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

Back to Index

Back to the Top
Back to Index

Sunday Times, SA

'Hard to stand up to Mugabe'

Friday August 26, 2005 08:41 - (SA)

ZIMBABWE - Zimbabweans find it nearly impossible to stand up against
President Robert Mugabe's oppression as they have lost all sense of having
any rights.

This is according to Zimbabwe opposition MP Roy Bennett who addressed the
Johannesburg Press Club.

"It is very difficult to stand up as people and fight it when there is no
assistance," he said.

Bennett was en route home from Britain where he spent eight weeks recovering
from eight months in Zimbabwean prisons.

He said people in Zimbabwe lived in fear of victimisation for having
anything to do with opposition politics.

"I witnessed treatment of guards and prisoners by their own government. If
they were suspected of having opposition links or showing sympathy, they
would be victimised.

"Guards would be doused with water, have to roll on the floor, carry logs
and roll tractor tyres in front of other guards.

He described the system in Zimbabwe as "communist" and "dehumanising".

Beatings of prisoners were a daily occurrence and poverty in the country
made it near impossible for the vast majority of prisoners to get what they
most wanted - a visit from outside.

He said that on his return to Zimbabwe he would work towards helping people
have access to visiting prisoners.

"The people I met in prison represent a microcosm of the rest of the country
and they deserve a fair chance. Their average age was 25 years and all that
they wanted one day was a job." Most were there in the first place because
petty theft was their only survival.

Bennett was sentenced to a year by the country's parliament for pushing
justice minister Patrick Chinamasa to the floor, after the minister accused
Bennett's ancestors of being thieves.

Back to the Top
Back to Index

Business Day

Former MDC MP Bennett says SA must not grant loan
Jonathan Katzenellenbogen


International Affairs Editor

SA SHOULD not pay Harare's arrears to the International Monetary Fund (IMF),
says Roy Bennett, a former MP from the opposition Movement for Democratic
Change (MDC).

"No amount of money will turn the economy around," Bennett told the
Johannesburg Press Club yesterday.

"It will carry on melting down," he said.

If SA had stepped in five years ago, it could have altered the course of
events in Zimbabwe, but nothing could prevent a complete failure of the
economy and other systems, Bennett said.

Providing money now would only prop up President Robert Mugabe and extend
the suffering in a country that could be on the verge of famine, he said.

A loan made sense only if the money would assist people who were suffering,
he said.

No announcement has yet been made about a loan by SA to help Zimbabwe pay
the $295m it owes to the IMF, which it must do to prevent its membership
being terminated.

South African Reserve Bank governor Tito Mboweni this week denied that any
loan had been discussed.

Bennett was speaking after a two-month stay in the UK that followed his
release from prison in June. He was sentenced to an eight-month term after
shoving Justice Minister Patrick Chinamasa to the floor in parliament.

After his release Bennett charged that the MDC been hijacked by corrupt
opportunists and was not showing sufficient leadership in confronting the
ruling Zanu (PF).

"My personal view is that the MDC must stop buying into Mugabe's agenda and
start calling the shots," he said yesterday.

"We need not attend parliament, nor Zanu (PF) functions. We do not need to
legitimise the government."

Bennett, who is no longer an MP, said he intended to take an active role in
the MDC and would also form a committee to help prisoners. With Sapa

Back to the Top
Back to Index

Zim Independent

Telecel battle hots up
Dumisani Muleya
THE battle for the control of one Zimbabwe's three cellular telephony
companies, Telecel Zimbabwe, is heating up as government steps up efforts to
oust tycoon James Makamba from the firm.

Sources said the authorities were determined to push out Makamaba, currently
facing further allegations of breaching the Foreign Exchange Control Act by
trading on the black market. He is due to appear in court on August 31.

The sources said the Telecel issue was the subject of a cabinet debate on
Tuesday. It was said while most ministers felt it would be difficult to shut
down the company on legal grounds, others said it could be done. Sources
said the Attorney-General - an ex-officio member of cabinet - has been
tasked to investigate "legal" ways of dealing with the issue.

Sources said the escalating campaign to seize Makamba's properties now
epitomises a coordinated effort to confiscate assets of entrepreneurs out
favour of with Zanu PF.

Businessmen who fled the country in terror as government cracked the whip on
companies accused of engagement in unethical deals have forfeited their
assets. Business magnate Mutumwa Mawere has had his mines and other
properties seized and nationalised.

Mawere has condemned the seizures and nationalisation. He is currently
fighting in the courts to retain ownership and control of his confiscated

Makamba is a major shareholder in Telecel and its non-executive chairman.
Telecel is owned 60% by Telecel International and 40% by the Empowerment
Corporation of Zimbabwe, a local business consortium.

Telecel International is in turn 100% owned by Orascom Telecom, an Egyptian
conglomerate listed on the Cairo and London stock exchanges.

Sources said there were "political, business, and personal" issues at play
in the Makamba saga. The personal "hot potato" was said to have attracted
the wrath of the political authorities.

President Robert Mugabe's nephew, Leo Mugabe, was said to be trying to
muscle into Telecel to get more equity with the support of Transport
minister Chris Mushowe and the Post and Telecommunications Regulatory
Authority of Zimbabwe (Potraz).

Makamba was understood to be trying to play close to Leo in the hope of
getting political protection.

But sources said Makamba -currently in Johannesburg, South Africa - was
under pressure to quit Telecel.

A Zimbabwe Independent journalist bumped into Makamba at Rosebank and
Sandton City in Johannesburg last weekend. Makamba was first seen with a
group of Zimbabwean businessmen at Park Hyatt hotel in Rosebank and then at
Michaelangelo hotel in Sandton.

Sources said Mushowe and Potraz officials have held a number of meetings on
the Telecel issue since last year on ways to gain control of the firm.

Mushowe and Potraz have gone to extent of writing to Telecel International
in Egypt, threatening to withdraw the licence unless Makamba was removed.
The Egyptians have so far resisted the blackmail.

Sources said Mushowe and Potraz officials travelled to Cairo in June in a
bid to sort out the crisis. No solution was found and hence authorities'
renewed effort to allow its favoured investors to take over or to close the
company down.

Sources said Leo and his business partners were closing in on Telecel but
the problem was that government wants a new shareholding structure without

The siege on Telecel last year in August forced Telecel International CEO
Jim Bailey to fly to Harare with his lawyers to meet Potraz. After that
meeting a compromise deal was struck which was to see 11% of Telecel
Zimbabwe shares offered to Leo and his Empowerment Corporation.

Leo was said to have convened another meeting after Bailey's trip where he
allegedly claimed President Mugabe had issued a directive that ownership of
Telecel be restored to his IEG company and indigenous empowerment lobby

Makamba's shareholding in Empowerment Corporation would be reduced from 98%
to 24% and in Telecel from 37% to a mere 14%. Jane Mutasa, a Telecel
director and shareholder, demanded through her lawyers to see the President
Mugabe's directives in writing but they were never produced, sources said.

Leo said the crisis at Telecel has been resolved. "The problems ended
sometime this year. As far as we are concerned, its all over. We no longer
have any problem with Makamba," he said. Efforts to contact Mushowe were
unsuccessful. His deputy Hubert Nyanhongo said the minister was in Victoria

Makamba, who last year spent six months in remand prison, has already lost
Joy TV, which was switched off air by authorities, Maryvale Farm in Mazowe,
a plot along Mutoko road, and his Blue Ridge Mazowe supermarket was closed
on Wednesday.

Makamba said he was removed from Maryvale Farm by three employees in
President Mugabe's Office. He said a war veteran named Chingwena seized his
32-hectare plot at Poultry Farm which he bought for $14 million several
years ago.

Makamba blamed state security agents for closing his Blue Ridge Mazowe
Supermaket which he valued at $9,5 billion.

"I think this is one of the failures of the human race: unnecessary hatred,"
sad Makamba. "This is pure and simple naked hatred. Zimbabweans know my
track record, from being a radio presenter, to an insurance broker, to a
councillor, to a Zanu PF MP and provincial chairman and businessman,"
Makamba said in an interview yesterday.

"I worked for all the properties I have. People know my assets and God knows
they are mine. Even if they take them they will remain mine. What have I
Back to the Top
Back to Index

Zim Independent

Mugabe tightens control on ministries
Godfrey Marawanyika
IN a desperate bid to stamp his authority in the running of the economy and
to further centralise power, President Mugabe is taking a greater immediate
role in the running of government business, with key decisions having to
come from his office.

Military and intelligence personnel have assumed a larger presence in
virtually all ministries to monitor compliance with presidential directives.

The Office of the President now embraces two state ministries of Policy
Implementation and Interactive Affairs. It also includes the Central
Intelligence Organisation and the Department of Planning.

The extended roles of the Office of the President were spelt out last week
in Finance minister Herbert Murerwa's mid-term fiscal policy statement.

This, economic analysts say, will add to red tape as decision-making gets
more centralised.

The Office of the President has taken over the role of approving foreign
currency allocation for imports of vehicles and other requirements by public
institutions "to reduce unnecessary forex outlays".

Mugabe's office will now assume the responsibility of project monitoring
together with the Public Service Commission (PSC) and the Audit
Inspectorate. The team is currently visiting all provinces to check on
progress on projects.

The President's Office will also work with the Auditor-General's office and
the PSC to audit the public service which is believed to be full of ghost
workers. The audit will also probe government's pensions bill which,
according to Murerwa, has been experiencing "phenomenal growth".

The office will also take measures to curb abuse of government assets such
as housing, phones, motor vehicles, domestic and foreign travel and
subsistence allowances.

The pairing of the Office of the President and the Auditor-General's office,
analysts say, raises ethical concerns. The Auditor-General's role is to
audit government departments and parastatals, hence it should work

Murerwa's statement also says Mugabe's office will consult with treasury and
the State Procurement Board to expedite public procurement. They will
"review the whole public sector tendering system with a view to making
appropriate recommendations to cabinet, in order to address the many
challenges in the tendering process".

Economist, Dr Daniel Ndlela, warned that the concentration of
decision-making in Mugabe's office would lead to red tape, consolidate
political hegemony and patronage.

"They are destroying the economic space for economic actors," he said.
Back to the Top
Back to Index

Zim Independent

Blitz exposes flawed state welfare system
Ray Matikinye
A GOVERNMENT slum clearance campaign launched in May has blown the lid off a
flawed state welfare programme often kept out of public scrutiny until
disaster strikes.

Operation Murambatsvina dre-dged up weaknesses in state welfare programme to
deal with the economic and social dislocations triggered by the campaign
that left an estimated 700 000 people roofless and many more without sources
of livelihood.

Squatter camps that dotted the towns and cities countrywide illustrate the
lack of affordable housing for the urban poor.

The shortage of employment opportunities in impoverished rural areas fed the
rural-urban drift despite government having acquired vast tracts of land
that could be redistributed for housing and farming.

Victims of the government blitz have contrived methods to counter the
ever-present spectre of official desire to intrude on vendors' new trading

Elegantly dressed in what could be her Sunday best, 19-year old Abibi Phiri
saunters out of a bus shelter with a bulging leather satchel slung on her
shoulder. She could easily pass for a traveller who has missed one of the
regular buses plying inter-city routes and trying to catch the next one.

Only when she pulls out two plastic bottles of popular beverages or rattles
a packet of potato munchies from her bag does she momentarily blow her
cover. Abibi is one of the scores of confectionery and fruit vendors who
have devised shrewd tricks to avoid detection by police prowling bus termini
between major cities and towns to enforce anti-vending laws.

"Twenty each," Abibi says quietly and making sure passengers can lip-read
what she is saying.

Constant harassment by municipal police since the government's onslaught on
informal traders as part of its Operation Murambatsvina has compelled
hawkers along major highways to invent smart ways to camouflage their

They either carry empty suitcases or stuffed knapsacks to bus stations so as
to pass off as intending travellers. Others wear knee-length jackets from
which they pull various items that they tout in loud whispers to commuters.

"Don't travel hungry or thirsty," is one of the popular sales lines often
recited by the vendors.

Women put on facial make-up and men rove around in suave elegance competing
for customers among travellers, cautiously aware that they might be

Police used to haunt and harass any sloppily dressed men and women in
regular swoops at bus termini along the highways until hawkers came up with
novel ideas to avoid arrest.

