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Renewed assault on media ahead of Press Freedom Day

Thursday, 26 April 2012 18:06

Wongai Zhangazha

AS journalists prepare to mark World Press Freedom Day next week, the
Zimbabwe Media Commission (ZMC) is forging ahead with plans to establish a
statutory media council to police journalists.
The move is seen as a renewed attempt to come up with new instruments to
suppress press freedom. Journalists in Zimbabwe have been subjected to
systematic repression over the years.

Of late there have been renewed threats to clamp down on the media by
banning foreign newspapers — which President Robert Mugabe’s diehards do not
like — from entering the Zimbabwean market, even though local papers
circulate freely in neighbouring countries.

The banning of newspapers from the region, especially from South Africa, is
likely to trigger a diplomatic quarrel as that would amount to unfair trade
practices. Newspapers are treated as any other product, paying necessary
taxes and duties.

ZMC chairperson Godfrey Majonga said yesterday the process of setting up a
media council started early last year but there has been “some resistance”
from other stakeholders.

“The media commission is consulting various stakeholders that include
journalists, churches, advertisers and Law Society of Zimbabwe, among
others,” he said. “We are getting resistance from some stakeholders but we
are hoping that with the passage of time they will become involved so that
the media council is inclusive.”

Zanu PF politicians have been pressuring ZMC to crackdown on the private
media and ban foreign newspapers. ZMC is trying to force foreign newspapers
to register with it, a move deemed unlawful as this is tantamount to
applying Zimbabwe’s laws extra-territorially.

The private media has already established the Voluntary Media Council of
Zimbabwe (VMCZ) to deal with complaints against journalists.

The move to establish a statutory body —  which is a counter to VMCZ — to
police the media is likely to have a chilling effect on the media. It would
also be a dreadful gift to journalists during this year’s World Press
Freedom Day next week.

The United Nations General Assembly declared May 3 World Press Freedom Day
to raise awareness on the importance of freedom of the press, and remind
governments of their duty to respect and uphold the right to freedom of
expression enshrined under Article 19 of the Universal Declaration of Human
Rights and marking the anniversary of the Windhoek Declaration — a statement
on free press principles put together by African journalists in 1991.

Media analysts say the media council would be used as a weapon against

Sources said the watchdog would consist of 13 members from across the
political divide, business, religious and civic society to give it a
semblance of legitimacy. State-run broadcaster ZBC and public-owned
newspaper group, Zimpapers, are among the organisations allegedly lining up
to help enemies of the media to assault press freedom and bludgeon

As a result the Media Alliance of Zimbabwe (MAZ) and private media are not
party to the media council. MAZ includes organisations like the Media
Institute of Southern Africa, Media Monitoring Project of Zimbabwe, Zimbabwe
National Editors Forum (Zinef), Zimbabwe Union of Journalists, Federation of
African Media Women of Zimbabwe and African Community Publishing.

MAZ says there is no need for a statutory media council because VMCZ, whose
mandate is to promote a professional and free media environment through
voluntary self-regulation, is already there.

MAZ coordinator Patience Zirima said even if  ZMC goes ahead with
establishing a statutory media council, her organisation would not take

“We believe we don’t need a statutory media council,” said Zirima. “We will
always support a voluntary media council. The statutory media council is not
an appropriate body in a democratic society. We don’t need it. Media should
be allowed to regulate themselves. Next week Zimbabwe celebrates World Press
Freedom Day but it will be a sad day for the media here given such

Zinef chairman Brian Mangwende described the move to police the media
through a statutory body as “undemocratic and sinister”.

“The move by the ZMC to constitute a statutory media council in terms of the
draconian Access to Information and Protection of Privacy Act is patently
undemocratic and designed to asphyxiate freedom of the press and broadly
freedom of expression,” he said. “That initiative is open to abuse by
politicians with hidden agendas against the press and by media ZMC hangmen
who want to trample on our constitutional freedoms, criminalise the
profession and strangulate journalists.”

Journalists are expected to widely denounce the ZMC plan during Press
Freedom Day.

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Zesa explores nuclear option

Thursday, 26 April 2012 18:02

Nqobile Bhebhe

ZIMBABWE plans to explore the possibilities of harnessing nuclear energy by
2020 to curb the country’s perennial power problems. The country is believed
to possess vast untapped uranium deposits, which are critical for nuclear
energy generation. Zesa chief executive officer Josh Chifamba said a team of
experts would soon be assembled to look into the feasibility of such a
venture in a move likely to attract international attention.

“We will set up a small group to look at the nuclear option,” said Chifamba.
“We are looking at the year 2020 and onwards for full-scale nuclear power
production,” Chifamba told an International Business Conference in Bulawayo
on Wednesday.

Zimbabwe has unexploited uranium deposits in the Zambezi valley. It is also
estimated that Kanyemba Mine in the Zambezi valley holds more than 45 000
tonnes of uranium ore with over 20 000 tonnes extractible.

Iran and China are reported to have expressed a keen interest in Zimbabwe’s
uranium deposits. The UN imposed fresh sanctions on Iran last year after it
refused to halt its uranium enrichment programme. Senior government
officials have travelled to Iran for discussions on exploiting Zimbabwe’s
uranium deposits.

Last year, Foreign Affairs minister Simbarashe Mumbengegwi told an Iranian
news agency that Zimbabwe was willing to work with Iran on extracting
uranium resources meant for Tehran’s controversial nuclear programme.

“Zimbabwe holds rich resources, but the problem we face is lack of budget,
finance and required technical equipment to take the very rich resources out
and use them,” the news agency quoted Mumbengegwi as saying.

The state-owned Zimbabwe Mining Development Corporation (ZMDC) and the China
Uranium Corporation last year entered into a uranium mining deal, which was,
however, thwarted by the fact that the ZMDC is on the United States and
European Union sanctions list.

The project would have been implemented through Afri-Sino Resources Ltd, a
company jointly established by China Uranium Corporation, New on Investment
and ZMDC.

Uranium ore, or yellow cake, can be converted to a uranium gas which is then
processed into nuclear fuel or enriched to make nuclear weapons.

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GNU can only go so far –– PM

Thursday, 26 April 2012 17:58

Nqobile Bhebhe

PRIME Minister Morgan Tsvangirai says the coalition government is not
capable of adequately addressing “massive unemployment and poverty”
currently plaguing the country.
He told an international business conference in Bulawayo on Wednesday that
only a legitimately elected government could solve Zimbabwe’s problems.

“This coalition has achieved a lot in the last three years, but our
experience has shown that only a legitimately elected government, and not a
coalition, can develop and implement a common vision and programmes that
will deal with the massive unemployment and poverty that Zimbabwe currently
faces,” said Tsvangirai.

President Robert Mugabe has been pushing for elections this year to end the
coalition government, but Tsvangirai says free and fair elections can only
be possible after a raft of political reforms to create the necessary

Tsvangirai projected himself as part of a new crop of African leaders who
must “consign repression and misgovernance to the dustbins and create a new
society with a new ethos and new values that poise us for peace, stability,
investment and growth”.

He told delegates on Wednesday there were sharp policy differences within
the coalition government. “Some of us want to nurture that potential and we
have publicly differed with those policies that do not address job creation
or send the correct message to investors. We say no to all forms of
machinations that seek to destroy the national wealth. We endeavour to grow
the national cake in a just, equitable and sustainable manner by focusing
more on creating new wealth while preserving and growing existing wealth,”
he said, in apparent reference to the controversial indigenisation drive.

“This is the true spirit of a national empowerment policy that every
well-meaning Zimbabwean should be pursuing.”

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Factionalism crippling Mugabe reelection bid

Thursday, 26 April 2012 17:50

Elias Mambo

FACTIONALISM and infighting within Zanu PF, which has ruled Zimbabwe for
over three decades, is now reaching boiling point as President Robert Mugabe
battles to keep the centre holding ahead of the next crucial elections.

Mugabe wants elections held this year without fail, with or without a new
constitution, when he is still fit to campaign. The veteran leader is
plagued by ill-health and old age complications. However, his re-election
bid may be crippled by internal strife.

Zanu PF factions, mainly led by Vice-President Joice Mujuru and Defence
minister Emmerson Mnangagwa, are largely defined along regional and ethnic
lines. The factions are fighting for control and dominance with the main
agenda of producing a successor to Mugabe.

Even though both have glaring shortcomings, Mujuru and Mnangagwa are seen as
the frontrunners to take over from Mugabe who is now in the twilight zone of
his long political career as he battles old age and ill-health. The
Mnangagwa faction currently has an upper hand in the ongoing district polls,
although Mujuru remains strong by virtue of her position.

Mugabe’s intensifying succession battle is fuelling internal power
struggles. The polls have unleashed a wave of renewed infighting now tearing
Zanu PF apart.

The district elections are important because they determine which faction
controls party structures. This is crucial, especially when going to
congress which meets after every five years to elect new party leaders. The
next Zanu PF congress will be in 2014 when the p arty will almost certainly
elect a new leader to replace Mugabe.

This is fuelling infighting. Lastweek, there were troubles within the party
in the two main hotbeds of factionalism, Masvingo and Manicaland, with party
officials clashing over imposition of candidates, vote-buying, doctoring of
voters’ rolls and ballot-rigging.

