The time has come to stop the
politics and get our priorities right
8/1/02 8:20:43 AM (GMT
+2)
WHO would have ever believed that Zimbabwe would one
day be referred to as a country facing famine?
In our wildest
dreams and worst nightmares I don't think any of us could have imagined the
day when almost half of our population would be starving.
Did we
ever think we would see all our elders reduced to hungry beggars? Could we
have foreseen the old women and men standing in endlessly long queues waiting
patiently for someone to give them a small bowl of beans or
grain?
How can it be that our beloved Zimbabwe is now no better
than the Sudan, Somalia and Ethiopia?
How can it be that in our
warm and fertile Zimbabwe whose dams and rivers are full, one banana costs
$10, a single egg costs $25 and people sit picking maize grain off the side
of the road behind the donor grain trucks.
Why, in just 29 months,
have people in the countryside, been reduced to eating leaves and field mice?
Is it really possible that the tail end of a cyclone in March 2000 and a
single drought in 2002 could have caused such massive
starvation?
I wonder if the men and women who lead and govern us
knew what they were doing when they sanctioned the takeover of 95 percent of
Zimbabwe's commercial farms.
I wonder why those men and women
with their doctorates and degrees could not see the day when we would have no
salt or sugar, no cooking oil and no maize.
I always thought
tertiary education was a sign of great wisdom, but now I know that I was
wrong.
A master's degree or doctorate may give a man letters after
his name but without a doubt those letters do not spell the word common
sense.
I wonder how much longer the people and leaders of Zimbabwe
are going to sit back and do nothing about this hell we live in.
During the last week the President made a few public speeches.
In
one he said that he was going to widen all of the country's main highways to
cut down on the number of traffic accidents.
In a country whose
roads are littered with potholes, where street signs are
non-existent because they have been stolen, and where only one in 10
street lights work, we are talking about widening thousands of kilometres of
main highways.
In another speech last week, the President said
that the British were secretly recruiting all of Zimbabwe's doctors and
nurses.
If I was a nurse in Zimbabwe I don't think it would take an
awful lot of secret plotting or clandestine recruiting to get me to go and
work in another country.
Why would I want to work in a
Zimbabwean government hospital when there are not even disposable gloves, let
alone drugs, pain killers or the most basic of equipment needed to comfort
and care for my patients?
Instead of addressing the real
emergencies in Zimbabwe, like 6 million starving people, we are
talking about widening roads and secret British plots.
I just
cannot believe that all the men and women in Cabinet with degrees and
doctorates are going to let this go on for much longer.
As
a nation we look to you, our leaders, Cabinet, government and President for
wisdom and guidance.
We look to you for example and national pride.
We have become the laughing stock of the world. Our people have become
starving beggars, our lush fields have become barren, weed-filled, dust
bowls.
Surely now the time has come for all our leaders to stand
together and stop the madness. When people have crops in the ground and food
in their bellies, we can talk about widening highways and secret British
plots. The time has come to stop the politics and get our priorities
right.
THE recent
expansion by the European Union (EU) of the list of names of some Zimbabwean
political leaders who can no longer enter any EU country is certainly not of
little consequence as some government officials seem to believe.
Zimbabwe is an impoverished country whose population is less than that of
London. Its budget is less than that of some of the states of
Germany.
Zimbabwe is only 22 years old, landlocked,
industrially under-developed and, therefore, economically weak and
vulnerable. That the country needs international aid is an incontrovertible
fact.
The European Union comprises highly industrialised countries
some of which have been in existence for several centuries and their
economies are far more advanced. Our standard of living is much lower than
that of the poorest EU country.
It is not our fault that we are
a young and relatively undeveloped nation. A variety of historical, social,
political, cultural and geo-political factors have produced the current
Zimbabwean socio-economic condition.
Our wish should be to
develop the country's economy by creating a conducive internal and external
environment.
The Government should be presently promoting a rapport
between itself and the outside world, while at home a visible and audible
process of reconciliation should be given high priority.
This
approach was conspicuous by its absence in President Mugabe's speech at the
opening Parliament last week.
The speech was accusatory,
confrontational and uncompromising. He described as sinister and enemies of
State those who advocate devaluation of the Zimbabwean dollar.
Among the advocates of devaluation are Mugabe's Minister of Finance, Dr Simba
Makoni, and the Governor of the Reserve Bank, Dr Leonard Tsumba.
While devaluation could certainly disadvantage the vast majority of consumers
in Zimbabwe by increasing prices of goods and services, it would benefit
importers of Zimbabwean products and services, and tourists by strengthening
the value of their (importers' and tourists') currency vis-a-vis that of
Zimbabwe.
However, whatever the merits or demerits of the matter,
it is vital that a full debate be undertaken by all concerned, including the
country's Finance Minister and the Reserve Bank Governor.
Their
views are vital to the decision-making process on this issue. It was,
therefore, grossly unfair for Mugabe to describe their view as sinister, and
that protagonists of devaluation of the Zimbabwe currency as enemies of the
State.
It should be understood and appreciated by every Zimbabwean
that difference of opinion on virtually every issue is a sine qua non to
a healthy democratic dispensation. It is socially unhealthy and
politically unacceptable for all people in all nations to agree on all issues
at all times at all forums.
Only in churches do people sing the
same hymn and at the same time, but even then, some sing soprano, some alto,
some tenor and others bass, creating a most harmonious musical sound through
that contrast.
When it comes to interpretation of biblical texts
read in church, there is bound to be a difference of opinion among members of
the congregation. But that does not mean or imply that those members of
the congregation whose interpretations differ with that of the pastor or
priest are heretics.
Mugabe pulled no punches against the
British Prime Minister, Tony Blair, and other leaders of the EU who are
critical of the Zanu PF government policies.
No sooner had he
finished reading his speech than the EU announced that it had added 52 more
names to the list of names of Zanu PF leaders barred from entering the
EU.
The whole episode is tragic. It is not necessary to worsen an
already sad situation because, all said and done, it is Zimbabwe that will be
the loser of this most unfortunate confrontation. I do not see how Denmark
or Sweden or Spain or Belgium has anything to lose by telling Zimbabwe to
get lost hell, so to speak.
But we have a great deal to lose by
throwing dust into the eyes of those nations that have helped us to build
roads, schools, clinics, bridges, industries and a variety of
infrastructure.
I am not aware of a single clinic or road or
whatever that Zimbabwe has built in Sweden, Italy, Denmark or any other EU
nation.
Zimbabwe needs the EU nations' moral and material support
more than they need our support. The government should acknowledge this basic
fact when it formulates national policies.
The question of
national sovereignty has been harped upon ad nauseam. There has even been
some suggestion that there could be plans to recolonise Zimbabwe! Zimbabwe's
national sovereignty is protected by the country's constitution and
guaranteed by its membership of international bodies such as the United
Nations.
But national sovereignty does not and cannot make nations
immune from international criticism. Zimbabwe is criticised for what is
perceived as poor governance and not for being a sovereign
state.
Some Zanu PF leaders have been harping on our national
sovereignty repeatedly as if the British government has demanded to send a
colonial administrator from Whitehall to take charge at Munhumutapa Building.