Police have been snapping on the heels of vendors, hawkers, touts, the
blind, beggars and streets kids who are constantly on the move to avoid
arrest. The blind no longer rattle begging bowls at street corners, nor sing
hymns along pavements to capture public attention and arouse their

Last week more than 300 people were arrested in the capital's city centre
for crimes ranging from vending, touting, loitering to begging and gambling.
City officials try to keep a tight rein on their initial clean-up campaign's
success in their bid to maintain the city precincts pristine.

But all these efforts are coming undone as the urban poor drift back into
the CBD to eke out a livelihood.

Finance minister Herbert Murerwa last week said government had noted a
widespread resurgence of rent-seeking trading and parallel market activities
in foreign currency and other basic commodities that the operation has
failed to suppress as people strive to eke out a living.

But the campaign-driven poverty has jolted government to the stark realities
that its social safety nets like health insurance, retirement pensions and
welfare payments to cushion the elderly, the orphaned and the disabled fall
woefully short of the demands of an economic environment characterised by

Murerwa has realised the inadequacy of state social security by reviewing
some benefits provided for under the scheme. Although major reviews concern
public servants and the armed forces, a pension reform programme he proposed
during his mid-term fiscal policy last week concedes that the state welfare
scheme is outdated.

Government now wants to ensure sustainability of state pension payments by
converting to a defined contribution pension scheme to be managed through a
pension fund. It also intends to reduce employee contributions to health
insurance by 20% while limiting the number of beneficiaries to four.

The new system will operate outside the budget. It has defined benefits,
unrelated to contributions and dependent on the economy's capacity to
sustain such expenditures.

"Experience has demonstrated that such systems are unsustainable in the
long-run, especially as the number of workers supporting pensioners decline
due to a variety of reasons," Murerwa admitted.

Zimbabwe's economic meltdown has thrown thousands out of formal jobs,
shrinking the revenue base for retirement and health insurance schemes.

Government's about-turn regarding these poverty-alleviation innovations is
illustrative of how Zimbabwe's welfare system is sagging precariously under
the weight of widespread poverty.
Back to the Top
Back to Index

Zim Independent

Hell on earth at Hopley Estate
Grace Kombora
FOR ageing Machisi Kapesi (76) whose wobbly legs are badly scarred and
barely covered with a dirty pair of trousers, sleeping in the dust at Hopley
has become hell on earth.

Hopelessness written all over his face, he does not know where he will be in
the next two years with the mental torture he has suffered in the past 16

He does not know what the future holds for him as he has been displaced four
times since he moved from Mozambique to Zimbabwe 39 years ago.

Initially, he resided in Mbare suburb whilst working at Louis Construction.
Later he relocated to Porta Farm where he was recently evicted under
Operation Murambatsvina and relocated to Caledonia transit camp. He has
since been moved to Hopley Estate south of Harare where he lives in a
plastic shack.

"I am tired of this life and wish I could disappear from the face of the
earth. Just disappear out of this world because I have had enough," Kapesi

The victims of government's poorly executed clean-up have been turned into
nomads. Those who have not been allocated stands at Hopley are set to be
moved again.

"We were told to vacate this place this week and go where we came from,"
said Kapesi.

The plastic shacks they call home are no higher than dog kennels. The shacks
are without form and shape yet they are the homes of Hopley Estate residents
whom government said it was accommodating in decent houses when their shacks
were destroyed in May.

Some sleep in the open on the ground bathed in dust everyday.

With their goods lying in the open, they do not foresee a better future
ahead of them.

The living conditions at Hopley are atrocious as the residents rarely take a

They do not have proper places for bathing themselves.

Those who are conscious of their cleanliness bath in Mukuvisi River or even
in the open without their dignity in mind.

"We even bath in the open because we do not have an option," said a
confident Morris Matutu.

Despite the temporary toilets that were built by Unicef, Hopley is replete
with human waste which creates a bad odour at the camp.

The Zimbabwe Independent visited the camp this week and witnessed young
children relieving themselves in the open not far from cooking fires.

"We fear an outbreak of diarrhoea at this place," said Virginia Tselo.

Tselo, a pregnant woman with four children, is finding the life at the camp
bizarre. She says no living creature deserves such terrible living.

"What crime have we committed to the government that we are treated like
this?" she added.

She thought the government would allocate them proper housing after they
were evicted from Porta Farm.

Her children were deprived their right to education. They now roam the camp
aimlessly with little hope of returning to school. The situation for them
has been compounded by the sharp rise in school fees.

Tselo's daughter who was set to write her final 'O' Level examinations in
October will not sit for the exams due to continuous displacements.

To earn a little money Hopley farm residents are resorting to selling
tomatoes and vegetables in the transit camp and mending shoes. This week,
those who did not meet the criteria to be allocated stands were
contemplating where to go if the government carries out its threat.

They cannot go back to Porta Farm which was demolished in June.

If they resist eviction, residents say, government has threatened to unleash
the army and the police to force them out.

"Government officials notified us that police and soldiers will beat us up
if we do not move," Kapesi said.

Kapesi would rather die than move again.
Back to the Top
Back to Index

Zim Independent

Hollow tales full of sound and fury
Dumisani Muleya
THAT'S the week that was! After breaking the media scandal that the state
security agency, the Central Intelligence Organisation (CIO), had taken over
three private newspapers, there were angry reactions and denials.

Our reports said the CIO had a buy-out at the Financial Gazette and the
Mirror group's two titles, the Daily Mirror and Sunday Mirror. For about a
week there were no denials. In fact, there has not been any official denial
except remarks by Ibbo Mandaza, editor-in-chief of the Mirror group, and his
Financial Gazette counterpart, Sunsleey Chamunorwa.

First it was Mandaza who made denials in foreign radio stations in South
Africa and United States. He later made similar denials in the Daily Mirror
on Friday.

On Thursday last week Chamunorwa weighed in with an opinion-editorial piece,
which he tried to pass for a company statement.

Then on Monday we had a cynical comment from former Financial Gazette
editor-in-chief Francis Mdlongwa.

On Tuesday the Financial Gazette's board member Supa Mandiwanzira organised
another whitewash effort on Zimbabwe's state television in which he brought
Mandaza and Media and Information Commission chair Tafataona Mahoso.

It was a dismal shot at obfuscation.

It was difficult to miss the fingerprints of desperation in all these
efforts. The denials by Chamunorwa and Mdlongwa showed the anxiety of a cat
on a hot tin roof.

Mandaza claimed he was the "100% owner" of the Mirror group, but his company
profile shows the newspapers were since August 2003 owned by "various
Zimbabwean business people".

The political economy of the media in Zimbabwe would make it difficult for
Mandaza to run those papers alone, especially given their weak advertising
and poor sales. The papers have a weak economic base to survive without an
injection of huge funds, not just bank overdrafts but a massive capital

Chamunorwa ducked key issues using diversionary tactics. He failed to come
up with a credible response on the main issue: Who owns the Financial
Gazette? The vague suggestion was that it was owned by central bank governor
Gideon Gono who in the past made it clear he was not the owner.

Chamunorwa himself, when he was still Gono's spokesperson at the CBZ, said
Gono was not the owner. But he went all over the place constructing a great
smokescreen to cover up the scandal. He even tried to clutch at the straw of
tribalism but it did not work. Hence the story won't go away.

Chamunorwa and Mdlongwa claimed they were not contacted for comment.

To answer Chamunorwa first, we phoned Gono as the supposed owner.

Mdlongwa's claim that he was not contacted for a comment was not just
misleading but malicious.

Ideally it would be better not to react to Mdlongwa's false claims. However,
given the gravity of his allegations, it would be a dereliction of duty not

It was open season for Mdlongwa to attack the Zimbabwe Independent and its
sister paper, the Mail & Guardian, via a long tirade - over 1 000 words -
for allegedly not contacting him. He was even abusive, claiming the papers
used "Gestapo-style activities to shut out the voices of those who are being

It is not clear what Mdlongwa's problems with the two papers are. But we
would hate to think he is so small-minded as to reduce his failed attempt to
buy into the Financial Gazette or to become editor of the Independent and
the Mail & Guardian - which he wanted by the way - to this level.

For Mdlongwa to insinuate that the Independent and the Mail & Guardian are
"the greatest threat to press freedom and democracy" shows his malice knows
no bounds.The truth is we tried last week and the week before to get comment
from him. It must be recorded that we sought to get the truth about
Mdlongwa's own side of the story way back in 2002 when the saga started but
he blocked us as he scrambled to cover up.

Instead of giving us straight answers he resorted to antics like claiming
there was "no story" or it was "beerhall talk". We also contacted him three
months ago when we were still investigating the story but he was hostile.

This week was a classic example of how unhelpful he can be. We phoned him
but instead of allowing a civilised conversation, he went ballistic. We
called his bluff and let him go.

He then sent an e-mail to the Independent editor complaining that we were
rude to him and we should not communicate with him on any issue again. Why
should we communicate with someone who wants to suppress news under a sludge
of angry rhetoric?

It is surprising for him to turn around and pontificate about ethical
journalism when he sought to defeat the same thing by avoiding constructive
engagement, only to issue a malicious statement which, to borrow
Shakespeare's words, read like a "tale told by an idiot full of sound

and fury signifying nothing!"

It is instructive that Mdlongwa makes a big fuss about the whole story when
he only had this to say on the central issue: "Whether the Financial Gazette
today is, as is claimed, owned by Zimbabwe's secret service, I do not know
because I have no such facts and I have had no such evidence."

In other words, he is angry that he was not contacted to say nothing! Is
this what he meant by getting "critical comment from me"?

While we respect his democratic entitlement to indulge in mumbo jumbo, we
expected from him an account told with an insider's authority, not
misdirected polemics.

Mdlongwa had the temerity to sign himself a moral cheque at once open and
blank to accuse the newspapers of trying to rehabilitate people who
allegedly committed "crimes against humanity". He also claimed we had
launched "a coordinated campaign of disinformation".

We reject his preposterous claims. We also dismiss his baseless allegations
that the publisher of the Independent and Mail & Guardian "found it
necessary to mobilise connected reporters in South Africa into picking up
the Independent story so as to give it 'wider and maximum' publicity in
their own news organisations in South Africa and abroad".

Mdlongwa insinuated we were "driven by a blind pursuit of bigger media
audiences and super-profits or other agendas" and that this reduced "an
otherwise noble profession into an instrument of systematic harassment and
torture of all who are unfortunate not to own a media outlet of their own".

Mdlongwa tried to hold forth on his pretensions of being the custodian of
"accurate, impartial and balanced" reporting. His professional record
carries a moral hazard. Has he forgotten stories he published as Financial
Gazette editor such as the "earth-shattering scoop" in 2002 which claimed
President Robert Mugabe had dug Al Qaeda-like bunkers at State House to hide
if he lost the presidential election?

Now where are the bunkers? Did Mdlongwa see them or he just published an
urban legend as news? Is that Mdlongwa's version of "accurate, impartial,
and balanced" reporting?
Back to the Top
Back to Index

Zim Independent

'Failure of talks a disaster for economy'
Dumisani Muleya/Conrad Dube
THE collapse of the African Union (AU) initiative to broker talks between
Zanu PF and the MDC will stick a knife in the heart of Zimbabwe's ailing
economy, MDC leader, Morgan Tsvangirai, has warned.

Tsvangirai said the failure of AU attempts to mediate in the political
impasse stemming from disputed election results would be disastrous for
Zimbabwe's haemorrhaging economy.

In an interview with the Zimbabwe Independent this week, Tsvangirai said
President Robert Mugabe's rejection of AU envoy, former Mozambican president
Joachim Chissano as mediator, showed he had crossed the line of rational
political engagement.

"The AU mission was stillborn and has been aborted," Tsvangirai said. "For
sometime President (Thabo) Mbeki (of South Africa) and his Nigerian
counterpart, President (Olusegun) Obasanjo have been searching for a
solution, but they have been frustrated by Mugabe. Most African leaders now
understand that the problem is not us, but Mugabe."

Tsvangirai said Obasanjo's initiative was an attempt by African leaders to
deal with a long-running problem on their doorstep.