The same problems were recently experienced in Mashonaland and Matabeleland
provinces, signalling Zanu PF is rapidly descending into widespread turmoil.

Zanu PF provincial offices in Masvingo town had to be closed last week  by
party supporters protesting against imposition of candidates along factional
lines and vote buying. Party officials led demonstrations this week over the
issue. There have already been disturbances in Manicaland and Matabeleland,
creating an explosive situation in the party.

This has deepened fears that factionalism and succession battles would
cripple Mugabe’s re-election bid and lead to the outright defeat of Zanu PF
in the next elections.

After losing the first round of the 2008 presidential election and seeing
Zanu PF defeated in general elections for the first time since Independence
1980, in the process losing control of parliament, Mugabe admitted then
factionalism had largely caused their loss to Prime Minister Morgan
Tsvangirai and his MDC-T.

At the party national conference in Bulawayo last December, Mugabe also
admitted that factionalism was “eating away the party”. He repeated the
problem had caused Zanu PF’s defeat in the 2008 March elections.

Political analyst Charles Mangongera said factionalism rocking Zanu PF had
now reached crisis proportions and could be the party’s downfall in the next

“Factionalism will remain a permanent feature in Zimbabwean politics but it
will depend on how political players put in place institutional mechanisms
to promote competition for power and that it does not erode the fabric of
the party to become dictatorial,” he said.

“Zanu PF was born out of divisions, so factions were there in Enos Nkala’s
house in Highfield (when the party was formed in 1963) and they were carried
over to the liberation struggle. But such divisions have come to haunt Zanu
PF hence its downfall in the 2008 elections. It’s likely to suffer its worst
defeat since Independence if these remain unresolved,” he said.

The war of attrition between the Zanu PF factions heightened in Manicaland
last week, leading to an unprecedented failure by senior officials of both
camps to attend Independence Day celebrations at Sakubva stadium in Mutare.
Officials stayed away as they feared for their lives due to the volatile

Only the governor of Manicaland, Chris Mushowe and Zanu PF deputy minister
Monica Mutsvangwa attended the Independence celebrations. The entire Zanu PF
provincial leadership did not go as infighting deepened, although the
chairman of the province Mike Madiro, whom disgruntled party members want
fired for mishandling the district elections, showed up at the closing
stages of the event.

Zanu PF members contesting the results of district elections thronged party
offices in Mutare and staged protests, demanding Madiro, a Mnangagwa ally,
and his provincial executive must be fired for rigging elections.

Elections in places such as Mutare, Chipinge, Nyanga, Makoni and Buhera were
also characterised by disputes and clashes amid imposition of candidates and
vote-rigging accusations.

The spreading factionalism has alarmed Mugabe and senior party officials,
leading to the dispatch of national chairman Simon Khaya Moyo and commissar
Webster Shamu to provinces to resolve the crisis. Moyo and Shamu visited
Mutare on Tuesday last week on a fire-fighting mission.

There is also havoc in Zanu PF in Matabeleland provinces due to leadership
wrangles. Shamu’s recent visit to Bulawayo failed to resolve the contentious
issue of provincial chairman Isaac Dakamela, suspended of late on
allegations of corruption and insubordination.

Shamu visited the party headquarters in Bulawayo and tried to re-instate
Dakamela who was replaced by Killian Sibanda but his move was thwarted by
influential politburo members, including Angeline Masuku, Eunice Sandi and
Joshua Malinga. A seven-hour meeting over the issue failed to find a
solution. On Tuesday last week senior Zanu PF officials in Bulawayo, except
Sikhanyiso Ndlovu, boycotted provincial governor Cain Mathema’s
pre-Independence commemoration function.

Early last week Zanu PF politburo member Jonathan Moyo complained about “the
ugly dynamics of factionalism” and succession problems in the party. He
described factionalism as “the cancerous scourge”. Zanu PF spokesman Rugare
Gumbo admitted last week factionalism was wreaking havoc in the party.

Local political commentator Ernest Mudzengi said factionalism was one of the
main problems afflicting Zanu PF, but would not lead to the party’s demise.
He said it was a combination of factors causing the decline of the party.

“The issue of factionalism alone cannot lead one to say that Zanu PF will be
finished,” said Mudzengi. “Since 1963 Zanu PF has always been affected by
factionalism but the downfall of the party will be triggered by a myriad of
woes bedevilling the former ruling party. Factionalism is one of the issues
but there are other important factors which are political and economic by
definition.” Analysts say unless factionalism and infighting is tackled,
Mugabe and his party are likely to face the March 2008 fate or worse.

“We are likely to witness a repeat of the 2008 ‘bhoramusango’ (an approach
Zanu PF MPs used to campaign for themselves while telling voters to cast
their ballots for the opposition in protest against Mugabe’s continued
leadership of the party) and that may mark the end of us if we are not
careful,” a senior Zanu PF official said.

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ZITF: Economy bears brunt of disastrous govt policies

Thursday, 26 April 2012 17:19

Tendai Marima

FOR more than half a century, the city of Bulawayo has hosted the country’s
biggest multi-trade show, the Zimbabwe International Trade Fair (ZITF).

Now in its 53rd year, ZITF still ranks as one of sub-Saharan Africa’s top
trade expos despite a significant decline in exhibitors from 800, in 2011,
to 675 this year, a general trend over the years.

Trade fairs are marketing events at which the fundamental products and
innovations of an industry or sector are exhibited by a variety of
companies, exhibitors, targeting interested buyers and industry
participants - the visitors. Trade fairs are usually organised by
governments, chambers, industry associations or specialised exhibition

The events represent a real-time, interactive environment bringing together
supply and demand, promoting the formation and growth of markets and market
segments. The three main economic functions of trade fairs include the
exchange of goods, sharing of information and promotion of products and

The largest and most important trade fairs on the African continent take
place in the southern part of Africa, especially in South Africa. The
southern African exhibition programme of the agricultural sector, for
instance, is manifold. There are trade fairs for the timber industry,
exhibitions of the commercial foods sector and, of course, internationally
renowned wine fairs.

The food, agriculture and consumer protection section of the German embassy
in South Africa provides a listing and information about agricultural trade
fairs and exhibitions in Southern Africa.

Zimbabwe is one of the major players in trade fairs in the region. During
the current trade fair in Bulawayo, the most notable thing is the return of
European countries, namely Italy, Germany and Poland to showcase their
companies and products. Strained diplomatic relations between Zimbabwe and
the West is one of the key reasons why American and European companies are
barely represented, while China’s 170-strong delegation dominates partly
because of the government’s “Look East policy” which has helped strengthen
trade relations between the two countries.

Themed “Investing Locally, Reaping Globally”, the trade fair echoes
government’s current indigenisation and empowerment policy which, in
principle, seeks to offer more equitable economic ownership to Zimbabweans,
but in reality, has the look and feel of a disastrous expropriation or
nationalisation policy.

Although ZITF is widely expected to attract foreign investment and business
partnerships for local industry, Zimbabwe, which has so many opportunities,
does not provide an attractive business climate. The current indigenisation
policy which requires foreign-owned companies to cede 51% of their shares to
indigenous Zimbabweans has created deep rifts within the coalition
government, particularly between Indigenisation and Empowerment minister
Saviour Kasukuwere and Prime Minister Morgan Tsvangirai. Kasukuwere insists
the policy would be applied across the board while Tsvangirai and Finance
minister Tendai Biti have strongly criticised that.

Reserve Bank governor Gideon Gono, while emphasising he supports the
principle of indigenisation, has vowed to resist any plans to indigenise the
“sensitive” banking sector. Gono has said the sector is already in local
hands and anyone who wants to open a bank is free to come and get a licence.
Recently, Biti and Gono, apparently targeting Kasukuwere, said those
clamouring to take over the banking sector must first show that they are
able to run banks already under their control instead of grabbing and
ruining more institutions.

Kasukuwere’s refusal to pay for mining shares in foreign-owned companies,
saying “why should we pay for minerals that belong to us?” all but confirmed
the indigenisation campaign is a poorly-disguised expropriation or
nationalisation agenda similar to the land reform programme in many

Globally, Zimbabwe ranks 171 on the World Bank’s Ease of Doing Business
Index 2012, down three places from 168 in 2011 and a few bars above
struggling countries like Eritrea, the DRC, Chad and Haiti.

Restrictive and regressive government laws, a simmering liquidity crisis in
the banking sector and an unsustainably high trade deficit of more than US$3
billion and many other socio-economic factors, as well as a US$9 billion
debt, make it difficult to do business in Zimbabwe, unlike in Mauritius, the
island of economic success, currently ranked at 23 or South Africa, the
continent’s economic powerhouse, placed at 35.

The situation is made worse by the protracted political stalemate caused by
disputed elections which has been dragging for more than a decade. The
looming elections further exacerbate the crisis.

All these factors, including macro-economic instability, combined have
ensured Zimbabwe has a high political or sovereign risk profile, something
which investors fear.
At the opening of the South African exhibition stand at ZITF, the country’s
deputy Trade and Industry minister Elizabeth Thabethe praised Zimbabwe for
its trade policies and saw ZITF as an opportunity for “concerted African
regional integration and value addition to our businesses”.

