe, but as an ally of those that
unilaterally invited him.”

Ahmadinejad arrived in the country yesterday amid tight security from both
the Zimbabwean security forces and the Iranian leader’s security team that
were milling around the airport.

Four fighter jets were flying over the airport for more than 30 minutes
before the Iranian leader arrived in his  official Islamic Republic of Iran
plane marked EP-AJD. There were ululations from Zimbabwe’s Muslim community
and praise singing from Apostolic church members.

Helicopters flew over Harare for the better part of the day before
Ahmadinejad’s arrival and continued to fly hours later in a show of
protection for the Islamic leader who is currently engaged in a war of words
with the United States and its allies.

Ahmadinejad took close to seven minutes before disembarking because the
stairway was not properly fitted to the giant aircraft.

Employees from the National Handling Services had to run around to fix the
stairway with close supervision from Ahmadinejad’s security personnel.

The Iranian leader was received by a 21-gun salute and inspected a guard of
honour before leaving the airport to visit Modzone, a textile company based
in Chitungwiza and financed by Iran, and Willowvale Mazda Motor Industries.

Ahmadinejad will officially open the ZITF today before leaving the country
for Uganda later in the day, according to official information from the
Iranian Embassy.

Political tension within the country’s fragile inclusive government is
likely to worsen after the MDC led by Tsvangirai described Ahmadinejad’s
invitation as a unilateral Zanu PF decision.

“Choice of friends defines character and inviting the Iranian strongman to
an investment forum is like inviting a mosquito to cure malaria,” the party
said. “Hobnobbing with dubious political leaders confirms stereotypes that
we are a banana republic.”

But Welshman Ncube, the secretary-general of the Mutambara-led MDC, said
there was no boycott by his party because most ministers were already in
Bulawayo attending the economic forum discussion that was going on at the

“There was certainly no boycott (by his party) because most of the ministers
are already in Bulawayo. I was also in Bulawayo but have returned (to
Harare) for the Iranian president’s tour of Modzone and the Willowvale Mazda
Motor Industries,” said Ncube.

Information minister Webster Shamu declined to comment about the “snub”
arguing that he was not the MDC spokesperson.

“Why should I be talking to you about someone who is not here? I am not
their spokesperson so you rather go and ask them why they are not here,”
said Shamu before walking off to join the kilometres-long motorcade.

Iran and Ahmadinejad in particular has been under harsh criticism from
Western nations for pressing ahead with uranium enrichment programmes it
says are to produce nuclear energy amid fears the militant Islamic state
could develop nuclear weapons.

Iran is the biggest exhibitor at the trade exposition Ahmadinejad is
scheduled to open.

Ahmadinejad is the first leader from outside the African continent to open
the exposition since Independence.

Valentine Maponga

Click here or ALT-T to return to TOP

Industry in dire need of capital injection –– Ncube

Thursday, 22 April 2010 20:34

LACK of long-term international lines of credit, punitive interest rates
charged by local financiers, coupled with erratic electricity supply is
threatening the recovery of the manufacturing sector currently operating at
35% capacity. Industry and Commerce minister Welshman Ncube on Wednesday
told captains of industry in Bulawayo that urgent long-term capital
injection was needed to increase capacity utilisation to save the sector
from collapsing.
“The continued lack of long-term lines of credit from local, regional and
international financiers is threatening the recovery of the manufacturing
sector and this is the most single challenge to us,” said Ncube at a
Zimbabwe International Trade Fair business conference.
He said industrial capacity utilisation has been stagnant at 35% since last
The local financial sector, the minister said, was not helping matters by
providing short-term loans which attract high interest rates.
“The local financial sector has been able to provide short-term finance
relatively adequate though expensive,” he said. “They are not able to
provide reasonable priced loans to industry yet they require industry to
repay within three months.”
Ncube said in Botswana and Zambia interest rates were about 5% compared to
20% locally, which is discouraging borrowing.
To remedy the situation, Ncube said, his ministry and that of Finance were
engaging international financiers to provide long-term lines of credit.
“We are working with Finance ministry to engage regional and international
financiers with the view of availing long-term lines of credit,” he said.
“Currently we have firm commitments that they are willing to help us and
that will save the manufacturing sector.”
On intermittent power electricity cuts, Ncube said by October “reliable
energy supply would be available to industry”.
The extended power load-shedding programme countrywide is attributed to a
power shortfall due to generation problems at Hwange Power Station.
Due to the power outages, companies are reported to be producing lower than
10% of their required capacity.
The companies are now forced to buy generators that are more expensive than
electricity thereby increasing production costs resulting in local goods
being more expensive than imported ones.
Ncube said the constant power cuts were causing extensive damage to most
machinery which industry had to repair or completely replace. equipment,
However, Ncube said high production costs render locally-produced goods
uncompetitive in the region.
“Production costs have to be looked into because locally-manufactured goods
are not only expensive here but are uncompetitive in the Sadc and Comesa
regions,” he said.
lMeanwhile, 28 prospective local airline operators are still to hit the
skies years after being granted licences by government.
The licences where granted as far back as 2005.
Tourism and Hospitality minister Walter Mzembi told delegates to the
business conference at the Zimbabwe International Trade Fair in Bulawayo on
Wednesday that it was only “discovered” last week that 28 licences that were
issued to black businesspeople were lying idle.
“I discovered last week when I was drafted into an Air Zimbabwe committee
that since 2005, government has granted 28 aviation licences to local black
businesspeople,” Mzembi said. “However, they are still to take off and it
could be for speculative reasons just like in the mining sector.”
He said a thorough investigation would be carried out to ascertain the
reasons behind the non-utilisation of the licences.
This comes at a time when government is slowly implementing the open skies
policy seeking to have more aviation players on Zimbabwe’s airspace.
Currently only two local airlines, the ailing national carrier Air Zimbabwe
and a new entrant Fly Kumba are operational.