"When I met President Obasanjo (in Abuja in June) he suggested he was
thinking of approaching Chissano to be the mediator but he needed Mbeki's
backing," Tsvangirai said.

"I didn't have problems with that, knowing fully well that Chissano had
established his democratic credentials. He negotiated with Mozambique's
opposition Renamo, handed over power to his successor smoothly, and on that
basis I endorsed it."

He said Mugabe's close friendship with Chissano was also taken into account.
Chissano was Mugabe's best man at his wedding to Grace in 1996.

"President Mbeki agreed because he wants to be part of the solution to the
Zimbabwe crisis," he said. "We want Mbeki to be part of the solution but he
should realise that this issue is now beyond South Africa's capacity. It is
now a United Nations, an AU, a Sadc (Southern African Development
Community), in fact an international issue. We must engage within that

Tsvangirai said Mbeki was sticking to "quiet diplomacy" because "he sees
Mugabe as a man who is not easily influenced by others".

"Mugabe is intransigent, defiant and mistrustful," he said. "His rejection
of Chissano's involvement is consistent with his policy of shooting down
other people's proposals without an alternative."

What then is the way forward? "There will be no way forward with regards to
talks between the MDC and Zanu PF, but a continued stalemate is not
sustainable," Tsvangirai said. "The MDC can do without talks, but Zanu PF
cannot in the end do without talks. Zanu PF will destruct if it remains on
its current path."

Asked why the MDC seems desperate for talks with a party which is not
interested, Tsvangirai said: "We are not begging for talks, but we realise
that that's the only alternative at the moment."

Tsvangirai said he was "committed to democratic resistance to the Zanu PF
dictatorship" and would not "act in an irresponsible manner".

"Over the past five years we have tried elections, court action, diplomacy,
mass action and dialogue, but this hasn't worked."

Has the MDC failed then? "No, we haven't failed. I believe experience is the
best teacher," he said. "There is need for new strategies and tactics but we
won't take people to the streets so that they are killed by the military,"
he said.

Tsvangirai went further: "Let's be realistic, if Zanu PF is prepared to beat
up four women on a protest in the streets, what more a group of people? What
is needed is a critical mass of people to confront this regime but it's
easier said than done."

Tsvangirai said the MDC, which he described as a "post-liberation political
formation", had done its best under difficult conditions. "We have been
constrained by resources, the environment, publicity and propaganda," he

Asked if the MDC had not been its own worst enemy by failing to situate
itself strategically across the political spectrum, he said: "Our
credentials are clear, we are a local post-liberation party. It doesn't
matter what Zanu PF says because we can't be defined by them."

Has the MDC made a compelling ideological case against Zanu PF to mount a
credible challenge for power? "We have been explaining our policies and what
we represent. Our economic paradigm and policy is that we want a market
economy with a social conscience," he said.

"People must first read our policy documents and criticise us on that basis.
The problem is we debate on the basis of personalities," he said.

He denied there was infighting and dismissed allegations of tribalism in the
party. "There is no infighting. There is no leadership or power struggle in
the party. When parties go for events like congresses there is always a
contest for positions," he said.

"But it's not like in Zanu PF where you have a (Emmerson) Mnangagwa faction
and a (Solomon) Mujuru camp. We have processes for leadership and
organisational renewal in the MDC and if there are incompetent leaders
people will say so."

Tsvangirai said there was no tribalism in the MDC. "We know Zanu PF is
trying to foment tribalism in the MDC. Zanu PF has a lot of regional
tendencies and tribalism," he said.

"But let me say this clearly, tribal politics and ethnic barbarism have no
future in this country. There are leaders who want to defend their positions
and power through tribalism. The politics of tribalism is primitive and we
must all of us as a nation destroy ethnic mindsets and get on with modern
politics," he said.
Back to the Top
Back to Index

Zim Independent

Greedy Zanu PF chefs draw dam water illegally
Augustine Mukaro
CORRUPTION in the land reform process has taken a new dimension, with Zanu
PF chefs allegedly illegally drawing water from dams at the expense of other

This resulted in farmers failing to irrigate their wheat crop for the whole
of last week when their pumps were left exposed by falling water levels.

Zimbabwe's fourth largest dam, Mazvikadei in Banket, the main reservoir for
the fertile Mashonaland West province where the majority of Zanu PF chefs
grabbed farms, has been overdrawn to record lows.

Sources allege that senior party officials with farms downstream of Mkwadzi
River on which the dam is sited, ordered the opening of valves to allow
water to flow into their smaller reservoirs.

They said the government-run Agricultural and Rural Development Authority
was operating a number of farms in the area on behalf of Zanu PF chefs.

A visit to the area by the Zimbabwe Independent last weekend revealed that
for a week farmers drawing water from the dam's south bank were forced to
move their pumps nine metres into the dam to reach the fast dropping water

"The dam is losing water faster than normal and so far it has dropped to the
lowest level ever," one wheat farmer said. "Traditional syndicate farmers,
including Bantebury, Pindi Park, Fenemere and Fish Farm had to move their
pumps nine metres into the dam to reach the water."

Workers at Pindi Park and Fish Farm confirmed that the dam water had
drastically dropped, forcing the syndicate farmers to move pumps into the

"Last week the syndicate farmers had to employ four tractors to pull out one
of their tractors that got stuck in mud as it was moving the pumps into the
dam," a foreman at one of the farms said. "Wheat crop at Fish Farm had gone
for almost a week without water."

The farm draws water directly from Mazvikadei to irrigate an estimated 54
hectares of wheat.

The workers said the small reservoirs which draw water from Mazvikadei
through canals were very low due to alleged theft of water.

Water experts in the area said the land reform programme had disrupted water
management systems, exposing them to abuse by powerful individuals.

"Previously the water was controlled by a river board that would allocate
water to syndicates in accordance with the budgets presented to it," the
experts said. "Water has a primary right where everyone has access to it and
an extraction right whereby water can be drawn for commercial use," he said.
Back to the Top
Back to Index

Zim Independent

Parliament to investigate Mediagate
Dumisani Muleya
PARLIAMENT has resolved to investigate the media scandal in which the state
security agency, the Central Intelligence Organisation (CIO), was said to
have taken over three private newspapers using public funds.

Sources said the parliamentary portfolio committee on transport and
communications decided on Monday to probe the ownership structures of the
Financial Gazette, and the two Mirror Group titles, the Daily Mirror and the
Sunday Mirror.

The chairman of the 14-member Zanu PF-dominated committee, Leo Mugabe, said
his team would not "investigate" Mediagate but "inquire" into it. Leo is
President Mugabe's nephew.

"We resolved that we want to know the true ownership of the newspapers
concerned. It's not an investigation but an inquiry," he said. "We will make
a decision of how to go about it. We will find out from the Media and
Information Commission."

However, sources said Mugabe had attempted and failed to duck the issue by
saying it should be referred to the government-appointed MIC, chaired by
state media columnist Tafataona Mahoso. His committee members rejected his

"He (Mugabe) was not comfortable with it. He tried to say we have a lot of
other issues to deal with and wanted the MIC to look into the issue but it
was rejected."

Mahoso said on a public television programme, Talking Business, on Wednesday
night the only information he had about the Mirror group was the one given
by Ibbo Mandaza, who also featured on the talkshow organised by Financial
Gazette board member, Supa Mandiwanzira.

The Mirror group profile says the Daily Mirror was founded in 2002 and was
first published on September 9 the same year. Together with a sister paper,
the Sunday Mirror, the Daily Mirror is owned by Southern Africa Publishing
House (Sapho) Pvt Ltd.

The profile reveals that since August 2003, Sapho was "owned by various
Zimbabwean business people, among them Dr Ibbo Mandaza" even though Mandaza
has claimed he owns the group "100%".

The Zimbabwe Mirror Newspapers Group (Pvt) Ltd was initially registered in
2001 as High-Portfolio Enterprises (Pvt) Ltd, registration number 8399/2001.

Its directors then were Ibbo Mandaza and Joyce Kazembe, according to its CR
14 dated May 29 2002. On September 3 2002 High-Portfolio Enterprises changed
its name through a special resolution dated July 26 2002 to Sapho.

The Sapho directors were Mandaza, Alexander Kanengoni, Thomas James Meke,
Ambassador Buzwani Mothobi, John Marangwanda, Charm Ndaba Mukuwane, Tendai
Mangezi who resigned on March 22 2004.

A new director, Amy Tsanga, was appointed on May 17 2004. There was also
Musi Khumalo, who has since left, and Jonathan Kumbirai Kadzura. On August
12 last year, Sapho changed its name to the Zimbabwe Mirror Newspapers Group
(Pvt) Ltd through a special resolution passed on June 22.

Meanwhile, sources said a slush fund with a local bank was used by the CIO
to buy into the Financial Gazette. "Funds had been withdrawn from some of
the slush funds, including a CBZ Sentry Investments account, to purchase the
Financial Gazette," a source said. "The operation involved a web of
financial engineering and a well-orchestrated board coup to seize control of
the newspaper."

Sources said the Mirror group's overdraft facility at the Jewel Bank had
been frozen, while the central bank was taking steps to recall its billions
advanced through the productive sector facility. Almost all newspapers in
the country got money from the facility.

The crisis gripping the Mirror has worsened its financial situation and
fears are mounting that the papers - which have poor advertising and very
low circulation - might soon shut down short of a huge capital outlay.

Sources said an audit was also going at the Mirror to check the finances,
while the CIO were said to be on a "financial trail" to see if any money was
siphoned from the company.

Mirror reporters were said to have been interviewed to find out whether
money could have been diverted for personal use. The situation has stepped
up pressure against Mandaza who was fighting for his survival in the group,
sources said.

Journalists were said to be closely watching the touch-and-go situation to
see how it will pan out. Reporters have already started looking for
alternative jobs as uncertainty pervades Charter House's corridors.
Back to the Top
Back to Index

Zim Independent

Newsprint price up 50%

THE cost of newspaper publishing has gone up sharply following a 50%
increase in the price of newsprint by the country's sole suppliers, Mutare
Board & Paper Mills (MB&PM), this week.

The latest increase on Monday raised the landed price of newsprint to $37,2
million a tonne including VAT and transport, from $26,3 million.

This effectively raises the cost of printing a copy of a newspaper, the
Zimbabwe Independent for instance, to $23 000 excluding VAT, mark-up and
distribution, said Zimind Publishers group chief executive, Raphael Khumalo.

He said the newsprint and printing costs now constitute 50% of the group's
total production costs.

Khumalo said the group's newsprint consumption per week would cost $685
million or $3 billion a month. Printing costs, he added, would be about $2
billion a month.

"For us to survive the paper should be selling for at least $40 000
including VAT per copy," said Khumalo.

"The problem has been compounded by the surcharge imposed on distribution
costs by our agents who have to source fuel at prices between $30 000 and
$40 000 per litre," he said.

Richard Zirobwa, chief executive of Art Corporation which owns MB&PM, said
the movement in the exchange rate had a significant impact on the newsprint
pricing structure since the company imports most of its inputs.

The foreign currency rate at the auction market moved from $9 896 to the
United States dollar in June to $17 701, a devaluation of 80%. The exchange
rate this month moved again to $24 108 to the US dollar, which means on the
import side, the exchange rate movement resulted in a 144% devaluation over
a two-month period, according to Zirobwa.

"We import most our raw materials. We absorb what we can and what we cannot
we try to mitigate through price adjustments," he said. - Staff Writer.
Back to the Top
Back to Index

Zim Independent

MDC's democratic constitution out

THE quest to come up with a democratic constitution for Zimbabwe took a new
twist this week when the opposition Movement for Democratic Change (MDC)
submitted a draft document to parliament to counter Zanu PF's piecemeal
amendments to the Lancaster House constitution.

The draft seeks to repeal draconian pieces of legislation passed after 2000
such as Posa and Aippa. It recognises the need for the state to acquire land
in the national interest but wants adequate compensation paid.

Provisions in the draft remove the limits to freedom of choice by parents
proposed under the Education Amendment Bill, soon to be presented to

The draft comes as President Robert Mugabe's ruling party is busy amending
the constitution to enable it to nationalise all acquired land and also
abridge people's movements "in the national interest".