Thabethe also encouraged local industry to partner with South Africa, whose
delegation comprises more than 30 exhibitors. Although Thabethe’s views were
encouraging, the trouble remains ensconced in the business environment and
legal framework  which makes investing in Zimbabwe difficult.
Once the industrial hub of Zimbabwe, Bulawayo’s industries now function at
60% operational capacity. Analysts say up to 100 companies have closed or
relocated from the city at the height of the economic meltdown and
hyperinflation, leaving over 20 000 workers jobless. The city hosting the
trade fair is now virtually a “ghost town” as companies shutdown en masse.

Acknowledging the crisis Bulawayo mayor Thaba Moyo said: “The trade fair is
coming at a time when we are having many challenges as most companies in the
city are finding it difficult to operate. A total of 87 companies have
closed or relocated from the city.”

For the time being, the fair will provide a short-term economic relief to
the city as hotels are booked up and leading shops record high sales.
However, the much-needed long-term benefits like investment will remain
unattainable as investors are repelled by the hostile business environment
and laws like the indigenisation statute.

The closure of companies has also affected Bulawayo city council itself as
this has led to loss of revenue. Council, which is in dire straits, is
currently negotiating to end a strike by 3 200 council workers over unpaid
salaries that amount to US$700 000.

Refuse collection has come to a standstill in some areas and council-run
clinics in poorer high-density areas are turning away patients. At a time
when Zimbabwe is trying to showcase itself to international visitors,
frequent city-wide water and power cuts and unrepaired burst water pipes in
the City of Kings paint a dismal picture of the situation. The Bulawayo
situation reflects the state of the nation.

Chinese exhibitors have been hailed as “investors” in official circles, but
exhibitors and visitors who usually pack the trade fair do not necessarily
translate into investors.

Although China’s US$560 million investment has brought immense benefits for
Zimbabwe, the country’s controversial approach to resource extraction in
Africa has sparked criticism of it operating like an exploiter of wealth
rather than an investor.

At ZITF 2012, China hosted a Zim/China business seminar and reports say the
China Development Bank may invest up to US$10 billion in the country’s
agriculture and mining sectors.

Claiming its title as an emerging world business power, China currently
hosts the world’s largest trade fair, the Canton Fair in the Olympic city of
Guangzhou. The fair usually has 23 000 exhibitors from all over China and
beyond and has a holding capacity of 1,2 million people, which is 10 times
more than ZITF’s 146 000 visitor peak of 2011.

While China reaps the benefits from its trade fairs, Zimbabwe is struggling
to due to the political situation, business environment and legal framework
which are not investor-friendly.

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SMMH: Parly trial to shed light on political actors

Thursday, 26 April 2012 17:58

Paidamoyo Muzulu

PARLIAMENT’S trial of state-appointed SMMH administrator Afaras Gwaradzimba
this week is expected to shed light on political figures behind the
expropriation of South African-based local tycoon Mutumwa Mawere’s business
empire, in the long-drawn out case which has been going on since 2004.
Gwaradzimba, who was appointed by Justice minister Patrick Chinamasa in
2004, is accused of uttering statements that demeaned the integrity of
parliamentary portfolio committee on Mines and Energy in an interview with
NewsDay in March 2011.

Gwaradzimba and Chinamasa have over the past two years failed to provide
documentation to parliament proving the government ownership of SMMH share
warrants. Speculation is rife that the decision to deprive Mawere of his
companies was political.

It is said Mawere lost his empire after falling out with Defence minister
Enmmerson Mnangagwa and his powerful Zanu PF faction to which Chinamasa
belongs. A source close to Zanu PF said Mawere was a victim of factionalism
within the party, pitting Mnangagwa and Vice-President Joice Mujuru although
his demise was linked to clashes with former allies in the camp led by the

“Mawere courted the ire of the Mnangagwa faction when he snubbed the
provincial chairmanship’s post of Masvingo after he was invited and was also
seen as being greedy having refused to accept other indigenous partners into
the SMMH deal which was a model indigenisation project,” the source said.
The sources said Mawere’s problems should be seen in the context of Zanu PF
power struggles which have a nexus with President Robert Mugabe’s succession
and money.

“The issue is about power, money and influence and Mawere is caught up in
that web,” a senior Zanu PF official said. “If you look closely, it’s the
Mnangagwa faction which is running the show around SMMH and Mawere is victim
of power politics, greed and revenge.”

However, Mawere has over the years steadfastly refused to comment on the
politics behind the expropriation of his empire whenever approached by the
media. Gwaradzimba, through his lawyer Simplisius Chihambakwe, denied the
charges of denigrating parliament on Tuesday when he appeared before the
Privileges and Immunity Committee chaired by Munyaradzi Paul Mangwana (Zanu

The other members in the five-member committee are Jessie Majome and
Shepherd Mushonga (MDC-T), Patrick Dube (MDC) and Joram Gumbo, also (Zanu

Gwaradzimba, who was accused of showing contempt to parliament, appeared
with his lawyer before the committee. The proceedings did not last long as
Chihambakwe asked for all the evidence to be used against his client and a
list of witnesses.

Mnangagwa was initially nominated onto the committee but recused himself
after speculation surrounding his conflict of interest surfaced. Mnangagwa
was widely believed to be Mawere’s political godfather before they fell out.

Chinamasa last year conceded before parliament that the matter could only be
solved out of court if Mugabe personally ordered him to do so.

“If the president calls me and says do this, I will do it without question.
In the circumstances, the finalisation of the matter in the courts (in my
favour) would give me a stronger standing and push me to present a new
position,” Chinamasa said.

Chinamasa’s position flies in the face of Reserve Bank of Zimbabwe governor
Gideon Gono’s advice to Mugabe that SMMH ownership should be restored to
Mawere. Mugabe and Gono tried to help Mawere after the president held
discussions over the matter with former South African president Thabo Mbeki.
Mawere had approached Mbeki for help, who in turn raised the issue with

Despite Mugabe and Gono’s push to have Mawere given back his companies and
assets, Chinamasa, apparently with the backing of Mnangagwa, fiercely

Chinamasa later defiantly told parliament that the matter would only be
resolved by the courts. “There is no way we will settle. Let the courts
decide,” Chinamasa declared.

“Thereafter, we will sit and discuss. It’s too late in the day after 25
case-sittings and we are not agreed on who is culpable for the mines’

Mawere, who has since been de-specified by the Home Affairs co-ministers,
last year, went on the diplomatic offensive to regain his empire from the
state. In December 2011, he wrote to the British ambassador to Zimbabwe
Deborah Bronnert and copied the letter to the South African embassy in
Harare seeking their help to re-claim his businesses from the Zimbabwean

Mawere argues government acted illegally by trying to apply its laws
extra-territorially since SMMH is a British-registered company and could not
be arbitrarily taken over without involving British courts.

Parliament is expected to call Mines and Energy committee chairperson
Edward Chindori-Chininga and NewsDay reporter Veneranda Langa as witnesses
on May 2 2012 when the case resumes. Langa interviewed Gwaradzimba when he
made remarks which allegedly denigrate parliament.

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‘Uncertainty pushes mining industry towards the brink’

Thursday, 26 April 2012 16:37

Gamma Mudarikiri

ZIMBABWE’s mining industry faces collapse owing to uncertainty caused by new
policies governing the sector and a huge national debt, former Chamber of
Mines CEO Cris Hokonya said this week.
Hokonya  told  journalists  in Harare that the ambiguity  surrounding  the
implementation of the indigenisation policy forced mining  companies to
defer investment  plans, a move that is detrimental  to  the growth of the

He said investment into the sector continues to slow down, adding that
government’s failure to review the policies would see the industry crumbling
in the near future.

According to the indigenisation law, mining companies are compelled   to
cede 51% of their shares to indigenous Zimbabweans. As a result, investors
are now  shunning  Zimbabwe  in favour  of  neighbouring  countries  which
are competitive  in terms  of legislative certainty.

The situation, he said, was worsened by government’s reluctance to
restructure the country’s huge debt amounting to US$9 billion, a situation
that renders Zimbabwe regionally uncompetitive in terms of   foreign

“The  uncertainty  surrounding   the implementation  of  the indigenisation
law  comes  when  the country  is  carrying  a  huge   debt  overhang  and
the  combination  of the  two is  a  serious  drawback  in  attracting
investments,” he said.

“We, as a country, need to  be brave  enough  to  negotiate  with  our
creditors to restructure our debt and also put in place legislation which
will allow the  development of the mining sector, which is key to our
economy,” Hokonya said.

“Mining remains the only sector that can revive the  economy because of the
international competitiveness of the country’s  minerals in terms of pricing
and quality,” he said.

Other sectors of the economy have lost competiveness globally in terms of
quality and pricing, he added.

Mining last year accounted for 50% of the country’s total exports and
contributed to more than 13% of GDP.

According to the Chamber of Mines, the sector is expected to contribute
US$2,6 billion to national exports this year, but the figure could be higher
if beneficiation plans come to fruition.