The deliberately misleading and faulty defence of their failures as a
government is deplorable and must be rejected with the contempt it
deserves.
The government has a responsibility to treat internal and
external criticism as an opportunity for improvement, and not as an affront
or insult. All civilised and human beings accept, in fact invite, criticism
and then take advantage of it to eliminate their weaknesses and
mistakes.
What Zimbabwe urgently requires is to initiate a
reconciliation process with the EU. That process would necessarily demand a
give-and-take as opposed to an arrogant approach.
It would be in
Zimbabwe's best national - as opposed to individual personal interests - to
launch such a programme to stop the country from slipping deeper into an
intolerable socio-economic mess.
Godwin Mkandla, the eldest son of the Gokwe North MP, Eleck
Mkandla, was on Monday sentenced to four years for defrauding the district
HIV/Aids fund of $140 000.
But Mkandla, 30, and his accomplice,
Town Kudakwashe Mudzungairi, 28, will not serve the jail term after the Gokwe
provincial magistrate, Godfrey Ruvetsa, fined them $10 000 each.
He ordered them to make restitution to the Gokwe North Rural District Council
before 23 August.
The accused were represented by Kosamu Zingoni of
Zingoni and Associates of Kwekwe.
The court heard that Mkandla
was the finance clerk directly in charge of the district's HIV/Aids
funds.
On 29 November 2001, Mkandla was instructed by Gokwe North
rural district council chief executive officer (finance), Watson Ushemakota,
to buy 600 litres of diesel worth $42 000 using the District Aids
Action Committee account.
He prepared a cheque for $42 000 and
cashed it at the Jewel Bank Gokwe branch. He later withdrew $50 000
cash from the safe box and converted it to his own use.
To cover
up the crime, Mkandla altered the figures on the fuel invoice claiming he had
spent $92 000 to buy 1 600 litres of diesel.
The account was
prejudiced of $50 000 and none of it was recovered.
On 10 December
2002, Mkandla wrote out a cheque with a face value of $8 500 to Sekai
Chokodza on behalf of Takaingei Kanosvova. The court was told that the latter
had rendered some unspecified services to the Aids committee.
Mkandla later connived with Mudzungairi, an accounts clerk, and altered the
records to reflect $90 500.
They later withdrew $90 000 from the
safe box and converted it to their own use. Nothing was
recovered.
Allan Chino, the council's chief executive officer,
unearthed the scam during an audit, which led to the arrest of Mkandla and
Mudzungairi.
ZANU PF youths allegedly beat up and confiscated the
property of a Gokwe-based transporter last week, accusing him of being an MDC
agent.
Josphat Jazi, 29, said he sustained internal injuries when
he was assaulted all over the body with sticks and iron bars.
Jazi said he was assaulted by about 30 Zanu PF supporters during one of his
routine trips to Gokwe growth point, where he rents a house in Mapfungauti
suburb.
He said: "I was awakened by knocking on my bedroom window
by a mob of people armed with sticks and iron bars."
"The youths
had some personal information about me and I suspect my landlord was working
with them as he is a well-known Zanu PF sympathiser."
He alleged he
was then force-marched to the party's headquarters at the growth point where
the youths handcuffed him and took turns to beat him up for nearly four
hours.
Jazi alleged that some police officers witnessed the assault
but ignored his pleas for help. The youths then robbed Jazi of $5
000 before bundling him into a rural bus, and threated to kill him if he
returned to Gokwe, he alleged.
He reported the matter at Kwekwe
Central Police Station after he managed to escape.
On 15 July
2002, Constable Sithole, the investigating officer gave Jazi a request for a
medical report form to facilitate his treatment at Kwekwe General
hospital.
In his report, Sithole said: "The complainant was
assaulted with a log and an iron bar all over his body."
Robert Mugabe is
finding out that it is one thing to allege that you won an election and call
yourself president, but quite another to rule effectively.
Mugabe has been reduced to roaming parts of the world that still entertain
him, looking for validation for his presidency, and issuing threats virtually
every time he opens his mouth.
In terms of half-hearted attempts to
solve the many problems bedevilling the country, he and his regime seem
completely out of ideas. Cornered as the regime is, it is sort of
understandable that the only response they have been able to master is
childish aggressiveness. It is like saying "we may be helpless and
incompetent, but we still have the power to threaten, beat, jail and
persecute you, so there!"
A big deal was made about Mugabe's trip
to Cuba, with the "success" of that junket said to be the sending of some
medical doctors from there to Zimbabwe. Many have pointed out that rather
than making Mugabe look like a dynamic problem solver, it only showed the
deficiencies of a regime that has to go and plead for skilled personnel
because it has done such a splendid job of alienating its own trained people,
who have been leaving the country in droves to escape his disastrous rule. It
apparently had not occured to Mugabe and his propagandists that this is the
connection people would make with his pleading for help from
Cuba.
Cuba has been diplomatically and economicallty isolated from
much of the world for 40 years now, but has still managed to do rather well
for itself in biotechnology and medicine. Zimbabwe, a once proseperous,
well connected country of well educated citizens that once enjoyed the
world's goodwill for most of its two decades of existence, should not be in
a position of pleading for technical skills from the likes of
Cuba.
Despite Castro being a despot, he has shown vision and
dynamism for his country that Mugabe and his regime embarassingly
lack.
Cuba, despite the lack of political freedom and its
economic depradations, has more to show for its brand of "revolution" than
Zimbabwe does, which continues to fall behind despite all the many things
going for it. It is a question of a lack of vision, concern, imagination and
common sense on the part of Mugabe's regime.
When Mugabe and his
ministers visit countries like Cuba and Malaysia, they would do better to try
to find inspiration on how to learn to fish for posterity, than to merely
make a nuisance of themselves by begging for fish to eat for a month or a
year.
Never has there been a character like Mugabe's propagandist,
Jonathan Moyo, on Zimbabwe's political scene. Here is a man whom people
acquainted with him say is intellectually brilliant.
Why then
does he talk and act in the unschooled way he does? I do not know many people
who any longer expect him to say anything to help improve Zimbabwe's image,
but even evaluated as Mugabe's personal public relations operative, it is
truly shocking how incompentent the man has turned out to be.
Let us ignore for a minute the many Zimbabweans who have no use for Mugabe
that he alieanates every day with vitriol even worse than Mugabe's. How do
you explain the lengths to which Moyo goes to step on the toes of
his ministerial colleagues and his seniors in ZANU-PF? What has Moyo
achieved other than making himself arguably the most hated man in
Zimbabwe?
There is nothing even remotely clever about the way he
has conducted himself since becoming a minister.
I had to laugh
last week when Mugabe, trying to pass himself off as the caring, concerned
president for a change, attended a memorial service for the students of the
Masvingo college who died in a horrific road accident recently. He promised
that every major highway in the country would be widened as part of efforts
to make the roads safer. Yet his government has neither the money nor the
concern to pay medical doctors a living wage commensurate with their training
and responsibilities. If there is no money for food imports, where will money
to widen roads come from?
Even if road money could be begged from
Libya or Malaysia, what would it say about Mugabe, his priorities and sense
of planning to plead for money to widen roads when he is too "presidential"
to roam the world raising money for urgent, life or death crises like hunger
and AIDS? I no longer have any respect for Mugabe the man, but I would be
relieved to see him get things right once in a while.