On Tuesday, heated debate on the proposed amendments lasted seven hours,
with stay-the-course Zanu PF MPs supporting the Bill against the MDC.

The opposition took Zanu PF legislators by surprise on Wednesday when it
presented a new constitutional draft to parliament for consideration.The MDC
said its draft could be the basis for a newbeginning for Zimbabwe.

MDC Secretary for economic affairs and lawyer Tendai Biti said the document
presented to parliament was a combination of the best of two draft
constitutions, one prepared by the Constitutional Commission in 2000 but
rejected in the referendum, and the other crafted by civil groups after
years of nation-wide consultations.Biti said the suggested constitution was
similar to the most progressive in the region, such those in force in South
Africa and Namibia.

The draft entrenches a welter of individual freedoms and rights while
abolishing arbitrary detentions, arrests and harassment from law enforcement

The draft proposes to abolish the executive presidency and instead vests
executive power in a prime minister elected by parliament for two terms. -
Staff Writer.
Back to the Top
Back to Index

Zim Independent

Zimra demands duty on aid
Grace Kombora
THE Zimbabwe Revenue Authority (Zimra) is demanding duty on goods imported
into the country to assist victims of Operation Murambatsvina, it has been

The goods include 4 800 blankets and foodstuffs donated by the South African
Council of Churches after a fact-finding mission to Zimbabwe last month.

Christian Care deputy director, Nyika Musiyazviriyo, said the donated
blankets were still to be distributed due to protracted negotiations with

"We are still negotiating with Zimra since these are new blankets," he said.

"It's a matter of interpretation of the law because under customs
regulations new blankets are supposed to pay customs excise duty. We would
not want to say anything more since we are still negotiating. This might
jeorpadise everything."

South African churches donated blankets and sent two other trucks loaded
with maize, beans, cooking oil and other food items to Zimbabwe two weeks
ago to help thousands of people left homeless and destitute by the urban
clean-up campaign.

The Zimbabwe government destroyed homes, shacks, market stalls and
businesses, leaving over 700 000 people homeless and without a source of

The trucks carrying the aid material were yesterday still stuck at
Beitbridge border post pending the outcome of the negotiations.
Back to the Top
Back to Index

Zim Independent

Taxing the poor: cruel political mischief

Vincent Kahiya

IS it not amazing that there are more Zimbabweans going to China than
Chinese tourists coming into the country to visit major tourist attractions?
Is it also not amusing that Air Zimbabwe now has weekly flights to Dubai,
carrying traders who bring in merchandise for resale here?

For a country that is short of foreign currency, this is scary. The Zimbabwe
Tourism Authority, whose major brief is to market the country's major
attractions, can only watch in awe at these developments. ZTA chief
executive Karikoga Kaseke last week told this paper that those going to
China and Dubai were fuelling the black market. He is right.

There was no trading on the stock exchange towards the end of last week and
early this week as brokers withdrew labour to protest the imposition of a
10% withholding tax on the sale of tradable securities.

A stockbroker, chatting to one of our staffers last week after Finance
minister Herbert Murerwa presented his mid-term fiscal policy review,
suggested that the best investment platform at the moment was the black
market and not the bourse or the money market. This is strange coming from a
punter who makes a living trading on the stock exchange. There are better
returns on the streets than in well-appointed boardrooms and office suites.

New farmers, notorious for accessing cheap government funds and then
diverting them into speculative activities, have found another avenue of
getting rich quickly without putting seed into the ground - fuel. It is easy
to access the scarce commodity. The farmers only need to produce documents
that they are "proud owners" of a piece of land even if they do not have
ox-drawn ploughs, let alone tractors. This is the fuel that is sold on the
black market. They have become billionaires overnight without participating
in the cumbersome business of farming.

Teachers who are taking exam classes can afford to laze around throughout
the term so that they can entice students to attend holiday classes to catch
up. This is for a fee of course. The teacher can make an extra dollar from
this misfeasance.

The chairperson of the Harare Commission Sekesai Makwavarara was on national
television last week to announce that the problem of street people can be
solved by ensuring that the city centre is "swarming" with municipal

This inventory of negative practices bears the symptoms of an economy which
is failing very fast. There is desperation among workers, most of whom are
content with just keeping their jobs. Industrial psychologists say in such
instances workers' productivity is greatly compromised as they engage in
other activities to augment their meagre earnings. Corruption is also
another by-product of this desperation. In the past three weeks, at least 20
Zimbabwe Revenue Authority officers have been arrested on corruption

Magistrates have also been arraigned before the courts for receiving gifts
from felons while immigrations officers stand accused of illegally
facilitating the extended stay of illegal immigrants in the country.

Bringing the economy on a recovery path in this environment of despondency
is the Achilles' heel of President Mugabe's government which is increasingly
running out of options. This was manifest in Murerwa's mid-term fiscal
policy review last week. The Finance minister acknowledged that the economy
was functioning in safe mode.

"The significant achievements of 2004 notwithstanding, recovery has remained
slow," he said. "Inflation relative to that of our trading partners is
unacceptably high.

"Similarly, unemployment also remains a major challenge while foreign
exchange constraints continue to undermine the full recovery of business

"Furthermore, large-scale crop failure has exacerbated the situation,
particularly in view of the agro-based nature of some of our major
manufacturing industries," he said.

This is a sure sign that the economy is decrepit. Murerwa decided to dump
his desperate measures on a writhing populace. The minister introduced a
myriad new taxes and levies and surtaxes across the board in a bid to raise
revenue, the most notorious being the increase in VAT from 15% to 17,5%.

He introduced a 22,5% tax on cellphone airtime, 10% withholding tax on
tradable securities and surtax on secondhand motor vehicles. He also
introduced presumptive tax on the informal and transport sectors.

Zimbabwe is now on its last legs and Murerwa's plan is to tax the last man
standing in order to finance government's recurrent expenditure. There is no
real attempt to expand the tax base by attracting investment, expanding
existing industries and ultimately cutting back on the unemployment

The tax base is shrinking as reflected in Murerwa's mid-term policy review.
Workers' contributions, Pay As You Earn amounted to $2,67 trillion against a
target of $3,54 trillion, while customs duty contributed $667,7 billion
instead of the targeted $846,4 billion. VAT and corporate tax were on
target, raising $2,34 trillion and $1,82 trillion against targets of $2,29
trillion and $1,17 trillion respectively.

The revenue base will keep shrinking while government's appetite to spend
remains high. The financing gap of the budget is widening but line
ministries had requested Murerwa to dish out an additional $31 trillion to
buy vehicles, furniture, equipment and to fund operations. And rightly so,
he refused as this would have pushed the budget deficit from the current 8%
to 50% of GDP and with it the mercury in the inflation gauge was set to
breach the record of 622,8% achieved in January 2004.

This is the tragedy of the ruling elite in Zimbabwe. They want government to
spend what it does not have. The government has to raise the required
revenue most efficiently with the least waste in the collection process.
Murerwa said there was a "higher incidence of smuggling and corrupt
activities at ports of entry".

The process of tax collection should be done with the least likelihood of
political mischief. The tax on airtime is political mischief. Very
importantly though, the process should achieve the least social cost and
greatest social benefit. At the moment there is no social benefit accruing
from these onerous taxes. Murerwa dished out $50 billion to finance the
staging of elections for the new Senate. On the other hand, he gave the
malaria control programme a mere $20 billion.

He spoke of the need to restructure the public service in order to remove
"duplication, redundancy, overstaffing and abolishing all superfluous posts".
He did not mention unnecessary ministries of Interactive Affairs, Policy
Implementation and Rural Housing. He dished out $50 billion to the new

The despondency in the country can only get worse if the government fails to
create the correct environment for investment and business. There is nothing
wrong with government taxing income, wealth or economic transactions. There
is everything wrong with taxing poverty.
Back to the Top
Back to Index

Zim Independent

Zim to disclose terms of SA loan
Godfrey Marawanyika
FINANCE minister Herbert Murerwa and Reserve Bank of Zimbabwe governor
Gideon Gono will today meet the International Monetary Fund (IMF) delegation
and perhaps explain the status of South Africa's R6,5 billion loan to

The meeting comes ahead of a September 9 deadline by the IMF executive board
to consider Harare's continued membership of the fund.

The three-member delegation, which came into the country this week,
comprises Sharmini Coorey (head of delegation), Sonia Munoz, an expert on
monetary and balance of payments, and Kevin Fletcher, a fiscal policy

Coorey and Munoz were in the country last month during Article IV
consultations, which found that Zimbabwe's financial position was far from

The trio is expected to head back to Washington on Monday and make a formal
report on their findings.

The findings will be incorporated in the executive board's final decision on
Harare's continued status with the international financier.

On Monday, the delegation met with Ministry of Finance and central bank
representatives to review the country's balance of payments and external

The R6,5 billion is part of external loans and Gono and Murerwa have to
disclose the terms to the IMF team.

The loan is expected to be disbursed in phases, with the first tranche of
US$160 million being used to settle just half of the country's US$295
million debt to the international financier.

At least US$160 million will be sufficient to save Harare from expulsion,
but will not necessarily open lines of credit with the IMF and the World

The country's external arrears amount to US$4,5 billion.

Washington officials said the Coorey delegation was expected to ask about
the loan issue since part of the money would be used to offset Zimbabwe's

Since last month, a Zimbabwean team of experts from the central bank and the
Ministry of Finance has been shuttling between Harare and Johannesburg to
negotiate the disbursement of the loan.

On Tuesday, the IMF met with central bank officials to review the monetary,
exchange rate regulations, forex inflows, and the auction system.

However, while acknowledging discussions between himself and the Zimbabwean
team, on Wednesday South African central bank governor Tito Mboweni disputed
the reported $1 billion loan, saying it was a media creation. "Yes, there
have been discussions about that, and the discussions are nowhere near a
billion dollar facility."

Loan discussions involving himself, Finance minister Trevor Manuel and their
Zimbabwean counterparts were not yet concluded, Mboweni said.

"The discussion really has centred around what policies need to be
undertaken in Zimbabwe to help boost economic performance, control
inflation, bring about a more stable exchange rate and improve the

production sector of the economy."
Back to the Top
Back to Index

Zim Independent

Govt ignored ZSE advice on new tax
Godfrey Marawanyika/Thomas Mutswiti
THE Ministry of Finance (MoF) and the Zimbabwe Stock Exchange (ZSE) met on
Friday last week in an effort to end the standoff caused by the introduction
of a 10% withholding tax on tradable securities.

It is understood that during consultative meetings between the ZSE and the
MoF, government was advised against the withholding tax. This was ignored,
forcing the current stalemate where there has been no trade on the bourse,
causing a serious erosion of the nation's wealth.

On a daily trading basis government rakes in at least $500 million in stamp

ZSE chairman Bart Mswaka confirmed they had met MoF officials to find a
solution to the crisis sparked by the introduction of the 10% withholding

"It's not correct that they ignored our advice because there is a difference
between hinting at something and policy implementation. But when you
implement that policy it becomes different altogether," he said

"We met the ministry on Friday, but we write and talk to the ministry
everyday. Consultations will always be there but we made our own input and
they (Minister Herbert Murerwa and permanent secretary William Manungo) have
their jobs to do."

The ZSE crisis has been compounded by government's decision to force pension
funds to increase their minimum capital requirements as they are the key
players on the bourse.

Mswaka said the same reasons that led to the non-implementation of the
Capital Gains Tax in 2001 had again stalled operations on the bourse, but
said a solution should be found soon.

The bourse failed to trade from Wednesday to early this week.

There are 79 firms listed on the local bourse, but on Monday only First
Mutual Life traded.

Stockbrokers are clamouring for a review of the tax rate which they say will
drive them out of business.

"Stockbrokers are realising a decrease in business as volumes traded are
minimal. Revenue levels have already started falling," said one stockbroker.

"Traditional buyers are the pension funds and currently they are selling.
Speculators are selling, investors are selling, all creating a glut as no
one is buying?"

Another stockbroker said no communication had been received from the
ministry on how the tax would be collected.

"We don't know how the tax will function. We might subsequently see the
reintroduction of Capital Gains Tax at 15%," one broker said.

"Investors will pay 10%, but when Capital Gains Tax is introduced, and if
they are found to have realised an assessed loss, they will have to claim
rebates. Given the red tape, by the time the investor gets the rebate,
he/she would have wasted money and time."