Nqobile Bhebhe

Click here or ALT-T to return to TOP

Energy crisis set to worsen

Thursday, 22 April 2010 20:27

ENERGY problems besetting the country are set to worsen for the rest of this
month as it emerged yesterday that only one unit at Hwange Thermal Power
Station is operational. According to a recent power generation status
report, Hwange Power Station is producing a mere 70 Megawatts against an
installed capacity of 750 megawatts owing to breakdowns in other five units.
Only unit 2 of the power station is operational while others might commence
operations by May 1 after massive repairs.
All six units at Kariba Power Station are operational and contribute 735
Megawatts bringing total power output to 805 Megawatts, only 48,5% of what
the country needs. This is against a forecasted 1660 Megawatts Zimbabwe
needs daily and ought to be producing. Apart from 400 Megawatts being
imported from Mozambique's Hydro Caborra Bassa and Zambia's Zesco Limited,
the country has no other sources of energy.
Other power stations in Harare, Munyati and Bulawayo remain shut. Power
outages increased this month throughout the country, especially in
residential areas in the capital with some areas going for more than 48
hours without electricity.
Although Zimbabwe is facing an acute energy deficit, it is under obligation
to export 150 Megawatts to Namibia after NamPower invested US$50 million
into the refurbishment of the troubled at Hwange Power Station.
Last week, Zesa Holdings, the country's power utility, had to suspend
indefinitely the annual maintenance of Kariba Power Station until power
generation improves at Hwange.

Chris Muronzi

Click here or ALT-T to return to TOP

2010 first quarter economic review

Thursday, 22 April 2010 20:09

ANY reasonable person with basic macroeconomics knowledge is unlikely to
have believed that the economy could be performing quite as projected in the
2010 Fiscal Policy Statement (FPS).  Nevertheless the first quarter economic
review given by the Minister of Finance Tendai Biti confirmed what had
become increasingly evident in the last quarter of 2009: economic growth was
beginning to slow down again after a strong performance in the six-month
period to September.
Rapid growth in the economy occurred when a raft of business-friendly
economic policies were initiated at and after the formation of the inclusive
government.  For a change, businesses were left to do their work with
minimal interference from politicians. Capacity utilisation accelerated from
under 10% to a minimum of 30%. Revenue collections by the fiscus jumped from
US$5 million in January 2009 to the current monthly average of US$100
The positive performance that was achieved in 2009 prompted Treasury to come
up with upbeat projections for 2010.
Barely four months into the New Year, the economic projections have already
been adjusted. In contrast to 2009 where economic growth was reviewed
upwards to 5,1% from an earlier estimate of 4,7%, the new projections for
2010 all constituted downward revisions. The economy will not grow by 7% as
anticipated in the 2010 FPS but by only 4,7% because of "a number of
downside risks".
This is sad but hardly surprising. It is sad because investors had bought
into the idea that the country was in a turnaround mode creating an
atmosphere of enthusiasm.
Normally, economies emerging out of crises similar to what this country
endured in the past 12 years could be expected to record double digit, or at
least higher single digit growth rates for several years to catch up with
erstwhile peers.  A slowdown in economic output in the second year of the
perceived recovery phase does not inspire long-term confidence. Not only
does it destroy the hope of some dynamic economic action but it can also
instil panic among investors especially as memories of hyperinflation days
are still fresh. No one wants to be trapped again in that stagnation so
soon. With other countries supposedly experiencing real recovery from the
two-year global crisis, the country has an onerous task of keeping capital
within its borders given that investors have many other options at their
From the onset, the growth rates projected for the key sectors of the
economy by minister Biti were overly optimistic.  While the economy was
largely expected to register positive growth, projections of a 40% upturn in
the mining sector and 10% each for agriculture, manufacturing and tourism
were too ambitious given businesses' perceived high political risk. Players
in the private sector were geared for the take-off, but issues such as the
delay in finalising the political talks impeded the fundraising efforts of
companies seeking to capitalise. For instance, some companies lost orders
while others who had successfully negotiated lines of credit saw the
facilities being terminated when the MDC decided to "disengage" from
government. Up to now industry is still licking business wounds inflicted by
that incident despite the party having 're-engaged'.
The gazetting of the Indigenisation and Economic Empowerment regulations has
literally brought the economy to a halt with foreign investors construing it
to be a forewarning of an impending expropriation of assets by indigenous
groups. Foreigners who had started warming to the inclusive government and
the stability in the economy have once again became apprehensive.
This has effectively cut off the country from the foreign suppliers of
capital, be it debt or equity. Shutting doors to foreign capital through
deliberate or unintended means is now hurting the economy making hopes of
recovery a mere pipe dream. Already some companies that had managed to
increase production in 2009 are experiencing declining capacity due to
factors such as a lack of funding and weak consumer demand for their
commodities. The slump in production, and not necessarily speculation, is
stoking inflation as companies hike prices in order to cover their overhead
It is important that Biti correctly identified the pricing of public
utilities as one of the factors hampering economic growth. Electricity
tariffs and municipal rates are very high compared to the level of economic
activity in the country notwithstanding the pricing models service providers
are using. A situation whereby utility expenses constitute 30% of the total
expense bill as is currently happening to many firms is untenable. Well,
maybe consumers would not have minded so much if the high tariffs were meant
to improve operational efficiencies of the utility providers.
The news that as much as 70% of the revenue collected by these institutions
is used to cover staff salaries and benefits is disturbing. The men and
women working for these organisations rightly deserve to be paid for their
labour but not by plundering their consumers without improving service
delivery. Many companies are losing significant production time because of
power and water cuts despite paying colossal amounts for these services.
This is costing the fiscus potential tax revenue.
If Biti together with his colleagues in government could expedite the
rationalisation of utility pricing certainly they would have solved a large
part of the problems holding back productivity in the economy.