Another
comic non-event was the meeting between agriculture minister Joseph Made and
some bankers.
Made excitedly announced afterwards that the banks
were now fully on board the land reform wagon. So much so that they would now
do the unprecedented and lend billions of dollars to new farmers, accepting
their leases as collateral! "That's a brilliant concession for Made to have
wrung from the banks", I thought to myself, "I wonder how he pulled off such
an unheard of stunt?"
It turns out that the banks had agreed to
no such thing. A lease to an inexperienced, first-time farmer that can easily
be overturned on the whims of some minor ZANU-PF operative is hardly likely
to make any bank worth its salt rush to advance millions of dollars. Yet all
this seems to have by-passed Made. I was extremely dissapointed at this
because my impression had been that he was a crack technocrat hired into the
Mugabe regime to impart some brilliance, worldileness and realistic
innovation, not pie in the sky daydreaming.
"Rule of law" is one
of the most bastardised expressions in Zimbabwe in recent years. I do not
know why Mugabe and ministers like Chinamasa and Moyo bother with trying to
convince us that it is important to them, when they also openly declare that
they will only respect the concept when it is favourable and convenient to
them. In this regard characters like Castro and Gaddaffi are more honourable
because they make no pretence of being law respecting democrats.
They are quite comfortable with being the absolute dictators that they are,
while others imagine that despite their actions they can still lay claim to a
veneer of democratic legitimacy.
The first lady, who this year has
loyally accompanied Mugabe to fashionable Rome, Durban and New York, could
not make it to Havana, Socialist Republic of Cuba. I wondered why, but the
mystery was solved when it was announced that duty called her to be away from
her husbands side, in Switzerland, allegedly to attend an AIDS conference. I
caught myself wondering why somebody more professionally suited was not sent
to deliberation on a problem that is every bit as serious to Zimbabweans
as Mugabe's misrule, but I decided to lighten up. Nothing might have
been achived by the first lady in Switzerland, but hopefully with the change
from her foreign currency allocation she brought us a few bars of those
delicious luxury chocolates the Swiss are so famous for.
Such is
a tragic comedy - its all hard to beat, but what a hell of a way to run a
country.
EDITOR - The
deadline for farmers with Section 8 notices draws closer and yet the people
of this country continue to act like a herd of ostriches with their heads in
the sand.
The impending disaster is monumental as the maize
shortage and imminent wheat shortage shows. The maize grown by the war
vets/settlers last year was such that any farmer worth his salt would have
hung his head in shame to admit to such a poor crop.
The people
of the country are already short of wheat and we can see this being far worse
next year, as even more farmers are prevented from farming. If you are to
listen to our ministers of agriculture and information, you would believe
that everything is rosy and you will all be fed next year.
We
have a war vet growing wheat on this farm who has been advised by the Agritex
officer in the area that he is wasting money and that it would be better off
to abandon the crop - the government will no longer supply him with diesel to
run the motor used to irrigate the crop.
We would have had at least
50 ha of wheat that would have produced a reasonable yield. I am told that
many of the settlers have planted wheat very late and that will probably only
produce stockfeed as they will be unable to harvest it before the rains
come.
Have the "powers-that-be" taken into account the large number
of farm workers that are going to be laid off and will then descend on
their relatives and friends and form squatter camps? The number of
people displaced off this farm is nearly three times the people settled here.
I doubt if the production equals one percent under the new
settlers.
It is all very well saying that the farmers have to pay
the workers large severance packages - many of the farmers will still have
crops in the ground or tobacco waiting to be graded and are totally unable to
pay out. I would also point out that the farmers are not being paid for
the improvements on their farms and have their own future to look after as
well.
We all believed Robert Mugabe when he said in 1980 that he
wanted us to stay and farm. Many of us have poured everything back into the
farm in capital development trusting that Mugabe meant what he said. Now we
have no other homes and no money.
There is another aspect of the
maize grown in this country in the past. Many of our workers came from the
adjacent communal lands and purchased their fertiliser and seed through us.
They could then afford to fertilise their crops well by working off the cost
of their inputs and the resultant crop would be adequate to feed their large
families and sell some as well.
The school fees and uniforms
would also be covered by a father's salary. We also purchased their crops
from them and paid cash on delivery - not three months later as the Grain
Marketing Board does.
People from the communal lands are already
complaining that they want their jobs on the farm back as they prefer the
secure income to a promise of land and government inputs. They have heard all
these promises from the government before and no longer believe
them.
The civil servants who blindly carry on following
instructions to settle people on our farms and ignore court orders to remove
illegal squatters will surely rue the day when they too have no food. The day
will also come when they have no pay as a large percentage of the
government's income will also disappear when the farmers close down and the
many businesses that are agriculture-related follow suit.
The
Minister of Finance has an interesting task when he next produces the
national budget. I wonder where he will find his income - the expenditure
seems to increase in leaps and bounds as more and more is being promised to
these "new farmers".
Wake up people of Zimbabwe. Stop the rot
before it is too late.
ZIMBABWE'S white commercial farmers have resolved not to cede
the title deeds of their farms until they are compensated by the
government, thus throwing down the gauntlet to the state ahead of an August
10 deadline to vacate their farms.
At a meeting between the
Commercial Farmers' Union (CFU) and Vice President Joseph Msika last
Thursday, the farmers said their title deeds were lodged with banks as
collateral while others wanted the issue of compensation to be
clarified.
The government has refused wholesale compensation for
the farms it is seizing from the farmers, saying it will only pay for
improvements made on the properties and not for the land itself which it says
was stolen from blacks by British colonists.
Only 106 farmers
out of nearly 3 000 whose properties are being seized have been partially
compensated since the government started taking the farms in
2000.
CFU president Colin Cloete this week confirmed that Msika had
raised the issue of title deeds during their meeting last week, which the
vice president facilitated to try to thaw frosty relations between the two
sides.
"The farmers want to know how much the government will pay
before they give away their title deeds," Cloete told the Financial
Gazette.
"On the other hand, most farmers have their title deeds
lodged with banks and they cannot supply them to the government until they
repay their loans.
"The farmers were using letters and signed
affidavits to confirm that they were giving their farms on an uncontested
basis but the government is saying this is not enough - it wants the title
deeds."
Cloete said during the meeting, Msika accused farmers,
descendents of the 1890s British colonists who settled in then Rhodesia, of
being insincere in their dealings with the government because they were not
providing the state with title deeds.
About 2 900 farmers face
eviction when the 90 days they were given by the government to vacate their
farms expire on Saturday next week but the farmers say they will hold on to
their title deeds until the compensation issue is resolved.
The
farmers are estimated to owe banks more than $80 billion in loans and
outstanding overdrafts. The government has not made a pledge to pay the debts
if the farmers lose their land.
Up to 80 percent of the farmers
borrow from commercial banks to fund their farming while a few use their own
cash.
The banks have refused to bankroll the operations of newly
resettled black farmers because they do not have collateral. The government
says it will not give the new farmers title deeds but 99-year lease
agreements.
Sources at the Msika-CFU talks said Msika accused the
farmers of even failing to provide the government with title deeds of 500
farms offered by the farmers on an uncontested basis last year.
