Cabinet divided over price blitz

Zim Independent

Dumisani Muleya

CABINET ministers mostly opposed government's price-slashing
programme, enforced by a vicious blitz by state security agencies and a
taskforce of price inspectors, as they feared it would have disastrous
consequences for the economy, it has now emerged.

Vice-President Joice Mujuru is said to have warned earlier the
crackdown could backfire with a damaging impact on the already battered
economy and the image of the ruling Zanu PF and government.

The clampdown has already boomeranged, leaving supermarkets and shops
empty and people scrounging for food. Zimbabwe is now a classic shortage
economy - reeling from an acute scarcity of basic commodities reminiscent of
former Eastern bloc economies in the 1970s and 1980s.

Top official sources said this week that Mujuru also revealed during a
recent Zanu PF politburo meeting that cabinet ministers had early last month
come out against arbitrary price cuts by government because of the
predictable negative effects on businesses and consumers.

Mujuru is one among many high-profile government officials who have
now joined Reserve Bank governor Gideon Gono in opposing the crackdown that
has ruined businesses and seriously damaged the economy.

Gono warned right at the start that the clampdown would have
"unintended consequences". He compared the blitz to the Iraq war, saying
government had no exit strategy.

The sources said Mujuru told a Zanu PF politburo meeting on July 5
during a debate on prices that the blitz would backfire "much to the
detriment of the party and government". It is also confirmed Mujuru said she
was surprised to hear Obert Mpofu, chairman of the Cabinet Taskforce on
Price Monitoring and Stabilisation, saying government had ordered businesses
to revert to June 18 prices when ministers had opposed that in a cabinet
meeting on July 3.

"Mujuru told the politburo she didn't understand Mpofu's wholly
positive report on the blitz because ministers had only three days before
the meeting dissociated themselves from the June 18 pricing directive in the
same way they later distanced themselves from a Government Gazette order
(which is now repealed) limiting the value of food imports," sources who
were at the meeting said. "In view of that, she asked why the pricing
directive had been implemented."

Mujuru's husband, Solomon Mujuru, told the politburo that Zanu PF
needed proper policy formulation and planning to become "more pro-active
than reactive".

The growing resistance to the price cuts campaign means government is
deeply divided. Only President Robert Mugabe and a coterie of party
loyalists are backing the populist policy.

Mugabe said this week in Malaysia there would be no going back on the
crackdown, although the Joint Operations Command (JOC) has recommended a
gradual climbdown due to the detrimental effects of the operation. The JOC
is said to have been behind the blitz that emanated from a Zanu PF central
committee meeting on March 30.

Mpofu's taskforce has set up a crack unit which comprises security
agencies and price inspectors to spearhead the campaign. The unit has
regional sub-units that work with JOC under the supervision of provincial
governors.

The sources said Mujuru further warned that Mpofu's team must be
careful in its operations because shops and supermarkets generally buy goods
in bulk and stock them for re-sale.

"She expressed concern at reports that some members of the taskforce
were behaving like rogue elements and misappropriating the goods they had
confiscated," a politburo source said.

"Mujuru said the taskforce should avoid such malpractices because the
campaign could backfire."

They said Mujuru, who also opposed the increasingly unpopular policy
at a recent meeting between Mugabe and business leaders, told the politburo
the campaign must have a timetable of when it would end and should not
disrupt production of essential goods and services.

While Mujuru opposed the price-slashing blitz, the sources said, her
presidential succession rivals Emmerson Mnangagwa and John Nkomo supported
it. They said Nkomo, backed by Mnangagwa, suggested that Zanu PF cadres be
deployed into the taskforce to push the party's political agenda. To their
surprise, Mugabe warned that incorporating party activists in the taskforce
could be "misconstrued".

The blitz, as clearly shown by the Zanu PF March 30 central committee
minutes published by the Zimbabwe Independent recently, is a ruling party
poll gimmick ahead of the elections next year.

The sources said Simba Makoni, former Finance minister, told the
politburo that the taskforce should not use the blitz to "settle old scores"
with colleagues and destroy businesses that add value to the economy and
help the ordinary people.

Mbeki mediation bid limps on

Zim Independent

SOUTH African President Thabo Mbeki resumed his mediation in talks
between the ruling Zanu PF and opposition Movement for Democratic Change
(MDC) after they broke down recently ahead of the Southern African
Development Community (Sadc) summit in Zambia next week.

Sources said the resumption of talks - which did not take place on
July 7 after Zanu PF failed to attend - is meant to cover Mbeki's back
during the Sadc meeting.

Reports from Zambia indicate there is a report on the talks leaked
from Mbeki's office which indicates that the South African leader will say
there has been progress in negotiations. This is seen as an attempt by Mbeki
to ward off mounting pressure while at the same time giving embattled
President Robert Mugabe a breathing space in the hope he will cooperate
during the process of dialogue.

The sources said this week that Mbeki's mediation team led by South
African Local Government minister Sydney Mufamadi met Zanu PF and MDC
negotiators in a bid to restart negotiations that broke down last month.

Zanu PF failed to appear at the talks in Pretoria last month amid
reports Mugabe had instructed his team not to go in an attempt to slow down
or sabotage the talks.

Mugabe's political advisors are understood to have told him the talks
are tantamount to a regime change agenda, hence not something he could
subscribe to.

The sources said Zanu PF negotiators, Patrick Chinamasa and Nicholas
Goche, and MDC representatives, Welshman Ncube and Tendai Biti, left for
Pretoria last week and held meetings during the weekend and early this week
to cover new ground in the wake of pressure from Mbeki.

Mbeki, who has been battling with the Zimbabwe crisis since 2000, is
said to be desperate to show progress in the talks to his Sadc colleagues.
He is also under pressure at home to deliver because of the recent surge in
the flow of Zimbabwean refugees fleeing repression and the economic
meltdown.

The international community is also pressing him to find a
breakthrough. Former British Prime Minister Tony Blair said in May he
expects Mbeki to have found a solution to the problem before next year's
elections.

However, Mbeki's task is made more difficult by Mugabe himself.

Mugabe has publicly said he does not want a new constitution, which is
the main item on the agenda for the talks.

The original agenda also included a political climate item which deals
with issues like demilitarisation of state institutions, hostile rhetoric,
use of militia, abuse of state aid and traditional chiefs, sanctions and
land. The failed meeting on July 7 was expected to exclusively focus on the
constitution which was seen as the main issue at stake.

A constitutional draft produced through informal talks between
Chinamasa and Ncube in 2003/2004 was to be the basis of the negotiations for
a new constitution.

The unpublished Chinamasa/Ncube draft constitution incorporates issues
from the government-sponsored draft, which was rejected by voters at the
2000 referendum, and National Constitutional Assembly proposals.

But the sources said since Zanu PF refused to discuss a new
constitution a compromise was struck for the talks to focus on
Constitutional Amendment (Number 18) Bill to harmonise elections in March
next year. The Bill, which throws the talks into disarray, will be
introduced in parliament later this month. Mugabe said during the opening of
parliament on July 24 his party was forging ahead with the plan.

The sources said Mbeki has now come up with a compromise deal for Zanu
PF and the MDC to feed their inputs into the proposed amendment instead of
focusing on a new constitution.

The two parties discussed the new agenda item during their talks in
Pretoria. This is designed to ensure free and fair elections next year,
which Mbeki has of late been emphasising.

It said Zanu PF and MDC delegates were given the report on Zimbabwe
compiled by a team headed by Sadc executive secretary Tomaz Augusto Salomao
which paints a grim picture of the economic situation.

Salomao will next Thursday present the report to the summit. Sadc
wants to provide an economic rescue package subject to progress in the
talks.

The resumption of negotiations at this point in time, the sources
said, is calculated to ensure Mbeki delivers an updated progress report to
Sadc heads of state at their summit which starts next Thursday in Lusaka.

Sadc leaders mandated Mbeki at their extraordinary summit in Tanzania
in March to mediate in the protracted Zimbabwe crisis. After the meeting,
Mugabe told his party that Mbeki had defended his regime.

Minutes of the Zanu PF central committee meeting held on March 30, a
day after the extraordinary Sadc summit in Dar es Salaam, show Zimbabwe's
Foreign Affairs minister Simbarashe Mumbengegwi claimed that Mbeki was
"tasked to communicate the Sadc position to the MDC and demand that the
opposition renounce violence and dissociate itself with Western powers". -
Staff Writer.

Telecel licence revoked

Zim Independent

Shakeman Mugari

THE Postal and Telecommunications Regulatory Authority of Zimbabwe
(Potraz) has cancelled Telecel's operating licence after it failed to
rectify its shareholding structure.

Potraz said Telecel had violated telecommunications regulations which
stipulate that locals must have a majority stake in mobile telephone
companies.

The majority stake of 60% in Telecel Zimbabwe (Pvt) Ltd is currently
owned by Telecel International while the remaining 40% is owned by
Empowerment Corporation (EC), a company owned by local groups.

The licence was awarded to EC in 1997 as part of government's
indigenisation efforts.

In a statement released yesterday, Potraz said: "Telecel Zimbabwe
(Pvt) Ltd was allowed to operate with a foreign majority shareholding on
condition that the ownership structure would be regularised within a period
of five years from the commercial date of the licence.

"Telecel Zimbabwe (Pvt) Ltd has now been operating for more than eight
years with a foreign majority shareholding and has failed to regularise its
shareholding structure within the period allowed. The company therefore
stands in breach of both the licence conditions as well as provisions of
Section 36 of the Act.

"Potraz would like to bring to the attention of the public that the
licence number NCT20020602 issued to Telecel Zimbabwe (Pvt) Ltd was
cancelled in terms of Section 43 of the Postal and Telecommunications Act
(Chapter 12:05) on the 9th August 2007 and that Telecel Zimbabwe (Pvt) Ltd
has been dully informed in writing of this cancellation."

Potraz had given Telecel until June 30 to rectify its shareholding
structure according to the regulations.

EC had the preemptive rights to buy 11% from Telecel International to
restructure the shareholding in line with the law. EC however failed to
raise the foreign currency required to buy the stake resulting in the
cancellation. Telecel's lawyer, Jonathan Samkange, a partner at Byron &
Venturas, told the Zimbabwe Independent that the company had prepared an
urgent appeal against the cancellation and was looking for a judge to hear
the matter.

Telecel has been dogged by infighting for the past two years with Leo
Mugabe insisting that he be given a stake in EC. Other EC members have
however resisted his demands saying Mugabe was never a member of EC because
his cheque for the joining fee was returned by the bank.

In April last year Mugabe wrote to the Telecel demanding that he be
given a contract to provide technical services to the company. He said he
was entitled to 1% of the company's total revenue.

'Diesel' n'anga in succession plot

Zim Independent

Kuda Chikwanda

THE traditional healer at the centre of the Chinhoyi diesel scam,
Rotina Mavhunga, has been sucked into Zanu PF's contentious succession saga
together with two senior ministers in President Robert Mugabe's cabinet.

State Security minister Didymus Mutasa and Local Government minister
Ignatious Chombo - whose connections to Mavhunga came under the spotlight in
both cabinet and the politburo two weeks ago - have been linked to the
35-year old healer, who is said to have fled the country after dabbling in
politics and succession issues.

Reliable ruling party sources said Mutasa and Chombo were confronted
by Mugabe in cabinet two weeks ago over their presidential ambitions. The
sources claimed the two heavyweights enlisted the services of Mavhunga to
divine their prospects of becoming president.

While police are looking for her under the name Mavhunga, she is also
known as Nomatter Tagarira, born on February 3 1972 in Guruve, in
Mashonaland West, and as Changamire Dombo and Sekuru Mboni.

In the line of fire in the saga is Mutasa, who is reported to have
asked Mavhunga to cleanse him to enhance his chances in the succession
stakes.

Mutasa is one of three security ministers who were tasked by the Zanu
PF politburo to investigate the fuel claim. He denied claims of "cleansing",
saying they were malicious.

"It is not true that there was a cleansing ceremony," said Mutasa. "In
fact there were ritual processes which were demanded by Mavhunga before we
could be shown the diesel. I had to make sure that all processes were done,"
Mutasa said.

"At no point was a cleansing ceremony held for me. Besides, at no
point have I ever said I want to be president. Ever since I was young I have
made it clear I want to become vice-president. I have never made that
secret."

He said the claims came from people with succession ambitions
themselves. "This may be the work of detractors who themselves have
presidential ambitions and therefore want to divert attention from their
ambitions," Mutasa said.

Mutasa was part of a delegation headed by Defence minister Sydney
Sekeramayi including Home Affairs minister Kembo Mohadi and police and
intelligence officers, to Maningwa Farm in Chinhoyi in June to ascertain the
veracity of the fuel claims. He also visited Makuti, another site where
diesel was allegedly discovered.

A number of ceremonies were conducted in order to access the diesel.

However, the team abandoned its mission on June 18 after Mavhunga
failed to show them where the diesel was located. The team concluded the
diesel claims were a "hoax".

Mutasa is later reported to have asked Mavhunga if there was anything
she could do to cleanse him to become president. A cleansing ceremony is
said to have been held in Rusape where Mutasa made his intentions clear that
he wanted to succeed Mugabe. State security agents are said to have reported
the issue to Mugabe who was very angry about it.

Mugabe - who has repeatedly complained that top Zanu PF politicians
were approaching witchdoctors to get charms to be president - is said to
have been riled by this incident.

Repeated efforts to get in touch with Chombo were fruitless. Zanu PF
information secretary Nathan Shamuyarira said he was not aware of the
matter. "Ask those involved, they would know better," said Shamuyarira.

Price Monitoring Taskforce: Terms of Reference

Zim Independent

THE Cabinet established the Taskforce on Price Monitoring and
Stabilisation on June 19 to stop businesses from raising prices.