Ranga Makwata

Click here or ALT-T to return to TOP

Wage bill: An albatross around govt’s neck

Thursday, 22 April 2010 20:04

FINANCE minister Tendai Biti last week stopped short of saying Zimbabwe
desperately needs new shareholders when he said if the country was a
company, it would have been declared bankrupt. Presenting a statement on
economic performance for the first quarter of the year, Biti listed a number
of factors he said if not urgently addressed would slow down economic growth
and reverse gains made in the past year.
The minister had projected 7%  growth this year but said the figure could be
revised downwards due to high costs of production and subdued exports.
For him the writing is now on the wall. Zimbabwe cannot walk out of the
economic woods alone. Foreign Direct Investment is still low owing to a high
country risk.
According to the minister, state coffers are now under “stress”.
He revealed that for every US$1 generated by government in revenues, 70
cents goes towards the public service wage bill. This leaves government with
30% of its total revenue to meet its development obligations. The US$913
million wage bill constitutes 18% of the Gross Domestic Product (GDP).
This portion, according to Biti, is abnormal and unsustainable.
However, his remarks are likely to cause resentment and anxiety among public
servants demanding a pay rise. Biti’s only hope lies in the ongoing public
service audit which he expects would unravel dormant vacancies and ghost
workers. He also proposed to “maintain a cap” on the wage bill by freezing
non-critical vacancies. But this will not be the end to pressure on the
He says existing labour laws would pile pressure on the fiscus should
government decide to effect job cuts on its 236 000 staff complement.
Regionally the public service wage bill makes up an average 10% of the GDP
and below 30% of total revenue.
“It is therefore imperative that government reviews both labour laws and
related institutional arrangements with the view of bringing flexibility to
the labour market and ensuring that wages are within the capacity of the
economy,” Biti said.
He said despite workers getting some protection from sections of the Labour
Act, companies intending to retrench workers will be left with a weaker
position after paying out retrenchment packages.
“Even when you get retrenched, the retrenchment packages are way out of
kilter with an economy that is using multiple currencies. In an economy that
doesn’t have hyperinflation, it is crazy to have a retrenchment package of
six months, 12 months for every year worked. It makes sense in
hyperinflationary circumstances…But now what is simply happening is that
companies are being bankrupted and that is the reality,” Biti bemoaned.
According to a recent Government Work Plan, the legislature intends to
harmonise labour laws during the current legislative agenda for 2010 but
analysts are sceptical that the process might fail to take off due to the
constitution-making-process which is expected to resume in May. Parliament
is leading the process of writing the new supreme law.
Labour and Social Welfare minister Paurina Mpariwa this week told
businessdigest that her ministry would push for the reforms this year.
“The changes, if passed by parliament would also see government workers
being administered by the Labour Act rather the Civil Service Act,” said
Mpariwa in a telephone interview on Wednesday.
Should the Bill pass in parliament, working conditions of public servants
will be the same as those of the private sector.
“We have received inputs from
the Zimbabwe Congress of Trade Unions and the Employers Confederation of
Zimbabwe and very soon we will be inviting public input,” she added.
Mpariwa was this week quoted by online publications saying it was
“disturbing” that “several” companies were seeking permission to retrench
employees in order to make their operations viable.
Efforts to get comment from the ZCTU on what changes they had proposed to
the Labour Act were in vain at the time of going to print.

Bernard Mpofu

Click here or ALT-T to return to TOP

Gold battles to regain lost glitter

Thursday, 22 April 2010 19:59

AROUND seven tonnes of gold are expected this year as the sector's
anticipated revival is likely to be slow and painful. At its peak, Zimbabwe
produced 24 tonnes of the precious metal before the levels fell to just
above a tonne in 2008.
The Zimbabwe Chamber of Mines said gold producers expected between six
tonnes and seven tonnes this season up from the 4,2 tonnes produced last
Figures from the Chamber of Mines show that 519 kgs of gold were produced in
January before output fell to 487 kgs in February.
Last month, gold production increased to 661 kgs.
Production during the first three months of the year were better than the
comparative period in 2009 when virtually all mines were either placed under
care and maintenance or had been closed.
Most gold producers resumed production after June last year and many are yet
to reach full capacity or recover from the effects of the closure of the
Most of the gold miners are yet to receive payment for proceeds they
delivered to the Reserve Bank of Zimbabwe before the marketing of the
mineral was liberalised at the beginning of last year.
It is estimated that the central bank, which was the sole buyer of the
mineral before liberalisation, owes the gold sector around US$28 million in
the form of bonds.
These bonds have since matured but the RBZ is not able to pay.
Most gold miners, especially the smaller ones with no access to external
capital, have argued that they would be able to significantly increase
production if they were to get their dues from the central bank.
Apart from the monies owed by the central bank, the gold sector is faced
with a number of problems, particularly inconsistent power supply.
The Chamber of Mines has suggested that members pay more for power as a way
of making sure that they have consistent supply.
Large scale gold mining companies have been investing in the sector since
production resumed last year but this would not carry the sector to the
pre-2000 levels when the yellow metal was the number one export in the
It has since been overtaken by platinum and it could soon be the third
largest export earner if the sale of diamonds was to be rationalised.
Companies which have raised funds for production include Mwana Africa which
received a US$10 million loan from the Industrial Development Corporation of
South Africa.
Other companies which have raised capital for refurbishment and expansion
include New Dawn Mining, Metallon Gold and African Consolidated Resources.