Last year, total tax paid by the mining sector to government was around
US$311 million, about 12% of the revenue collected by government. However,
the contribution would increase to around 18% should diamond revenues be

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Inflation figures doubtful

Thursday, 26 April 2012 16:33

By Linda Tsarwe

FROM experience, Zimbabweans have a fairly good understanding of inflation.
Their experiences with hyperinflation showed them its devastating effects on
the livelihoods of people and the economy. During that period, both
government and independent economists published different inflation rates,
with the government official figure always being the lowest. Independent
economists argued that things were much worse than what the official
inflation rate depicted, and they seemed right considering the rate of price
increases at the time.

At the peak of hyperinflation, government ceased releasing inflation
figures. The last official inflation rate released under the hyperinflation
era was approximately 231 000 000% in July 2008.  Independent economists on
the other hand attempted to come up with their own estimate of inflation at
the peak of hyperinflation. However, inflation had reached ridiculous levels
and the figures were almost nonsensical, with some stating figures as high
as 90 000 000 000 000 000 000 000% (90 sextillion %).

As a result of dollarisation in February 2009, hyperinflation was halted. In
fact the country went into deflation for some months after dollarisation, as
the economy adjusted to the use of multiple currencies. Official inflation
in 2009 ended the year at -7,7% before rising to 3,2% by the end of the year
in 2010. This appeared normal since we were coming from a period of

The year 2011 also registered a year-on-year increase of 1,7 % after
inflation closed the year at an official rate of 4,9% against independent
estimates of 6,5%. This year, government revealed that it is targeting an
annual inflation rate of 5% and is confident this level can be achieved.
Recently, Zimstats released March CPI figures which indicated a slowdown in
inflation during the month. Month-on-month inflation was down 0,06 points to
0,43%, while year-on-year inflation slowed down to 4% after recording a
decrease of 0,3 percentage points from February.

Even though official figures suggest that inflation is easing off, prices
seem to be going the other way. General observation shows that the month of
March alone witnessed significant increases in food prices when the rand
firmed, and yet month- on- month inflation for food and non-alocholic
beverages inflation is said to have come off by 0,22 percentage points.

Also, during the same month, fuel prices were adjusted upwards by about 3%.
Fuel price increases have a major influence on the CPI not only directly but
also because fuel has a bearing on the prices of most other goods in the
CPI. However, according to Zimstats, from February 2012 to March 2012, the
CPI for domestic electricity, gas and other fuels is said to have gone down
by 0,26%, which raises a red flag! on whether the figures are accurate.

Likewise, the decrease on year- on- year inflation is also questionable.
During the period March 2011 to March 2012, there have been a number of
policies implemented by government which have resulted in price increases.
When government reintroduced duty on basic commodities, retailers were quick
to adjust their prices upwards to cushion themselves against the effect of

Local producers also increased their prices in tandem to match those of
imports. In addition, there was a significant increase in electricity
tariffs in September, which went up by approximately 30%. Similarly,
retailers also tend to increase prices when the rand firms, but when the
rand weakens against the dollar no downward review is made. Therefore prices
tend to be sticky downwards, which fuels the country’s inflation.

Independent economists believe that inflation might end the year at 9,5%,
and some are touting double digit figures. Their argument is that the
imposition of duty and surtax on certain foods is likely to push food
inflation upwards, which has already happened but is not reflected in the
current CPI figures. Higher utility tariffs continue to be a burden to
consumers, and there is a high probability that they might be increased

Wage demands, especially from the civil service, will likely have a negative
impact on the inflation rate if they are met. Two-thirds of the population
is estimated to be living under the poverty datum line, which means that the
wage war is far from over. Being an election year, government is likely to
come up with populist policies which will involve an increase in government
spending. Inflation can only go upwards in such a scenario.

The IMF also believes that the official inflation figures could be
understated and believe that they could reach 6,2% by year end. They cite
the same reasons of increases in food and fuel prices and higher wage
demands as the main drivers of inflation. Even our economic growth rate
figures have been revised downwards, which could indicate that the
government might be a bit aggressive on the economic performance indicators.

An analysis of the CZI consumer basket for a family of five shows an
increase of 35% from the US$427,11 estimated in May 2009 to the last
published figure of US$576,69 in January 2012. Loosely, we can conclude that
prices of basic commodities have risen by 35% since dollarisation, which is
a huge contrast to the official inflation figures over the years.

It would appear the current methodology of calculating inflation is flawed.
This was also hinted at by government itself when they reinforced the need
to restructure and revitalise CSO structures and data collection methods. A
significant weight of 31,9% is allocated to food and non-alcoholic
beverages, while categories such as education and communication are given
minimal weightings of 2,9% and 0,99% respectively.

Long ago, the structure would have worked as education and communication did
not constitute a substantial allocation of consumer spending. With the
advent of mobile phones and new communication technologies, the contribution
has significantly increased. A weighting on communication of 0,99% is not an
accurate representation of communication costs to the total consumer basket.

The CSO figures seem to focus on conventional communication means such as
telephones and postal services. Furthermore, school fees are turning out to
be one of the major cost burdens for the consumer.  Although increases are
done periodically, they are usually material and the impact is significantly

Despite contradicting reports by independent economists and the IMF that our
official inflation figures could be understated and that the official
year-end figures could be unachievable, government remains adamant. Although
it would be desirable for the country to maintain low inflation rates, the
odds are against us and the reality on the ground is that inflation is
possibly on an uptrend.

There is need for a thorough revision of the methods used to calculate the
CPI. Technical assistance can be sought from the IMF to update the CPI
groups and the reallocation of weights to reflect the changes in the
spending patterns over the years. Most importantly, a survey could be
carried out which will come up with the current spending patterns.
Independent and official inflation rate figures should converge at some
point or the variance should be narrowed.

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‘Parastatals have potential’

Thursday, 26 April 2012 16:20

PARASTATALS could contribute around 60% to the country’s gross domestic
product if they were run properly, Deputy Prime Minister Arthur Mutambara
has said.
Mutambara said those running parastatals needed to be accountable for the
operations of the entities.

He said other countries had harsher penalties for dealing with failed heads
of parastatals, adding Zimbabwe should consider that route.

Mutambara was speaking at the ZITF International business conference on

Analysts have noted that while parastatal reforms have always been a
priority since mid-1980s, nothing has been done to institute reforms.

All the policies followed by the government to rehabilitate the state
entities have failed because of the large scope of their nature; government
comes out as a poor decision maker.

Rather, analysts suggested that parastatal reform efforts should be aimed at
reducing parastatal dominance and promoting a larger role for Public-Private
Partnerships while at the same time improving parastatals’ use of resources.

At the moment, a business conference was told, the state was not getting
proper or even returns from past investments and assets were being misused.
According to a recent African Development Bank report, a total of nine state
enterprises have a direct role in the provision of  basic services.

These are the Zimbabwe National Water Authority (Zinwa) in the case of
water; Zesa Holdings, the Zimbabwe Power Company (ZPC) and Zimbabwe
Electricity Transmission and Distribution Company (ZETDC) in the case of
electricity; the National Railways of Zimbabwe (NRZ), Civil Aviation
Authority of Zimbabwe (Caaz) and Air Zimbabwe in the provision of railway
and civil aviation services; and TelOne and NetOne in communications.

With the exception of communications, where there is substantial private
sector service provision, and air travel, where Air Zimbabwe competes with
other regional and international carriers, the remaining state operated
infrastructure services face little or no private competition. Zinwa has a
monopoly in the provision of raw water and clear water for small towns and
rural areas.

Mutambara said the country should pay attention to the need for the
development of human capital and the opportunities that exist in consumer
goods industries if any economic growth were  to be achieved.

He said government was currently emphasising  minerals and agriculture, yet
there were opportunities in retail and banking services. According to global
research, sub-Saharan Africa consumer-facing industries have the potential
to earn US$1,3 trillion. — Staff Writer.

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SA lends support to Zim’s trade policy

Thursday, 26 April 2012 16:19

Nqobile Bhebhe

SOUTH Africa has pledged to fully back Zimbabwe’s new industrial trade
policy, saying the country’s vast mineral deposits have positioned its
neighbour as a key strategic partner within the Southern African Development
Community (Sadc) bloc.
South Africa’s Trade and Industry deputy minister Elizabeth Thabethe,  who
is leading a trade delegation at the Zimbabwe International Trade Fair in
Bulawayo, said it is critical for intra-Africa trade in the wake of global
economic challenges. South Africa is Zimbabwe’s major trading partner

“Zimbabwe is well endowed with mineral resources, including strategic
minerals such as platinum. This illustrates the economic potential that the
country has and makes it a leading and key strategic partner amongst the
members of Sadc,” said Thabethe.

Zimbabwe’s Industrial Development Policy and the National Trade Policy
(2012-2016), launched by Zimbabwe this month, hopes to revive the sector,
among other objectives.

“We compliment Zimbabwe on the recently launched industry policy in Zimbabwe
as the framework that will guide the economic growth in this country,”
Thabete said.

She pointed out that since 2003, South African companies had undertaken 12
investment projects in Zimbabwe totalling R10,87 billion, creating more than
2 000 jobs in the metals, minerals, tourism and financial services sectors.

On the other hand, foreign direct investment into Africa, which peaked in
2008 and was driven by the resources boom, has since 2009 been on the

“It is these global economic challenges in our midst that bring intra-Africa
trade to primacy,” she said.