The following are the terms of reference that Cabinet set-out to guide
the taskforce in the implementation of its pricing policy. The terms of
reference should also be read as the objectives of the taskforce:

*To ensure that there is a transparent and objective pricing mechanism
throughout the entire supply chain through the application of scientific
pricing models on all controlled and monitored goods and services;

*That appropriate regulations as per the recently promulgated National
Incomes and Pricing Commission Act are formulated and effectively enforced;

*To ensure that manufacturers are obligated to print selling prices
for monitored and controlled products directly on the packaging materials to
facilitate prescription on mark-ups at wholesale and retail levels;

*To ensure that the recently appointed National Incomes and Pricing
Commission is effectively operationalised;

*To investigate causes of shortages of basic commodities in the formal
market, while abounding in the black market and suggest appropriate
corrective measures;

*To come up with measures to enforce the relevant by-laws which govern
the sale of goods in designated areas and ensure that violators are brought
to book;

*To engage the private sector entrepreneurs, ie manufacturers,
wholesalers and retailers, transporters, real estate agencies and local
authorities on the need to restrain speculative price hikes in the spirit of
the recently signed Incomes and Pricing Stabilisation Protocol;

*Explore other innovative measures to stamp out black market
activities and bring about sanity in the pricing arena.

Since its inception the taskforce has issued the following directives
in order to stabilise prices:

*That the current prices for all controlled and monitored goods shall
be approved by government;

*That prices of all goods and services revert to those ruling on June
18, 2007, while the National Incomes and Pricing Commission looks into the
justifications for the price increases;

*That all goods and services that were previously neither controlled
nor monitored shall, with immediate effect be monitored in terms of
Statutory Instrument 125 of 2003;

*That all Small and Medium Enterprises and vendors that connive with
the large manufacturers, wholesalers and retailers will not be spared by the
law enforcement agents;

*That it is illegal for real estate management companies or
individuals to either sell or rent out properties in foreign currency;

*That an immediate moratorium is imposed on rent increases of either
commercial or residential properties, pending finalisation of appropriate
regulating formulae;

*That it is an offence to evict a tenant without the stipulated three
months notice;

*That no tariff adjustment should be effected by public utilities
without government approval;

*That any leader or any other person across the board, who obstructs
the course of justice in the implementation of price stabilisation measures
be apprehended regardless of their status in society;

*That the production of goods and services should continue
uninterrupted and all products be found on the shelves;

*That those who do not comply with the above shall face the full wrath
of the law;

*That all members of the public with information on issues involving
price violations and hoarding should urgently report such information to the
nearest police station though the crack unit hotline.

*Businesses are encouraged to accept the RTGS and bank cheques as form
of payment instead of insisting on cash.

*That following the reduction of the prices people desist from
hoarding;

*That wholesalers and retailers should desist from allowing bulk
buying of basic commodities, for example, sugar, bread, milk, mealie-meal,
cooking oil and salt.

Price blitz backfires

Zim Independent

Shakeman Mugari

THE empty shelves in the supermarkets and long queues at most shop
outlets across the country provide the clearest sign that government's
effort to slash prices has compounded the current crisis.

The major victims of this disaster are the poor whom government
claimed to be protecting when it launched the price clampdown on businesses.
Basic commodities have disappeared from the shops and there are no signs
that they will be available anytime soon.

The blame lies squarely with government, business executives and
observers say. Even ordinary Zimbabweans now understand this fact.

It has now emerged that contrary to government claims that the policy
was meant to stabilise prices, the blitz was part of Zanu PF's political
campaign strategy ahead of next year's elections.

The decision was made at Zanu PF's central committee meeting in March
in which it was decided that price controls be reintroduced to win support
of the urban populace ahead of the elections. It is becoming increasingly
clear that the crackdown was never meant to be an economic policy but part
of a grand political scheme meant to win the hearts and minds of voters.

That agenda seems to be collapsing as the policy has created more
problems than solutions.

Basic commodities like mealie-meal, sugar, cooking oil and bread have
found their way onto the black market where they are being sold at
exorbitant prices which are beyond the reach of ordinary Zimbabweans.

The policy was never well thought-out from the onset and the plunder
that characterised the implementation attest to this assessment. For
instance the terms of reference of the taskforce do not state how it will
deal with the aftermath of the blitz.

In other words the government did not anticipate the disastrous
outcome of its policy.

The taskforce on Price Monitoring and Stabilisation went on a
blundering spree violating its own terms of reference as set out by the
cabinet. One of the responsibilities of the taskforce was to ensure that
there is a "transparent and objective pricing mechanism throughout the
entire supply chain through the application of scientific pricing models on
all controlled and monitored goods and services".

In short, before declaring a price slash, the taskforce was supposed
to analyse the supply chain, look at input costs at every production level
and the economic factors before directing businesses to reduce prices.
Instead the taskforce went ahead with the crackdown without a transparent
and scientific pricing model. For example there was no model to determine
the retail prices of basic commodities.

The result was mayhem at the shops. There was no system to ensure that
the process was transparent. There were reports of police officers and
monitors setting their own prices. For example when police raided Makro
Wholesalers people bought television and radio sets for as little as $2
million. The monitors, armed with "presidential powers", randomly set the
prices that they deemed fit.

The taskforce was supposed to engage the private sector on the need to
exercise restraint on prices, according to the terms of reference. This was
however ignored as it went about randomly cutting prices and arresting
business leaders. It was left to the businesses, the victims of the
crackdown, to seek audience with the government.

The taskforce sabotaged itself by trying to spread its powers into
other areas that are difficult if not impossible to control like the
property sector.

It said it will deal with the landlords who charge rentals in foreign
currency. For instance how does the government regulate the terms of a lease
agreement between a private landlord and a tenant?

Landlords may stop charging rentals in foreign currency but they will
still peg the payments in hard currency rate. This clearly shows that the
taskforce did not understand the magnitude of the problems they were trying
to solve.

The taskforce ignored its mandate to investigate causes of shortages
and the black market. Soon after the crackdown the black market flourished.

While the crackdown has managed to cut down prices it has failed
dismally to ensure that the commodities are available on the formal market.
Because of the chaotic implementation of the policy, the operation has been
characterised by massive hoarding which have led to shortages in the formal
market.

As the crisis deepens, it is becoming clear that the taskforce had no
action plan in the aftermath of the blitz.

There is no plan to deal with the black market which has become the
main source of the basic commodities. The taskforce does not have a plan to
deal with retailers that are now struggling to restock after being looted
clean during the blitz. It is still to be seen how businesses that sold
their goods at a loss will be able to restock and pay their workers this
month.

Government has not delivered on its promises to provide business with
cheap foreign currency, fuel and funding. The businesses have been left to
pick up the pieces and revive their enterprises on their own.

The $30 billion that was promised for distressed companies is not even
enough to stock one large supermarket.

Perhaps one of the clearest signs of the lack of a coherent plan is
the fact that government itself did not realise that the crackdown will hit
their revenues hard.

Most companies are likely to declare losses and will therefore
technically not be liable to pay corporate tax to the government. With
company closures comes unemployment which will reduce government's income
tax revenue.

The damage goes beyond that. Most boarding schools are not likely to
reopen next month because of food shortages. Hospitals are already grappling
with the shortages and some might close down. Most pharmacies have run out
of medicines.

*From next week the Zimbabwe Independent will run stories on the
effects of the blitz. Please email your experience to Shakeman Mugari at
shakemanm@zimind.co.zw or call 0912 275866.

Government backtracks on prices clampdown

Zim Independent

Augustine Mukaro

GOVERNMENT is backtracking on its price reduction operation after
realising that the blitz has been an economic disaster.

Confidential information gleaned from a government assessment of the
blitz shows that the crackdown has had disastrous consequences, undermining
government's stakeholder-driven turnaround initiative, reducing government
revenue, fuelling the parallel market, eroding investor confidence and
militating against efforts to reduce inflation.

This has caused key players, including state security services,
especially the army, to recommend a halt after the blitz left the military
without adequate food.

The government report says the blitz has rendered useless the
newly-established National Incomes and Pricing Commission which was mandated
to monitor price movements across all sectors of the economy as part of a
turnaround programme when government, business and labour signed a social
contract on June 1.

The social contract implied an agreed framework in terms of the way
forward, including measured and agreed adjustments in prices and wages.

"The current turnaround efforts are anchored on the success of the
recently signed social contract," the report says.

"The recent events on the goods market have, however, heightened
mistrust between social partners, particularly government and business,
thereby compromising the contract."

The report warns that any attempt to discontinue the use of fuel
coupons would close a window of opportunity that was available for those in
the diaspora to finance the importation of fuel.

"The coupon system has enabled companies, mines, and NGOs to run
generators in an environment of frequent power outages," it said.

"Already the UNDP and embassies have indicated their intentions to
relocate to neighbouring countries, citing the difficult environment
currently obtaining."

It acknowledges that the directive to slash prices to those obtaining
on June 18 triggered panic buying and excessive hoarding characterised by
criminal elements taking advantage of this programme, resulting in retail
shops being cleared of goods.

"Due to the uncertainty associated with the sustainability of reduced
prices and the availability of commodities, consumers rushed to hoard basic
commodities for both consumption and speculative purposes," the report says.

"Most basic commodities such as beef, cooking oil, soap and
mealie-meal have disappeared from supermarket shelves. Some commodities are
beginning to resurface on the parallel market at exorbitant prices compared
to those that were prevailing in shops."

The report says as a result of the slashed prices, retailers are not
able to restock finished goods as manufacturers cannot produce and sell at
levels below production costs.

"Retailers have suffered most as those that had purchased goods at
high prices made huge losses," the report says.

"Some manufacturing companies have scaled down operations, some closed
shop, leading to shortages of basic commodities and increased unemployment."

The report says producers have responded by scaling down production
and any further price controls, which are not related to cost build-ups,
will inevitably drive the economy deeper into recession.

"The concomitant decline in production coupled with unviable prices
would constrain exports in cases where authorities require producers to
satisfy the domestic market first before exporting," the report says.

"This will accentuate the foreign exchange generation initiatives
under the import substitution and value addition programme."

It says commodity prices, which are low relative to production costs,
usually create an artificially high demand for goods, exerting inflationary
pressures as demand outstrips supply.

The report says the blitz has created an entirely new value chain
system, largely informal, depriving the fiscus of revenue due to tax
evasion.

"Government's ability to finance its activities will be severely
constrained by the shrinking tax base," the report said.

"The recent price monitoring initiative is likely to impact negatively
on government revenue collections.

"Government revenue is likely to be reduced in areas of value added
tax (VAT) on reduced company sales; VAT refunds by Zimra; corporate tax
through reduced production and company closures and individual income tax
through increased unemployment."

The report predicted that most companies were likely to declare losses
in the next quarter and that would exempt them from paying corporate tax and
that will deprive government of the much needed revenue. Government revenue
for 2007 was projected at $30,2 trillion.

"The recent price control initiative is likely to result in revised
total revenue of $17,1 trillion, implying a loss in revenue of $13,1
trillion," the report says. "Equivalently, attendant revenue decline could
well exceed 45%. The entire contraction in revenue levels would translate to
a higher budget deficit, which has to be financed from domestic sources.
This type of financing increases inflationary pressures."

The non-availability of commodities in the formal market has promoted
cross border trading using scarce foreign currency, resulting in increased
demand for forex, pushing the parallel market up. The importation of goods
that can be produced locally exacerbates de-industrialisation thereby
further contraction of the economy.

The report says the blitz has undermined business confidence and acts
as a deterrent to both domestic and foreign investors.

"Investors usually shun away from environments that are seemingly
fraught with controls which impact on their return on investment," the
report says.

The loss of confidence and uncertainties about the future viability of
companies has direct limitation on most firms to access offshore lines of
credit.

"The country perceived risk is now much higher, making it difficult
for even government to access bilateral finance from friendly countries such
as China," the report says.

Tempers flare at Mugabe meeting

Zim Independent

Augustine Mukaro

MORE details of what transpired during the July 23 meeting between
President Robert Mugabe and business leaders emerged this week.

They show that business leaders went out of their way to sing the
praises of Mugabe despite being subjected to acerbic attacks by his
ministers. Sources privy to the meeting said the Price Monitoring and
Stabilisation taskforce was made to present its report on the impact of the
price blitz before the businessmen could table their 12-point plan of action
to turn around the economy.

In the process, tempers flared with Finance minister Samuel
Mumbengegwi lambasting business leaders, calling them unpatriotic. He
reminded them that he had taken two oaths of office, one as an MP and the
other as a minister, to serve the country.

Mumbengegwi said business leaders had taken no oath, hence their lack
of patriotism.

Other members of the taskforce blasted the businesspeople, forcing
Reserve Bank governor Gideon Gono to intervene on behalf of business
leaders, saying the objective of the meeting was not to attack each other
but to find solutions to the current problems, especially shortages of basic
commodities.

Vice-President Joice Mujuru also reminded the taskforce that they were
not in the meeting to attack anybody. Mujuru and Gono are opposed to the
price-slashing crackdown.

It was only after the intervention of the two that the meeting
proceeded, with the business leaders praising Mugabe for giving them an
audience.

Information to hand shows that prior to the meeting with Mugabe, the
business leaders developed a "strategy for managing the engagement" in which
they came up with a spokesman, agreement on who else would speak and at what
point they would speak. They also devised a fall-back plan if the 12-point
plan failed to work.

"We seek to create a safe climate by affirming respect for President
Mugabe, confirming the alignment of all parties and support for his national
goals and ideals," the strategy said.

In reference to the ongoing price blitz, the strategy was to recognise
the good intentions of the price stabilisation taskforce before mentioning
the disaster it had caused.

"Your excellency, we recognise that when you set up the price
stabilisation taskforce you had very good reasons to call for the decisive
and drastic action that was taken," the strategy said.

"We are not here to apportion blame but to find a way forward in the
interest of our nation and the people of Zimbabwe who look to those in
leadership positions in government and business for solutions."

Zanu PF plans cyber warfare against online publications

Zim Independent

Itai Mushekwe

ZANU PF has blacklisted 41 online publications, including websites for
American-owned Cable News Network (CNN) and the United States Embassy in
Harare, which it claims have launched a cyber war to promote a regime change
agenda against President Robert Mugabe's government, the Zimbabwe
Independent can reveal.