Leonard Makombe

Click here or ALT-T to return to TOP

Biti raises spectre of price controls

Thursday, 22 April 2010 19:53

WHEN inflation soared out of control in 2007, President Robert Mugabe had a
quick solution to the problem - cut prices of goods by half and impose a
freeze. Almost overnight goods disappeared from the shelves. Mugabe's
argument was a simple and less convincing one: businesses and retailers were
conspiring with Western forces, Britain and United States, to raise prices
and force a mass uprising of the people.
The days that followed saw several executives and shop managers being
arrested and fined. To ensure that businesses were adhering to set prices,
government quickly set up a National Incomes and Pricing Commission (NIPC)
headed by Godwills Masimerembwa.
The commission did its best but possibly realised the task of monitoring
prices of goods in a market where industry had close to zero production
capacity and empty shops was an uphill one.
In the months that followed, it became apparent that government had lost the
price control battle.
The NIPC became irrelevant. Apart from occasional threats, it was as good as
dead. But the last nail on the NIPC's coffin came when the country
officially adopted the use of multi-currencies in January 2009.
With the use of the US dollar and other stronger currencies, it was
generally assumed prices would be relatively stable.
But inflation data and the economy's outlook are proving otherwise. Now
Finance minister Tendai Biti might be forced to recommend the resurrection
of the NIPC and go down the same road, judging by his comments last week.
In his review of the 2009 and first quarter economic performance, Biti
painted a gloomy picture. Inflation is rising. Profiteers are back. The
country's balance of payments position is US$1,6 million in the red. In
essence, Zimbabwe is importing much more than it is exporting. Civil
servants salaries are not sustainable.
But his main worry above all was inflation. Since last year, government
adopted a free market economy where demand and supply are the chief
variables. As such, government, according to Biti, had left the market to
regulate and correct itself.
Government, Biti lamented, could have blundered and now wants to assume a
more than watchdog role. If he follows through on his threat, this would be
a marked departure from a free market economy into a semi-command economy
where the state dictates economic policies.
Biti is of the view that businesses can no longer be allowed to "have its
own cake and eat it" alone while abusing government liberal economic
His argument is not new. In fact, it is the implausible one Mugabe made
three years ago. Biti says although Zimbabwe has achieved economic
stability, the economy is facing a number of "downside risks" with a
potential to "reverse the gains realised" to date.
Like Mugabe in 2007, Biti sees profiteers bent on lining their pockets with
cash at the expense of the economy. But unlike Mugabe, Biti does not see a
grand conspiracy for regime change. Instead, he feels "greed" is the cause.
Biti said: "There are strong signs that inflation is on the increase as
demonstrated by the month-on-months inflation of January and February 2010.
What is clear and self-evident is that speculation tendencies are back on
the market and that there is a huge constituency of the business sector that
is keen to draw us back to the hyper-inflationary matrix of 2008. Going
backwards where there was no confidence and businesspeople increased prices
for the sake of increasing prices, we will not accept that.
They (business) cannot expect us to play basic liberal economics when they
themselves (business) are not playing by the book.  Business cannot have
their cake and eat it. We are making a clear message that we are not
accepting inflationary pressures on our economy."
But will price controls succeed in fighting inflation where even Mugabe,
with the assistance of state machinery, has failed? Many feel that if Biti
pushes for price controls, the move could achieve the same disastrous ends
like Mugabe and invite the electorate's anger on his Movement for Democratic
Change, a partner in the unity government.

Chris Muronzi

Click here or ALT-T to return to TOP

Muckraker: Municipal police need their wings clipped

Thursday, 22 April 2010 21:28

CONGRATULATIONS to the Sunday Mail (April 11-17), for publishing a letter
questioning the source of Mines minister Obert Mpofu's wealth. The reader
was not convinced by Mpofu's attempts to make Zimbabweans believe the source
of his reported wealth is "legitimate". The letter was headlined "Minister
Mpofu unconvincing".
It was a response to the minister's assertions that properties he bought
were through a US$1 million "bank loan". But this account has clearly not
convinced everyone.
"I could not help laughing at your article on Obert Mpofu and his alleged
'buying spree'," wrote one reader who identified himself only as Taurai.
"If CBZ Bank advanced one million dollars to his business for capital
expenditure, in what way is buying houses for employees capital expenditure?
"If African Sun, which is in the same tourism business, were to borrow a
million dollars to buy houses for staff in Victoria Falls, we the
shareholders, would fire chief executive Shingi Munyeza. Does that amount to
capital expenditure to you?
"How about the casino he is said to have bought which is secured by ZRP
details? How come you did not ask him about that one?"
In the same issue, the paper had an opportunity to ask Mpofu about the
capital expenditure and the loan but failed to seize the opportunity. In a
long question and answer session with the minister, Augustine Moyo allowed
Mpofu to get away with this fantastic statement: "I am a businessman in my
own right and my SMALL businesses are running viably." Come on Augustine, no
small business can borrow a million bucks in this economy.
To his credit all the same, Mpofu was able to convince John Nkomo and
Thokozani Khupe that mining operations in Chiadzwa were being done
satisfactorily. After touring the claim, Nkomo said: "We were highly
impressed with what we saw here at Chiadzwa. If diamonds from this area are
sold they will contribute a lot to our national economy and we cannot
continue borrowing when we have abundant resources in the country awaiting
exploitation. We think we are poor, yet we are very rich. We should find
ways of exploiting all our resources and show the world that we are very
We are glad Mpofu was there to hear it for himself.