To strengthen economic ties, South Africa has lined up a series of finding
missions to the “key regions, provinces and cities in Zimbabwe to promote
proudly South African products and technology.”

This year’s trade fair is being held under the theme, Investing Locally,
Reaping Globally.

The NTP is expected to result in the increase of exports and promote the
diversification of the country’s export basket by harnessing comparative
advantages in key priority sectors. The policy targets increasing export
earnings by 10% annually from $2.5 billion in 2010 to $4.5 billion in 2016.

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‘Zim needs a corporate governance code’

Thursday, 26 April 2012 16:13

Clive Mphambela

IN April 2011, Afre Corporation executive chairman Patterson Timba was
forced to quit the group he founded following a Reserve Bank of Zimbabwe
enquiry into related party transactions that had been unearthed at his
Renaissance Merchant Bank, (RMB).
The saga, which took several months to unfold, left a trail of battered
careers, including Timba’s own and those of a coterie of others who had
trusted him enough to work with him.

The bank was only rescued by NSSA after a lot of kicking and biting in a
costly US$24 million transaction.

Many analysts still believe the price was an overpayment for an asset whose
value depended primarily on good reputation.

Through contagion effect, the problems at the bank negatively affected
business at other subsidiaries in the Afre stable such as First Mutual Life
and Tristar Insurance, according to recent statements by Afre management.
The allegations against Timba were tantamount to fraud against the company
which he substantially owned and led, which ultimately led to fellow
shareholders  losing substantial amounts of money, whilst customers were
subjected to the financial and emotional stress associated with funds being
locked up in a bank under curatorship.

In a similar case in November 2011, Fred Mutanda, CEO of the then listed
pharmaceutical entity — Caps Holdings — was reportedly arrested on
allegations of defrauding his company of various amounts of money and
fraudulently registering drugs with an offshore company called Caps

Corporate Zimbabwe has over the last 20 or so years experienced a fair share
of corporate scandals dating back to the Access to Capital fiasco of the
early 90s to the First National Building Society and ENG scandals of the
early 2000’s. What rings common amongst the few examples cited is the fact
that major shareholders, or people with significant influence over the day
to day management of these institutions, have been at the forefront of those
accused of fraud against the companies they are entrusted to govern.

Some analysts have attributed these unfortunate incidents to corporate
governance failures within these institutions but others think that these
cases are a tip of the iceberg and are symptomatic of failures at the
regulatory level.

An analyst asked: “How does one person acquire more than 70% of a
pharmaceutical company whilst there are very clear regulations in the
country about ownership thresholds and ownership structures within the
pharmaceutical industry?”

In most, if not all cases, very senior executives with significant and often
controlling stakes have perpetrated these frauds, clearly abusing their
privileged positions in the companies.

The powerful owner-managers have usually elevated themselves to positions
where it is often difficult for fellow executives and even board members to
question their actions and to adequately interrogate transactions they
originate and promote.

Most of the board members are usually hand-picked by the CEO, who in the
case of Afre happened to be the executive chairman of the board and majority

Such boards lack the required level of independence and, more often than
not, will solely serve the purpose of rubberstamping the executive
management’s views. They will not pay sufficient attention to the broader
needs of other stakeholders, who then suffer the consequences of lack of
adequate fiduciary oversight over the companies’ affairs.

Other senior executives will often be rendered powerless and will not
exercise independence of action and thought, being reduced to mere
implementation tools for the CEO’s decisions.

Analysts argue that having strong institutional shareholders is a better
option as opposed to powerful individual shareholders. The say institutional
investors are the route to good corporate governance for Zimbabwean
companies. Recently NSSA took control of Afre and management was upbeat
about this development.

Douglas Hoto, the new Afre CEO, said they were pleased that NSSA now owned
about 54% of Afre. Institutional shareholders do not only offer deep pockets
for companies in times of trouble, but because of the wider stakeholder base
that they represent are often more demanding in terms of corporate
governance and fiduciary care.

This ensures that they appoint directors of proper repute to the boards of
investee companies. Institutional investors tend to be more risk averse as
they have deep institutional memories and vast experience from the diversity
of investments they make over multiple time horizons and even in different
geographical areas.

Individual shareholders sometimes are not patient enough to slowly build
long term value that institutional shareholders are inclined to, preferring
instead rapid short term gains that are normally fraught with high risks.
Indeed, as is the case  in Zimbabwe, the individual shareholders have been
so keen to reap dividends quickly by ripping off the companies they run
through insider trading, self dealing and outright fraud.

Whilst regulators such as the Securities Commission of Zimbabwe  and the
Reserve Bank of Zimbabwe have been accused of being overzealous and heavy
handed when dealing with issues of governance and disclosure in the markets,
these cases merely reinforce the need for closer scrutiny of the shareholder
profiles of our public companies and a more thorough interrogation of
transactions engaged by public companies. These regulators have to satisfy
everybody so that the interests of all stakeholders, particularly minorities
and customers are protected.

“We have been talking a lot about a corporate governance code for the
country and to date nothing is binding, except for what the RBZ and Sec are
doing. We at Sec have a corporate governance code which binds all our
licensees and will soon (after amending our Act) be applicable to all listed
companies. We need a code that is enshrined in the Companies’ Act,” a senior
official with the Sec said.

Analysts say the major weakness with our laws at the moment is that the
perpetrators have still not been brought to book, leaving room for more
incidents in the future.

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MuckRaker: Someone else started apostolic ‘meddling’

Thursday, 26 April 2012 17:12

MUCKRAKER is frequently struck by the naivety of diplomats appointed to this
country. Instead of spelling out the principles by which their nation’s
foreign policy is guided, they are more inclined to say such principles don’t

Last week we had the Irish ambassador, Brendan McMahon, who is accredited to
Pretoria, telling the state press that sanctions are “a small issue”. This
was obviously designed to butter up Zimbabwe which is sending a delegation
to Brussels  next month for talks designed to normalise relations.

Nothing wrong with that, but it would be useful to know if Ireland has any
principles guiding it. Sanctions were imposed in response to EU election
supervisor Pierre Schori’s eviction from the country when he identified
electoral manipulation and political violence in the 2002 poll. The Zimbabwe
government proceeded to claim the EU was directed by the British who were
bitter over the land issue.

It would have been an impressive feat for British diplomacy to have twisted
the arms of all 27 EU members but that is what the Irish are implying when
they gullibly refer to sanctions not mattering.

McMahon needs to get a grip on why sanctions were imposed and why certain
principles have been incorporated in the GPA before he next pontificates on
“small issues”.Once negotiations get underway in Brussels those issues will
become the basis for the talks. It will be interesting then to see what
matters and what doesn’t!

We have a similar dilemma in the Copac talks. The Sunday Mail has been
squealing about the views of the people in the outreach programme being
“dumped” and replaced by a more “explanatory principles approach” as
advocated by constitutional advisor Hassen Ebrahim.

This is not difficult to understand. Any draft that is to command public
confidence must have universal principles guiding it. That means including
the views of all parties in the electoral process so at the end of the day
electoral outcomes are embraced by a broad consensus.

These must be electoral principles found everywhere in democratic societies
such as Sadc’s commitment to electoral principles and popular participation.
These principles were adopted without difficulty by a Zanu PF government at
Grand Baie in Mauritius in 2004. So why now all the fuss about foreign

Is TB Joshua coming to Zimbabwe or not?

It was interesting to see Munyaradzi Huni in the Sunday Mail claiming
“impeccable immigration authorities” had told him that “it was highly
unlikely that TB Joshua would be allowed into the country as he is known to
use his alleged prophecy to meddle in politics”.

Clearly rattled by Joshua’s prophecy about an old African leader dying, Zanu
PF apologists have been in overdrive in their bid to portray him as a false

In yet another disjointed hatchet job, entitled “Tsvangirai’s letter of
shame to Prophet TB Joshua”, the Sunday Mail laid into Prime Minister Morgan
Tsvangirai for inviting TB Joshua to “assist him to become the country’s
next leader”.

This followed a letter despatched to TB Joshua by Ian Makone inviting him to
visit the country to preach here. TB Joshua is described by Huni as
“controversial”. He describes Makone as Morgan Tsvangirai’s “close
confidante (sic)”.

This is all part of a ploy, we are told, to infiltrate “Zanu PF strongholds”,
especially in the rural areas using the prayer rallies.
Funny isn’t it that Zanu PF has not found it shameful to attach itself to a
number of dubious “apostles” in the hope these “pastors” will deliver votes
to Zanu PF.

Huni calls Tsvangirai “desperate” but he doesn’t say the same for Zanu PF
which has roped in many hangers on like “Reverend” Obadiah Msindo of Destiny
for Afrika who are only too keen to “meddle in politics”.

They were not even ashamed to associate themselves with the late
self-proclaimed spiritual healer and convicted rapist, Godfrey Nzira.
This was despite Nzira being convicted of seven counts of rape and one count
of indecent assault involving two women who sought help from him at his

Who started this apostolic “meddling”?

Readers of this column over the years will know we have sent shrill warnings
about the failure of governance in South Africa, not very different from our
own government’s poor example.

Recently, the chairman of Nedbank, Reuel Khoza, has warned that South Africa’s
democracy is under threat from a “strange breed” of political leaders who
appear to be incapable of dealing with the demands of modern-day governance
and leadership.