The properties were offered under the so-called Zimbabwe Joint Resettlement
Initiative, which the government at the time lauded as the right way to
finding a lasting solution to the vexed land question.
The meeting
with Msika came after President Robert Mugabe rebuffed a request for a
meeting by the farmers two weeks ago.
The farmers are expected to
meet Msika again after the government's Land Committee comes up with a report
on its audit of the land reforms now underway.
The committee,
headed by Agriculture Minister Joseph Made and Local Government Minister
Ignatius Chombo, was this week in Matabeleland winding up the
audit.
Cloete said the issue of the August 10 deadline for farmers
to quit their land did not come up during the meeting with Msika but would
be discussed at their next talks.
He said the next meeting will
help give direction on whether the farmers will be able to plant in the
coming season, if they are still on the land, and more importantly if
Zimbabwe-based banks will still support the farmers.
"Banks are
now increasingly nervous, especially the international banks," Cloete said
without elaborating.
"They do not want to make a decision on
lending next year but if government makes a positive statement they will lend
us the money."
DOCTORS at district
hospitals in Zimbabwe yesterday joined a six-day strike by their colleagues
in most urban areas to press for improved pay and better working conditions,
an official of the strikers said.
Howard Mutsando, president of the
Hospital Doctors' Association, said the doctors would only go back to work
once their on-call allowances and basic salaries had been
improved.
They would also require a written agreement from the
government that a viable grading system would be instituted
immediately.
"The mood right now is that the doctors will remain on
strike until such a time as when their grievances have been addressed. In the
past, promises made to us have not been kept, even though we had in good
faith agreed to go back to work," he told the Financial Gazette.
"We had asked district hospital doctors (at the start of the strike) to
continue working but now they are all pulling out," he said
without elaborating.
Mutsando said the strikers wanted basic
remuneration of $220 000 a month, inclusive of the monthly salary and the
on-call allowance. The doctors currently earn a gross salary of $50 000 a
month.
"There are standing regulations that no matter how much
overtime you do, the call allowance should not be more than your gross
salary, and yet because of the shortage of medical doctors we work more
hours," he said.
He said his association on Tuesday met Deputy
Health Minister David Parirenyatwa, who promised that the doctors would be
paid their call allowances by tomorrow.
But a source close to
the meeting said Parirenyatwa, his permanent secretary Elizabeth Xaba and
other officials walked out of the talks when the doctors refused to return to
work before their grievances had been fully met, a charge Parirenyatwa
denied.
Major state hospitals in Harare had very few patients
yesterday and these said they had been at the hospitals since morning and
were still to be attended to.
A couple which had brought an
elderly relative into Harare Central Hospital said it had decided to leave
and seek medical attention from a private doctor because no one at the
government hospital could attend to the ill.
In Bulawayo,
several patients at the two major state hospitals complained that they were
being attended to by nurses even for cases where that needed specialist
care.
The opposition Movement for Democratic Change (MDC)
yesterday condemned what it said was the government's lack of interest in the
welfare of the doctors, who have long complained of their poor pay and have
been on strike several times in the past few years.
"The
doctors' strike is symptomatic of the decay that is eating away at the heart
of Zimbabwe's public services as a direct result of lack of funding and the
sheer incompetence of the ruling elite," the MDC noted.
"Mugabe's
response to the strike and the decline of the health service he once helped
to build is to revert once more into a state of denial and blame others for
the problems that are clearly of his own making," the party said in a
statement.
It said although the government had blamed Britain for
allegedly stealing Zimbabwean doctors, the truth was that the doctors were
leaving on their own because of despicable working conditions and
miserable remuneration at a time of runaway inflation.
By Joseph Ngwawi Business News Editor 8/1/02 9:15:48 AM (GMT
+2)
IN a landmark ruling which highlighted the confusion caused
by Zimbabwe's multiple exchange rates, the High Court has ruled that
the official exchange rate must apply in disputes involving
foreign currency-denominated debt where parties agree that repayments are to
be made in local currency.
High Court judge Justice George Smith
said the official exchange rate of 55 Zimbabwe dollars to the US greenback
should apply in a case in which British Virgin Islands-registered Echodelta
Limited was disputing an offer by Zimbabwean firm Kerr and Downey to pay off
more than US$90 000 owed to the overseas group at the official
rate.
The arrangement between the two parties was that Kerr and
Downey would pay off the debt, which stretched back to May 1997, in Zimbabwe
dollars.
The dispute arose in October 1998 when Echodelta contested
the offer by the debtor.
In court documents with this newspaper,
Echodelta argued that it would incur exchange losses amounting to more than
US$70 000 if the official exchange rate was applied.
Converted
at the official exchange rate, the debt of US$90 385 translated to about $5
million.
Echodelta argued that, due to shortages of foreign
currency on the official market, it would be forced to buy foreign currency
on the parallel market and that it would therefore fail to raise the US$90
385 from the $5 million the debtor was proposing.
The company's
lawyers argued that only US$18 300 would be raised from the $5 million
offered.
Dealers on the parallel market are trading foreign
currency at about 700 Zimbabwe dollars to the US unit.
Kerr and
Downey was engaged by Echodelta to act as agents for the foreign firm on a
project involving a tourist resort on the island of Margaruque, off the
Mozambican coast.
The firm was responsible for marketing, booking,
operations, logistics, staffing, accounting and other issues related to the
daily management of the resort.
Justice Smith, in a recent
ruling seen by this newspaper this week, said the debt must be repaid in
accordance with the Exchange Control (Exchange Rate Management) Order of
October 2000, which makes it illegal to quote rates above what is offered on
the official market.
The judge however conceded that the
21-month-old artificial exchange rate was causing confusion because it was
divorced from the reality on the ground.
"It is not disputed
that the official rates of exchange for foreign currencies are far removed
from reality," Smith noted.
The judgment, which is expected to set
precedence for other local firms with foreign currency-denominated debt that
they are supposed to pay back in Zimbabwe dollars, came against the backdrop
of the proliferation of multiple exchange rates caused by the selective
devaluation of the Zimbabwe dollar by the government.
Firms with
similar arrangement include the National Oil Company of Zimbabwe (NOCZIM),
which last year entered into an arrangement with the Libyan Arab Foreign Bank
(LAFB) under which the LAFB financed NOCZIM's imports of fuel from
Libya.
NOCZIM imports about 80 percent of Zimbabwe's monthly
fuel requirements from Tripoli under a barter deal brokered by President
Robert Mugabe and Libyan leader Muammar Gadaffi.
Under the deal,
the LAFB is supposed to get part of what it is owed by NOCZIM in Zimbabwe
dollars while the remainder is repaid in the form of shareholdings in
state-owned companies.
The ruling by Smith therefore means that in
the event that NOCZIM defaults on its commitments to the Libyans and the
total debt becomes due and payable, the Zimbabwean firm would only be obliged
to pay the local dollar equivalent of the foreign currency-denominated debt
calculated at the official exchange rate.
At present, Zimbabwe
has about five exchange rates for different sectors of the economy as the
government continues to dither on calls to devalue the local
currency.
There are separate rates for gold miners, tobacco
merchants and growers, tourism operators as well as the "official" and
parallel markets.