It was not immediately apparent what measures, if any, the party can
take against offending websites.

The list of the websites was tabled at a recent politburo meeting and
is said to have caused alarm among party members during a heated debate on
the media, sources said. Various download print-outs from the websites were
distributed at the meeting.

The development comes against the backdrop of Mugabe's outburst in
Malaysia on Monday alleging journalists lacked objectivity and were writing
"subjective views" in their reports.

Mugabe made the attack on scribes when taking part in the Langkawi
International Dialogue aimed at fostering closer ties between Asia and
Africa and between governments and business.

"The press and journalists, are they driven by the sense of honesty
and objectivity all the time? Or are they swayed from objectivity and truth
by certain notions arising from their own subjective views?" said Mugabe.

One of the downloads seen by this paper was extracted from ZimUpdate
Forums and shows a reader on the forum giving seven reasons why he thinks
Mugabe does not want to step down. "Is it because he is afraid of being
hanged just like Saddam (Hussein); or extradited just like Charles Taylor,"
the reader asks. "Is it because he is afraid that the party will
disintegrate? Is it because he is intoxicated with power? It is because he
does not trust anyone in Zanu?"

The reader added that Mugabe was afraid of the Americans and British.

Government has been struggling to counter what it terms "negative
publicity" by Western media organisations. Among a cocktail of strategies to
counter bad publicity from various international media, the state has set up
a short-wave propaganda radio station, Voice of Zimbabwe (VOZ) operating
from Gweru.

However, the radio project appears to have suffered a stillbirth amid
reports of self-jamming as a result of gagging equipment installed to block
broadcasts from foreign radio stations such as Voice of America's Studio 7.
The project has also been unpopular with state media journalists.

ZBC's Sports FM manager Methuseli Moyo recently left the station after
he refused to be deployed to VOZ, saying he was not a propagandist but a
journalist. Government has also splurged over US$1 million in an
image-making campaign with New African magazine.

Zanu PF secretary for science and technology, Olivia Muchena,
presented a report on the role and importance of information and
communication technologies (ICTs) on July 26, arguing that the ruling party
had no choice but to embrace ICTs to remain "politically relevant".
"Comrades, we are all aware that Zanu PF is at war from within and outside
our borders," said the report. "Contrary to the gun battles we are
accustomed to, we now have cyber-warfares fought from one's comfort zone, be
it bedroom, office, swimming pool, etc but with deadly effects."

Muchena said Zanu PF must pause and think who is behind the creation
of "these websites", the target market of the websites, the influence and
impact they have on Zimbabweans and what the image of Zanu PF and its
leadership looks like "out there as portrayed".

Muchena said websites, the Internet and cellphones had become daily
weapons used to fight Zanu PF, adding that ICTs were now vogue platforms for
high-tech espionage -hardware, software and infrastructure that peddles
"virulent propaganda" to delegitimise "our just struggle against
Anglo-Saxons".

President Mugabe recently signed into law the Interception of
Communications Act which empowers government to snoop on messages
transmitted through the telecommunications system, cellphones and the
Internet.

Below is the list of the blacklisted websites:

www.zvakwana.org

www.newzimbabwe.com

www.zwnews.com

www.zimvigil.co.uk

www.zimbabwesituation.com

www.zimddays.com

www.allzimbabwe.com

www.crisisgroup.org

www.zimbabwe.8m.com

www.zimbabwedemocracytrust.com

www.zimonline.co.za

www.changezimbabwe.com

www.thezimbabwetimes.com

www.wozazimbabwe.org

www.zimupdate.com

www.zimpundit.blogspot.com

www.thegreatzimbabwe.com

www.zimdaily.com

www.thezimbabwean.co.uk

www.gozimbabwe.com

www.zimobserver.com

www.zimbabwepost.com

www.insiderzimbabwe.com

www.africantears.netfirms.com

www.hrforumzim.com

www.amnesty.ca

www.dfat.gov.au

www.abyznewslinks.com

www.worldpress.org

www.topix.net

www.harareusembassy.gov

www.technorati.com

www.delzwe.ec.europa.eu

www.globalvoiceonline.org

www.usip.org

www.ipsnews.net

www.washingtonpost.com

www.uk.oneworld.net

www.pbs.org

www.msnbc.msn.com

www.cnn.com

CSC disrupts Zim's eating habits

Zim Independent

Constantine Chimakure

THE current severe shortage of beef, which has resulted in many
households resorting to chicken, pork, lamb and goat meat, has been caused
by a serious lack of capacity by the Cold Storage Company (CSC).

This follows the recent cancellation of licences of private abattoirs
by government as part of its catastrophic price-reduction campaign which has
left shops empty and ordinary people struggling to get food. Before the
revocation of licences, private abattoirs were supplying 98% of the country's
meat requirements, while the CSC only accounted for 2%.

For many Zimbabweans sadza, cooked from maize-meal, and beef are the
main part of their staple diet. Thus the shortage of beef is compounding the
national crisis because it disrupts people's eating habits and way of life.

The CSC's lack of capacity this week forced government to authorise
the company to subcontract private abattoirs, virtually confirming that as
long as the government withholds private abattoirs' licences the country
will continue to face acute meat shortages.

Information gathered by the Zimbabwe Independent reveal that the CSC
is operating below 10% of its slaughter and ranch capacity, leading to
operating losses and severe meat shortages.

The government revoked licences of private abattoirs and restored the
CSC's monopoly as part of a price blitz targeting manufacturers, wholesalers
and retailers.

This resulted in serious shortages of beef as the CSC failed to cope
with demand. Meat has practically vanished from butcheries, supermarkets and
shops as a result. Daily Zimbabweans hunt for beef, often without success.

The meat industry was de-regularised in 1992.

Information obtained from the CSC shows private abattoirs were from
2006 providing 98% of beef requirements in the country.

"As at end of 2006, the CSC slaughtered 5 795 head (2% of total)
compared to private abattoirs which slaughtered 194 205 (98% of total),"
says a document from the company. "This indicates that the CSC has no
capacity to provide adequate beef to the whole nation."

The company said that when the government issued a directive to
business to revert to the June 18 prices, the CSC's four abattoirs in
Chinhoyi, Bulawayo, Masvingo and Marondera were slaughtering a combined
average of 200 head of cattle monthly.

It said the restoration of its monopoly forced the company to reduce
its beef exports to Hong Kong in order to satisfy the domestic market
resulting in loss of foreign exchange.

"The Cold Storage Company continues to face serious operational
challenges and requires huge financial resources for it to operate viably,"
the company said in a document in our possession.

"In line with government policy to foster competition, it is
recommended that private abattoirs be allowed to operate alongside the CSC."

Reserve Bank of Zimbabwe governor Gideon Gono a fortnight ago said
private abattoirs should be allowed to provide beef to the nation, adding
that the CSC had no capacity to do so.

The RBZ also recommended to the government that over the medium to
long-term, the CSC should be allowed to invite a technical partner to
enhance its effectiveness and increase output.

The company also bemoaned the decline in the commercial herd - where
it used to draw 70% of its throughput - since 1991 due to persistent
droughts and high interest rates.

The commercial herd declined from 1 714 000 in 1991 to 519 028 in
2005. The CSC inherited a highly geared balance sheet when the company was
privatised in 1992.

"Most of the CSC's expansion programmes have been funded by debt, both
domestic and foreign. In addition, due to lack of equity funding, the CSC
had to borrow to fund its operations and working capital," the company said.

The CSC also bemoaned inadequate working capital.

Apart from owning four abattoirs, the CSC has a canning plant, whose
production is mainly for export, operating from Bulawayo. The abattoirs and
canning plant were European Union-approved.

The company operates distribution depots in Harare, Gweru and Mutare.
It owns seven ranches and 191 751 hectares of feedlots.

The ranches were used as holding grounds for slaughter stock that
smoothens the peaks and troughs of the cattle supply seasons.

They also have the potential and capacity to produce over 50% of the
CSC minimum throughput requirements.

. . offers Mugabe fuel, 'golden' gifts

Zim Independent

PRESIDENT Robert Mugabe was offered 40 litres of diesel, four "golden
boulders" and six packets of loose stones by the spirit medium known as
Rotina Mavhunga who claimed there was diesel in Chinhoyi.

Information to hand shows that Mugabe was offered the gifts so he
could appreciate that there was diesel, as claimed by Mavhunga, in Chinhoyi.

The gifts were given to a politburo taskforce, which included Defence
minister Sydney Sekeramayi, State Security minister Didymus Mutasa, and Home
Affairs minister Kembo Mohadi. They were accompanied by senior police and
intelligence officials.

Zanu PF sources this week told the Zimbabwe Independent that the issue
was discussed in the politburo on July 5 during which the taskforce reported
on the gifts that Mavhunga had sent to the president.

"Forty litres of diesel, four 'golden' boulders and six packets of
loose stones were availed to the team for onward transmission to President
Mugabe, for him to 'appreciate' (Mavhunga 's) efforts," said the sources.

The sources revealed that the team abandoned the mission on the diesel
after realising that it was a hoax.

Diesel was reported to be present at a site in Makuti as well as
Chinhoyi. According to the sources, a police fuel tanker was brought to the
site in Makuti on June 7 to have it filled but nothing materialised.

Mavhunga also raised suspicions when she started claiming that there
were also supplies of Jet A1, petrol and paraffin in their pure state.

"The team complied with all Mavhunga's requirements but each time it
was her turn to deliver the diesel, she would make fresh and unrealistic
demands," one of the sources said.

Mutasa is also said to have noted that the spirit medium kept bringing
more participants into the process.

"Furthermore, Mutasa observed that the matter kept on roping in new
spirit mediums such as Mbuya Nehanda, who were not part of the initial grand
plan. These were likely to clamour for recognition by government and
possibly come up with their own requirements," the source added.

Mutasa also told the politburo that it was evident that the spirit
medium was not sincere in her dealings and had failed to provide the diesel.
Mutasa also said he suspected the diesel had been sourced elsewhere.

"Mutasa highlighted that Sekuru Dombo (Mavhunga) was working in
cahoots with other fraudulent elements in order to fleece government of
resources and in turn gain undeserved publicity. He stated that the
conclusion drawn was that the whole exercise was futile and served to
confirm there is no diesel at Chinhoyi," said the source. - Staff Writer.

Government loses trillions in revenue

Zim Independent

Shakeman Mugari

THE current price blitz has cost government a massive $13 trillion in
potential tax revenue, businessdigest can reveal.

Sources at the Zimbabwe Revenue Authority (Zimra) said the clampdown
on businesses is likely to reduce government revenue from Valued Added Tax
(VAT) and Income Tax by about 40%, a situation that would force the state to
continue its reliance on money printing and local borrowings to fund its
activities.

Experts say this would further stoke inflation which the International
Monetary Fund recently said would end the year at 100 000%. The year-on-year
inflation for June was
13 000%, according to the Consumer Council of Zimbabwe, but analysts
say the figure could be much higher.

Government has lost money due to reduced sales volumes and company
closures. The blitz has forced many companies to close shop while others
have had to cut down on production.

Zimra will have to pay billions of dollars in VAT refunds.

A source said Zimra has since revised its revenue target for this year
from $30,2 trillion to $1,1 trillion.

With most people out of their jobs due to company closures, government
will also lose revenue in Income and Corporate Tax. In a normal economy the
government relies on tax to fund its operations.

Companies that made losses due to the blitz are technically not liable
to pay corporate tax.

It is almost certain that most manufacturing and retail companies will
make huge losses this month.

Analysts say it will take more than six months for businesses to
recover from the cash flow problems caused by the crackdown. The contraction
of revenue levels will lead to a much higher budget deficit which will have
to be financed by the domestic borrowing and money printing.

It is estimated that the revenue loss will widen the budget deficit to
more than 50% of GDP. The nominal GDP of Zimbabwe is currently $85,5
trillion.

The crackdown has also hit revenue from exports as companies are
forced to push their products into the local market to cover the shortages.

The price controls will force companies to stop or scale down
production. It is estimated that revenue from exports will be reduced by
US$132 million because of the operation.

The source said export revenue will come down from US$1 730 in 2006 to
US$1 598 this year.

This means that there will be less foreign currency to import fuel and
power. The US$132 million that was lost as a result of the crackdown is
enough to import three months' fuel supply for the country.

Banking future uncertain

Zim Independent

Kuda Chikwanda

UNCERTAINTY has gripped the financial sector amid speculation this
week that the Reserve Bank of Zimbabwe (RBZ) could be planning to cut
interest rates to support government's ongoing price blitz.

Fears abound that such action will increase the gap between galloping
inflation and interest rates which will result in negative returns on
borrowing.

Banks have been scrambling for the past three weeks to buy Treasury
Bills (TBs) to hedge against the looming interest rate cut. This has left
the money market short. Bankers that spoke to businessdigest this week
bemoaned the lack of policy guidance from the central bank on interest
rates.

Political pressure has been mounting on the central bank to cut
interest rates in line with government policy on prices.

In March the Zanu PF central committee recommended that the central
bank reduces interest rates to make borrowing cheaper.

Bankers and treasury officials told businessdigest this week that they
feared the financial sector would collapse if the RBZ cut rates in the
mid-term monetary policy statement.

"As bankers we fear the worst. We think that (Gideon) Gono could give
in to the political pressure and cut interest rates," said a senior treasury
official with a local commercial bank. "There is a lot of uncertainty. If
the interest rates are cut it would make running a bank impossible."

The banking sector expected the central bank to intervene with a
contingency plan and sterilise speculative activities by hiking interest
rates in the face of inflation which rose steeply in the past three months.

"A lot of speculative activity is bound to happen. The differences
between inflation and interest rates were and are still unsustainable," said
the official. Minimum lending rates have averaged 450% annually.

Banks are paying annual effective rates in the region of 570% to 580%
for their liabilities, while receiving only 340% from their statutory
assets.