Brokers said information technology preparedness was key as they would have
to customise their information systems to capture the tax information.

They said Murerwa assumed that by forcing insurance firms and pension funds
to increase their holdings of government securities, they would liquidate
their shares and in the process pay the 10% withholding tax, raising
billions of dollars for a gluttonous government.

"Unfortunately for him, no revenue is flowing to the government. Hopefully,
Murerwa will realise that he collects more money by levying 2% stamp duty
than by levying 10% withholding tax," a broker said.

"What this effectively means is that investors venturing into the stock
market will now pay transaction costs amounting to 14%, that is the new 10%,
2% stamp duty and 2% brokers commission," said a market watcher.

Currently, the appetite for equities is at its lowest ebb.

"The alternative would be to borrow from the money market. This too is
unsustainable given that minimum lending rates are in excess of 300% due to
rate hikes by the RBZ," one banker said.

"The greatest impact will be on those institutions that will be floating
rights issues to conform with new capital requirements. There will be no
takers for their shares and some will be forced to pursue mergers or wind

The banker said the downside was the added cost when a firm attempts to
balance its weighted average cost of capital, since any share buyback
decision by the company must take into account the potentially huge bill
generated to investors by having to pay 10% tax on shares sold.

"No modern economy imposes such a burden on its wealth-generating
companies," the banker said.

"Zimbabwe is not a particularly rich country and needs wealth-creating
investment to become one. Zimbabwe has long suffered from under-investment
and is today significantly less capital-intensive than its main

Because of increased transaction costs, a shift by foreign investors out of
Zimbabwean equities is more likely.

Analysts also noted that high tax rates are a barrier to foreign investment

"Investors will allocate less capital to Zimbabwean registered securities
than would otherwise be the case because of increased transaction costs," an
analyst said.

"The tax will fuel parallel market activities as investors seek financial
freedom. For wary investors who are thinking twice about buying shares, a
reduction in withholding tax remains at the top of their wish-list."
Back to the Top
Back to Index

Zim Independent

Only change in politics can save economy - Makoni
Godfrey Marawanyika
FORMER Finance minister Simba Makoni has said unless there is a change in
the political environment, the country should not expect an end to the
economic crisis. Makoni has also raised concerns about a series of economic
programmes which he said are not being fully implemented.

Since 1991, Zimbabwe has come up with five economic blue-prints which
include the Economic Structural Adjustment Programme, the Zimbabwe Programme
for Economic and Social Transformation, the National Economic Revival
Programme, the Millennium Recovery Programme, and Towards Sustained Economic
Growth - Macro-Economic Framework 2004-2006 which was launched last year.

However, the blueprints were never implemented due to lack of political

In an interview published in the Mail and Guardian of South Africa, Makoni,
who fell out with Mugabe in 2003 over devaluation of the dollar, said for
the country to recover from the current economic mess, it has to implement
some of the things he could not do.

"You need a stable macroeconomic environment with stability in policies you
implement. You need to support the productive sector, and you need to relate
normally to the rest of the world," he said.

When asked if any of that was possible without a change in the political
environment, Makoni replied "No", insisting that economics and "politics are
two-sides of the same coin".

Although Makoni has never publicly commented on his dismissal from cabinet,
speculation is rife that he clashed with government over devaluation of the
currency which Mugabe called an act of economic sabotage.

Makoni said some economic policies, if implemented fully, could result in a
change of fortunes.

Zimbabwe, once a vibrant and diversified economy, had been a hope for the
continent's future, but today it is in deep crisis and signs of collapse are

The economy has contracted in real terms in the past five years, inflation
is in triple digits, the currency has lost 99% of its value since December,
and almost half of the country faces starvation.

Makoni said there was a basis for making the country work normally, but said
that basis is not the same as action.

"We are not doing everything that needs to be done, or not doing it
simultaneously," he said.

"Action on interest rates, the currency and support for the productive
sector is being taken piecemeal. What you need is a comprehensive programme
for all three to be enacted simultaneously."

Asked if he was interested in leading the recovery process for Zimbabwe, he
said: "I don't seek specific roles, but I will remain engaged."

Commenting on the role of South Africa, and in particular the R6,5 billion
which is currently being negotiated, he said Pretoria had a right to find a
way to help Harare.

"There are well intended things that we have done the wrong way, and people
need to take time to understand the drivers of that," he said.

"Glib condemnation doesn't help. As much as we need Mugabe to understand why
the world takes the view it does of Zimbabwe, we need the world to
understand why we are doing what we are doing."

On constitutional reform, Makoni said Zanu PF's defeat in 2000 was

He said people campaigned against the constitutional reform on the basis of
two or three problematic clauses but said Zimbabwe would have been better
off now if the constitution had been approved.

"We would have had time to focus on the offending clauses in a more
inclusive way than is possible now," he said.

"I think the party and government will continue to amend and make better the
constitution, but there is not going to be a constitutional commission held
by this government in the next two, three or five years."
Back to the Top
Back to Index

Zim Independent

      New Nssa asset ratio blow to pensioners
      Eric Chiriga

      THE National Social Security Authority (Nssa) is now required to
increase its prescribed asset ratio to 35%. Critics say the move is another
desperate decision by government to widen its revenue base to fund its
excessive expenditure at the expense of Zimbabwean pensioners.

      This means lower returns for the pension fund and will adversely
affect the lives of pensioners.

      Currently Nssa's investments in prescribed assets is below 15%.

      Economic analysts say the imposition of prescribed asset ratios on
pension funds is unfair.

      They say instead of investing the money where there is a higher
interest return, pension funds are obliged to tender for government bonds
with zero return.

      "The government borrows money not for investment but to finance its
recurrent expenditure and they end up borrowing again to pay up the debts,"
economic analyst John Robertson said.

      He said pension funds have become victims of massive redistribution of
wealth and pensioners are failing to retain their lifestyles.

      Pension fund managers have also highlighted that they are being robbed
by requiring them to buy unattractive bonds as prescribed assets.

      They argue that the 35% requirement at sub-optimal rates of return
mean that the Zimbabwean pensioner would ultimately be very poor yet the
manager is supposed to invest where real returns would be realised for the

      As long as pension funds comply with the prescribed asset ratios they
will not subscribe to new issues or buy treasury bills, which will be above

      "Consistent with the requirement of the pension industry, the National
Social Security Authority is now also required to comply with the 35%
prescribed asset ratio at market value," the Minister of Finance Herbert
Murerwa said.

      Murerwa added that Nssa would also be required to submit monthly
investment portfolio returns to the Commissioner of Insurance and Pension
Funds with effect from the end of October this year.

      He said that the prescribed asset ratios would remain unchanged at 25%
for short-term insurance, 30% for long-term insurance and 35% for pension

      The finance minister also reviewed the minimum equity capital of

      For reinsurance business, the minimum equity capital was increased
from $2 billion to $30 billion, from $800 million to $30 billion for
reinsurance business, $800 million to $10 billion for non-life insurance
business and from $750 million to $15 billion in the case of funeral

      In the case of life and non-life insurance business, the capital was
increased from $1,6 billion to $30 billion while it was reviewed from $250
million to $5 billion for insurance brokers.

      Nssa is a corporate entity constituted in terms of the National Social
Security Authority Chapter 17:04.

      Section 5 of the Act establishes the board, which has the
responsibility of controlling the operations of the Authority.

      The board of directors is appointed by the Minister of Public Service,
Labour and Social Welfare and its composition in terms of section 6 of the
Act, should comprise three members representing government, three
representing employers, three representing employees and the general manager
who is an ex-officio member.

      However, Nssa has been without a substantive general manager since the
year 2000.

      The board is supposed to meet every two months and is responsible for
the authority's strategy and putting in place policies for directing,
conrolling and monitoring the afffairs of the authority.

      Nssa last published its financial results in 2003.

Back to the Top
Back to Index

Zim Independent

Tobacco seed sales decline 30%
Itai Mushekwe/Grace Kombora
TOBACCO seed sales for the 2005/6 season are facing a 30% decrease which is
set to have a major bearing on the country's national output and foreign
currency earnings.

The decline in seed sales will result in yields of 40 000 hectares at 6,25

The sales for the 2005/6 season were affected by dire shortages of critical

The hectarage is being affected by the shortage of seedbed chemicals, land
preparation, chemicals, fertilisers, tractive power, fuel and oils and the
availability of cost-effective coal.

Officials said the irrigated crop which is a key component of quality and
high-yielding tobacco might fall in the 2005/6 selling season.

The decline is due to low dam water levels, re-allocated resources to winter
crops and delays in crop planting and financing. The planting season for the
irrigated crop for the 2005/6 begins on September 1 with the last date for
seedbeds being the end of this month.

"Timing is everything in tobacco. We are constantly too late: exchange rate
and price support mechanisms six weeks after floors open, finance for
seedbeds not yet practically available, loans repayable in June are six
weeks too early," an official said.

"At least 60% of the national crop was sold at an exchange rate of $9000-10
800:U$1 and inputs for the following season are being replaced at $18 000-40
000:US$1 or 100-300% of the inflation rate," said the official.

The 2005/6 season is bound to be affected by a host of factors which include
access to concessionary funding for the duration of the season and access to
15% of US dollar retention scheme to guarantee the timely imports of inputs.

Once the biggest forex cash cow accounting for over 45% of the total hard
currency inflows into the country, tobacco has attracted minuscule revenue
at the auction floors, according to statistics from the Zimbabwe Tobacco

The revelations come hard on the heels of African countries scrambling for
Zimbabwean farmers in the wake of government's proposed Land Amendment Bill
which seeks to nationalise land and erode property rights.

According to ZTA data, the crop has to date earned US$97,6 milllion down
from US$120,7 million during the same period last year, reflecting a
downfall of US$23,1 million.

Tobacco output has deteriorated over the last four years from 285 million kg
to plus or minus 60 million kg last year.
Back to the Top
Back to Index

Zim Independent

Let them hang

AS Zimbabwe continues on its rapid descent into chaos and suffering, one
wonders who to despise more - those directly responsible for the chaos and
suffering, or those who remain silent.

What, for example, will our gutless "captains of industry" have to say in
their defence when this financially corrupt and economically destructive
regime is finally removed?

What will many of those who claim to be religious leaders (and not just
Christian leaders) who remain silent in the face of so much human suffering
say in their defence when the day of reckoning finally comes?

We criticise (South African president Thabo) Mbeki's "quiet diplomacy" but
let there be no doubt that the silence of so many supposed leaders within
Zimbabwe has contributed greatly to the survival of this regime.

Perhaps their silence is because many of them are too far removed from the
daily struggle for survival that most Zimbabweans have to contend with.

Most likely, it is also because their material affluence is more than offset
by their moral bankruptcy and personal cowardice.

Let all those who by their silence have acquiesced in the destruction of
Zimbabwe and the suffering of its people hang their heads in shame.

Everett Scott,

Back to the Top
Back to Index

Zim Independent

Editor's Memo

Let's all pay

IN the developed world, there is a realisation that the so-called sin
industries generate enough revenue from consumers to deserve a tax. Sin
industries include trades like prostitution, glorified as the commercial sex
work or pornography, and gambling. Products of these industries are deemed
by moralists to cause the erosion of social capital and a rise in criminal
behaviour. Their products are, in short, evil itself. But those running the
industry do make money - sometimes more than those in white collar jobs.
This whets the appetites of governments to want to share in the spoils.

With sex, countries in Scandinavia, and Germany set up red light districts,
health institutions to check and certify the sex-worthiness of sex workers.

That has justified taxing the profession, but how do you do it with no
proper accounting by those involved?

Presumptive tax was the answer. Finance minister Herbert Murerwa introduced
it to many Zimbabweans for the first time last week in his mid-tern fiscal
policy review. Commercial sex workers in Zimbabwe are still exempt but bus
operators and SMEs now have to pay this "sins" tax.

The similarity between taxed prostitutes and bus operators and SMEs is that
they are considered hard to tax but must still be taxed. This is the
hallmark of presumptive tax. It is employed primarily in economies where the
so-called "hard-to-tax" entrepreneurs make up the majority of the population
and administrative resources are scarce on the part of the collector.