Deputy Prime Minister Khupe was full of praise for Mpofu: "There was a lot
of speculation in Cabinet about what was happening at Chiadzwa and Cde Mpofu
was the lonely voice concerning mining activities here. We are very grateful
with what we saw and we will be good ambassadors from now onwards."  Really,
Thoko? Is that your role?
We hope Nkomo and Khupe will stand by their words after the Parliamentary
Committee on Mines and Energy finishes its job on Chiadzwa.
Still on the Chiadzwa tour, we were surprised by suggestions by Public Works
minister Theresa Makone that court challenges on the ownership of the
minerals should be disregarded because the country needed money from
realised from the sale of the diamonds.
"We know that there are court challenges regarding the ownership of diamonds
here but they should be sold for the benefit of everyone. The money realised
from the diamond sales is badly needed in our economy." What happened to the
rule of law that Makone and her MDC have been fighting for for the last

Poor old Tafataona Mhoso continues to miss the point. Can he tell us which
media are advocating for Chiadzwa diamonds to be given to "Australian-based
In his Sunday Mail column Mahoso wrote: "This is the exact meaning of the
attacks on Mbada Diamonds and Chiadzwa which the last installment of this
column dealt with last week. Better give the diamonds to Australia-based
Rhodesians than allow them to fall into the sovereign hands of natives."
So Mahoso thinks the plunder of Chiadzwa is fine as long as it is being done
by "sovereign hands of natives"?

Harare Mayor Much Masunda is a likeable fellow whose industry and attention
to detail are the envy of many. As a business leader and prominent lawyer,
we believe that his actions and those who work under him must be beyond
reproach. The conduct of municipal police officers deployed in the CBD
however is fast eroding all the respect that residents had for the mayor.
The Combined Harare Residents Association say they are not amused by the
"rowdy and irresponsible behaviour of the municipal police officers who are
constantly harassing residents for petty issues". This week the overzealous
officers threw spikes in front of a moving commuter omnibus in a bid to stop
it after the driver was accused of flouting parking by-laws.
The commuter omnibus overturned and crashed into another vehicle at the
corners of Julius Nyerere and Robert Mugabe. The two municipal police
officers took to their heels as the bus was overturning. About eight people
were injured and there are unconfirmed reports that some died.
That is not all; the thugs masquerading as municipal policemen have taken to
jumping into mobile kombis through windows to effect "arrests".
CHRA says the municipal police officers are operating in an increasingly
militarised fashion; a situation that has made them to become a nightmare to
"It defies logic to note that the council seems to be more inclined towards
unleashing violence on residents instead of exploring professional and
amicable ways of disciplining offenders. Compromising the safety and lives
of residents for a $20 fine for wrong parking is simply unacceptable and it
is tantamount to serious human rights violations," said CHRA.
"The tens of thousands of US dollars that are being used to employ
municipal police officers who spend most of their time chasing vendors can
be actually used to build market stalls. It is of no gain to employ a huge
number of municipal police officers who have no knowledge of their key
result areas."
Muckraker is keen to know from Much what the brief of the officers is. Does
it include throwing spikes in front of packed kombis on crowded streets?
Does it also include jumping into vehicles through windows and grabbing
steering wheels of moving vehicles? Did we miss city by-laws legalising this
crude behaviour? Answers at the back of a postage stamp please!
It is common cause that commuter omnibuses have become a nuisance in the CBD
but the solution to the problem does not lie in spikes and stunts. We expect
better planning and leadership here. How about putting up new bus termini
outside the city centre? That is more respectable than spikes. If council
fails to collect bins and clear litter should residents also resort to

There was some interesting piece of advice from our First Lady Grace Mugabe
to Malawi's new First Lady, Callista waMutharika.
"I would not want to tell her what to do," she was quoted in the Herald.
"My advice to her would be that she should do what she knows is closest to
her heart. She should do things her way and not to please people. She should
know that people should get to understand that there are some things that
she can be good at and her people should accept that there are other things
that she cannot do.
"That is what I did. It is a tough job to be the First Lady but as long as
she follows her heart, she will be successful and I wish her all the best."
"Wise counsel" from Amai, as the Herald likes to call her. But we all know
what our first lady is good at and what is close to her heart. The
uninitiated in this area can always refer to the archives for the Hong Kong
encounter with a British reporter.

At time of going to press, it was not clear if Zimbabwe's delegation to the
reengagement talks in Brussels has secured another appointment following the
volcanic interference this week. This is something that cannot be blamed on
the British and Americans. But the Herald still managed to slip the
following into one of its stories: "A 2006 study by the EU admitted that the
sanctions were imposed in a bid to influence the 2002 presidential elections
won by President Mugabe."
The only "bid to influence" the 2002 poll that we know of was the EU's
insistence that the elections be free and fair if Zimbabwe wanted to remain
engaged with the EU in terms of the Cotonou agreement.
Sanctions were imposed following the expulsion of EU observer mission head
Pierre Schori who committed the unpardonable offence of suggesting what all
Zimbabweans already knew - that they were far from free and fair.
The current EU ambassador Xavier Marchal is leaning over backwards to secure
concessions from Brussels for Zimbabwe. Yet every day we see evidence of a
small clique retaining a stranglehold on the public media misleading the
public on why sanctions were imposed in the first place. Their hateful and
dishonest opinion pieces occupy pride of place every day in the
government-owned newspapers as they seek to denigrate Morgan Tsvangirai and
the MDC. They don't deserve to be indulged by EU diplomats when media
reform, required by the GPA, remains an illusion. Beware of Belgians bearing

Forgotten war veteran, Endy Mhlanga, resurfaced this week telling a BBC
correspondent, Dan Isaacs that land reform in Zimbabwe was a "success"
"As war veterans we are satisfied that the programme of land reform has
succeeded," Mhlanga told Isaacs.  "It might not be 100%, but now the land is
with the people of Zimbabwe."
But the BBC correspondent would not be misled by Mhlanga. He reported that
large swathes of Mhlanga's farm, on prime agricultural land, were now lying
"What was once a large commercial farm now produces nothing for export, and
where there once were intensively irrigated fields of wheat and tobacco,
rough grassland now stretches into the distance," Isaacs reported. "One
small field of maize is growing near the farmhouse, a few turkeys cluck
their way around an old tennis court, and a dozen or so cattle graze at the
bottom of the garden."
Curiously Mhlanga contradicts himself when he says: "We have the ability to
work on the land but we're prevented from doing so because of a lack of
"Investors aren't forthcoming, so we aren't able to do much with the land.
For us, this is really a silent war."
What dross Endy! What happened to all the seed and tractors doled out by the
Reserve Bank? The real war we have to wage as a nation is to remove lazy
farmers from the land and replace them with those prepared to grow food for
the nation.