Gold miners, citing rising production costs
exacerbated by the scarcity of hard cash, have successfully lobbied the
government for a subsidy which, when converted, amounts to an exchange rate
for bullion equivalent to more than twice the official rate.
Growers of Zimbabwe's golden leaf tobacco have also arm-twisted authorities
to reluctantly revise the exchange rate for export tobacco at $158.50 for one
US dollar, about three times the official $55 to the American
greenback.
Analysts this week warned that the multiple exchange
rates would cause administrative nightmares for the central Reserve Bank of
Zimbabwe, which last month instituted a probe into the role of financial
institutions in the parallel market.
"The multiplicity of
exchange rates is going to cause serious nightmares for the Reserve Bank in
terms of its supervision and surveillance of the foreign exchange market," an
economist at a Harare commercial bank said.
Independent
economist John Robertson said: "There is already confusion about which rate
should be used whenever one carries out business and in each case the figure
you get depends on which rate you have used."
The increase in the
number of exchange rates is therefore expected to make it difficult for local
firms to plan, worsening Zimbabwe's economic crisis at a time the country
desperately needs to boost exports and improve hard cash earnings.
Proposed exchange controls kill goose that lays golden
egg
By Joseph Ngwawi 8/1/02 9:25:50 AM (GMT
+2)
ZIMBABWE'S manufacturing base, already shaken to the core by
more than two years of skewed economic policies, is expected to shrink
further while inflation is seen hitting 200 percent by year-end as the
government ponders tougher action against illegal foreign currency dealers
and the extension of price controls, analysts said this week.
A
study just released by the Confederation of Zimbabwe Industries shows that
about 100 firms closed shop in 2001 but analysts say the haemmorhaging of
local industry could worsen this year if the government presses ahead to
clamp down on a parallel forex market that has been the lifeline for most
companies in the past two years.
According to a report by the
Economist's Intelligence Unit (EIU), the Reserve Bank of Zimbabwe (RBZ) is
considering a return to strict exchange controls last used in the 1980s as
well as the introduction of other measures aimed at destroying the parallel
market for hard cash.
Quoting from two policy papers presented by
the central bank to the government, the EIU notes that other proposals under
consideration by the RBZ include the indefinite suspension of bureaux de
change and the centralisation of all hard cash transactions within the
bank.
Analysts warned this week that, if implemented, the proposed
measures could hasten the shrinking of Zimbabwe's manufacturing base, worsen
the shortage of foreign currency and further fuel the country's inflation,
which is presently pegged at 114.5 percent and is already one of the highest
in the world.
Independent economist John Robertson said the
proposed measures, which were quickly crafted after the Cabinet had thrown
out another set of proposals early last month, were likely to compound
Zimbabwe's hard cash crisis at a time the government is battling to contain
leakages from the official system.
"One of the effects of the
new measures will be greater shortages of foreign currency, which will also
have an effect on companies that do not have access to foreign currency,"
Robertson told the Financial Gazette.Zimbabwe has faced a severe hard cash
crisis since November 1999, with monthly inflows averaging US$25 million out
of total requirements of about US$250 million.
The crisis,
worsened by the decision by the government to fix the exchange rate at 55
Zimbabwe dollars to one US unit since October 2000, has spawned a thriving
parallel market where dealers quote rates as high as 700 local dollars to the
American greenback.
The EIU warned that any attempts to destroy the
parallel market without concrete measures to contain inflation would push
most exporters out of business.
"This will be accompanied by
increased shortages and a growing black market," the EIU said.
"Indeed, government officials privately predict that consumer price inflation
will reach 200 percent by the end of the year," the EIU said.
The
analysts said extreme nature of the proposed measures reflected growing
desperation by the government over the direction of economic
policy.
"There is no doubt that we are drifting towards exchange
controls but all these measures are a sign of desperation within government
to arrest the parallel market," said Nyasha Chasakara, an analyst at First
Mutual Asset Management.
"But to impose exchange controls might
be a problem because of the current level of speculation caused by
inflationary expectations," he noted.
Other measures proposed by
the RBZ include a reduction of lending rates for exporters and the productive
sector as well as maintaining the cap on treasury bills at around 26
percent.
The RBZ plans to cut lending rates on its $15 billion
concessional revolving fund from 15 to five percent for exporters and from 30
to 15 percent for other productive sectors.
There are also plans
to cut the bank rate from 57 to 27 percent, according to the EIU
report.
Robertson said the cut in lending rates would fail to
entice the private sector to invest in new projects because of fears of
future sharp increases in interest rates.
"The greatest concern
of the private sector when it comes to investment is that they fear they may
be caught up by future increases in rates after committing themselves long
term," he said.
Is MDC's urban fortress showing signs of
cracking?
8/1/02 8:23:06 AM (GMT +2)
By Luke
Tamborinyoka, recently in Kadoma
IT's definitely a no-win situation
when you deal with Zanu PF.
The sight of a frightened Editor
Matamisa, the MDC candidate for Kadoma, fleeing the counting centre through a
back exit, left an indelible mark in my mind.
She had lost the
election but jubilant Zanu PF supporters still wanted to celebrate by beating
her up. It is likely she would have met the same fate if she had won the
election.
It took a vigilant policeman to restrain a Zanu PF
supporter who was baying for her blood, threatening to beat her up with a
baton.
But following her narrow defeat to the Zanu PF candidate,
Fani Phiri, a question has arisen whether the ruling party has finally broken
the jinx in urban areas, where they have always played second fiddle to
their political rivals.
This was indeed a highly charged
political contest in the small mining town. This culminated in an equally
charged atmosphere both inside and outside John Simpson Hall at Jameson High
School where the counting took place on Monday afternoon.
On
that sunny afternoon, Zanu PF, in a rare victory in an urban environment,
finally broke the jinx and won a mayoral seat.
Since the MDC was
formed in September 1999, Zanu PF had never won elections in urban areas, the
bed-rock of the opposition.
Zanu PF lost the mayoral elections in
Harare, Chitungwiza, Masvingo, Chegutu and Bulawayo. They were not expected
to win in Kadoma, where they lost to the opposition party in both the
parliamentary and presidential elections in 2000 and 2002
respectively.
Sensing a second defeat in President Mugabe's home
province of Mashonaland West since they lost Chegutu to the opposition last
year, Zanu PF ventured into the Kadoma fray in grand style.
Two
weeks before the election, the whole town had turned green following an
unprecedented influx of the notorious "green bombers".
They were to
play a crucial part in hi-jacking the venue for a legally sanctioned MDC
rally, which was supposed to be addressed by the party's president Morgan
Tsvangirai, a week before the polls.
In the run-up to the polls,
hundreds of Zanu PF supporters established several bases at Mabanana creche,
Kadoma Vocational Training Centre and Specks Hotel. The party's senior
officials booked themselves at Westview Lodge and Kadoma Hotel and Conference
Centre.
Two weeks before the polls, the "green bombers" were a
common sight, especially at the Zanu PF offices in Rimuka, which operated as
the party's command centre.
On the first day of the two-day
poll, a group of Zanu PF youths, flanked by two police vehicles, attacked
Matamisa's home. Ironically, the police arrested the victims, 12 of whom were
still in custody by the close of voting on Sunday.