Khoza’s remarks were carried in BusinessDay and elicited a bitter response
from the country’s post-liberation aristocracy.

He said South Africa was fast losing the checks and balances provided by the
constitution and called on South Africans to hold to account “putative
leaders who, due to sheer incapacity to deal with the complexity of 21st
century governance and leadership” could not lead.

“We have a duty to insist on strict adherence to the institutional forms
that underpin our young democracy,” Khoza wrote in Nedbank’s latest annual
“Our political leadership’s moral quotient is degenerating and we are fast
losing the checks and balances that are necessary to prevent a recurrence of
the past,” he said.

“South Africa is widely recognised for its liberal and enlightened
constitution yet we observe the emergence of a strange breed of leaders who
are determined to undermine the rule of law and override the constitution.”
For those who recall, Khoza was an advisor to Thabo Mbeki. The debate that
has followed Khoza’s remarks, BusinessDay notes, therefore has much to do
with Mbeki’s legacy.

Khoza has touched a raw nerve with his intervention –– whether Zuma is up to
the job. This hurts because it coincides with popular sentiment. Many South
Africans don’t think so. On Mbeki’s watch the South African economy boomed.
During Zuma’s tenure half the employment gains won by Mbeki have been lost.

The late Malawian president’s Democratic Progressive Party (DPP) has
apologised to new President Joyce Banda and the nation on all the ills “they
injected on them” when wa Mutharika was alive, reports the Malawi Voice.

DPP Secretary-General, Wakuda Kamanga, said they were aware that DPP leaders
wronged Banda and a lot of Malawians in their quest to please wa Mutharika.

Speaking at wa Mutharika’s funeral at his Ndata Farm, Kamanga said: “To all
Malawians, it is easy to wrong others when you have a president. And during
our time, we are aware that we did some things that might not please you.
So, as we bury this man today, may we bury along with him your anger.”

Talk about the chickens coming home to roost! Here is hoping that
apparatchiks this side of the border will learn a thing or two from this
incident and temper their overzealous conduct accordingly.

They might, just like the DPP, find themselves on the other side of the
political divide and be forced to plead for mercy.

However, Kamanga’s gesture did not go down well with the DPP cadets, who
called Kamanga to a secluded area within Ndata Farm and beat him up.

According to the Malawi Voice the bemused cadets said Kamanga’s remarks had
the potential of selling the party out to the now ruling People’s Party.

The youths also vowed to deal with all DPP MPs that have promised their
allegiance to Banda.

These are clearly the violent kicks of a dying horse.

A reader sent us a funny story  which shows that, contrary to popular
perceptions, the City of Harare rubbish disposal department don’t always
have it their own way.

A rubbish disposal truck was doing its rounds one morning recently when it
was stopped by a policeman who was intent on fining the crew for hanging
onto the back of a moving vehicle.

No amount of explanation from waste management officials about their modus
operandi could budge the resolute policeman from charging them. They
eventually had to go to the officer-in-charge who apologised and sent them
and their truck on its way –– two hours later.
It’s a scary thought that we have so many half-trained policemen with the
powers of properly trained officers causing this sort of disruption to all
and sundry.

Finally here’s a different take on affirmative action from Thomas Sowell, an
African American who started out poor in the south.

Q: Overall, do you believe Affirmative Action has had a more positive or
negative impact on the lives of black Americans?

TS: Affirmative action has been a boon to those blacks who were already
affluent and particularly for those who were rich but has done little or
nothing for those blacks who are neither. Moreover empirical data from other
countries around the world shows the same general pattern from group

Q: Do you believe reparations should be paid for slavery?

TS: The people made worse off by slavery were those who were enslaved. Their
descendants would have been worse off today if born in Africa instead of

Put differently, the terrible fate of their ancestors benefited them. If
those who were enslaved were alive, they would deserve huge reparations and
their captors would deserve worse punishments than our laws allow.

But death has put both beyond our reach. Frustrating as that may be,
creating new injustices among the living will not change that.

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Eric Bloch Column: Diaspora an economic mainstay

Thursday, 26 April 2012 17:08

ONE of the greatest tragedies of the political and economic morass which has
affected Zimbabweans for more than 15 years has been the large number of
Zimbabweans who have left the country. Although no reliable data exists as
to the actual number of Zimbabweans who have left Zimbabwe to seek pastures
new, it is authoritatively estimated that between three and four million of
the country’s nationals have left  to seek employment in South Africa and
other countries in southern Africa, in the UK, Germany, US, Canada,
Australia and elsewhere.  This emigration has reduced Zimbabwe’s population
from an estimated 15 million to 11- 12 million.

The overwhelming majority of those who are now known as the Zimbabwean
diaspora were motivated by economic desperation.  Such  was the magnitude of
unemployment in Zimbabwe as the economy progressively declined that millions
sought income opportunities elsewhere.  Not only did they do so in order to
support and sustain themselves, but also to support their families and many

The economic decline was so intense and financially debilitating that whilst
an authoritative survey in 1991 determined that the average Zimbabwean
employee had been supporting himself and five dependants, a similar survey
in 2008 assessed that the average Zimbabwean worker was wholly or partially
supporting himself and 19 others!

The first major development to escalating unemployment was in 2000 when
Zimbabwe  embarked upon its ill-considered and mismanaged land reform
programme, which resulted in more than 300 000 agricultural workers losing
employment, and hence approximately two million (being those workers, their
families and their dependants) becoming destitute.

As government progressively destroyed the economy further through its
disastrous economic policies and actions, more and more became unemployed —
primarily  workers in the manufacturing sector of the economy —- followed by
inevitable downsizing of other economic sectors, including the wholesale and
retail operations and those in the tourism and financial services sectors.

Unable to obtain alternative legitimate sources of income, many of the
unemployed turned to informal sector activities in desperate attempts to
generate income to support themselves, their families and numerous other
dependants (which dependants included many others who had become unemployed,
HIV/Aids widows and orphans, those afflicted by severe ill-health due to
malnutrition and inability to access essential healthcare).

But even the immense growth of informal sector economic activity did not
suffice to fund the support needed by so many, and thereafter that sector’s
operations markedly declined following the necessary demonetisation of
Zimbabwe’s currency, and as some small economic upturn started in 2009.
That upturn was of major importance as a first (albeit small) step towards
Zimbabwe’s long-term economic recovery, but did not suffice to restore
employment opportunities for the millions that had become unemployed.

As a result millions perceived no opportunities for their survival and that
of the many financially-reliant upon them, other than to seek
income-generating opportunities elsewhere.  Progressively, more and more
fled Zimbabwe in a desperate attempt to earn that which they, their
families, and other dependants needed to survive. Almost without exception,
they perceived their departures from Zimbabwe to be beyond their control,
determined to return to their homeland as soon as an economic upturn made it
possible for them to do so.

However, as the years went by, the major economic recovery so anxiously
awaited did not occur, notwithstanding the hopes and expectations that
developed when 2009, 2010 and 2011 showed some economic growth (but not
sufficient to re-create employment opportunities).  Families became
increasingly scattered and shattered, with many of those who had departed
Zimbabwe at best being able to visit their beloved ones at home only once a
year, and maintaining limited contact telephonically.

Although the majority of Zimbabweans who left to seek employment elsewhere
had every intention to return permanently to Zimbabwe as soon as possible,
that prospect  progressively diminished.  As time went by, they sank new
roots in their adopted foreign homes.  Many were promoted, made new friends,
some married abroad and, as time went by, started families.

New homes and investments were acquired; consequently their resolve to one
day return to Zimbabwe diminished more and more, although fortunately not
all have lost that resolve.

Apart from the appalling fall in family interactions, with the attendant
distress suffered by so many in Zimbabwe, the country, its economy and its
resident population have also suffered the great magnitude of loss of
invaluable skills.  That loss has been yet another constraint upon achieving
substantive national economic recovery and growth.

It will only be compensated for over an extended period of time as Zimbabwe
progressively develops a new pool of the skilled, and is able to motivate
those who acquire the skills to remain in Zimbabwe. Those will only be
achieved if, belatedly, politicians do the right things to assure economic
wellbeing, and to attract transitional expatriate skills pending a
sufficient resource of skilled, resident Zimbabweans.

There is only one material compensation for the huge loss of skilled
Zimbabweans to other countries: the absentee Zimbabweans have, despite not
being active in the country’s economy, become a key mainstay of its
sustenance. A recent survey assessed that the remittances they send to their
Zimbabwean families and dependants approximates US$850 million per annum.

Some of these funds are transferred through the formal money market
channels, whilst a large portion enters Zimbabwe unofficially, either when
the Zimbabweans abroad visit their families, or through the services of
“runners”.  However, the inflows to Zimbabwe from diasporans are
considerably greater than the survey suggests. In addition to the transfers
of funds, hundreds of millions  of dollars worth of goods are also sent to
the families at home from  relations abroad.

In part, those goods are forwarded through official channels, especially so
as and when the diasporans visit their families, and great quantities are
brought into the country by “runners” who have become very skilled in
evading customs authorities.  These goods range from consumables to
clothing, electrical appliances and equipment. This is either  for
consumption by the recipients, or for trade on the informal markets.