The authorities presume that the targeted group lacks the financial
transparency that allows for effective taxation by government. This forces
government to estimate or presume the appropriate income on which taxes
should be levied.

There is also another similarity. The industrialists have to pay the tax for
them to be given licences to operate. These are health certificates in the
case of commercial sex workers, road permits for bus companies or shop
licences for SMEs. The industrialists can however decide not to pay the tax
but still continue in business in the form of illegal prostitution (in
countries where it is legal), use of uncertified buses or street vending.

I have no quarrel with transporters and SMEs paying taxes so long as it is
sustainable. But Murerwa targeted the wrong sector.

The so-called new farmers must pay tax. Currently the bulk of them are not
paying any. They are not utilising the land allocated to them for free under
the disastrous land reform programme. They should contribute to the fiscus
because they are beneficiaries of government largesse in the form of free
land, soft loans and input support programmes.

In March the Zimbabwe Revenue Authority (Zimra), responding to questions
from my desk on why new farmers were not being taxed, promised us something
was being done.

"Farmers have always been taxed much like any other business entity," Zimra
said then. "They contribute tax under the various tax heads, including VAT,
PAYE and Income Tax.

"In line with the government's agrarian reform project, however, studies are
currently taking place which will look at the taxation of new farmers and
how they can contribute more positively to the fiscus."

When will Gershem Pasi announce the results of his study if he has been
studying anything since March?

The World Bank says economists advocate a presumptive tax on the potential
use of land to encourage landowners to utilise it productively.

In Zimbabwe agricultural output comprises 16% of GDP. Yet, because there is
little bookkeeping and a propensity to sub-lease, new farmers can be
difficult to trace. They fall in the hard-to-tax zone and there is an urgent
need for government to come up with a presumptive tax. The level of taxation
can take into account the geographical location of a farm, soil type,
potential output or crop yield, and levels of assistance by government.

Reserve Bank of Zimbabwe governor Gideon Gono's ambitious "command
agriculture" pilot project can incorporate presumptive tax to ensure the
farmers also contribute to the national purse.

This may not sound politically-correct because the new farmers have "to
enjoy the fruits of independence". But that is wrong because mere mortals
like us cannot be taxed to death for new farmer Bobo to get cheap money to
grow crops and pocket every penny.

While presumptive tax is meant to eliminate bureaucracy and allow for
smoother revenue collection, it can still be problematic here. Zimra
officers have become notorious for corrupt activities and crude
fastidiousness in the execution of duty. This includes stripping women and
subjecting them to humiliating body searches. A combination of this
crudeness and corruption can be used to estimate taxable income, analyse the
profitability of various economic activities and to define the indices for
calculating presumptive income. As a result, genuine small businesses with
no capacity to challenge the taxman's estimates could be overtaxed while
political prostitutes are exempt. How unfair can life be?
Back to the Top
Back to Index

Zim Independent

Truth behind Tsholotsho declaration
By Pearson Mbalekwa
IT is expected that after a very strong and devastating Eddy with a trail of
destruction and misery in its trail, victims would start to pick up the
pieces and begin to rebuild their lives when the dust has settled down and
losses counted.

But alas! The political hurricane which I shall term "Hurricane Destruction"
has continued to cause havoc and mayhem and will not subside until every
standing natural and man-made structure is destroyed.

It is now nine months since the so-called plot to unseat the senior
leadership of Zanu PF by six provincial chairmen that included some Young
Turks and a few old guard politicians, were accused of contravening party
regulations and condemned to political banishment by those who wield state
power within Zanu PF.

It is a fact that Hurricane Destruction has torn the threads of the party
from the seams, no matter what (secretary for administration Didymus) Mutasa
or anyone says.

Zanu PF will never be as coherent as in the past and certainly the die is
cast; the wheel of change is turning, the stage is set and the countdown is
about to begin towards an advent that will certainly change the face of
Zimbabwe politics forever and, initiate a collapse of a system that had
started very well but which has now suddenly abandoned its course and has
become afraid of its own shadow as it moves towards oblivion.

Why have things gone wrong; who has destroyed Zanu PF and for what? These
are the questions millions of Zimbabweans are asking themselves.

The story of Tsholotsho has been told albeit by the beneficiaries of a
political party that is fraught with hate, fear and a tyrannical leadership.

According to the presidium of Zanu PF and indeed those that are controlling
state power, it is claimed that there was a conspiracy to remove the senior
leadership of Zanu PF by a group led by six Zanu PF provincial chairmen,
some members of the politburo, central committee, MPs, veterans of the war
of liberation and that this conspiracy was hatched by former Information
minister Jonathan Moyo.

It is further alleged that the beneficiary would have been Emmerson
Mnangagwa, the current Minister for Rural Housing.

The actual coup détat against the constitution was not by the so-called
Tsholotsho conspirators but by the politburo that sat at Zanu PF
headquarters on November 18 2004 to undermine the party constitution.

The constitution was illegally amended to accommodate the preferred
candidate of the political mandarins of Zanu PF when it had become clear
that Mnangagwa was heading for a clear victory if the party procedure was
followed to elect a new vice-president during the next congress which was
due in December 2004.

These political mandarins felt Mnangagwa had to be stopped by every
conceivable plot that could be hatched. Those members of the politburo that
gathered at the Zanu PF headquarters on November 18 2004 totally and with no
regard whatsoever to the requirements of the guiding principles of the
party, usurped the power of the central committee which by its every nature
is empowered to deal with constitutional matters.

The powers of the politburo are:

* to act as the administration organ of the central committee;

* implement all decisions, directions, rules and regulations of the central
committee on all matters; and

* be answerable to the central committee on all matters.

It was presumed that since in Zanu PF posts are through patronage, this move
by the politburo would put the matter to rest. The status quo in the
presidium would remain save for the inclusion of the new princess of Zanu PF
politics whose ascendancy, had been determined by the coup détat against the
constitution that morning.

Why was the altering of the constitution by the politburo illegal and a coup
against the constitution?

The answer lies within the constitution of Zanu PF which under Article 7 of
section 34 (8) states: "the central committee being the principle organ of
congress and acting on behalf of congress which congress is not sitting
shall have full preliminary unfettered powers to amend the constitution, if
deemed necessary, subject to ratification by congress".

It is therefore crystal clear that the politburo acted ultra vires as it had
no mandate nor authority to act in the manner it did.

It usurped the authority of the central committee thereby undermining the
importance of the constitution to accommodate Joice Mujuru. The appointment
was unprocedural and unconstitutional and the whole amendment of the
constitution was equally illegal and whatever appointment that came through
this illegal amendment is null and void.

According to Article 30 section 253 (6) of the constitution, if a two-thirds
majority of delegates of the central committee is present, voting shall be
required for the adoption of proposed amendments to the constitution and in
this particular case, neither was there an assembly of the central committee
nor the adoption of the amendment of the constitution on that November day -
a real mockery of democracy.

It is therefore not difficult to see why the camp that usurped power has
been very vicious in its retributions. In every coup, those who would have
usurped power will use brutal force to purge their opponents and subdue any
resistance against them. They always live in fear as they know that only
brutal force and intimidation can ensure their survival.

It is not surprising therefore to realise that one newspaper (which
supported the female candidate) is calling for forgiveness of the
"Tsholotsho conspirators". This is an act of desperation.

Vice-President Mujuru is the one who must be forgiven for coming in through
a blatant coup against the Zanu PF constitution.

Those of us that attempted to introduce some semblance of democracy in Zanu
PF became villains of the vanguard party, we had become unpatriotic to the
senior leadership, we had to be reoriented to the requirements and dictates
of a revolutionary party. Because we did not have (gwara) discipline we had
to be sent to the party's gulag archipelago to be reformed.

These Zanu PF gurus are experts in the art of stick and carrot strategy,
they are now frantically trying to divide this formidable group by
appointing some into ineffectual positions in government just to keep the
leash on their necks while others are threatened to have their life-serving
machines cut off. This is where the importance of political patronage comes
into play. This is political blackmail which has worked so well in the past
but the hold on this noose will soon break.

So was there a putsch about to take place organised by the so-called
Tsholotsho conspirators?

The answer is an equivocal no.

The truth of the matter is that only the vacancy left by the colossal and
unifier of the flock of Zanu PF, the late Simon Vengesai Muzenda was being
canvassed for by supporters of Mnangagwa. But, the events of November 18
2004 changed the whole plan as the political mandarins of Zanu PF had
blocked this vacancy by the action already alluded to. This therefore
necessitated a change of game plan so the original idea had to be revised
and a total onslaught on the presidium had to be embarked upon with the
exception of the president and first secretary but the rest had to be
contested. All this had to be done within 48 hours. It was an elephant of a
task given the fact that the other group had the referee and all the state
machinery at its disposal. But yet, we put up a credible account of
ourselves, a feat we all pride ourselves in. Of course one has to be proud
to be associated with the so-called Tsholosho group, we were exercising our
right to make an informed decision, the right to choose a person of our own
desire. Is this not what thousands of our gallant heroes died for?

They died so that we could participate in national debates through universal
suffrage. This is the right that I am ready to sacrifice all in order to
attain. It is better to die trying than never try.

Time has now come for patriots to get together and contribute to a truly
democratic Zimbabwe, which is not only independent but free. We now want
independence with freedom. This is what the Tsholotsho group was aiming at
and that aim must now be achieved by patriotic Zimbabweans through the unity
and dedication towards this cause by all freedom-loving people.

Did I hear someone say freedom is within our sight?

A party that is incapable of upholding its own constitution cannot be
expected to respect any other constitution. A party that does not believe in
a free and fair election using its own constitutional guidelines cannot, and
will never freely accept any challenge to its hold on power.

It is obvious that campaigning or canvassing for positions within the
structures of Zanu PF by the Tsholotsho group was legal and constitutional.

There was no law nor regulations infringed by the Tsholotsho group. It is
within the sphere allowed by a democratic system. May the political
mandarins of Zanu PF be reminded that when there is congress, all positions
are open for challenge including that for the first secretary of the party.
That is what an election means.

Unless there is democracy within the ruling party, people should never
expect Zanu PF to freely allow the political playing field to be even during
any other election.

Democracy can only be practised by democrats. For all those that want to
fulfill the aspirations of our fallen heroes, I dare them to (sungai
dzisimbe) brace themselves for a gruelling battle in 2008.

The population of this country should and must ensure that the presidential
election is held in 2008 and not further than that, as this country has
economically and socially bled enough.

* Pearson Mbalekwa is a fomer Zanu PF legislator for Zvishavane.
Back to the Top
Back to Index

Zim Independent

Gonomics, alchemy or voodoo economics?
By Tafirenyika L Wekwa Makunike
WHEN President Mugabe an-nounced that the time for bookish economics was
over with the appointment of Gideon Gono as governor at the Reserve Bank,
some thought perhaps we must give this government the benefit of the doubt.

The confusion arising from the alchemy concoction of the so-called
"Gonomics" to date, has resulted in what Professor Tony Hawkins once called
voodoo economics.

For the Zanu PF government, it is fire-fighting to the hilt without an inch
of strategic thought in sight. My fervent hope for the country is that if it
cannot learn from its so-called enemies then at least it should take a leaf
from the so-called friends.

On August 16, I had the pleasure of being invited to meet the delegation
from Nanning City at the Palazzio Hotel in Fourways, Johannesburg.

On arrival I was showered with a nicely packaged capitalist present.

Nanning is the capital city of China's Guangxi Zhuang autonomous region of
China which in 2004 won China's Most Competitive City in Exhibition

The Vice-President of Nanning People's Association, Huang Hanming in a
characteristically capitalist, less than 10-minute speech, outlined their

He explained that they had visited because South Africa comprises 30% of the
entire GDP of Africa, and the economy of Gauteng is 10% of the African
economy and South Africa is the biggest trading partner of China in Africa.
So to develop a good business relationship with Africa it was necessary to
develop strong ties with Gauteng in particular and South Africa in general.

With pumped up music and nicely-animated slides they made a presentation
which showed big companies such as Walmart, Macdonald's and Phillips that
have aided the annual growth rates of as much as 9% in the last 10 years.
After that he then arrayed his team of Chinese capitalists.