Although the Finance ministry has blocked the release of the latest
inflation figures, conservative estimates place it at around 13 000% for the
month of June. When Gono made his presentation in April, RBZ inflation
estimates were 4 530%.

This makes minimum lending rates a mere 4% of inflation according to
the current estimates. Ideally interest rates should match inflation to curb
speculative borrowing.

Bankers Association of Zimbabwe president, Pindie Nyandoro said: "I
was not aware that there was lack of policy guidance."

Gono's advisor, Munyaradzi Kereke said interest rates charged on
deposits or borrowings were determined by each bank and not by the central
bank. He said the RBZ minimum lending rates were only a signalling tool to
discourage lending from the central bank.

"The Reserve Bank of Zimbabwe's own accommodation rate is essentially
a signalling tool to underscore that the central bank is the lender of last
resort and that individual banking institutions are encouraged to exhaust
their counter-party trading limits among themselves, in the inter-bank
market, before approaching the central bank for bail outs on their
day-to-day liquidity mismatches," Kereke said.

Kereke said RBZ's relations with the banking community were cordial
and that the central bank would not comment on matters to do with the
matter.

"It is therefore, not a fair question for the central bank to pre-empt
in advance its position on interest rates, whichever way they will change,
if at all, as doing so will be self-defeating, through market players'
pre-emptive position-taking, which tends to blunt monetary policy
effectiveness," Kereke said.

Banks are forking out 600% compounded daily in interest payments for
unsecured lending when the market is short.

At the same time money supply has grown faster than real Gross
Domestic Product (GDP) growth. It grew by 4 211% for the month of April
according to figures released two weeks ago, up from 3 255,9% in March.

Broad money supply rose by $1,684 trillion in April. This has fostered
unproductive debt expansion with government being the chief beneficiary
after domestic debt soared to $6,8 trillion, rising by 221,8%.

Economic consultant John Robertson said the RBZ would continue to
suppress interest rates to allow government to borrow more.

"Government cannot afford to pay higher interests and so the interest
rates will be kept low. If interest rates go up, government will go
bankrupt," Robertson said. "Increasing interest rates will likely double or
even quadruple the interest component," he said.

The contrarian investor will come out the winner

Zim Independent

By Admire Mavolwane

INVESTORS think and act alike. This explains why the stock market has
been in limbo since the month began. Institutional investors and punters
have all decided to give the stock market a wide berth, with the industrial
index losing 8,83%, nine days into August.

This is not withstanding that many analysts and stockbrokers are
touting the current lull in the market as a buying opportunity. Their advice
is obviously not being heeded. One explanation is that no investor is bold
enough to take the first step and it would appear that the upcoming Uhuru
holiday is being used as an excuse to do nothing.

In the good old days August was the month for position taking.
Investors would be cherry picking the stocks to take them through the home
stretch to the end of the year. Others, who would have missed first half
opportunities would also be taking positions, particularly in banking and
insurance counters, which generally attract a lot of interest at that time
of the year because of the reporting season. Also, normally contributing to
the effervescent mood on the market would be the aftermath of the monetary
and fiscal policy statements that would have been delivered at the end of
July.

2007 has departed from the norm in a big way. Firstly in June, the
government decreed a price control directive. This caught the market by
surprise. The nation had become accustomed to the Zimbabwe Reserve Bank
governor making all the announcements. This time around a new and mighty
animal had taken over.

This new body which seems to be running the show at the moment, called
Cabinet Taskforce on Price Monitoring and Stabilisation (CTPMS) made the
price edict. Since then, June 25 2007 has become to the business fraternity
what December 18 2003 is to bankers, a watershed day. Further pronouncements
were to follow, some which left many stupefied.

If the price slash directive caused panic buying then the banning of
the fuel coupons, a declaration which was latter suspended indefinitely
caused pandemonium. The Indigenisation and Economic Empowerment Bill was
also gazetted at about the same time as investors were trying to come to
terms with the price controls.

To drive the point home, the chairman of the powerful taskforce is
alleged to have gazetted statutory instruments 137 and 138 of 2007 which
sought to outlaw the importation and exportation of basic commodities. The
statutory instruments were first disowned by the taskforce as fake but we
are now reliably informed that they have now been repealed.

Whilst all this was happening the governor announced an indefinite
postponement of the reading of the monetary policy statement (MPS), whilst
the Minister of Finance has not indicated as to when he will present the
interim fiscal policy review. Following the postponement of the MPS, the
governor did announce the review of the tobacco and gold support prices. The
validity of the bearer cheques was also extended by the Minister of Finance.
In essence, there is to be no Sun Rise II, at least not in the short term.

In the overall scheme of things these announcements are relatively
minor and remain subordinate to those from the CTPMS. As such, investors
have remained largely unmoved. Furthermore, the news coming from the trading
updates that listed companies have been giving to shareholders have tended
to justify the circumspect approach that investors have adopted.

The sentiments expressed by Delta were commented on last week but
suffice it to say that after 'guarding' two or three cars a 'street adult'
can now afford to buy an equivalent number of pints. Obviously clear beer
seems to be losing its status symbol as "white collar" liquor. No wonder
there are so many inebriated persons in Zimbabwe.

Redstar, at their recent annual general meeting, advised shareholders
that "significant losses" had been incurred in July. Margins were grossly
negative as the group had to sell some products at below cost. Compatriot,
OK Zimbabwe, expressed the same sentiments. However, management at the
latter qualified the quantum of losses as "not crippling". We wonder how
many billions would cripple the group but at last count, end of March 2007,
shareholders' funds stood at $151 billion.

For Pelhams, the price control directive had little impact as no stock
was sold at below cost. Some sales, however, were lost in early July as
customers waited to see how low the prices would be reduced. The fact that
no single item was sold below cost, even after the 50% or June 18 price
directive, in no small way highlights the "fat" that the company had been
enjoying. In any case, a leather lounge suite was costing $600 million or
US$3 000 at the parallel market rate, an amount that can secure one a good
second hand motor vehicle. So even if reduced to $300 million, affordability
by the general public still remains doubtful.

Given the background of this pall of uncertainness, it is thus not
surprising that investors have stayed away from the market. But without a
change in the interest rate framework, how long will they shy away from
shares and what are they doing with their money in the mea time. There is a
limit to how many groceries, and other goodies, one can buy.

Investors should take a cue from Carlos Slim, a Mexican by origin, who
has overtaken Bill Gates as the richest man on earth. Carlos bought most of
his companies cheap in 1982. That year, the collapsing price of oil threw
Mexico into a tailspin. When departing President José López Portillo
nationalised Mexico's banks, the traditional business elite feared the
country was becoming socialist, and ran for the exits. Companies were
selling for as little as 5% of their book value. Carlos picked up dozens of
leading firms for bargain-basement prices, a move that paid off when the
economy recovered in the following years.

In the long run the winner will be one who takes a contrarian view and
goes against the current tide. Whilst others are consuming their groceries,
buy shares and you will be consuming when they are now scrambling to buy the
shares off you.

Interest rates drop

Zim Independent

Paul Nyakazeya

MONEY market interest rates have taken a huge knock from as high as
350% on the short-end last week to as low as 50% this week. Short-term
deposit rates fell to below 80%, due to liquidity injected in the market
caused by government's increased expenditure.

Rates on 90-day paper fell to between 50% and 150% from over 350%
earlier, as the appetite for cash in the market eased.

Call money continued unchanged at 4% or below while the interbank
overnight rate dropped to 80% from between 180% and 300% previously.

Analysts said the market had very low volumes of Treasury Bills (TBs)
maturities up to December and was expected to remain short in the short-tem,
although government expenditure will occasionally reduce the deficit.

Analysts say with the tobacco selling season closing next month there
will be no significant liquidity injection into the market in the
short-term.

The Reserve Bank of Zimbabwe's Monthly Economic Review for May shows
that the rate at which banks have been subscribing into TB's versus their
loan origination has been coming down since beginning of 2006.

The trend is progressive downwards, showing that inasmuch as banks are
buying TBs everyday, their loan origination is much faster.

Due to the poor returns on TBs banks have switched to overdraft
facilities whose rates are determined by the minimum lending rates.

Minimum lending rates of banks are averaging 450% per annum.
Compounded monthly as they do, they give an annualised return of 4 530%,
well ahead of the 340% on the TBs on offer at the Reserve Bank.

The central bank's accommodation rates have remained unchanged at 600%
and 700%.

Domestic debt soars

Zim Independent

Paul Nyakazeya

GOVERNMENT'S domestic debt has soared to $8 trillion, increasing by
19,4% in two weeks from $6,7 trillion largely due to huge interest payments
and treasury bill instruments.

Figures obtained from the Reserve Bank this week showed that
government debt surged to $8 trillion on July 6. Economists say the debt
will continue to increase on the government's continued reliance on the
local market for funds. Government's revenue from taxes is not enough to
cover its bloated expenditure. The debt had opened the year at $175 billion.
Government also need funds to import maize, fuel, wheat and power which are
all in short supply.

The new debt levels mean that with an estimated population of 13
million, every citizen currently owes $615 384,61 to the local financial
sector. Most Zimbabweans live below the United Nations poverty benchmark of
US$1 per day.

"Outstanding treasury bills accounted for 99,3% of this amount while
interest payments accounted for 75,4% of total debt," the bank said.

The increasing government debt raised fresh fears of a renewed
turbulence in the crisis-sapped economy, battling high inflation currently
topping 4 530%.

Independent economists however said the current inflation was above 10
000%.

High interest rates have helped swell the level of domestic borrowings
forcing government to restructure its debt early this year.

As the debt continues to rise annual broad money growth (M3) rate for
May rose to 7 134,9% an increase of 2 923,2 percentage points from 4 211,7%
recorded in April.

This represents a rise in broad money of $10,7 trillion from $146
billion in May 2006 to $10,6 trillion in May this year.

"On a monthly basis, broad money increased by $5,8 trillion in May
compared to $ 1,6 trillion in April. Growth in narrow money was largely due
to an annual expansion of currency in circulation of 10 204,7%," the central
bank said.

Annual narrow growth increased to 8 443,8% from 4 819,2 April 2007. On
a monthly basis, narrow money rose by 135,7% to $8 276,3 billion in May this
year.

"Year on year growth in quasi money stood at 4 690,4% up from 3 120
the previous month. Monthly quasi money grew by 82,8%. The growth in money
supply was largely due to an annual expansion of currency in circulation of
10 204,7%.

"Annual growth in domestic credit continues to be mainly driven by
lending to the private sector which grew by 14 903,1% lending to government
4 119% and credit to public enterprises 947,9%," said the bank.

Noczim set to monopolise fuel imports

Zim Independent

Kuda Chikwanda

GOVERNMENT has intensified efforts to restore the monopoly once held
by state-run National Oil Company of Zimbabwe (Noczim) on fuel importation.

Businessdigest can reveal that Noczim has been importing fuel through
the same players it is pushing out of business as government extends its
price blitz to cover fuel importers.

Private fuel companies can now only import fuel for companies and
individuals with Foreign Currency Accounts (FCAs) and free funds under new
regulations which are meant to increase foreign exchange inflows to
government.

At the same time Noczim has introduced a direct fuel import (DFI)
facility which still requires companies and individuals to have an FCA
before they can make any purchases.

Noczim has been flighting adverts for bulk DFI purchases for the past
two week.

Noczim bought 600 000 litres of fuel from Caltex last week. Caltex has
since stopped issuing coupons to the general public.

Under the new arrangement any bank charges incurred on fuel purchases
will go to the central bank, the Reserve Bank of Zimbabwe, which is now in
charge of all foreign exchange resources meant for fuel importation.

"This time around the central bank will handle all the foreign
exchange. Currently we are doing business with Noczim who just last week
bought 600 000 litres from us," said an official from Caltex who requested
anonymity.

However, many companies have been forced to sell their fuel to
government at official prices since the price
crackdown began.

Mpofu announced that Noczim had been given the mandate to be the sole
authorised dealer of fuel as part of efforts to eliminate parallel market
fuel dealers who he accused of prejudicing government billions in revenue.

Zesa, blunders yield another wheat disaster

Zim Independent

Augustine Mukaro

THE latest indication that Zimbabwe faces the worst wheat harvest this
year since the launch of the controversial land reform programme is the
culmination of a series of blunders which government has failed to correct
over the past seven years.

The admission of a wheat failure is set to worsen the already acute
bread shortages plus a host of other basic commodities, throwing into
disarray all prospects of a quick economic recovery.

Farmers' organisations this week predicted a harvest way below the 78
000 tonnes produced last year against the country's annual requirement of
480 000 tonnes.

The farmers placed the blame for the poor yields on Zesa Holdings'
failure to supply power, resulting in frequent countrywide blackouts. The
erratic power supplies disrupted irrigation cycles on farms and damaged many
electric irrigation pumps.

Indigenous Commercial Farmers Union president Wilson Nyabonda said
wheat crops wilted in the fields from lack of irrigation.

"This is where things fell apart as electricity was only available in
the first days of May," Nyabonda said. "From there onwards it became a
nightmare for farmers."

The Zimbabwe Farmers Union, which represents mostly small-scale
farmers, alleged that its members were forced to abandon crops because of
the power crisis.

Farming experts however said although Zesa had contributed to the
current season's crop failure, falling agricultural productivity was a
combination of government blunders and other factors such as the shrinking
of hectarage planted each year, poor planning, lack of confidence and
financing, and unavailability of fuel and other inputs.

The experts quickly referred to the reduced irrigation capacity as a
result of vandalism and theft of equipment.

"From the onset of the season, farmers had planted only 10% of the
targeted winter wheat crop hectarage just two weeks before the recommended
planting deadline," one expert said.

"Farmers over the years have complained of lack of farming inputs such
as fuel, fertilisers, chemicals, seed and fuel, and commercial farming
skills. In response to these problems, farmers have reduced hectarage or
abandoned some portions when the power situation deteriorated."