Thus, the total economic contribution that Zimbabwe enjoys from its
nationals abroad considerably exceeded US$1 billion per annum — comparable
to, or greater than the substantial earnings of Zimbabwe’s mining sector.

These inflows are not incorporated in the determination of Zimbabwe’s Gross
Domestic Product, which is the barometer for measurement of economic growth
or contraction, and therefore real economic recovery is somewhat greater
than statistically determined. Indisputably, Zimbabweans abroad constitute
one of the mainstays of the economy, which is moderate compensation for the
losses and prejudices suffered by the country from their no longer being at

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RBZ role comes under renewed focus

Thursday, 26 April 2012 16:56

Clive Mphambela

THE role of the  Reserve Bank OF Zimbabwe (RBZ) in the prevailing
multicurrency dispensation has been brought back into sharp focus following
the recent establishment of a monetary policy committee within the bank at a
time when the country has no domestic currency, while government no longer
has the margin to borrow or print money to expand its limited fiscal space.
A monetary policy committee comprising Dzinotizei Mutasa, Brains Muchemwa,
Rudo Faranisi, Kennias Mafukidze and Professor Tony Hawkins was set up in
February, but questions abound as to what the role of the committee is.

This development has caused anxiety as some commentators speculate the
committee is preparing for a return to the Zimbabwe dollar, whilst
economists argue there is in fact no need for it in a multicurrency regime.

The primary objective of the RBZ, created in 1956, is supposed to be to
maintain the value of the Zimbabwean currency decimated by hyperinflation in
2009. The bank is also responsible for the formulation and implementation of
monetary policy, directed at ensuring low and stable inflation levels.

A further core function of the institution is to maintain a stable banking
system through its supervisory and lender of last resort functions. Other
secondary roles of the bank include the management of the country’s gold and
foreign exchange assets. It is also supposed to be sole issuer of currency
and banker and advisor to government.

However, the functions of the RBZ have now been reduced and its role limited
under the multicurrency system.

Prominent economist and member of the RBZ monetary policy committee, Hawkins
says the RBZ now has a minimal role to play as far as monetary policy is
concerned. “I believe the main role of the central bank at the moment is to
regulate and supervise the financial sector to ensure that banks do not take
huge risks”, he said, adding the RBZ is technically insolvent due to huge
debts and lack of capitalisation.

The central bank has received only US$7 million in new funds since the
advent of the multicurrency system, severely limiting its scope,
particularly as a lender-of-last-resort in an economy reeling from a
liquidity crunch. There are plans to inject more than US$100 million to
boost its-lender-of-last-resort function, although some say at least US$150
million — or 5% of total banking system deposits —  is needed.

The bank is saddled with more than US$1,2 billion in debt and this, coupled
with its current poor capitalisation levels, severely constrains its
function and role.

The central bank also seems to have somewhat relinquished its role of being
banker to the government. Traditionally, the principal account of
government, or the so-called Exchequer’s Account,  resides at, and is
managed by, the central bank.

However,  most, if not all government departments and ministries, including
the Zimbabwe Revenue Authority, now hold active accounts with various
commercial banks.  In a normal environment, foreign missions and other
international institutions and banks would also hold accounts with the RBZ.
But this has changed because of the bad experiences these institutions have
had with the central bank.

While placing their money with commercial banks may have in some instances
improved the efficiencies of the day to day operations of the affected
government departments, one major bank which carries a significant
proportion of the government’s business suffered severe liquidity challenges
at the end of last year when there was surging demand and large value
transactions it failed to handle.

Whilst the RBZ is subordinate to the parent Ministry of Finance when it
comes to fiscal policies, it is the traditional role of the RBZ to feed into
the formulation of fiscal policy and to ensure monetary policies are
consistent and supportive of fiscal initiatives of government.

Economic commentators say the RBZ no longer has a significant role to play.
But the central bank argues its “rigorous supervision and vigilant
surveillance of the financial system” has ensured continued financial
stability and as a result, the banking sector has remained in a “safe and
sound” state, notwithstanding certain underlying risks.

The bank also has the sole responsibility for the management of the national
payment system and promoting alternative forms of payment mechanisms and the
use of plastic money platforms such as ATMs, Point of Sale facilities, as
well as electronic, cellphone and internet banking products and services.
In the midst of criticism, the bank has defended its role and the monetary
policy committee made up of the governor as the chairman, the two deputy
governors, deputy chairman and not less than five but no more than seven
other members appointed by the president in consultation with the Minister
of Finance.

RBZ governor Dr Gideon Gono (pictured) said this week in response to
questions from the Zimbabwe Independent the bank was still important and its
committee was useful. Although he admitted its role has been reduced under
the multicurrency regime, he said it was still critical in “ensuring
monetary and financial stability”.

“Zimbabwe adopted a multi-currency regime in February 2009, in which
residents became  free to transact in any of the major currencies such as
the US dollar, British pound, South African rand, Botswana pula, and other
internationally convertible currencies, with the US dollar being the
settlement currency,” Gono said.

“Under this arrangement, the Zimbabwe dollar is no longer operational
resulting in the RBZ losing one of the key traditional roles of the central
bank, that of issuing the country’s legal tender. Analysts have, however,
questioned the role and relevance of a monetary policy committee in
Zimbabwe, given that the scope of the traditional monetary policy function
has been reduced by the adoption of the multi-currency system.”

Gono admitted the central bank’s role has been curtailed but insisted the
bank remained important and the committee  useful. “The adoption of the
multiple currency system has resulted in the country losing some monetary
policy autonomy. As a consequence, the traditional monetary policy
instruments of currency issuance, interest rates and exchange rate
management are no longer at the disposal of the RBZ,” he said.

However, he said the bank remains key in ensuring “financial sector
stability, national payment system, policy advice to government and being
lender of last resort”.

“Central banking by monetary policy committees has become the rule rather
than the exception, and it is often argued that collective monetary policy
decision-making results in better outcomes due to the pooling of
information, models and expertise,” he said.

“Notwithstanding the relative loss of control of monetary policy instruments
following the adoption of the multi-currency regime, the RBZ is currently
seized with policy matters in relation to other core mandates of the central
bank, such as bank licensing, supervision and surveillance;  economic
research and policy advice; national payments systems and market-friendly
exchange controls (particularly on the capital account). All these areas
present the monetary policy committee with sufficient scope for influencing
the direction of central bank policies and the economy at large.”

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Copac turns constitution-making into circus

Thursday, 26 April 2012 16:51

Qhubani Moyo

THE ongoing debate about the constitution-making process is crucial and as
such Zimbabweans should freely engage the subject to contribute in shaping
their future framework of governance. The process is critical as it seeks to
consolidate a set of fundamental principles or establish precedents
according to which the country will be governed.
That is why it must be taken seriously. Zimbabwe needs to come up with a
credible constitution which captures and defines its character and content –
based on its rich history, diverse cultures and civilisations. The new
constitution should lay a strong foundation on which the country can build a
progressive future.

We have to accept that we need a constitution that will endure for
posterity, not a document which is a conflict-resolution mechanism like the
current Lancaster House constitution. Any constitution tied to solving a
conflict is by nature fragile and cannot withstand the test of time, which
is why the Lancaster House document has been amended 19 times. It is purely
for this reason that the current Constitution Select Committee (Copac)
process, which unfortunately is now tied to the next elections, will
inevitably produce a flawed document. Already the process is entangled in
debate and disputes around the emotive issue of elections.

While it is desirable to go into the next elections with a new constitution
which hopefully will provide a democratic environment and credible framework
for free and fair polls, it is also important that we do not reduce the
constitution-making process to a mere exercise  for resolving political
questions. That is probably why the current process has become entangled in
narrow political agendas and disputes which need not be confused with the
constitution-making exercise.

If in the process of producing a new constitution the country manages to
deal with concomitant political questions that would be a tremendous
achievement, but it should not be the key objective. Despite that
constitution-making is inherently a political process, it must not be
opportunistically used as a conflict-resolution mechanism.

That is why the process needs to be managed by knowledgeable, serious and
sober minds. Unfortunately Copac is run by clueless and idle minds that have
no idea of what actually needs to be done in terms of the fundamental
objective and vision it must of necessity embody. As things stand now, MDC-T
co-chair Douglas Mwonzora and his Zanu PF counterpart Paul Mangwana have
hijacked the process while sidelining MDC co-chair Edward Mkhosi, turning
the exercise into a circus.

Making a new constitution is no child’s play and thus it needs serious
intellectual and organisational capacity as well as sufficient logistical
arrangements. Currently those in charge are failing to run and manage the
process, which explains all this confusion and chaos.

Those few who have stood up to contribute to or criticise the Copac process
have been threatened with all sorts of actions, including legal measures,
among other gagging mechanisms.

Democratic engagement in Copac has been criminalised mafia-style. Those
doing this forget their mission. Copac is a committee of parliament mandated
to spearhead the constitution-making process in the country. It was
established in April 2009 in terms of Article VI of the Global Political
Agreement signed on September 15 2008. The new constitution is aimed at
replacing the current supreme law, a product of the Lancaster House
Conference of 1979. Being a ceasefire document, the Lancaster House
constitution is widely regarded as flawed and woefully inadequate, hence it
has been amended 19 times in 32 years.