Gosh! These guys are communists right but they have mastered how the
capitalist system functions. China's foreign currency reserves as stated in
October of 2004 stood at US$540 billion.

A country cannot generate that kind of level with a head in the sand
communist rhetoric but by systematic application of economic principles.
Whatever China and the USA may say to each other in the political arena they
are so steeped in each other's economies that they will never do anything to
damage that relationship.

China is up to its neck in US bonds and US companies are up to their necks
in the Chinese economic frontier.

When I was still living in Harare and I had foreign visitors, I would take
them to the Mbare and Glen View crafts people. The idea was not to parade
our poverty but to show the resilience and creativity of common people.

Even now that I am currently based in South Africa, I sometimes take
visitors to Soweto not just to show visitors that Nelson Mandela used to
live in a Rugare-like home but to get them to feel the true story of the
African people.

I am all for cleanliness but I am not for the unbudgeted haphazard
destruction of the livelihood of people and the impairment of their dignity.
If every government was to behave like Zimbabwe, then the Korean traders one
encounters near the White House in Washington selling memorabilia, the
Zimbabwean street traders in Johannesburg or Gaborone or the traders in
London or Rome would not survive Operation Murambatsvina.

If we are to buy the story that too much black market activity was taking
place in these areas then why punish only the poor foot soldiers while
rewarding the rich dealers?

I understand the rich can now import 2000 litres of fuel, no question asked
as to the source of funds and in case they are in a hurry they can use their
black market-sourced dollars in Harare. My foot!

The basic laws of supply and demand cannot be violated. A call I received
from Harare tells me that the rand is pushing beyond $7 000 and no-one can
convince me this is good for the Zimbabwean economy. We are busy confronting
the effects of the economic melt-down but not the causes.

The problem is that if a country persistently runs down its economy then its
own people begin to have trouble in affording assets in their own country.
Who is really working for the British: the MDC or Zanu PF?

Who has systematically run down local banking institutions and cast
aspersions on the few surviving ones so that British-owned banks - Barclays
and Standard Chartered Bank - can consolidate their positions in Zimbabwe?

Zanu PF decimated the middle class by various strategies to the extent that
now, Zimbabwe just has the poor and the rich.

For the president to say he will not talk to the MDC is being disrespectful

the millions who voted for the party in urban areas just like it would be
disrespectful to the rural masses for Morgan Tsvangirai to refuse to talk to
the government.

It is colonial mentality for President Mugabe to only want to talk to
British premier Tony Blair but not the local people. It is a rabid hatred of
anyone with the same skin colour as oneself. It was the same mentality that
allowed one to forgive Ian Smith but refuse to forgive Abel Muzorewa, the
late Ndabaningi Sithole or Chief Kayisa Ndiweni.

Perhaps the man in Beijing should talk to the man at Number 10 Downing
Street together with the man from Tshwane and invite the MDC and Zanu PF as

Zanu PF has made Zimbabwe ripe for the picking by economic vultures. I would
be more comfortable with national assets in the hands of Strive Masiyiwas,
Mutumwa Maweres, William Nyembas, Mthuli Ncubes, Julius Makonis, James
Mushores, and Nicholas Vingirais of this world than others from beyond.

Granted, some of them were turning into crooks but what was required was to
fine them for their economic crimes and rehabilitate them. In any case,
their dealings were all a result of the voodoo economics of the day. With
Gono's no-questions-asked policy Zanu PF-aligned dealers are making killings
in fuel deals at the moment.

Apart from mortgaging the rest of the surviving national assets to the
Chinese, SA conglomerates own all the platinum reserves in Zimbabwe.

SA empowerment companies own more than 60% of the gold mined in Zimbabwe.
The economy has been mothballed to the extent that most locals cannot afford
any of the assets judging by the comical slow uptake of the 15% in Zimplats.

Zanu PF has pauperised the Zimbabwean people and not empowered them. There
seems to be a spontaneous hatred by Zanu PF for any black-owned businesses
partaking in the national cake unless they are party folks. It was the
Chinese who popularised the notion that the colour of the cat whether black
or white did not matter as long as it caught mice.

* Tafirenyika L Wekwa Makunike is a Zimbabwean currently based in South
Back to the Top
Back to Index

Zim Independent

Eric Bloch Column

Budget intensifies economic woes

WHEN the Minister of Finance, Herbert Murerwa, presented his Mid-Term Fiscal
Review and 2005 Supplementary Budget to Parliament last week, he did so in
an environment of desperate hopes that he would be announcing substantive
actions to aid the long-talked about, but as yet mythical, economic

The widespread poverty and economic distress, closure of businesses, massive
shortages of essential commodities, hyperinflation and many other ills, have
provoked a crisis of expectations. Those expectations centred upon the
minister announcing measures that would be complementary to the monetary
policies set out three weeks earlier by the governor of the Reserve Bank.
They centred upon deep-seated anxieties that the fiscal policies,
appropriately aligned with the monetary policies, would vigorously attack
the pronounced inflation afflicting Zimbabwe, would dynamically incentivise
investment, job creation and export growth, and would demonstrate a belated
determination of government to pursue good economic governance.

At the commencement of his presentation, it appeared that the hopes of the
populace were about to be fulfilled. The minister's introductory remarks
evidenced awareness of the troubled state of the Zimbabwean economy. He
noted that: "Inflation, relative to that of our trading partners, is
unacceptably high. Similarly unemployment also remains a major challenge,
while foreign exchange constraints continue to undermine the full recovery
of business activity." Admittedly those words implied some, albeit
inadequate, economic recovery, whereas the reality is that the economy is
still in decline. Nevertheless, the minister at least recognised some of the
major economic ills, and that was reinforced by his statement that economic
turnaround "will require the consistent implementation of policies and
measures to achieve macro-economic stability, coupled with concerted efforts
in support of both domestic and foreign investment".

Unfortunately, that reality of the troubled economic circumstance, and some
of the very necessary actions to be pursued, dissipated almost immediately
for, after his introductory comments, he then tried to review the current
state of the economy. However, he did so without the realism of his opening
comments. Acknowledging that the November, 2004 budget statements projection
of economic growth of over 3,5% was not attainable, he revised it to a
growth of under 2%. In the private sector almost all are agreed that the
economy has been, and is continuously, contracting. The 2005 agricultural
outturn has been abysmal, allegedly due to the drought but, in practice, due
to inadequate planting as a result of the replacement of many productive
farmers with unproductive squatters, as a result of insufficient
availability of funding, as a result of widespread vandalism of irrigation
systems and other essential farming infrastructure, and as a result of
grossly belated availability of inputs.

Mining has been severely retarded, mainly due to unrealistic exchange rates
in the first seven months of 2005, and manufacturing has been brought to its
knees by rampant escalation of operating costs, unmatched by exchange rate
movement. All those factors must result in negative growth of at least 2% in
2005, unless there is an almost immediate, massive economic turnaround.

Regrettably, there is very little if anything, in the enunciated fiscal
policies, and the budgetary proposals, to inspire any hope of that
occurring. The minister very correctly noted the consequences of unchecked
governmental expenditure trends. Disclosing that government had a deficit of
$5,7 trillion in the first half of 2005, as against a budgeted deficit of
$4,5 trillion for the entire year, he noted that a continuing higher than
projected fiscal deficit would "not only undermine the inflation target, but
also the financial resources available in support of the productive sectors
and infrastructure development". He supplemented this by claiming that:
"Government has declared inflation as our number one enemy" and that,
therefore, the budget "has to play its central role of ensuring that we
fight and win the battle against inflation and support efforts being made to
stabilise the economy".

But despite this recognition of the very necessary, he proceeded to table
budgetary proposals diametrically opposed to bringing down inflation and
achieving economic stabilisation. The highly prejudiced proposals include
not only increasing the Value Added Tax (VAT) rate by a sixth, from 15% to
17,5%, but also subjecting many products previously not subject to VAT to
tax at that rate, including tea, butter, powdered and canned milk, fresh
meat (other than beef), processed meats, and diverse fresh vegetables.

VAT applies to all, including the estimated then 9 million Zimbabweans who
are already struggling to survive, at levels below the poverty datum line.
Driven only by the perceived need to generate more revenues for the state,
the minister intends to compound the destitution of the majority of the
population by a substantial increase in the VAT rate, and a widening of the
VAT net of products. So, not only are economic factors impacting adversely
upon inflation, but the state is directly intensifying inflation with
greater consumer taxation.

This disastrous impact upon the poor is to be compounded further through the
imposition of a "presumptive tax" on commuter omnibuses. Those with a
carrying capacity of 15 to 24 passengers, and taxi cabs, are to pay $6
million per quarter, whilst those who can carry 25 to 36 passengers will pay
twice that amount, and those carrying greater numbers will pay $18 million
per quarter. It is inevitable that transport operators will recover such
taxes in the fares charged by them, resulting in yet another burden for the
struggling populace.

The minister also announced that: "Arrangements are at an advanced stage to
introduce tollgates on the country's major highways, and in entries into the
major cities, including the Harare-Gweru, Harare-Masvingo,
Masvingo-Beitbridge, Harare-Mutare, Gweru-Bulawayo, Harare-Nyamapanda,
dura and Bulawayo-Victoria Falls Highways". While this intent is commendable
to the extent that is stated that the revenues will fund the "ongoing
dualisation, road infrastructure maintenance and development", it can only
be acceptable if the toll payable will not apply to heavy duty vehicles
conveying goods within Zimbabwe (other than those only transitting Zimbabwe
to more distant destinations).

If the toll does apply to such vehicles, that addition to transportation
costs will inevitably need to be recovered in the selling prices of the
goods, thereby causing yet further inflation.

Expressing the incontrovertible fact that increased governmental expenditure
and consequential borrowings are catalysts for inflation, the minister
stated that "in view, of the limited financial capacity of the economy,
additional expenditures can only be financed through rationalisation within
the existing budget envelope" and that, therefore, he proposes to finance
"additional expenditures from reallocation of funds from the various
sub-heads of the 2005 budget", over and above raising additional revenues.
Notwithstanding that intent, he still expects government's borrowings to
increase by $1,6 trillion, which will be yet another inflationary trigger.

Despite all his recognition of the ravages of inflation, he has - with one
minimal exception - "deferred review of tax thresholds and brackets to the
2006 budget. That one exception is raising the tax-free threshold for
employed persons from $1 million to $1,5 million per month. Bearing in mind
that the PDL for a family of five is now in excess of $5 million per month,
this one concession is niggardly in the extreme. Even if both spouses in a
family are gainfully employed, their combined tax thresholds will only be $3
million, which is very markedly less than the PDL.

The famed, fictional Robin Hood was admired for his redistribution from the
rich to the poor, but the government of Zimbabwe's fiscal policies and
taxation measures result in the poor becoming poorer.

Furthermore, at variance to expressed intents of increasing the sources of
revenues, the minister is motivating yet further "brain drain" from Zimbabwe
by introducing provisions that recipients of part of remuneration in foreign
currency will have to pay tax thereon in foreign currency. Many of the
highly skilled have remained in Zimbabwe, despite the appalling economic
environment, because of their receiving some foreign currency-based income.
If that is now diluted, they will depart for environments more conducive to
them. How is economic turnaround achieved without the requisite skills base?

Economic turnaround also requires a vibrant stock exchange to facilitate
investment, but the taxation proposals include reinstatement of Capital
Gains Tax (in the form of a withholding tax) on quoted securities. That,
over and above inflation-driven economic decline, can only result in a far
less virile stock exchange than heretofore.

So disastrous is the Supplementary Budget that parliamentarians should,
irrespective of party, unhesitatingly reject it. With the constraints
imposed upon him by the president and the cabinet, Minister Murerwa must
have had very little room to manoeuvre, and one must sympathise with him for
the impossible fiscal hurdles that confront him, but the message must be
sent to government as a whole - the Supplementary Budget is an economic
Back to the Top
Back to Index

Zim Independent


Western sirens seduce Cde Gaddafi

IT appears Nathaniel Manheru is laughing the longest at the fall from grace
of his boss Jonathan Moyo. It is, though, a mirthless laughter, full of bile
from a clearly frustrated civil servant. If the claims are true, Manheru is
bitter that President Mugabe did not consider him ministerial material.