Agriculture permanent secretary
Shadreck Mlambo in May told a parliamentary portfolio committee on
agriculture that the targeted 76 000 hectares - which would have produced
400 000 tonnes of wheat - would not be achieved due to shortages of fuel and
fertiliser.

"Close to 8 000 hectares have been planted so far and we need to go
faster than this if we are to meet the targeted hectarage," Mlambo told the
committee just two weeks before the planting deadline.

The recommended date for planting is May 31. Any wheat planted after
that date delivers reduced yields, which are "not worth it".

Another official told the committee that farmers would need to till 2
000 hectares of land a day and plant the wheat crop at the same time, a
process that required at least 1 000 tractors, which were not available.

The analysts said developments that dealt a severe blow to government's
efforts to boost production included legislative changes and continued farm
invasions which made it hard for investors to expand businesses.

The situation became untenable after government imported substandard
fertiliser, while top government officials grabbed farming implements at the
expense of ordinary farmers.

"Nationally, agricultural output has declined to a national joke," one
analyst said. "The major constraint to increased productivity was the
uncertainty of tenure in the agricultural sector where farmers are evicted
on a daily basis. Continued acquisition notices, disruptions, acts of
violence on farms and lack of land-based collateral are some of the problems
farmers face."

Agricultural experts have said despite numerous promises that
government would support new farmers with inputs and tillage, this has not
happened in the past seven seasons.

In some cases where inputs were provided on time, they were diverted
to the black market for quick returns.

Government measures to redress the situation through amendments to the
Land Act since 2000 have not improved production.

In 2000, the government, through a presidential decree, began to
compulsorily acquire white-owned commercial farms. The decree was later
confirmed by the passing of the Land Acquisition (Amendment) Bill in
November 2000.

In September 2002, another amendment to facilitate the forcible
eviction of defiant farmers was passed. Farmers had resisted eviction on the
grounds that lending banks, which held their bonds, had not been informed of
pending seizures as required by law.

This meant the government had to notify banks of farmers affected by
the seizures and then reissue eviction notices. The amendment removed this
impediment, resulting in mass evictions towards the end of 2002 and
beginning of last year.

The final blow was Constitutional Amendment 17 which nationalised all
land and barred farmers from contesting in court all land gazetted for
acquisition since 2000.

"The tinkering with the legislation has failed to address the
fundamental issue of security of tenure, which is crucial to securing
funding," one expert said.

"The amendments have accelerated the acquisition of land without a
corresponding increase in grain and cereal production. It has increased the
conflict of ownership of business on the land and reduced investment in
agriculture."

The amendments, analysts said, have scared away investors in the
capital-intensive agro-processing industry and in agro-forestry sectors.

The chaotic land reform programme, which from inception was condemned
by international donors as unworkable and a recipe for disaster, has turned
out to be just that.

Over the past six seasons production in all facets of agriculture has
plummeted, dragging the economy down with it. Farmers estimate production to
have fallen by 70%.

As alarm bells ring over pending wheat shortages, the UN's World Food
Programme has launched an appeal to donors for money to scale up the supply
of emergency food aid to more than three million Zimbabweans.

Bread is an important part of the Zimbabwean diet. But state-imposed
controls on the selling price have caused shortages, as bakeries refuse to
produce bread and sell it at a loss. Long queues have become the order of
the day in supermarkets supplying limited quantities of bread.

Mutambara: unity broker or another opportunist?

Zim Independent

Jacob Rukweza

WHEN Arthur Mutamabara stepped onto the local political scene many
believed in his declaration that his urgent task would be to unify the two
bickering factions of the MDC.

Observers concurred that in pursuit of this task, Mutambara had the
advantage of being an outsider untainted by the ugly row that had split the
opposition in October 2005.

Since his election as a faction leader, the late 1980s student leader
has sought to cast himself as a true democrat, a selfless politician and a
genuine broker of unity within the fractured democracy movement.

In his acceptance speech after being elected president of the
pro-senate faction on February 26, 2006, Mutambara bemoaned the absence of
other MDC "soldiers and fighters" at the congress.

Describing Morgan Tsvangirai as a "hero" the faction leader
acknowledged that Tsvangirai deserves a special place of honour in the fight
for democracy in Zimbabwe.

"All the democratic forces in Zimbabwe need to engage each other," he
said at the time. "We need to unite. I am here because I cherish democratic
principles and values. I am here because I am pro-Zimbabwe."

Listening to Mutambara addressing a press conference on July 28 -
barely 17 months on - reading his interview in the Zimbabwe Independent last
week, and listening to his interview on BBC's Hardtalk on Tuesday, many are
beginning to wonder whether it is the same voice speaking.

Mutambara astounded many with his recent about-turn on the unification
of the MDC. His outbursts against Tsvangirai have raised more questions than
answers.

The first question is whether Zimbabweans were correct in their
assessment and belief of Mutambara as a genuine broker of unity between the
two MDC factions.

The second is whether Mutambara still comes across as a selfless,
consistent, honest and bankable leader who should be rated as better than
the persons he seeks to replace.

The third question is whether Zimbabweans should agree with Mutambara
that in order for the country to move forward, it needs a robotics
professor.

It is possible that when he entered the political arena, many in the
democracy movement, including intellectuals - spellbound, almost intimidated
by the new political entrant's colourful CV - did not have time to
objectively assess Mutambara as a unity broker and a relevant opposition
politician in post-Independent Zimbabwe.

But his acceptance of a position to lead a faction of the MDC as its
president should have obviously defined him as a partisan actor with direct
interest in the power game that lay at the centre of the MDC split.

By joining the pro-senate faction, Mutambara not only emboldened but
inoculated and gave impetus to the existence of a terminally-crippled
faction which hitherto did not have a credible leader to take it to the next
level.

The general feeling is that if Mutambara was serious about unifying
the MDC and had wanted to offer himself as a competent broker of unity he
should have done so from outside both factions.

But for Mutambara - because the opportunity for cheap power was more
compelling than the principle of a united opposition - his first choice was
assuming factional power at the expense of unity.

Realising the quandary that he had placed himself in, Mutambara tried
to wriggle out by describing himself - albeit confusingly - as "the
anti-senate leader of the pro-senate faction".

After referring to Tsvangirai as a soldier, a fighter and a hero,
Mutambara wants us to believe him when he turns around to call the same
Tsvangirai an "insecure, weak and indecisive leader".

However, a close inspection of Mutambara's recent actions will show
that it is him who is insecure, weak and indecisive not Tsvangirai.

In the first place, it is Mutambara who has clamoured for the so
called unity between the two factions more, knowing fully well that his
faction is not only small but also largely made up of unpopular but
intractable spoilsports.

Mutambara was bound to be a weak leader from the start considering the
manner of his arrival on the political dance floor.

The pro-senate leader who does not have a constituency to talk about,
having been parachuted to the leadership of the pro-senate faction from his
political wilderness in South Africa, remains perpetually weak as a
political leader in and outside the MDC faction because his constituency is
made up of a few elements in the top echelons of the faction who literally
invited him and imposed him as leader of the faction ostensibly to balance a
tribal equation.

This is why his nomination and election in February 2006 was met with
stiff resistance from Gift Chimanikire and his camp.

Those who elected Mutambara at the Bulawayo congress are a rented
constituency who voted at the behest of their principals in the faction who
are in fact Mutambara's benefactors and obvious engineers of the MDC split

Tsvangirai on the other hand has a visible constituency and a track
record as a strong and courageous leader traceable to the Zimbabwe Congress
of Trade Unions.

He lost narrowly to Zanu PF's Kenneth Manyonda and Robert Mugabe in
the rigged 2000 parliamentary elections and 2006 presidential elections
respectively.

Tsvangirai has always come through as a popular leader since his
election by a broad- based constituency of the historic Working People's
Convention in 1999 to lead the formation of the MDC before being elected its
founding president at the party's inaugural congress in 2000.

Mutambara has shown worrying signs of being indecisive. From the onset
he has failed to decide on which faction to belong to hence his description
of himself as "the anti-senate leader of the pro-senate faction".

But Tsvangirai has remained decisive and consistent in his call for
unity of all democratic forces under the aegis of the Save Zimbabwe
Campaign.

It is not Tsvangirai but Mutambara who has decided to pull out of the
Save Zimbabwe Campaign and the unity talks.

If Mutambara is not insecure, weak and indecisive he should
immediately stop clinging to the MDC name-tag, form an independent political
party that can distinguish itself as a force to reckon with without
grandstanding while on the pedestal of Tsvangirai's image which is
inseparable from the MDC.

Mutambara admits that his faction has no capacity to win against Zanu
PF and acknowledges that contesting against Mugabe and Tsvangirai at the
same time would split the opposition vote and hand victory to Mugabe.

If Mutambara is so convinced that this position as taken by his
faction will practically hand over power to Mugabe, the question is, what
then is he trying to prove to the suffering Zimbabweans?

If Mutambara is himself prepared to sacrifice the freedom of over 15
million Zimbabweans to settle factional differences with counterparts in the
MDC, is he any better than those he seeks to blame and attack.

It does not need a rocket scientist to realise that by participating
in the 2008 elections as a separate formation the singular objective of the
pro-senate faction is not to unseat Zanu PF but in fact to upstage
Tsvangirai at the expense of the masses.

Mutambara must be told that he will go down in the anals of history,
not only as a politician who led an opposition party whose main objective
was to oppose another opposition party, but also as a politician who played
an infamous but central role in prolonging the suffering of the masses and
indefinitely deferring democratic change in post independent Zimbabwe.

Mutambara will be placed in the same league with betrayers like Abel
Muzorewa, Chief Chirau and latter day politicians like Jonathan Moyo among
others who, driven by selfish personal ambitions, delayed the liberation of
the masses and caused irreparable damage to the lives of millions.

The opposition politician seems to be under the dangerous illusion
that being a robotics professor is all that it takes to be acceptable as a
relevant political leader in Zimbabwe.

This is why Mutambara is often inclined to flag his superior
scholarship and academic intelligence in every argument or press statement.

Describing Tsvangirai as an intellectual midget Mutambara is adamant
that Zimbabweans cannot afford to have mediocrity running the country.

He does not attack Mugabe's intellectual deficiency confirming the
suspicion that Mutambara respects Mugabe's scholarship although the schooled
ZANU PF leader has presided over the economic meltdown of this nation.

Come 2008 elections Mutambara will learn two lessons: First that is a
difference between politics and scholarship and second, that Zimbabweans are
not looking for a political opportunist no matter how schooled, but are
looking for a bankable political leader with the clout to wrestle power from
Mugabe.

Will Mugabe survive this time round?

Zim Independent

By Charles Mangongera

PRESIDENT Robert Mugabe's political career, both before and after
Independence, has been shaped by risk-taking behaviour.

But more so after Zimbabwe's Independence in 1980. Whether Mugabe's
calculated risk-taking has been successful as a political strategy is
another subject of debate.

There are those that will argue that he has been in power since 1980
and has managed to outwit his political opponents, both within and outside,
and therefore his risk-taking behaviour has scored him successes.

Yet others will argue that Mugabe has been a monumental failure in
politics because he will go down in the annals of history as a liberation
hero who went from respectable statesman to a power-thirsty dictator.

That he has become an embarrassment not only to Zimbabweans but also
to Africa as a whole.

I will highlight six political milestones or events in Mugabe's
post-Independence political career that I think define his risk-taking
behaviour.

In the early 80s, a gang of marauding North Korean-trained soldiers
from the Fifth Brigade of Zimbabwe National Army went on a rampage, killing
innocent and defenceless villagers in the Matabeleland and Midlands regions
of Zimbabwe in what is now termed the Gukurahundi massacres.

In an orgy of unprecedented violence, more than 20 000 people were
massacred in cold blood.

Their crime: belonging to the Ndebele tribe and attempting to
jealously guard their zones of autonomy against Mugabe's quest for a
totalitarian one-man political show.

Today, Mugabe has refused to own up and seek forgiveness for the
killings, only grudgingly offering a very terse apology by calling that dark
era in Zimbabwean history "a moment of madness".

Those that spoke against the madness in the corridors of power in the
West did so in hushed tones. Mugabe at the time was lauded as a great
statesman.

While his soldiers were busy slaying innocent men, women and children,
Mugabe was juggling his life between having a cup of tea with the Queen at
the palace or Lady Thatcher at No 10 Downing Street in London and receiving
another honorary degree somewhere in Europe or the United States.

Whether Mugabe will live to face the consequences of his actions is
between him and his God.

The fact of the matter is he took a risk at the time and this was to
mark the beginning of a political career characterised by calculated
risk-taking behaviour.

In November 1997, faced with growing dissent from within his own
ranks, Mugabe acceded to calls by veterans of the liberation struggle for
them to be compensated for the sacrifices that they made to bring freedom.

He fully understood the economic consequences of paying out a gratuity
at a time when the economy was beginning to show signs of il-health.

However, he was quick to figure out that he could buy loyalty among
the war veterans if he paid them a gratuity.

Against wise counsel from within and from outside, Mugabe agreed to
pay each war veteran $50 000 in cash and a subsequent monthly stipend of $2
000.

At the time there were 50 000 registered war veterans but the number
was to grow with the news of the cash bonanza. As the news filtered through
to the financial markets, there was economic disaster. On Friday the 14th,
now popularly referred to as the "Black Friday", the Zimbabwean dollar
tumbled from $14 to the US down to $26.

This was to mark its free fall and to date it has never relented.
Mugabe soldiered on and the war veterans were to prove a vital cog in his
2000 election campaign, a campaign that was characterised by terror.

Having secured the loyalty of the war veterans through the cash
payment, Mugabe was faced with two major hurdles that threatened his
political life. The economy was sinking deep into crisis.

There was mounting opposition to his rule and towards the end of 1999
a new formidable opposition political party, the MDC, emerged. Mugabe could
see his political fortunes waning and he took another gamble.

Land had always been an emotive issue in post-Independence political
discourse. That there was a problem in the land ownership pattern was a fact
that no sane Zimbabwean could deny.