Two days
before the election, Matamisa's election agent and Kadoma Central MP, Austin
Mupandawana, three polling agents and eight others were arrested following a
clash with Zanu PF supporters in Eiffel Flats.
At the Women's Club
Centre in Eiffel Flats on Saturday, Zanu PF trucks were distributing food to
a group of women before they proceeded to vote at Cam and Motor primary
school.
The drama finally reached fever pitch at Jameson High
School, where Zanu PF - fairly or unfairly - broke the MDC dominance in an
urban election.
Outside the hall, Zanu PF supporters in a green
pick-up truck attacked their MDC counterparts outside the gate and the police
dispersed the opposition supporters "for their own safety".
Some
of them were injured in the process and had to be ferried
to hospital.
The Zanu PF supporters had already erupted into
song and dance, celebrating their victory exactly an hour before the results
were announced.
Inside the hall, a tense atmosphere enveloped the
occasion.
Clad in loose-fitting blue jeans, Phiri paced up and down
the hall and occasionally engaged in hushed discussions with his polling
agents and made rough calculations on a piece of paper as the moment of truth
beckoned.
His counterpart, Matamisa, sat unmoved at the corner of
the counting table, even after Phiri was eventually announced winner,
sparking wild celebrations in the Zanu PF camp.
Former minister
Enos Chikowore took leave out of the political wilderness and joined Phillip
Chiyangwa, the Zanu PF chairman for Mashonaland West and Kadoma East MP, Paul
Mangwana in congratulating Phiri.
The jinx had finally been
broken.
As the MDC goes back to the drawing board, the question
remains whether their loss in Kadoma is a harbinger of worse things to
come.
For Zanu PF, they are likely to employ the tactics they used
in Kadoma to win in future mayoral elections.
Welshman Ncube,
the MDC secretary-general, said Zanu PF had stolen the election.
"The full Zanu PF machinery was involved in constructing a warped victory
against a genuine expression by the people of Kadoma," he said.
Ncube said his party had detected serious irregularities. He said Matamisa's
election agent, Kizito Mhike, was denied access into Rimuka high polling
station.
He said the MDC would decide what action to take regarding
his party's participation "in these fraudulent exercises".
Yet,
others maintain that Zanu PF has indeed turned a new chapter by destroying
the barriers to what had turned out to be the MDC's impregnable fortress -
the urban areas.
For a 52-year-old former head teacher
called Editor Matamisa, who did not even have sight of the voters' roll
before the polls, it turned out to be a tough adventure in a dangerous,
male-dominated game called politics.
MDC members arrested for alleged burning of
tractors
8/1/02 7:56:50 AM (GMT +2)
From Brian
Mangwende in Mutare
FOUR MDC members, including Prosper Mutseyami,
the vice-chairman for Manicaland, have been arrested on allegations that they
burnt three tractors parked at a government complex in Chipinge North on
Sunday.
The others are Zakaria Makoni, Shane Kidd and Daniel
Ngorima. Makoni is a traditional healer.
Police in Chipinge
confirmed the destruction of the tractors and the arrest of the
four.
A policeman, who refused to identify himself, said: "Three
government tractors were burnt and we have arrested some
suspects."
He would not comment any further and referred all
questions to Edmund Maingire, the police provincial
spokesperson.
Maingire could not be reached for comment. An officer
said he had gone to Grand Reef Infantry Battalion, about 30km south of
Mutare. Pishai Muchauraya, the MDC spokesperson in Manicaland, said: "Why is
it that whenever a crime is committed, only MDC members are arrested? I smell
a rat. "The police should be impartial. Mutseyami has become their
scapegoat.
"He was arrested on yet another charge and immediately
after his release they re-arrested him. These intimidatory tactics by the
police will not work because as a party we are determined to soldier
on."
Meanwhile, two MDC activists in Buhera South, including the
party's treasurer in that constituency, were last week allegedly kidnapped by
Zanu PF youths. Muchauraya said their whereabouts were still
unknown.
Musande Matsveta, 30, the treasurer, was reportedly
abducted as he attended a funeral in Masasa. Kudzai Magama of Chibidza Ward
in Buhera South was abducted from his home on the same day.
Makoni refutes rumours of his resignation from
Cabinet
8/1/02 7:55:55 AM (GMT +2)
Staff
Reporters
SIMBA Makoni, the Minister of Finance and Economic
Development, yesterday dismissed persistent rumours that he had resigned
after a disagreement with President Mugabe.
Makoni, speaking
through his secretary, said it was untrue that he had decided to jump ship to
join Nkosana Moyo, the former Minister of Industry and International Trade,
who resigned over what he said was frustration and non-co-operation from
Cabinet colleagues.
Moyo, now based in the United States, left the
country and reportedly faxed his resignation to Mugabe from South
Africa.
"The minister says he has not resigned at all," Makoni's
secretary said. "Actually you are not the first person to call asking the
same question. He says it's not true."
Makoni has always been
viewed as "the odd man out" in Mugabe's Cabinet and is probably one of the
few ministers acceptable to the international community and most
Zimbabweans.
The plot against the former Southern African
Development Co-ordinating Community executive secretary thickened following a
veiled attack on him and the governor of the Reserve Bank, Leonard Tsumba, by
Mugabe.
The two have repeatedly called, so far in vain, for the
devaluation of the Zimbabwe dollar against the major currencies.
The Cabinet action committee on financial and economic affairs has rejected
their proposals, saying they would trigger a rise in inflation.
Makoni has also been at variance with his colleagues over the implementation
of fiscal and monetary policies to prop up the
tottering economy.
Mugabe said at the official opening of
Parliament last week, in apparent reference to Makoni and Tsumba:
"Devaluation is sinister and can only be advocated by our saboteurs and
enemies of this government. . . Devaluation is thus dead."
Sources close to Makoni insisted he resigned after Mugabe's speech but only
after taking the issue up with the President. They said Makoni had discussed
the matter with Mugabe at a reception the President recently hosted for MPs
at State House.
The sources allege Mugabe then summoned Makoni to
his ffice the following day and dressed him down over the devaluation
proposal, saying a "runaway" exchange rate was not the answer to the
country's economic woes.
Economists and individuals have urged
Makoni to resign as his Cabinet colleagues seem to constantly spurn his
advice.
There are now believed to be pro- and anti-Makoni factions
in Zanu PF, with the latter campaigning for Makoni and Tsumba's
dismissal.
Makoni admitted he has had differences with his
colleagues, especially over policies pertaining to the exchange
rate.
"I do not give up after only one attempt. I will go back
again and again until I am able to convince my colleagues that this is the
right way to go, or alternatively until my colleagues can offer me a
better alternative," he has been quoted as saying
ZFTU accused of extorting $3bn from farm workers' exit
packages
8/1/02 7:54:14 AM (GMT +2)
By Takaitei
Bote Farming Editor
THE Zimbabwe Federation of Trade Unions (ZFTU)
has allegedly extorted more than $3 billion meant for farm workers'
retrenchment packages.
According to the Justice for Agriculture
(JAG), an association representing commercial farmers, during the past three
weeks more than 100 farmers, issued with eviction notices were barricaded in
their homes, under pressure to pay staff retrenchment packages.