We find it difficult to believe that war veterans turned down a cash
donation from "good Samaritans".
The Manica Post tells us the alleged Nyanga bank robbery gang offered cash
donations to war veterans in Rusape towards their transport to travel to
Bindura for a congress called by factional leader Jabulani Sibanda.
The paper said war veterans' leaders in the town spurned the cash offers "on
suspicion the money was dirty".
"The gang arrived at the Zimbabwe National Liberation War Veterans
Association complex, which houses offices, in a hired taxi. John Teramayi
alias Katsande disembarked, leaving his colleagues Tafadzwa Nindi of St
Faith's area in Rusape and Bright Madani of Plot 43 Inyati area of Headlands
in the car. Katsande approached the War veterans' district chairman, Cde
George Mukundu and first asked for Cde Nathaniel Garikayi Mhiripiri before
laying bare his intention to bail out the association's transport costs.
"Katsande had almost succeeded in 'duping' the ex-fighters into accepting
and believing that the offer was genuinely out of philanthropy," we were
Zanu PF district chairman in Rusape Albert Nyakuedzwa said their party was
"reputable" and hence did not accept gifts from dubious characters. The
alleged robbers were subsequently "chased" from the offices of the war
What we find curious in this whole saga is that the robbers' cash ended up
in the hands of senior Zanu PF officials in Rusape.
The paper made interesting disclosures when it reported Mhiripiri and his
two colleagues in Zanu PF got $5 000 from the gang for providing the firearm
that was allegedly used during the robbery.
Mhiripiri and his friends have since been arrested and taken to court over
the issue.
Now, how can Zanu PF and war veterans claim they refused to accept the
donation when their colleagues reportedly pocketed the cash.

Youth and Indigenisation minister Saviour Kasukuwere needs help; not only to
craft an empowerment policy that will not ruin this economy, but to also
improve his literary skills. His statement this week announcing the
extension of the deadlines for companies to submit indigenisation plans
exposed this.
Minister, government decided to extend and not "extent" the deadline.
Kasukuwere can decide to be a bit "recklace" with the president, but at the
end of it all, he must not be reckless with what remains of big business. We
do not want him to be the youth who has "born the brand of unemployment".
Was that "bore the brunt"?

Click here or ALT-T to return to TOP

Eric Bloch: Biti got it wrong

Thursday, 22 April 2010 21:20

WITH very rare exception, every Minister of Finance (the world-over, and
throughout history) makes errors of judgment.  This is inevitable, for even
those with immense financial ability and expertise are affected by the
innumerable imponderables and unforeseen occurrences that impact upon
economies, and therefore upon financial perceptions, policies and actions.
Regrettably and unavoidably, economics is a very impure science, for it is
often impacted upon by the unforeseeable and unexpected.
For example who would, just a month ago, have anticipated the immense
volcanic eruption which occurred in Iceland having devastating economic
consequences upon almost all of Europe, and even further afield?  Similarly,
only a few months ago, none could have authoritatively forecast the
devastation of the Haiti earthquake and, subsequently, that in Chile? In
like manner, most Ministers of Finance cannot always foreshadow actions of
political colleagues and opponents, let alone the economic repercussions
that will arise therefrom.
However, in his first year of office, and notwithstanding that his very
diverse and considerable skills do not have a pronounced foundation in the
field of finance, Tendai Biti has generally had sound perceptions of the
circumstances of the Zimbabwean economy, of the needs of that economy, and
of policies to address those needs.  He has done more right than wrong, and
was a key player in achieving those first phases of economic recovery in
2009.  Although that recovery was minuscule in relation to the nation's
needs, it included elimination of the most severe hyperinflation ever
experienced anywhere in the world, with Zimbabwe benefiting from deflation
last year.  That recovery was also evidenced by restoration of commodity
availability in most shops, by the virtual elimination of currency black
markets, and a marked decrease of other black market operations.  Various
other facets of tentative economic recovery became evident as 2009
Nevertheless, in giving an overview of the first quarter of 2010, Biti got
it wrong!  Although understandably concerned that Zimbabwe is again
experiencing some inflation (but not markedly so) he ascribed blame for that
inflation to Zimbabwe's industrialists, in effect alleging that they are
resorting to unjustifiable profiteering.  Whilst such an allegation may have
validity in respect of an isolated few, it has no substance insofar as the
vast majority of industrialists are concerned.  The reality is that that
majority is desperately struggling to survive, operating under exceptionally
constrained circumstances.  Admittedly, many have had to increase prices,
but only because of no alternative but to do so if their enterprises are to
survive.  The survival difficulties confronting the manufacturing sector are
many, including:
=Recurrent losses of production as a result of frequent interruptions in
electricity supply.  Many hours are lost each week due to scheduled
load-shedding by Zesa, compounded by further supply interruptions on
occasions of unscheduled load-shedding, or of system faults sustained by
Zesa.  These production losses are not matched by reduced expenditures, for
fixed operational costs and overheads are unavoidably sustained
notwithstanding the absence of production.  In some instances, losses are
exacerbated by goods in the course of manufacture being irreparably damaged
when plant and machinery ceases to operate due to the electricity cuts.
Manufacturers have no alternative if their businesses are to survive, but to
recover all costs from their selling prices and, with lessened production
volumes and consequential lesser sales, the price of each unit must
unavoidably be increased.
=During the intense hyperinflation era of 2008, consumer demand crumbled to
minimal levels, purchasing power having been almost wholly eroded.  As a
result, most manufacturers sustained very considerable losses, and those
losses grievously depleted their capital resources.  Such limited resources
as they were left with were further decimated by the 2009 currency
redenomination, and subsequent demonetisation of Zimbabwean currency.  In
order to continue operations, industry had to turn to the money market for
working capital facilities.  However, that market has very limited funding
ability due to various factors including minimal access to foreign lines of
credit.  Continuing political and economic instability, intensified by
recurrent foolhardy, racialistic, and economically destructive policy
statements have been an ongoing deterrent to foreign financiers making lines
of credit available to the Zimbabwean money market.
=Because funds are scarce on the money market, they are available to
industry at exceptionally high costs (in some instances, establishment and
drawdown fees, interest, and other allied charges aggregate to considerably
over 100% per annum, exponentially greater than prevailing elsewhere in the
world).  Again, the manufacturer has no alternative but to pass on those
finance costs to consumers, by building the cost recovery into selling
=Yet a further burden afflicting industrial viability is the continuing
magnitude of charges by parastatals (including Zesa and TelOne), local
authorities and other public entities.  In most instances the charges are
considerably greater than prevailing elsewhere with the region, and
therefore impact negatively upon industry's ability to be export market
competitive.  This therefore further reduces production volumes,
necessitating higher selling prices for manufactured products.
=Volumes, and quality, of production are also adversely affected by
wide-ranging low levels of worker morale.  Workers are understandably
demoralised by continuing financial constraints, their incomes being below
the Poverty Datum Line (PDL), notwithstanding some negotiated wage
increases.  Employers cannot afford to pay more, but employees and their
dependants are struggling to survive.  The intense loss of worker morale has
impacted massively upon productivity, and upon maintenance of quality
standards, further undermining the viability of manufacturing operations.
=Another brake on industrial viability is, in many instances, the magnitude
of imports of competitive products from the Far East (although often
disguised as of South African manufacture in order to benefit from Sadc
duty-free entry into Zimbabwe).  Those imported products benefit not only
from the frequent evasion of import duties, but also from very immense
governmental export subsidies. As a result they are unfairly price
competitive against locally produced goods.
These are but a few of the tough operational constraints upon Zimbabwe's
manufacturing sector, forcing price increases and consequential inflation.
Until government does the right things to resurrect and achieve economic
recovery, the reality is that it is fuelling inflation, not industry.  Hence
Biti's criticism of industry was misguided (possibly due to misinformation
by some of his advisors), and the culprit responsible for inflation is
government itself.