The contentious issue has always been how to address the problem.

He instigated chaotic land seizures that saw thousands of commercial
farmers being violently removed from their land.

Some paid the ultimate price for resisting the invasions. Mugabe urged
his supporters to "strike fear in the heart of the white men".

He had the instruments to do this at his disposal. The war veterans
had been paid handsomely. Chenjerai Hunzvi and his gang became a dreaded
force in many rural areas of Zimbabwe.

Hunzvi became some kind of de facto commander-in-chief of the violent
land seizures. This is the era that marked the beginning of Joseph
Chinotimba's political career.

Mugabe's reasoning was that if he annihilated the white farming
community, he would have succeeded in wiping the MDC off the political
landscape in Zimbabwe.

He parcelled out pieces of land to his supporters, most of whom were
not committed to farming at all. To date the once vibrant agricultural
sector has become a pale shadow of itself. Another risk taken.

At the time Mugabe was agonising over the ramifications of his
generous package to the war veterans, he embarked on yet another costly
political adventure.

This time it was in a far off land. Laurent Kabila, the buffoon-like
rebel leader had just ousted the tyrant Mobutu Sese Seko from power in the
then Zaire and the latter had fled to exile in Morocco.

Having captured political power and renamed the vast country the
Democratic Republic of Congo, Kabila was now facing internal opposition
after his allies accused him of failing to deliver on his promises.

Uganda and Rwanda backed a rebel group that was now threatening to
march on Kinshasa and remove Kabila from power.

How Mugabe got involved with Kabila still remains shrouded in mystery.

Some mention the lure of diamonds as the bait that did the trick for
the buffoon.

In an operation code-named Operation Sovereign Legitimacy (OSLEG),
Mugabe committed about 11 000 troops to fight on Kabila's side. By 2 000,
the war had gobbled a whopping $15 billion of Zimbabwean taxpayers money.

For three years thousands of Zimbabwean sons and daughters were
butchered for a cause that no one has cared to explain to the nation.

The politics of risk-taking!

In May 2005 Mugabe embarked on yet another risky adventure, this time
targeting hungry and poor urbanites in an operation that was code-named
Murambatsvina.

He had always been cynical of urbanites and at one time called them
"totemless people".

His anger was understandable. In all the elections that have been held
since 2000, the opposition MDC has garnered landslide victories in most
urban centres, particularly in the capital Harare.

In a brazen act of wanton disregard for humanity, Mugabe sent out his
forces to mow down people's houses ostensibly to destroy what he called
"illegal structures".

Despite protests from his victims and human rights groups, Mugabe
waged a war against his own people and to date more than 700 000 have been
left homeless.

A United Nations report has condemned the operation as a gross
violation of people's rights. Mugabe has not said a word!

On June 27 2007, speaking at the occasion of the burial of the late
Brigadier General Armstrong Paul Gunda at the National
Heroes Acre, Mugabe spoke of new enemies that he said were out to
remove him from power.

A few days before the then United States Ambassador to Zimbabwe,
Christopher Dell, had predicted that Mugabe would be out of power in six
months time because of the rapidly declining economy.

Mugabe accused the business sector of hiking prices of basic
commodities to starve the people so that they could revolt against him.

In typical Mugabe fashion, he promised to deal with errant businesses.

A few days later Mugabe launched another operation codenamed Operation
Dzikisa Mutengo (Operation Reduce Prices).

All retailers and service providers were ordered to reduce prices of
commodities by 50%.

The order resulted in a chaotic shopping frenzy where consumers rushed
to snap up anything that they could lay their hands on.

Businesses have refused to restock arguing they are operating at a
loss.

Mugabe has threatened to take over the industries that fail to operate
accordingly and give them to those that are willing to produce.

But will Mugabe survive this time round? Only time will tell.

*Charles Mangongera is a human rights and development expert based in
Harare. Email mangongera@yahoo.com

No one else believes that nonsense

Zim Independent

By Hudson Yemen Taivo

LIKE many people, I was disgusted by recent press reports that the
Zimbabwe National Army chief's wife, Jocelyn Chiwenga, verbally assaulted
and threatened to physically attack MDC leader Morgan Tsvangirai in a Harare
supermarket.

Chiwenga's actions should be dismissed as typical of those who support
the Zanu PF regime only to protect their own interests and not because they
care about the well-being of everyone else in the country.

Chiwenga has taken every opportunity to boast about her success as a
businesswoman. But her strong links with Zanu PF make it difficult for
anyone outside government to believe she could have been successful in
anything without her connection to power.

I can understand why Chiwenga would believe the government propaganda
that the problems in Zimbabwe were brought by sanctions called for by the
MDC. But if she seriously thinks everyone else believes this nonsense she is
not only dull and ignorant, but she is displaying symptoms of a severe case
of paralysis of analysis which requires urgent attention by a competent
psychiatrist.

Zanu PF is the party in government, and it is the government's
policies which can bring success or failure. It is contradictory for
Chiwenga to argue on the one hand that Tsvangirai is well-fed and therefore
he owes his fat cheeks to President Mugabe's policies and yet on the other
hand attribute the suffering and starvation of millions of the rest of
Zimbabweans to some imaginary external factors.

Chiwenga might not like it when people try to drown their sorrows by
referring to Tsvangirai as "president". But that is the reality and she has
to learn to live with it.

* Taivo writes from London.

Give meat business back to abattoirs

Zim Independent

By Kagubo Ka Kasya

ZIMBABWE is a government agency - a parastatal.

In the 21st century, any so-called progressive and decent government
would not stoop so low (except for wilful and malicious intent of
controlling its citizens by reducing them to beggary) as to be genuinely
involved in the sale of goat intestines and cattle hoofs!

It is extremely awful economics because historically in the 19th and
20th centuries wherever it was undertaken it failed miserably and also it
bred corruption, malnutrution and other adverse effects.

Please Zanu PF, reconsider and reverse your decision and action and
let private abattoirs and butcheries run the meat business like in Hong Kong
(under the Communist Chinese government) because privately managed it is
more efficient and cheaper than under government control.

And it would especially be ideal for any cash-strapped government like
Zimbabwe.

Zanu PF should be attending to and directing its meagre resources to
real issues and real problems such as human rights, water, electricity,
health services, education, infrastructure, investments etc but should not
be directing the sale and distribution of chicken and hog trotters, fish
heads and "kapenta"!

*Kagubo Ka Kasya writes from California, USA.

Controls never work

Zim Independent

Editor's Memo

By Vincent Kahiya

IN April price controls in Argentina triggered shortages of milk, meat
and other foodstuffs on the shelves of the nation's supermarkets.

The shortage of beef in Argentina - a country famous for its abundant
cattle - would always sound incongruous.

But retailers could not find suppliers willing to sell their products
at the prices imposed by the government in its effort to control inflation.

The quest to control inflation through price controls created serious
price distortions and the emergence of a black market of the missing
products, as was the case in the 1970s and 80s when the country tried to
impose price controls.

Argentina's price controls were imposed by President Nestor Kirchner
to contain surging inflation spurred by rising consumer demand amid a
five-year economic expansion.

The government last year imposed price controls on hundreds of
products while banning beef exports and limiting wheat sales abroad to force
producers to sell more on local markets.

Commenting on the price controls in that country, Omar Borla, an
economist with Dresdner Kleinwort Wasserstein in New York, said: "Maximum
prices of meat seem to reduce the industry's capacity to maintain its stock.
It's not news that price controls don't work. They never did," he said.

The price controls in Argentina also created another problem.

The Centre for Consumers Education, a non-governmental watchdog group,
was unable to conduct its weekly survey of basic food prices because many of
the items it used in its survey were not available in supermarkets.

Beef prices for example are so important to Argentine consumers that
they make up 7% of the consumer price index.

On the other hand, Argentina's National Statistics Institute -
responsible for collating and computing inflation data - in a bid to show
that the controls were working reportedly made changes to the officials in
charge of the consumer price index so they could tamper with the data.

The Institute then reported that food inflation had slowed from 3,6%
to 0,2%.

Not many believed this.

We wait for the Central Statistical Office to give us the latest
inflation figures, which of course will be based on the controlled prices of
goods which are not on shop shelves.Our rulers know all too well about the
impact of price controls.

We are already living the Argentine experience of shortages.

The ruling elite in Zimbabwe would rather live the lie that shortages
in the market are artificial.

That explains why they confidently implement policies that have failed
elsewhere.

This economy has been run on the basis of our government trying to
defy history and with it, common sense.

Printing of money has never resulted in economic recovery anywhere in
the world but President Mugabe and the central bank have pinned their hopes
on the money press.

Wholesale nationalisation of resources is detrimental to investment
but our government is now targeting mines after destroying farms through the
same policy.

Then there is the quest to reduce inflation by imposing price
controls. Bitter fruits of the exercise are already with us.

But we have been told that price controls are working because prices
of scarce goods have come down. This has nothing to do with economic
recovery.

It is part of a raft of moves by the state which place too much
emphasis on enforcement while discouraging growth.

In a bid to strictly enforce the land reform, very productive wheat
farmers with combine harvesters and tractors were chased away and replaced
with pretenders who use sickles to harvest patches of the crop.

The story is true with the current exercise where government daily
celebrates arrests of business people as if that would overnight result in
the availability of sugar, salt, cooking oil and matches.

The root cause of our predicament is that the country has almost
stopped producing in the fields and in industry.

There is no infrastructural development - a major potential employer.
There is nothing on the ground today to suggest that the Zanu PF government
is keen to work with business leaders to get the country out of this morass.

The government has failed to encourage the growth of centres of
excellence in agriculture, the manufacturing sector and commerce.

Ministers have made enforcement their key preoccupation.

The Water minister is running with enforcing the Zinwa takeover of
municipal infrastructure; the Industry minister is enforcing price controls;
the Transport minister is enforcing reduction of fares by transporters and
re-testing of public transport operators; the Education minister is focusing
on school fees and in agriculture the thrust is on enforcing regulations on
commodity trading.

Everyone is holding a hammer and ready to strike. Our government has
lost the power to create.

Holy 'baboonhood'

Zim Independent

MuckRaker

JOCELYN Chiwenga, the venomous ruling-party termagant, has threatened
to sue a website that carried unflattering remarks about her last week. This
followed an incident in which she claimed to have confronted Morgan
Tsvangirai at Makro wholesale store.

According to Tsvangirai he was well outside her vocal range.
Nevertheless, with the help of the state media she has managed to claim the
incident as a small victory.

But Chiwenga, it appears, can't stand the heat in the political
kitchen. She is threatening to sue the website for US$1 billion for comments
from readers carried on its chat-line and a further US$1 billion for calling
her on her cellphone after she told them not to.

She doesn't seem to realise that by abusing Tsvangirai and members of
the press corps she has invited an inevitable response.

Those interested in the discussion she has generated may care to visit
the ZimDaily (ZimDaily.com) chat forum.

Jocelyn is the wife of Zimbabwe Defence Forces commander Constantine
Chiwenga. Both Chiwengas are blacklisted by the US government, and so the
proceeds of a successful lawsuit would not be available to them.

And judges in Britain and the US tend not to be impressed by the
claims of politicians to judicial protection. Those who seek the public
spotlight get what they deserve, is the prevailing view.

The Sunday Times published a semi-literate e-mail she wrote which
provides a useful insight into the intellectual calibre of Mugabe's fan
club.

"Whoever told you that I was a bitch should first check your facts
right . . . We are not at war with the British people but we are at war with
that little puddle (sic) Blair toilet . . ."

"The war still goes on," she declared. "Never threaten any of my
intelligents (sic). Am going to sue you no matter what, am very cross with
you idiots."

Chiwenga would be best advised to keep her mouth shut the next time
she wishes to advertise her slavish loyalty to the Mugabe regime. Sometimes
it is better to say nothing than to have your "intelligents" held up to
public ridicule.

She ruthless Zimbabwean kingpin of a gang suspected of a spate of bank
heists in South Africa is safely behind bars, the Johannesburg Star reports.

"Maxwell Khumalo claims he is the 'Robin Hood' of Bulawayo - robbing
South African banks and bringing the spoils back to his starving community
in Zimbabwe," the paper reports.

"But to police, Khumalo - who has been linked to 28 robberies - and
his gang are possibly the country's most ruthless bank robbers, who caused
last year's statistics to rocket."

Khumalo - dubbed the "hammer man" for smashing banks' bullet-proof
glass with a sledgehammer - was finally arrested last month. Three of his
accomplices are also behind bars.

National police commissioner Jackie Selebi's spokesperson, Sally de
Beer, reckons the backbone of the country's bank robberies has been broken.

"They were responsible for a huge chunk of bank robberies in South
Africa," she said.

Police estimate that the smashing of the gang could influence national
bank robbery statistics by over 60%, the Star reports. According to the
police's latest figures, bank robberies more than doubled last year from 59
to 129.

Police have identified 15 members of the gang, some of whom are
believed to have formed a small splinter group after a violent feud between
the robbers over the division of spoils. Investigators are closing in on the
new group some of whom may have fled to Zimbabwe.

Police described Khumalo as "pleasant and cooperative". But they will
have difficulty seeing the back of him when, or if, he serves his term. A
police source said the alleged kingpin admitted he would rather sit in jail
in South Africa than live in Zimbabwe.

And there was President Mugabe off to Langkawi for a meeting on "human
capital development".

How many of those present at the Langkawi dialogue know that under his
direction Zimbabweans are today significantly poorer than they were at
Independence in 1980, indeed poorer, according to some assessments, than
they were in the 1950s?

Growing poverty has led many to take up a criminal career in South
Africa, as the Khumalo case illustrates.

Another Khumalo, South Africa's representative at the United Nations,
Dumisani Khumalo, was the victim of South Africa's crime wave recently when
he was hijacked at a relative's home shortly after his arrival at OR Tambo
airport. The attackers were alerted by look-outs at the airport, the South
African press suggested.