The packages are alleged to run into an average of more than $30 million for
each farm.
Commercial farmers and farm workers affected are mainly
from the Mvurwi area of Mashonaland Central.
JAG was formed
following divisions within the Commercial Farmers' Union (CFU).
The ZFTU, a pro-Zanu PF workers' union, is alleged to be forcing commercial
farmers issued with Section 8 orders to pay farm workers their retrenchment
packages.
The union is allegedly taking between 30 and 40 percent
from the workers' total packages.
About 3 000 commercial farmers
are expected to vacate their farms in nine days' time (10 August), as the
government takes over their land under its controversial land reform
programme's second phase, expected to be completed this month.
According to labour regulations, commercial farmers are supposed to pay
retrenchment packages as soon as they are compensated by the government for
making improvements to the farms they formerly owned.
The CFU
alleged last month that only about 100 commercial farmers issued with
eviction notices had been compensated.
Most commercial farmers who
have paid laid-off farm workers so far are using their own
resources.
Jenni Williams, a spokes-person for the JAG, said
Chigamire Farm in Mashonaland East was one such property where the owner was
under pressure to retrench workers. The owner has not been issued with
eviction notices.
Williams said: "ZFTU have taken it upon
themselves to visit farms to incite and intimidate a traumatised
workforce into breaking their contracts of employment."
The
General Agricultural Plantation Workers' Union of Zimbabwe (GAPWUZ), the
union which represents commercial farm workers, confirmed yesterday the ZFTU
were extorting money from commercial farmers.
Clemence Sungai,
GAPWUZ secretary general said: "The ZFTU are taking between 30 and
40 percent from the packages paid to farm workers. That
is illegal."
Sungai sad no union was entitled to workers'
retrenchment packages and this included the GAPWUZ.
Sungai
alleged the Ministry of Public Service, Labour and Social Welfare was aware
of the ZFTU extortion issue and that investigations had been
instituted.
There was no immediate confirmation of this from the
ministry last night.
Sungai could not indicate the total number
of farm workers affected.
Contacted for comment, ZFTU president,
Alfred Makwarimba, referred the matter to another ZFTU member whom he only
identified as Mudanwa.
Mudanwa was contacted on at least four
occasions this week, but he claimed he was driving each time and could not
discuss the matter.
Farmers yesterday said most of the farms
affected by Section 8 acquisition orders still had produce in their sheds
awaiting delivery to market.
An estimated US$ 330 million
(Z$18,1 billion) worth of tobacco still being graded.
PARLIAMENT met on Tuesday and approved the protocol
establishing the Pan African Parliament, the Legal Affairs accord in the
Southern African Development Community and the Appropriation Bill giving the
government the right to access funds given to it under last week's
supplementary budget.
After approving the three, Patrick Chinamasa,
the Leader of the House, adjourned Parliament to 10 September.
The protocol establishing the Pan African Parliament falls under the recently
launched African Union. MDC MPs said it was not clear how the parliament
would function since most African leaders were "despots and dictators" who
did not even have parliaments in their own countries.
MDC MPs like
Job Sikhala (St Mary's), Priscilla Misihairabwi-Mushonga (Glen Norah) and
David Coltart (Bulawayo South) said most African leaders did not adhere to
the principles of democracy and good governance that the AU and Nepad were
calling for.
Coltart said Zimbabwe and Libya were some of the
African countries that were most undemocratic unlike South Africa, Nigeria,
Ghana and Senegal.
Storm brewing over hiring of Mutare's medical
officer
8/1/02 7:58:58 AM (GMT +2)
From Brian
Mangwende in Mutare
MORGEN Chawawa, Mutare's town clerk, on Tuesday
refused to shed light on the circumstances leading to the controversial
hiring of Dr Christopher Zishiri as the city's medical officer.
Earlier this year, the council submitted three names to the local government
board, which appoints all senior officials in local authorities.
The successful candidate was to succeed Diarmuid McLean, who resigned from
the eastern border town's council two years ago.
On the list as
first choice was Dr R Gwisai, followed by Zishiri and Dr G L Mpala,
respectively.
Chawawa's task was to submit the names to the board
and advise the candidates on the dates of their interviews.
Instead, the town clerk allegedly recommended Zishiri ahead of Gwisai who was
council's first choice.
Contacted for comment, Chawawa said: "You
go ahead and write what you want to write. You are being paid by people who
do not have progressive ideas for the country.
"You have been
diminishing my image ever since you came to this town. I do not want to be
part of any of your reports. Your paper is out to get me. I have given you
the latitude and granted you permission to go ahead with your reports but do
not involve me."
Yesterday, Lawrence Mudehwe, the Mutare executive
mayor, said Ignatius Chombo, the Minister of Local Government, Public Works
and National Housing, had put Zishiri's appointment on hold pending
investigations into the controversy surrounding his appointment.
Yesterday, Zishiri, the Midlands provincial medical director, said:
"I resigned from central government after Chawawa told me that my
application had been successful.
"But up to now I have not
received any correspondence regarding my appointment. "To my
surprise, senior officials in the Ministry of Health and Child Welfare told
me that I had been imposed on the council.
"I have always wanted to
work in Mutare, but it seems I have been caught up in the political
cross-fire."
Mudehwe confirmed Zishiri had not been appointed
because of the controversy surrounding his recommendation.
The
mayor said: "Only after the situation has been clarified to the full council
can we make a decision on whether or not to hire him."
Zishiri has
since expressed disapointment at the controversy surrounding his
recommendation.
"I have been told a lot of unpalatable things about
my recommendation. Now I'll just wait and see what happens. However, Mutare
was just one of my options." he said.
ZIMBABWE'S mainstay
agriculture sector, in turmoil in the past two years, will this year shrink
by 24.6 percent instead of only six percent projected at the beginning of the
year, Finance Minister Simba Makoni has told Parliament.
"The
agricultural sector faces a decline of 24.6 percent," Makoni told the House
last week when seeking approval for a $52.97 billion supplementary budget for
food imports and farming inputs for farmers resettled under the government's
land reforms.
But the Commercial Farmers' Union (CFU), whose white
members contribute 60 percent of total agricultural output, this week said
the sector would fall by much more than the 24.6 percent predicted by
Makoni because of an alarming 40 percent decline in commercial
agriculture.
CFU president Colin Cloete said "our sector will
shrink by 40 percent and although I don't have the overall figures, it is
however more than that (24.6 percent). The commercial sector will decline
because of inability by farmers to plant."
For example, Cloete
said, commercial wheat producers had slashed their hectarage by nearly 50
percent from the 53 829 hectares planted each year in the past five years to
only 27 000 hectares put under wheat this year.
The huge cutdown in
wheat production has not been matched by a corresponding rise in production
by small-scale growers.
Production of the country's staple food
maize by commercial, small-scale and communal farmers had this year fallen by
66 percent while national output of most major crops like cotton and soya
beans tumbled by between 33 and 59 percent.
Cloete said farmers
had been unable to plant to capacity because of disruptions of farming
operations by government supporters and the seizure of farms by the
government under its fast-track land reforms.
Makoni, who made no
reference to the disruptions on agricultural production by the government's
reforms, blamed the drought that has ravaged parts of southern Africa as the
chief cause of the huge decline in agriculture.