Click here or ALT-T to return to TOP

‘High production costs fueling inflation’

Thursday, 22 April 2010 21:16

BUILDING inflationary pressures, more than a year after the central bank’s
printers went silent, have exposed the country’s unenviable economic
position and the lethargy in industry and commerce. Money-printing was
blamed as the main driver to Zimbabwe’s record inflation, which was
estimated at above two billion percent in mid 2008 before statisticians and
authorities lost interest.
The right medicine, economists suggested then, was to stop printing notes
and adopt a more stable currency, especially the United States dollar or the
South African Rand.
This advice was partly followed in February last year when instead of a
wholesale adoption of the US$, multiple currencies were introduced in the
country’s payment system.
Partial dollarisation proved the right medicine as it fought inflation
overnight, presumably paving way for an economic rebound.
However, 14 months later, inflationary pressures have started building up
and they threaten to drown the few successes realised as a result of the
adoption of multiple currencies.
For many Zimbabweans, inflation brings memories of the time when prices of
mainly basic commodities changed daily and nothing was affordable.
This also brings memories of government response to high inflation,
especially the price slashes in 2007 when retailers were ordered to sell
commodities lower than the marked price.
Price slashes resulted in empty shelves as producers either withdrew or held
on to their stocks citing uncompetitive prices which were set by government.
Threats of increased inflation are, however, coming at a time when Zimbabwe
is using multiple currencies, one of the medicines that steered the country
from hyperinflation to deflation.
It is also coming at a time when there is a government of national unity
(GNU) which has exercised restraint when dealing with business unlike the
populist and radical approaches President Robert Mugabe’s administration
This leaves the authorities grappling for rational and legitimate solutions
to the threat of high inflation.
Many are wondering what role government would play at a time when the
currency in circulation is issued by other authorities, especially by the
USA and South Africa.
The Reserve Bank of Zimbabwe (RBZ) which should take initiatives to fight
inflation has its hands tied as it now plays a peripheral role since the
adoption of multiple currencies.
RBZ would have used various instruments, through monetary policies and
increasing or decreasing money supply to fight inflation but this
disappeared with the adoption of multiple currencies.
This has left economists and the ordinary citizens asking what has gone
wrong and the likely consequences.
For economic commentator John Robertson, the recent trend is a reflection of
the contrast between a very strange situation, in 2009 and the reality this
Robertson postulates that the rate of inflation is likely to continue
growing as it will be a comparison with a very small figure registered last
For Robertson, the rapid increase in inflation rate is only a “mathematical
aberration” and “it is not very serious”.
It is a reflection of what is happening in the economy where government has
failed to raise votes of credit because it has gone on “self inflicting
damage and then carry on to behave badly” in the eyes of the international
investors and businesses.
“There is lack of confidence,” added Robertson. “There is lack of money
because of the issue of confidence. The banks outside the country do not
have confidence to provide equity capital (to their subsidiaries in
As a result of the liquidity crisis, there is no money for government to fix
all the other things which would create an enabling environment for
competitive and efficient production.
Economist Ranga Makwata said there is an external source of inflationary
pressure, especially because most of the products on the shelves are
“Most of the products we have are from South Africa and the strengthening of
the rand means that the cost for raw materials also goes up,” said Makwata.
The rand has firmed in the last 12 months and this has increased the
production cost for local industries which use the US dollar.
Apart from the external pressure, Makwata added, inflation is also being
driven by the cost of doing business in Zimbabwe, especially utilities
Utilities, especially electricity, are highly priced and at the same time
inefficient which is a double cost to manufacturers who are kept guessing
when they would have power cuts.
There are companies losing out because they lose power at a time when raw
materials are already in the production chain and they may not be reused.
“There are times when it is better to have higher electricity tariffs with
efficiency,” added Makwata.
Most local companies are not competitive because of the high electricity
tariffs and inefficiency.
Robertson also concurred saying government should fix the infrastructure so
as to improve the efficiency of the local industry.
Local industries are less competitive compared to South Africa, for example,
and it explains why unit prices are usually at par.
It costs less than US$2 to produce a kilogramme of chicken in Brazil and
South Africa, yet it is almost double locally.
These disparities are a result of the structural weaknesses in the local
economy which do not promote efficiency.
In Zimbabwe, it costs producers as much as US$0,93 to make a US$1, while in
other countries it costs significantly less, around US$0,60 to make a
A producer in Zimbabwe would pay US$0,12 for every dollar they borrow while
in some countries it is like free money with the highest being US$0,05 for a
This high cost of doing business has relegated Zimbabwe into a retail outlet
of more efficient producers like Brazil and South Africa and it comes at a
cost as the country becomes a net importer.
Makwata said it was only after addressing these factors contributing to
local inflation that external pressures are eliminated.
Improved capacity utilisation, Makwata added, would mean that local
companies meet the demand and there will be no need to import, thus ending
the influence of external inflation.
Capacity utilisation increased from an average 10% at the beginning of last
year to around 3 % by September, but this trend has stopped. Increased
capacity utilisation, economic analysts say, can be sustainable if the
producers are doing so efficiently and competitively.