Khumalo, it will be recalled, was responsible for blocking discussion
on Zimbabwe at the UN Security Council. It was not the appropriate forum, he
argued.

Now he has fallen victim to criminals who quite possibly originate
across the Limpopo border, perhaps he and the government he speaks for will
take the crisis here more seriously.

Harare Anglican Bishop, "the Right Reverend" Nolbert Kunonga, has been
denouncing colleagues who "sell Zimbabwe for pieces of silver".

"It is our moral right, divine duty and sacred mission to help people
reject all Western forms, designs, plots, tactics and strategies to drag us
back into a state of boyhood and baboonhood," he declared.

He didn't say which hood he came from. But he lambasted not just
archbishops, bishops and priests, but "hopeless pseudo-politicians who let
others use them against their own people . . ."

"The talk of governance and democracy is silly and foolish without
controlling the land and economy," he said in an address to the 61st
Anglican synod last Friday.

He omitted to declare an interest in matters relating to land. We
advise the Right Reverend of biblical standards on property rights as stated
in Micah 2:1-2: "Woe to them that devise iniquity, and work evil on their
beds! When the morning is light, they practise it, because it is in the
power of their hand.

"And they covet fields, and take them by violence; and houses, and
take them away: so they oppress a man and his house, even a man and his
heritage."

It was sinful, Kunonga said, "to allow ourselves to be pawns, puppets
and Tomboys of the alien British".

Is a Tomboy related to an Uncle Tom, we wonder?

But leaving aside the bishop's malapropisms, why does he studiously
ignore criminal violence by those whose agenda he appears so anxious to
endorse?

Does his Christian calling not require him to make at least some
comment on abductions, torture and murder as a political way of life?

Or does the extent of his compromise with the state require him to be
silent on these issues?

And how does he feel about the impoverishment of a whole population as
a result of the very policies he espouses on the specious grounds of
biblical teaching?

Bishop Kunonga should know that singing for his supper is one thing,
but disregarding the Christian tenets of justice and compassion on behalf of
a manifestly wicked regime is quite another.

We should not be surprised however that he uses the Story of Creation
as backing for "images of empowerment". He probably thinks Charles Darwin
was an alien sell-out.

Baboonhood indeed! The bishop is entitled to advertise his devilish
political thoughts. But none of this is "Right" and certainly none of it is
"Reverend".

One thing churchmen should be concerned about is the unwarranted
deprivation of freedom suffered by political activists who are incarcerated
on charges that subsequently prove to be false. The High Court last month
released 13 MDC activists accused by the state of undergoing terrorist
training and carrying out petrol bombings.

The South African farm at which the activists were allegedly trained
in terrorist activities does not exist, according to the court judgement.

"The police had alleged that the applicants had trained at a farm
known as Lala Bundu Farm," the judgement said. "When challenged to show on
the map where Lala Bundu Farm was, they failed to do so. It turned out to be
non-existent."

In addition to the non-existent farm, the state claimed to have
witnesses to support its petrol-bombing charges who also turned out to be
fictitious. When the state was ordered by the court to produce these
individuals to show that they existed, it failed to do so.

In other words the 13 applicants were held for five months in
appalling conditions when the state had no evidence against them apart from
what it had concocted.

What a shocking commentary on Zimbabwe's justice system. The Law
Society and other legal bodies should draw attention to this case as an
example of how arbitrary detention is used by the state to get even with its
critics regardless of evidence.

And there was President Mugabe in Langkawi castigating journalists for
not telling the truth! Didn't one of the journalists present ask him about
this case?

Muckraker has often argued that we have a severe shortage of talent in
our business leadership in this country. Many of our business leaders have
been inadequate at best and supine at worst in voicing the concerns of their
sector.

But nothing quite prepared us for the pathetic utterances of whoever
prepared the document submitted to President Mugabe at his meeting with
business leaders last month.

Not only did they dishonestly blame the country's problems on
sanctions and drought, they told Mugabe that the country had let him down.

"Your Excellency," they gushed, "when we look at how we as a nation
have performed against the goal that you set for us . . . we can all clearly
see that we have let you down . . . This country, business and government
together have let you down."

Who fashioned this nauseating document? Why are its authors unable to
see what the rest of the country can clearly see? Whose disastrous policies
have condemned the country to massive annual contractions of GDP, to
burgeoning unemployment, and to inflation of 20 000%?

If business leaders cannot see where the problem lies, they should be
doing something else. Rarely has there been such public dishonesty by people
supposed to represent the business sector.

The bit about the country having let Mugabe down reminded us of the
words of Bertold Brecht who, mocking the dismay of East Germany's Stalinist
leadership with the workers following their protests of 1953, said if the
government was dissatisfied with the people then it should find a new
people!

BBC had a disappointing experience at the Chinhoyi Show, opened amidst
great ceremony by Ignatious Chombo last week.

The corporation booked the Orange Grove Motel from where rave reviews
were to be transmitted. But sadly there was no Zesa, no coal, no meat, and
worst of all, no beer.

Not even the most patriotic propagandist could hide this "State of the
Nation".

National Foods workers down tools," the Herald told us this week.

"When the Herald visited National Foods head office in Workington
industrial area they found scores of workers milling around the premises."

"Milling" around? Did Herald readers get the joke, we wonder?

Another classic quote was drawn to our attention last week. "Mugabe
has dismantled everything but mantled nothing," Joshua Nkomo said in an
interview in 1983.

What would he think today?

Tsunami Mpofu strikes again

Zim Independent

By Eric Bloch

IT is an old maxim that lightening rarely strikes twice and similarly
it is relatively rare for other catastrophes of nature to recur over and
over again.

And, in particular, it is exceptionally rare for such catastrophes to
repeat themselves in close succession to previous occurrences.

Even those parts of the world as are particularly vulnerable to
disastrous calamities, such as floods or hurricanes, do not often suffer
such events endlessly.

Amongst the worst of the devastating incidents of nature are the
tsunamis which, from time to time, afflict parts of the Far East.

Unfortunately, however, when the destructive events are driven not by
nature, but by man, the reverse is often the case for, whilst possibly
nature learns from its mistakes, few men appear to be able to do so. That is
especially so when the men are politicians, and even more so if they govern
Zimbabwe.

That has been irrefutably demonstrated by the Zimbabwe government's
repeated mismanagement of agriculture, in general, and its land progammes in
particular, by its never-ending recourse to spending vastly beyond its
means, with cataclysmic economic consequences, by its inept operation of
most of its parastatals, by its continuously foolhardy alienation of most of
the international community, by its contemptuous disregard for economic
fundamentals, and by much else.

But over the last seven weeks much of government's past creation of
disasters has paled into insignificance when compared with the appalling
consequences of its price control polices.

The magnitude of the damage that has been done, and which is
continuing to be suffered, is as immense, if not greater, than the abysmal
harm caused by the most pronounced of tsunamis.

That damage is being compounded and increased by the never-ending
further actions being taken as extensions of that price control polices.

Minister Mpofu's statement on June 26, on the introduction of
mandatory price reductions, and a price freeze, was a stupendously great
tsunami. But he, and government, did not even contain themselves to just
that one tsunami.

Almost daily they have battered Zimbabwe with further tidal waves of
destructive measures and actions.

So great have they been that the Minister of Industry and
International Trade, who heads the Price Control Task Force could
realistically now be called Tsunami Mpofu.

The forced slashing of prices to those prevailing at June 18 (or less,
when "mark-ups" on specified costs exceed 20%, irrespective of operational
funding costs and other essential expenditures and costs which are excluded)
has had horrific repercussions, including:

*Massive shortages of most commodities, with shelves of most stores
being almost bare, as more and more manufacturers had to discontinue, or
reduce, production in order to minimise losses, and stores did not buy even
such goods as were available, when the controlled prices would have resulted
in losses. As a result, almost all businesses are sustaining immense losses,
and consumers are struggling to survive in view of the near-total
non-availability of essentials.

*An even more vigorous and virile black market than previously
existed, due to the intensity of demand in the absence of goods in the
formal market. With demand massively exceeding supply, the black market
merchants are able to command prices very considerably greater than those
which were being charged by retailers prior to the controls being
introduced. Thus, instead of reducing inflation, government has caused real
inflation to soar upwards.

*A sharp decrease in revenues for government, with markedly lesser
value-added tax (VAT) in view of pronouncedly lower sales by businesses,
diminution in Income Tax due to the business losses being sustained,
decreased Pay As You Earn (PAYE) inflows as businesses progressively reduce
numbers of employees, and reduced Customs Duties as values of imports
decrease.

* A tremendous increase in the "brain drain", as more and more
Zimbabweans strive to survive by seeking livelihoods in other countries.

*Almost total loss of business confidence (already much reduced),
impacting negatively upon productivity and operational efficiencies.

*Further deterioration of Zimbabwe's international image, not only
resulting in an almost complete disinterest in Zimbabwe as an investment
destination, but also further diminishing tourist patronage, and resulting
in relocation to neighbouring territories of regional corporate conferences.

These are but a few of the deleterious consequences of the initial
price control measures, worsened by the draconian enforcement tactics,
inclusive of large numbers of arrests, with those arrested held at least
overnight, and often longer.

However, post the initial ministerial directive, much else of a
detrimental nature has been done by Tsunami Mpofu and his colleagues.

The peremptory cancellation of licences of all private abattoirs
resulted in the already great scarcity of meat becoming even greater.

Undoubtedly, one of the minister's motives will have been to empower
Cold Storage Company (CSC), being yet another of the state's only
semi-effective parastatals, but CSC does not have the capacity to provide
for all Zimbabwe's meat needs.

Even more so, CSC cannot do so when the price it is permitted to pay
for cattle is so inadequate that few will sell to it. The initially allowed
price of $3 million per beast was ludicrously low, and within weeks the
minister increased that price to $12 million. But that price also does not
suffice to accord viability to producers, so meat shortages continue.

In order to support yet another parastatal, which action demonstrates
yet again government's desire for total economic control, primarily by
operation of monopolistic parastatals, Tsunami Mpofu then created chaos by
announcing a ban on fuel coupons, save where issued by the National Oil
Company of Zimbabwe (Noczim).

With only erratic fuel deliveries, and only one Noczim - supplied
service station outlet in each of Harare and Bulawayo, the minster has
empowered Noczim, but disempowered the private sector, with especial regard
to non-governmental organisations and exporters.

Combined with the forced reduction of the fuel price to $60 000 per
litre, which has forced the cessation of operations of all service stations
(whose costs of fuel procurement exceeded $140 000 per litre), almost all
motorists are virtually stranded, as increasingly being emphasised by
near-empty city centre roads. Almost the only fuel availability is in the
black market, at prices of $250 000 per litre, or more. Yet more inflation,
minister 'Tsunami' Mpofu!

Last week the minister announced that schools must reduce their fees
to June 18 levels. No school can break-even with such fees, so the minister
is forcing the imminent closure of the schools, and yet government has
neither the resources nor the capacity to absorb and operate all the private
schools.

Furthermore, that which is sauce for the goose is not sauce for the
gander, for at almost the same time as the minister's seismic action on
fees, Midlands State University increased its fees from $124 000 to $20
million per semester, and Zimbabwe Open University raised fees from $70 000
to $1 million per semester. It is presumably coincidental that both those
universities are governmental!

When the stringent price control measures were introduced, they were
stated by Tsunami Mpofu to be for a short, transitional period, pending the
National Incomes and Pricing Commission formulating pricing policies, but
last week he extended the application of the measures to the end of the
year.

By that time almost all enterprises will be bankrupt, hundreds of
thousands will have had their lives permanently destroyed, the Zimbabwean
economy will be derelict in the extreme, government will have alienated not
only the international community, but also almost all Zimbabweans. Rarely
will any tsunami have had such disastrous, near- irremediable effects.

Outrageous

Zim Independent

Comment

IT needed Zanu PF "experts" to drive the point home: that the
so-called land reform in Zimbabwe is a disaster. Zimbabwe Indigenous
Commercial Farmers Union president Wilson Nyabonda forecast this year to be
the worst season for wheat production.

The national wheat requirement is about 400 000 tonnes. The farmers
were asked to produce a modest 76 000 tonnes this year. The deficit would be
met through imports, at a huge cost in foreign currency.

Nyabonda said: "For the first time farmers received seed, fertilisers
and chemicals well before May. Most farmers accessed fuel as well, which
they received without paying cash upfront. Everything was in right order
from the onset."

Things fell apart however when they could not receive uninterrupted
power from Zesa at critical stages for irrigation. Nyabonda said due to
unscheduled load-shedding, many electric motors were destroyed and the
farmers could not get them repaired. At times they were forced to abandon
their wheat crop.

Government will need to answer very hard questions if it wants to
maintain the illusion that it is in charge. Since the beginning of May, we
were told we would be subjected to long periods of darkness because priority
in the distribution of electricity was being given to winter wheat farmers.
If Zesa was not sending electricity to farmers, where was it going?

Farmers claim that they experienced "nightmares" with Zesa from May
and could therefore not meet the modest target of 76 000 tonnes out of 400
000 tonnes, which is nothing if not a national scandal. Taxpayers are
obviously keen to know what became of the subsidised fuel, seed and
fertiliser they received from government.

Going through the Sunday Mail story, one is left in no doubt that the
nation is facing food deficits because the new farmers lack skills, can't
plan and have no resources. A study on the farms might reveal that most of
the inputs said to have been supplied on time ended up feeding the black
market because there is no close supervision.

Given the dire state of affairs, you would expect government to revise
its priorities to assist farmers who are able to produce and are committed
to farming and to kick out those who are undermining food production. Not in
Zimbabwe.

Inside the same issue of the Sunday Mail we were informed that
government was on a witch-hunt for white commercial farmers who had stayed
beyond their eviction notices. Nothing was said about whether they were
productive or not. It was more about the colour of their skin and whether
they had been served with an eviction notice.