Zimbabwe and
regional farming experts acknowledge that the poor rains last year are partly
to blame, but say the huge decline in Zimbabwe's farm output and the
resultant food shortages are self-inflicted disasters.
The experts
warn that production could tumble further in the 2002/2003 farming season due
to an El Nino-induced drought expected to hit southern Africa this
year.
The Department of Meteorological Services in May this year
said it was monitoring developments in the Pacific where the warming of
waters to above normal temperatures usually triggers the El
Nino.
An El Nino warning is expected to be issued by regional
weather experts next month to enable countries to come up with contingency
measures to deal with the effects of a possible drought.
Agriculture contributes 17 percent to Zimbabwe's annual gross
domestic product of $928 billion.
FINANCE Minister Simba Makoni projects that
Zimbabwe's balance-of-payments (BOP) deficit is set to worsen almost 10-fold
this year in what analysts say is another sign that the government is now
realising its policies have failed to arrest the free-fall in exports and
contain a two-year-old foreign currency crisis.
Makoni, who last
week requested parliamentary approval for a $52.9 billion supplementary
budget and presented a half-year economic update to Parliament, said the
overall BOP deficit was expected to increase from US$194 million in 2001 to
US$1.1 billion this year.
He conceded that Zimbabwe's BOP position
remained under severe pressure from poor export performance and reduced
capital inflows.
"The estimates show that the overall balance of
payments recorded a deficit of US$194 million in 2001, which is projected to
worsen further in 2002, with a preliminary estimate of US$1.1 billion
deficit," Makoni said.
Acute shortages of hard cash have resulted
in the accumulation of external payment arrears, which stood at US$1.1
billion as at July 19.
Zimbabwe also requires to import grain to
feed about 7.8 million people who are in need of food assistance until the
next harvest in May 2003.
According to Makoni, the government
needs to raise more than US$310 million ($17.1 billion) between now and
December 2002 for food imports.
"The above review presents the
context within which, half way through 2002, we should brace ourselves as
leaders and citizens of a nation in deep crisis to resolutely, decisively and
definitely confront the challenges facing us," the minister
said.
Analysts this week said Makoni's speech painted a grim
picture of Zimbabwe, particularly regarding the foreign currency crisis that
has beset the economy since November 1999.
They said the
deteriorating BOP position pointed to deepening hard cash problems for the
southern African country, already ostracised by major Western donors and
multilateral financial institutions.
"This means they are not
expecting an improvement in export performance and that local companies and
ordinary Zimbabweans should brace for even worse foreign currency problems in
coming months," economist Witness Chinyama said.
Official
statistics show that Zimbabwe's exports have declined by more than 30 percent
in the past five years, from US$2.5 billion in 1996 to US$1.7 billion last
year.
Reflecting the sluggish export performance, hard cash
receipts from the export of services, which accounts for about 16 percent of
total foreign currency earnings, declined from US$50.9 million five years ago
to US$35.3 million last year.
"The poor performance of exports
is a cause of concern in the economy, especially given the cold diplomatic
relations with industrialised countries," financial services group Century
Holdings said in a commentary on the economy.
Zimbabwe, its ties
with the international community strained by the government's encouragement
of its supporters to seize commercial farms, was further dealt a major blow
in June when it was barred by the International Monetary Fund (IMF) from
accessing the Fund's technical assistance.
The IMF's decision
followed the government's failure to make regular payments to retire
outstanding arrears, which stood at US$132 million on June 12 but have since
increased to more than US$137 million.
Meanwhile, heightened
speculation about a possible reduction in interest rates and $4.8 billion
worth of treasury bill (TB) maturities on Monday and Wednesday last week
drastically dragged short-term money market rates to below 20 percent for
negotiable certificates of deposit and a discount rate of 21 percent for the
indicative 90-day TBs.
The discount on 90-day TBs was pegged at
around 27 percent at the beginning of last week.
The pressure on
the rates was worsened by resistance by the central Reserve Bank of Zimbabwe
(RBZ) to accept bids quoting rates above 21 percent.
"The belief
in the market is that rates will come down, most probably before the end of
this week and therefore no one is prepared to commit long term before
everything becomes clear," said one money market dealer.
The RBZ
has been widely expected to cut interest rates as part of a strategy to
cushion the government from the high cost of domestic borrowing.
The government currently sits on a domestic debt of more than $310 billion
and needs to raise about $5 billion during the current fiscal and calendar
year to meet the expenditure levels proposed under the revised budget
presented last week.
Under the supplementary budget, Makoni
proposed to raise $46.5 billion of the additional $52.9 billion required
until December 2002 through a reallocation from non-priority areas.
JOHANNESBURG - De Beers chairman Nicky
Oppenheimer said this week South Africa's draft proposals to shake up the
mining industry had set off some alarm bells, but he did not expect mines to
be expropriated as some feared.
Oppenheimer also said the
world's biggest diamond group - which is 45 percent owned by Anglo American -
had had a "good" first half and was working to bring more black people on
board at De Beers and in the wider industry.
De Beers reports
its first-half sales on August 12. In 2001 the group, which supplies
two-thirds of the world's uncut gems, had sales of
US$4.45 billion.
Last month South Africa approved a hotly
contested Minerals Bill that aims to give blacks a larger role in the sector,
which is one of the pillars of the economy but is still dominated by whites
eight years after the end of apartheid.
Before the Bill was
passed, De Beers said it could put 8.5 billion rand (US$840 million) in
investment at risk because it threatened mining firms' security of
tenure.
But the release last week of the draft Mining Charter - the
meat on the Bill's bones - for industry discussion has caused even more
concern, with its clear targets and deadlines.
"I think this
government knows full well that nationalisation of parts of the industry is a
disaster. I don't think we'll end up with that," Oppenheimer
said.
Asked at a foreign correspondents' briefing if he ruled out
mine expropriations, he said: "Absolutely."
The draft of the
mining charter says control of all new projects must rest with new black
business within 10 years.
ZIMBABWE'S more than
90 000 teachers yesterday rejected a 20 percent pay rise given to civil
servants last week and threatened to go on strike to force the government to
hike their salaries to match the country's current annualised inflation rate
of 114.5 percent.
"The 20 percent increment is too little to match
our country's inflation rate which is above 100 percent," Progressive
Teachers' Union of Zimbabwe secretary Raymond Majongwe told the Financial
Gazette.
"Next term we are going to take action over the November
exams and this will have an impact on the government which is supposed to pay
what is due to us," he warned.
The larger Zimbabwe Teachers'
Association (ZIMTA), which last week said it planned to stage demonstrations
to pressure the government to award teachers a 60 salary hike, this week said
it was consulting members on the next course of action.
ZIMTA
president Leonard Nkala said: "Teachers are not happy about the 20 percent
increment and as of now we are making consultations on what to
do next".
Givemore Masongorera, who heads the Public Service
Association which represents all government workers, said the entire civil
service was unhappy about the government's latest pay rise but added that his
association was concentrating on negotiating for a higher salary increase for
next year.
Finance Minister Simba Makoni announced the 20 percent
pay rise for all the government's 160 000-plus workers in Parliament last
week