But what was most useful in his attack on Moyo this week was biographical
information he gave us, if it is true. While Manheru and Zanu PF were
engaged in a conspiracy of silence about Moyo's liberation war record, it
took the Zimbabwe Liberator's Platform to describe Moyo as "the first
successful war deserter". Now Manheru has added a footnote about Moyo's
"fake and fraudulent pretensions to war veteran status". Of course Zanu PF
was complicit in nurturing that false image. It also let him lord it on the
opposition and the private media while he pretended to be the greatest
patriot ever born in Zimbabwe.

Manheru also let it be known that Moyo indulged in "quisling politics"
alongside the late Ndabaningi Sithole. We suspect he forgot to mention Zanu
PF spokesperson Nathan Shamuyarira and his Frolizi. Zanu PF invariably
offers succour to all the bad guys while it suits its agenda. That is how
Moyo was able to "sell himself to an embattled Zanu PF" before it regained
balance and spate him out like a rotten tooth.

Both were desperately looking for each other: Zanu PF fleeing MDC hounds
while Professor Moyo was under siege from Ford Foundation and Wits

More revealing about Zanu PF's criminal abuse of power than Moyo's paranoia
is Manheru's disclosure that Moyo invented death threats so he could be
given 24-hour security. That was how he landed at Sheraton Hotel during his
inauspicious reunification with Zanu PF as spokesperson for the ill-fated
Constitutional Commission. Thus wrote Manheru: "Put up in a suite (at
Sheraton), guarded around the clock and wafted from place to place in a
ministerial convoy, his ego inevitably puffed, and puffed and puffed."

Why was this gross abuse of public funds never made public at the time? Or
is this a case of sour grapes as it becomes clearer that it's so near yet so
far? Mugabe picks his cabinet from some dark corners without appearing to
notice the gaping mouths and lolling tongues in the passageway!

Sadc predictably said nothing that would offend President Mugabe at its
summit in Gaborone, Botswana, last week. He was allowed to sit next to the
host, Festus Mogae, a man Mugabe would love to hate for reputedly hosting
American military bases.

But appearances and form can be very deceiving.

The Sunday Times reports that South African president Thabo Mbeki implored
regional leaders to act responsibly for a common destiny in his weekly
online letter. He wrote that it was important to "understand that what we do
in any one of our countries has an impact on the rest. It means, as
countries, we sink or swim together."

We wonder how many countries are prepared to sink with Mugabe.

While there was deference to his age and contribution to freedom in the
region, temperatures are evidently getting cooler and there is growing
impatience with Mugabe's dogged refusal to put his shoulder to the wheel in
the cause of the African renaissance.

The Sunday Times observes again: "With no one obviously keen to chat to
Mugabe, he entered (the meeting place) and left alone, flicking his fingers
or crunching his fists together until his knuckles audibly cracked."

At Mogae's banquet for the regional leaders Mugabe reportedly "ate largely
alone and in silence".

How loud can quiet diplomacy get we wonder?

In a dramatic sign of Libya's rehabilitation into the international fold,
Muammar Gaddafi has invited US president George Bush to visit Tripoli. This
follows a thawing of relations between the west and the Arab nation since
Gaddafi renounced a programme to develop weapons of mass destruction and
pledged to improve his country's human rights record.

Since then Libya has played host to French president Jacques Chirac and
British prime minister Tony Blair, Mugabe's unyielding bogey.

Why is that of interest, you might wonder? Because Zimbabwe is being left
out of the loop. While a few years back we could posture about Libya
supporting Zimbabwe in its land reform and emptying part of its fuel into
our tanks, we can kiss goodbye to all that now, forever. Gaddafi appears to
have given up on trying to help a leader who can't take advice and behaves
as if the whole world owes him an apology for colonialism. More than that,
the gesture shows just how other countries are able to move forward while we
are tied to the millstone of history by a leader who is afraid of the

And so it is that while other countries are forging new friendships, we
remain tied to Fidel Castro and other international outcasts. It's not
surprising that we have been set back almost 50 years by geriatrics who will
not accept that there is time for everything under the sun.

Meanwhile, President Mugabe is waiting for an invitation to No 10 Downing
Street. It's all vanity, said the Preacher.

Does the Sunday Mail have an editor? We seriously doubt it in the light of
preposterous fiction published on its front page as stories. The story on a
British bank seeking to scupper so-called "Zim, China deals" takes pride of
place in the league of the ridiculous.

Ignoring all business sense and pretending the UK and China were at war, the
writer claimed that by buying a 10% stake in the Bank of China, the Royal
Bank of Scotland wanted to "shackle Zimbabwe's chances" of getting loans
from China. The tenuous evidence for the bank's insidious plot against
Zimbabwe is that it allegedly intensified efforts to buy into the Bank of
China during President Mugabe's recent visit to China!

Strenuously refusing to let facts get in the way a sweet reverie, the writer
saw no contradiction in his conspiracy theory and the statement that the
negotiation "follows a string of other major deals clinched between Chinese
lenders and Western financial institutions".

Are we being told that before Zimbabwe's disastrous land reform there was no
business between the UK and China? And they want readers to believe this

The cacophony against resolving Zimbabwe's political impasse intensified
last week with a frenzied campaign to discredit Nigerian leader Olusegun
Obasanjo's efforts. Newsnet went into overdrive, telling ignoramuses on the
streets of Harare that Obasanjo was a "tool" of Tony Blair and therefore had
no right to interfere in Zimbabwe's internal affairs. It was risible seeing
old women who probably can't afford a radio licence commenting
authoritatively about Obasanjo's double standards and how he can't be an
honest broker when he is a friend of devils in the MDC.

You didn't need to be a rocket scientist to realise that most of the people
interviewed had become avid readers of The Other Side. Which is most
probably where the order for the anti-Obasanjo campaign came from. And
whoever conducted the interviews made no secret of his location: Zanu PF's
provincial headquarters along Fourth Street in Harare. Unless all those
women are getting subsidised commodities and food from the party, the truth
will soon out!

The master analyst was one Sylvester Mashingaidze who said there was no
crisis in Zimbabwe. Indeed, as he sat on the sofa, there was enough evidence
of opulence and surfeit protruding from under the jacket.

Talking of food, the Consumer Council of Zimbabwe says the consumer basket
for a family of six has risen once again to over $6 million per month. This
is a basket of the most basic commodities before we factor in Aeneas
Chigwedere's backdated school fees. The shock increases expose the mirage of
Gideon Gono's economic turnaround and inflation figures running riot at

Still the figure can only be as accurate as the direction of the wind in an
economy where altering the prices of goods already on the shelves has become
a daily preoccupation for major retail shops. Why is Zanu PF not setting its
sights on this very real national crisis and leave Obasanjo and Joachim
Chissano alone?

Zimbabwe has marshalled all resources at its disposal to import enough grain
for the patriotic sons and daughters who have not escaped starvation to the
diaspora. This was revealed by GMB acting chief executive Samuel Muvuti.
Road, rail and sea routes had been opened to "bring maize to the ports and
into the country", the retired colonel said.

"A ship carries about 30 000 tonnes," he said helpfully, "making it easy for
us to cover areas like Mashonaland West and nearby areas. We are
well-networked and we intend to import grain at the rate 120 000 tonnes per

We should take that with a fistful of salt seeing as this is the same
colonel who claimed in one Newsnet interview just before the March election
that the country had enough grain to last for 18 months. What happened to
that, we wonder?

Then this sea route into the hinterland, is it the same route the Portuguese
explorers, or was it David Livingstone or Henry Morton Stanley, were looking
for those centuries back? Now the colonel appears to have "discovered" the
route up the Zambazi River, perhaps with Lake Kariba as our inland port! You
can bet hunger in Zimbabwe will "soon be a thing of the past".

There was another major discovery made in Victoria Falls at the weekend. The
Herald reports that the president of the Zimbabwe Medical Association
"discovered" that economic hardships were causing a huge brain drain in the
country. This was a result of "health costs and general scarcities related
to international sanctions", Dr Billy Rigava reportedly told doctors
attending the association's congress in the resort town.

Apart from the propaganda bit about sanctions, did we really need a
stethoscope to diagnose the cause of the accelerated brain drain in the past
five years?
Back to the Top
Back to Index

Zim Independent


Africa has had enough of Mugabe

GONE are the days when President Mugabe would speak and the continent would
listen. Those days when auditoriums would resonate in response to his
bluster. In fact, he is losing the moral high ground to speak on issues of
governance and international relations because of his saber-rattling and
poor record at home.

This week at a reception to welcome Namibian leader Hifikepunye Pohamba,
Mugabe tried to set an agenda for Africa at the United Nations General
Assembly summit in New York next month.

"It is important for us to use that forum to ensure that the voice of Africa
is clearly heard," Mugabe said. "It is also critical that the United Nations
carries out its mandated and comprehensive role in the economic and social

Mugabe sorely misses the big platform and can only muse about the prospects
of being the alpha leader on the continent. He did not get that platform in
Libya at the African Union Summit in July, he didn't speak at the AU
extraordinary summit on UN reform in August and he was sidelined at the
recent Sadc Summit in Botswana.

While his counterparts in the region have refrained from directly attacking
him, they are increasingly feeling the effects of his misrule and the
economic meltdown in Zimbabwe.

New Sadc chair, Botswana's President Festus Mogae, last week said the
Zimbabwean crisis was not placed on the agenda because it was not a regional
issue, even though problems here have weakened the economy of his country.

There are clear indications that the failed Zimbabwean economy is pulling
down the scoreline in the region. The Sadc economy grew by 4,1% last year.
Angola, Mozambique and the DRC registered returns of 11%, 7,8% and 6,3%
respectively. In addition, Botswana and Malawi had average growth rates of
4,8% and 4,9%. On the other hand Zimbabwe's economy last year declined by
28,4%, thereby pulling down the overall index for regional growth.

With plans on the table to grow the economy by 6% next year, South Africa is
edgy about the contagion effect of Mugabe's polices. It was therefore not
surprising last week when President Thabo Mbeki issued a veiled indictment
of Mugabe.

Writing in his official "Letter from the president" column on his party's
website, Mbeki said a stable Zimbabwe was critical to regional integration
and economic growth.

"Given the potential strength of the Zimbabwe economy . it can and must play
a central role in the struggle to achieve the goals spelt out in the Sadc
Treaty," he said. "All of us must understand that what we do in any one of
our countries has an impact on the rest. It means that, as countries, we
will sink or swim together."

Zimbabwe has become the millstone around the neck of the regional bloc
retarding progress towards the shoreline. Mugabe does not mind sinking with
the rest of the region as long as it adds another feather in his martyrdom

Deputy foreign minister Aziz Pahad last week spoke of the dangers of South
Africa having a bad neighbour. "All our interventions on the Zimbabwean
issue have been to prevent a failed state on our doorstep," he said. He
called for "fundamental changes" in Mugabe's economic policies.

But there are unlikely to be any fundamental changes in Zimbabwe so long as
Mugabe believes no one can rule this country better than he is doing. The
office of the President and Cabinet is assuming greater responsibilities in
the running of the economy and the results are there for all to see in the
shortages of virtually everything as a result of poor policies.

Zimbabwe is a failed state and Mugabe's moral authority to champion various
causes for the continent, including UN reform, is slowly losing the
endorsement of a continent that once held him in high esteem. He has eroded
the reverence he once enjoyed because of his hostility toward anyone who
challenges his autocracy.

This has a bearing on Zimbabwe's foreign policy. He has rejected an AU
initiative to broker dialogue with the opposition. Former Mozambican
president Joaquim Chissano, appointed by AU chair Olusegun Obasanjo to
broker a deal, was told his services were not needed.

Mugabe has rejected the report by the UN special envoy on Operation
Murambatsvina. He refused to sanction a probe on the operation by the
African Commission on Human and Peoples' Rights.

Unfortunately, everyone on the continent appears to have seen through
Mugabe's persecution chicanery and they are not ready to be deceived again.
Why should he want to talk to Tony Blair of Britain but will not listen to
fellow African leaders who are most hurt by his damaging policies? Is this
not a case of a former slave wanting to sit side by side with his master as
a mental assurance that we are now equal? Obviously African leaders cannot
fit that bill.
Back to the Top
Back to Index