This racial purge is spearheaded by the Ministry of State for National
Security, Lands and Land Resettlement headed by Didymus Mutasa. On July 4
the ministry released a circular ordering police "to act" on reports of
"white commercial farmers" defying orders to vacate farms acquired for
resettlement.

The same reporter who exposed the failure of newly-settled farmers to
meet their small winter wheat targets then went on a witch-hunt in
Mashonaland West, checking which "white" farmer was refusing to vacate their
premises. She found "scores" of them, some of whom were committing the crime
of taking the new owners to court. The irony of course was that nobody
thought that those who were failing to produce deserved to be shown the red
card more than committed farmers whose sole crime was being white. Shouldn't
these people be sharing skills, know-how and technology? Isn't the problem
black farmers are facing one of capacity more than having white farmers as
neighbours?

President of the Senate Edna Madzongwe complained that she was "moving
up and down carrying my papers to move on to the farm (in Chegutu), but I am
failing as the former owner is refusing to move out, threatening to take me
to court. I do not know what makes these farmers brave enough to defy the
law."

Only recently, Makonde MP in the same province, Leo Mugabe, said there
were unnecessary on-farm disruptions when he defended Doug Taylor-Freeme. He
said the farmer was "doing a wonderful job" of producing for the nation.

We have no doubt there are more like Taylor-Freeme, which might
explain why they have not abandoned their farms despite the threats and the
insecurity now associated with investing in farming, but they don't have
godfathers to speak on their behalf. Meanwhile the nation is paying a heavy
price through food shortages.

It is tempting to conclude that in addition to lack of skills and
financial resources among black farmers, power politics is also at play in
Mashonaland West. We find it hard to believe that Zesa Holdings is solely to
blame for the farmers' disastrous performance in a year when they say they
got all the inputs on time. Then the political leadership weighs in with
racial rhetoric. We wonder why the Zanu PF government continues to sell the
pretence that there are more enemies outside the country than it already has
in its own rank and file. The story on winter wheat exposes enough shame for
a self-respecting Minister of Agriculture to resign. The begging bowl for
maize is already doing the rounds in the region. Could there be anything
more shameful?

Candid Comment

Zim Independent

What exactly do we want?

By Joram Nyathi

Blair is gone. It is said he did it for the good of England. He didn't
do it to protect the image of the Labour Party or for fear of the
Conservatives. After pushing Britain into a costly, unwinnable war in Iraq,
Blair listened to the aggrieved national sentiment and quit as prime
minister on June 27 before the end of his term. He had agreed to let Gordon
Brown fill the post in a deal agreed even before his third election win.

At ministerial level here, the same should have happened to people
like Joseph Made for failing to revive the agricultural sector over the past
seven years. Looking at the parlous state of the economy and the political
paralysis in the country, President Mugabe would have gone long ago. But
this is Africa where men are still men. You don't quit.

There was excitement in Zimbabwe when the oracle of Washington,
Christopher Dell, predicted before he left for Kabul in June that Mugabe
would not last another six months. He said no government had survived five
or six digit inflation, a league in which Zimbabwe enjoys unrivalled
distinction.

Dell didn't say how Mugabe would go although the insinuation was that
there would be a popular uprising. He would not resign because his policies
had failed. Dell concluded that given what was happening post-March 11,
government had itself become the most robust agent of regime change.

There is feverish expectation about the effects of the current price
blitz and the resultant shortages of goods countrywide. Will there be a
spontaneous uprising? What does that mean for the opposition? Where does it
stand? And the ZCTU?

Brown took over from Blair without going to the polls although the
Labour Party gave its approval in an internal poll. There were no protests
from the Conservatives that the people had not been given the chance to
choose who they wanted to rule them. Perhaps that is what their law says. I
am sure the opposition in Zimbabwe would raise a stink if Mugabe quit today
and Zanu PF decided that Vice-President Joice Mujuru should take over until
next year.

Which brings me to the muddled debate about Amendment Number 18. There
is a lot of confusion in Zimbabwe. All too often analysts tell us President
Mugabe should resign for the good of the country. This is the view of the
opposition MDC, too. Witness that unfortunate declaration that if Mugabe
didn't go peacefully he would be forced to go.

I don't know how the MDC would benefit if for instance Mugabe threw in
the towel today. The law says an election should be held within 90 days. In
the interim one of the vice-presidents will act.

The most rational objection to Amendment 18 I have heard is that it is
a continuation of the piecemeal processes Zanu PF has used to mangle the
constitution since Independence. The opposition and civil society groups
advocate an overhaul that will produce a "people-driven" constitution.
Amendment 18 will also increase the number of parliamentary constituencies
from 150 to 210 and Senate seats from 66 to 84.

Politically, it is argued, Zanu PF will gerrymander constituencies
according to its perceived strength in rural and urban areas. I am sure if
there is a "level playing field" by the time of elections there won't be
rural or urban strongholds for either party.

The amendment also proposes the syncronisation of parliamentary and
presidential elections. The reaction of the opposition and civic society has
been muddled. I don't know whether saying something is a "Zanu PF project"
is a rational objection because making laws is one of the key functions of
any government. Whether Zanu PF is supposed to be so irrational as to make
laws favourable to the opposition is beyond me.

The most vocal objection to Amendment 18 has been about parliament and
the Senate constituting an electoral college to elect someone to complete
the presidential term in the event that the incumbent resigns or for some
reason is unable to execute his duties as head of state. Which is more or
less what the British did when Tony Blair resigned, and Britain has enjoyed
a smooth transition although Gordon Brown is yet to face voters on his own
terms.

My question is: Why is such a transitional process diabolical in
Zimbabwe? Would the opposition be ready to mount a significant challenge to
Zanu PF by November as required by the constitution, if Mugabe resigned
today? Because if they want to be consistent, they can't turn around and say
Mugabe resigned before we had a new constitution, therefore we can't have
presidential elections within three months as required by law, which they
don't want amended.

It is more like focusing on the individual than on far-ranging
institutional changes which the nation is craving for. Which is why as a
nation we need a vision.

For a president elected by an electoral college might just provide the
transitional widow which the opposition needs to wring out electoral law
reforms and other institutional changes critical to the holding of free and
fair elections in March. Yet so far it has been more vocal in opposing this
route than in opposing a violent and chaotic uprising.

Why is a chaotic "regime change" through a "spontaneous uprising" seen
as more auspicious for the opposition than a peaceful transition according
to the law, no matter however flawed that law? My little experience is that
nobody has ever correctly predicted the outcome of an uprising. It might be
crushed, and make things worse; it might bring in military rule, which is
worse; or by chance, it might install an opposition government, which is
just a chance, like Dell's prediction. What exactly do we need as a nation?

Zim Independent Letters

Price freeze: how are we expected to survive?

MY husband and I are pensioners. My husband is 80 years old and I am
74. We own several properties and we live from the rent collected from these
properties.

Most of our rents were to be increased as from July 1 as per the lease
agreements but with the rent freeze we cannot increase the rents - even
though the rents are so unrealistically low.

We own a commercial building in Msasa with four shops and four offices
from which we receive just over $7 million gross.

This month we had a leaking pipe at the property that had to be
replaced. The cost of the repair was $13,7 million.

Please, can you explain how we are supposed to survive?

We cannot increase our rents but still have to pay for medicines,
visits to the doctor, wages for my two domestics, their school fees, food,
rates, repairs and maintenance, electricity, water etc - the list is
endless.

Rates have increased so much in July - where is the price freeze on
this?

We do agree that some of the prices of some commodities were
unrealistic. But we do not benefit from those commodities that are
price-controlled because as soon as these items are put onto shelves, they
are sold very quickly to people who queue all day to then sell them on the
black market.

We should have a realistic rate per square metre for industrial,
commercial and residential properties taking into consideration that
inflation is still on the increase. As you can see, the repair of the pipe
for our building was more than the rents collected.

Rates and water charges have also increased.

The landlord has invested his capital in this country and taken the
risk but it is very sad to see that he is unable to even survive from his
investment when he needs it most for his retirement.

Landlord and Ratepayer,

Harare.

-----------
How many just men?

"PERHAPS there are 50 just men in the town? Will you not spare the
place for the 50 just men in it?" so asked Abraham of God, according to the
Bible, when God was about to investigate reports of massive evil and sin in
Sodom.

God replied: "If at Sodom I find 50 just men in the town, I will spare
the whole place because of them."

Abraham went on to reduce the number of just men who might be found to
45, then 40, then 30, then 20 and finally 10, and each time the Lord replied
that He would spare the whole town if He found that number of just men. But
in the end He did not even find 10 just men, and so Sodom was destroyed in a
rain of burning sulphur.

My mind jumped to the government and the ruling Zanu PF when I
listened to this reading recently, because of the dire straits we find
ourselves in.

We are so desperate for change that we are intent on destroying the
party and its evil system that has brought us to our knees and separated our
families in the most cruel and traumatic fashion.

So would we be right to destroy the entire Zanu PF edifice if we found
50 good people among them? No, I do not believe this would be justified.

And if there were only 45 good people? No. And only 40? No. And so on.

But surely we would find at least 10 good people in Zanu PF! This
would perhaps prevent us from taking the dire action of total and dramatic
annihilation wreaked upon Sodom!

There is indeed a great danger, whenever great evil has been
perpetrated, that victims will demand that the entire people, institution or
whatever that perpetrated that evil be annihilated, without any regard to
the rights of the few "just men" who happen to be in the guilty camp.

This danger is at the root of many efforts to get to the truth and
instigate a system of justice, reparation and reconciliation in recent
times, notably the Nuremburg Trials post-Second World War and the South
African Truth and Reconciliation Commission post-apartheid.

The need for justice for the victims has somehow to be balanced with
the need for respect for the rights of those who are not guilty.

This is extremely difficult, and even South Africa's admirable effort
has not been perfect. Indeed, it is heavily criticised in some quarters for
allowing the guilty to "get off scot-free" for simply telling the truth.

The element of reparation seems to be missing in that process.

Before change finally comes in Zimbabwe, as it surely will, we need
national debate on the issue of our own system for truth and justice, so
that we are agreed before the question arises.

How far back do we go: Gukurahundi, liberation war, Mbuya Nehanda,
Ndebele raids, flight of the Khoisan?

And also let us acknowledge that the current opposition is not exactly
squeaky clean. Indeed, in some instances there is no difference between the
two sides. Violence, corruption, greed, power-hunger, arrogance, lust,
sloth, deceitfulness - all are present in both sides of the national divide.

This is why we will always need laws and a system of police and
justice. This is a fundamental difference between Zanu PF and the MDC.

National debate on these and other matters needs to begin now, and I
submit that it is important to include Zanu PF in this debate. We may find
that there are far more than 50 just men in Zanu PF, while there may not be
many more than 50 in MDC or any other opposition party or civil society
group!

Trudy Stevenson,

Harare North MP.

----------
Toilet money

AM I right in understanding that the price of toilet paper will not be
increased till the end of December 2007? Will it really stay at $85 000 for
four rolls? What bliss!

According to me, that translates to just a bit over $21 000 per roll
of 350 sheets, or $60 per sheet. Now that is actually six $10 bearer
cheques.

I haven't seen any smaller denominations lately, but wouldn't it be
great to be able to go to your bank and apply for $1 000 worth of one cent
bearer cheques? One hundred thousand pieces of paper, altogether 200
"bricks" which would keep me going for years.

Others must have cottoned on to that idea long before me, because I
haven't seen any one cent bearer cheques for months. I guess they all went
"down the toilet"!

Bummer,

Bulawayo.

---------
Voyeurism

HOW can the Pius Ncube case be said to be sub-judice when it should
not even have been brought to court?

As far as civilised societies are concerned, bar tumultuous tyrannies,
rigging a camera for the purpose of spying on someone's bedroom is
voyeurism, a very serious criminal offence in itself of which the
perpetrator can only get a custodial sentence.

The person who rigged the camera and the person who paid him to rig
the camera are both guilty of housebreaking and voyeurism of the highest
order and this should have been an open and shut case.

I wonder what law this government is following? It begs belief.

Ferris Chihombori,

United Kingdom.

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There's more to power problems
AS an electricity supply industry insider, I read with great interest
the article "Load shedding: who is to blame?" published in the August 3
edition of the Zimbabwe Independent.

The one sentence that summarises the author's answer to the question
states as follows: "The problems of electricity are a creation of the
Ministry of Energy and Power Development officials who sacrificed the
country because of their personal differences with (Sidney) Gata."

I would like to respectfully differ with the author and submit that
our power problems pre-date the Ministry of Energy and Power Development
(that was only created in August 2002) and are a result of more fundamental
issues than mere personality differences between officials.

It is important to dispel at the outset the common perception that the
problems are due to lack of planning. It may come as a surprise to many to
know that Zesa, in consultation with the government, prepared tender
documents for the Hwange Power Station expansion project as far back as
1986/87.

Over the past 30 years there have been extensive and exhaustive
studies and plans for the Batoka Hydroelectric Scheme, Kariba South
Expansion and Gokwe North projects. All these projects have not been
undertaken because the capital required is far beyond the capacity of our
domestic resources and it is necessary to mobilise foreign capital,
primarily from the rich and developed countries.

Unfortunately for the country - and this is the case for all other
developing countries - the conditions for accessing foreign capital have
generally been at variance with local political realities and the result is
a stalemate in project development until there is a crisis.

Before blame can be apportioned one has to step into the shoes of
either party and assess the reasonableness of their positions.

Is it legitimate for those with capital to use this for their
political objectives?

Is it legitimate for those with political power to yield to those with
capital in preference to their own electorate?

If one can answer those questions, then one has the answer as to who
is to blame for load-shedding.

However, I believe that a more useful exercise is to go beyond
identifying who is to blame to seeking a way forward.

In my opinion we will make progress if governments in developing
countries create a significant domestic private sector with a stake in the
electricity supply industry. This will facilitate the alignment of local
political objectives and the requirements of the providers of capital.

This approach is applicable to other infrastructural services such as
transport and telecommunications.

Engineer S Mangwengwende,

Harare.