If Copac is running a democratic process which seeks to make a new
Zimbabwean constitution, why does it seem afraid of public engagement and
debate on issues which affect the country and people’s future? Why is it
suppressing not only debate, but also people’s views?
The basic tenet of participatory democracy, including on such processes as
constitution-making, is to ensure citizens are given space to contribute to
the national discourse on the process, expenditure, content and outcomes.
The process should be done in a transparent and open manner to the
satisfaction of stakeholders.

This is important especially given that Copac was initiated and defined as a
people-driven process. It must thus allow the basic tenets of deliberative
democracy to prevail and citizens to express themselves freely to shape and
influence the process and its content. This should be done without
conditions or attempts to use legal instruments to gag the deliberation
process because the moment that is done the exercise fails the legitimate
test of democratic expectations.

As a national body Copac cannot expect to be respected if it uses threats to
suppress a divergence of views, or ignores people’s views. Its leaders need
higher levels of competence, capacity and maturity to handle issues in a
credible manner in order to have legitimacy. Those who were there from the
first stakeholders’ conference to the outreach, data collation, data
uploading, thematic committees, report-writing and even drafting will know
this process was handled badly due to poor leadership, especially on the
part of Mwonzora and Mangwana.

In fact, if truth be told Copac is a major disaster. If people really knew
what is going on within the chaotic process, they would probably riot
against its leadership.

Right now the country is at a standstill regarding important issues which
are deadlocked, including devolution of power and dual citizenship, among
others,  yet  answers to those matters are contained in the national report.
This bears testimony to disruptive incompetence and gross mismanagement of
the process.

That’s is why now you have actors like President Robert Mugabe and Local
Government minister Ignatius Chombo working day in day out to sabotage
devolution, while currently firing elected mayors. Most people want
devolution to prevent such partisan politics and it is there in the national
report. We must not ignore people’s views under technical arguments of
whether this is a constitutional or statutory issue. What is important is
that the issue is correctly captured through whatever necessary mechanisms
in the current constitution-making process.

If Copac had done the right thing of publishing the national report there
would be no questions about what people said during the outreach as the
questionnaire was clear. For instance, the questionnaire asked whether
people wanted a unitary state, a federal state or a devolved state. And
their answer was unequivocal: there was an overwhelming call for devolution
and similarly an emphatic rejection for a federal state.

The other question was on whether people wanted provincial governments or
not, and the answer was an overwhelming yes.

The other question was on how these provinces should be constituted and the
overwhelming answer was that they should have provincial parliaments and
elected provincial governors. All these answers are there in the national
report and if Copac had done the right thing of publishing the report then
those who want to suppress the people’s views on devolution will not have a
chance to do so. But now because of hidden political agendas, incompetence
or both, we now have chaos which is entirely unnecessary.

Copac must not be allowed to threaten its critics and suppress people’s
well-documented views to get away with murder in service of dubious agendas
by anti-democratic forces.

Moyo is a lecturer at Nust and public policy academic. He is also organising
secretary for the MDC led by Professor Welshman Ncube. Email:

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Zanu PF baits youths with patronage

Thursday, 26 April 2012 16:49

Sydney Chisi

THE world today is still fixated with developments triggered by the Arab
Spring across the Middle East and North Africa. Young people in Tunisia,
Algeria, Egypt, Libya, Yemen, Bahrain, Syria and many other places in the
region have been a catalyst of social and political change. Their energy has
been fuelling democratic change and civic participation in reshaping public
policy and the future of their countries.
Four features were evident in countries which experienced the Arab Spring,
namely youth dominance within populations in different countries concerned,
internet penetration and influence, repressive and unaccountable leadership
and social unrest caused by deteriorating socio-economic conditions and
associated problems, including youth unemployment.

A fundamental feature of the Arab Spring was its structural cause as opposed
to trigger events. Over a long period of time, governments in the Middle
East and North Africa had shaped public policy in pursuit of economic
development without democracy, and worryingly not sharing the benefits of
economic development equitably.

Political and democratic participation in the countries’ affairs was
outlawed or limited. Gradually, societies experiencing high levels of
economic growth and impressive indicators with massive democratic deficits

The United Nations human development report of 1996 observed that the link
between growth and human development is not automatic. It said in most cases
too much emphasis on economic growth has led to lop-sided and often flawed
growth patterns, producing:

Jobless growth (without expanding employment opportunities);

Ruthless growth (associated with increasing inequality and poverty);
Voiceless growth (without extending democracy)
Rootless growth (that withers cultural identity) and
Futureless growth (that squanders resources needed by future generations).

Young people who constitute the biggest section of different countries’
population are neither participants in the economy nor beneficiaries of the
proceeds of the growth. Instead youth unemployment, poverty and inequality
have replaced opportunity, hope and faith in government. In the Middle East
and North Africa, an explosion of popular discontent erupted resulting in
entrenched dictatorships and the league of autocrats falling by the way

The current Zimbabwean economic empowerment drive that is largely targeting
young people as a means of correcting the imbalances caused by colonialism
amid government refusal to accept its failures over the last 32 years has
stirred heated debate.

Economic empowerment is not a new term in the post-Independence discourse in
Zimbabwe. A lot of stillborn, premature and partisan initiatives have always
been introduced, especially when Zanu PF is faced with internal
contradictions or elections. One of those was the ill-fated decision to
adopt the International Monetary (IMF) and World Bank-sponsored Economic
structural Adjustment Programme (Esap) in 1991. Then in 2000 there was the
good but badly-implemented land reform programme, and now, indigenisation.

The bulk of young people born just before and soon after Independence grew
up in an environment dominated by one political party whose policies caused
so many problems, including marginalisation of the youth and regions like

Whilst young people are the majority of the marginalised, unemployed and
prone to political manipulation, those behind economic empowerment have
failed to appreciate the reality that economic growth and indigenisation in
isolation  would not necessarily translate into progress. Young people
should not be taught the “make money and all things shall follow mentality”.

Indigenisation must be linked to economic growth and translated into
productive-employment growth, which is a key nexus between growth and
poverty reduction. That is the why the idea of grabbing 51% of foreign-owned
companies, including Zimplats, and coming up with community trusts without
linking that to the mainstream economy will not enhance human development or
help to fight youth unemployment.

The approach only exposes government’s policy contradictions and the failure
to understand the necessary framework for indigenisation. Take for instance,
government’s move on Zimplats and how it handled Ziscosteel. How does
government explain the policy contradiction inherent in that approach?
How do the youth fit into such a policy framework? Zanu PF has taken
advantage of the situation and registered its youth organisations and fund
which has benefitted only groups associated the partisan Zimbabwe Youth
Council. Besides saying he is prepared to be Hilter ten-fold, what programme
does Youth, Indigenisation and Empowerment minister Saviour Kasukuwere have
to benefit the youth of this country and not those of his party alone?

The reasons why a lot of young people have been alienated and not benefitted
from the youth fund which is supposed to be part of the empowerment drive is
clear: partisan politics and agendas. The fund is now simply benefitting
elitist Zanu PF officials who will only give leftovers to their party’s
loyal youths. These are same youths who then run organisations like
Chipangano, Upfumi Kuvadiki and some dubious entities that have strong links
with Zanu PF.

In the process, the real youth of this country are marginsalised. As things
stand, communities being given shares seized from foreign-owned companies do
not have solid human capital besides their labour. What the Ministry of
Youth should instead be looking at is to ensure investment in human capital.
Focus should be on revisiting the land reform programme after an audit to
accommodate the majority of the poor Zimbabweans. The same also goes for the
informal sector dominated by young people, especially women.

Now that elections are looming many young people, especially young women,
are being roped into partisan projects like the Kurera-Ukondla Youth Fund
launched on November 24 last year  by Vice President Joice Mujuru.

With Zimbabwe’s youth population being around 65%, Zanu PF has strategically
positioned itself to target the vulnerable youth to vote for it. Therefore
the nexus that exits in the Zimbabwean context between youths and voting for
Zanu PF is well defined and the youth ministry is at the centre of it.
Government should not lure and make young people rush for the 30 pieces of
silver at Old Mutual or at CABS. Youths should begin to participate in the
formulation, implementation and monitoring of public policy to get
themselves involved in the mainstream economy through legitimate means.

Looking at the Zimbabwean situation and the Arab nations, a number of key
lessons are discernible. Since the inclusive government took office in 2009,
economic decline has been arrested. Growth took place for the first time in
10 years. An economy that had cumulatively declined by 50% over a period of
10 years was stabilised and started to realise growth. It is now three years
of successive growth even though this is fragile and mainly driven by
consumption and the narrow enclave of extractive industries. This results in
the widening of the gap between the rich and the majority poor, mainly the

Evidently the economy has neither been broad-based nor pro-youth.  The fact
that the majority of people have not benefitted from the growth in the
economy has either demobilised them or completely depoliticised them as the
struggle for daily survival take precedence over civic action, hence their
inability to launch Arab Spring-like protests.

Alternatively, youths have become part of the catchment area of the politics
of patronage, manipulation and abuse by self-serving politicians who have
colonilised the state for partisan purposes. Youths have been turned into
vigilantes and militias by some leaders and their parties, an insensitive
abuse of the young generation .

Chisi writes in his personal capacity. Email: .

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