Leonard Makombe

Click here or ALT-T to return to TOP

Sanctions must stay until real change

Thursday, 22 April 2010 21:11

FAR from hurting the generality of the people of Zimbabwe, as President
Robert Mugabe would conveniently want everyone to believe, it is becoming
increasingly clear that the targeted sanctions are achieving their desired
effect: to hurt Mugabe and his self-interested mob. The European Union (EU)'s
sanctions must and are likely to stay put until Mugabe does more than just
heed Julius Malema's call to denounce violence.
There is nothing more indicative of the stinging and now unbearable effects
of the targeted sanctions than the increasing complaints and calls for those
sanctions to be removed and removed as soon as yesterday. Any psychologist
would surely tell you that what that means is plain and simple: now is
precisely the wrong time to relax the sanctions. If anything, now is the
opportune time to go a gear up and intensify their effects.
The mob has been hit where it matters the most - in their pockets. While the
travel bans have curtailed the lavish spending of individuals, preventing
them from indulging their shopping passions in places like Paris, London and
Rome, the bulk of the mob have been barred from sending their children to
study at expensive colleges in Australia, the UK and America as the once
highly esteemed University of Zimbabwe lamentably falls into decay.
There is no way the European Union would decide to ease the pressure on
those who have hurt us for so long while never bothering to do anything to
mitigate our suffering except to mouth empty words denouncing violence at an
Independence celebration, after having inflicted 30 years of perennial
misery. Even the Bible warns against words without action. Accordingly,
Mugabe's message of tolerance on April 18 must be ignored for what it is:
mere talk.
In case they need reminding, sanctions are there for a reason and that is
that a handful of people have vandalised the country in a way almost too
frightening to comprehend. Hundreds of innocent and law-abiding citizens
have been tortured and killed simply for expressing their democratic desire
to elect a government of their choice.
Their best opportunity for reform came when Morgan Tsvangirai who won the
last presidential election agreed to form a government of national unity
with Mugabe. It is fair to say that while Mugabe has somewhat become less of
a dictator after the September 15 2008 agreement, he has not done enough for
the people of Zimbabwe to warrant any mitigation of the targeted sanctions.
Political reform is not coming as quickly as it could. For instance, while
the country was "celebrating" Independence, political activists were being
held in the dark, cold and miserable cells of the notorious Harare Central
Police Station. Frivolous though their protest may have been, the
attention-seeking ladies of Women of Zimbabwe Arise (Woza) should not have
been forced to endure an entire Independence weekend in primitive, cells.
While Mugabe says he regrets the low pay for teachers, he customarily takes
a delegation of 60 or so people with him on international trips to
Copenhagen for instance, for an entire week, and they are paid scarce
foreign currency.
Progress on human rights and related issues is key to the relaxation or
removal of targeted sanctions. However, despite the setting up of a media
commission responsible for the licensing of new media houses, not even one
has been licensed. Instead, the under-fire Attorney General Johannes Tomana
is to head that process.
If Mugabe and his henchmen are serious about the lifting of sanctions, they
must genuinely promote human dignity, freedom of speech and the rule of law,
end arbitrary arrests, apply Zimbabwean laws to the full extent without
bias, and bring to justice all perpetrators of politically-motivated
violence. They must also act in conformity with the letter and spirit of the
global political agreement.
The people of Zimbabwe have suffered far too long at the hands of a bunch of
self-interested individuals who have unconscionably abused their power. Our
consolation, however, is that the targets of the sanctions are clearly stung
hard by them. We applaud this and wish the sanctions could be intensified
until we witness real change.

Psychology Maziwisa is interim president of the Union for Sustainable
Democracy  and can be contacted at

Back to the Top
Back to Index