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Democracy Mask Falls Off Zanu PF's Face



Financial Gazette (Harare)

ANALYSIS
December 13, 2006
Posted to the web December 14, 2006

Charles Rukuni
Harare

ZANU PF is likely go ahead with a decision to extend President Robert
Mugabe's term of office this week, but the resolution will strip the ruling
party of all pretensions that it believes in democracy.

Most Zimbabweans -- and the international community -- had been anxiously
waiting for 2008 because President Mugabe had suggested that he would step
down to write his memoirs. But in the build-up to ZANU PF's conference,
which opens today at Goromonzi High School, five party provinces backed
calls to extend the President's term of office by at least two years.

The proposed extension is being touted as a cost-saving measure, but
observers say it has nothing to do with money. It is meant to enable the
ruling party to put its house in order.

Reggie Moyo of the National Constitutional Assembly (NCA) in Matabeleland
said it was not "the people" that wanted this extension, but the ruling
elite itself. "Mugabe has said in the past that he will retire in 2008.
Everyone, including the international community, is waiting for this. So the
party now wants to make it look as if he has been asked by the people to
stay on. This is why the issue of succession is not even on the agenda
because it would put Mugabe in bad light because he would not have honoured
his word," Moyo said.

"This (extension) will also give Mugabe a chance to purge the party of all
undesirables. It has nothing to do with saving costs. If they were genuine
about saving costs and implementing the wishes of the people, they would
bring forward the parliamentary elections to 2008. This would not require an
amendment of the constitution because the president has powers to dissolve
parliament," Moyo said. Zimbabwe has already amended its constitution 17
times, and most of them have been used by ZANU PF to cling to power.

This conference will again underscore ZANU PF's dictatorial tendencies,
which are being so amply exposed in the on-going defamation case of former
government spin-doctor Jonathan Moyo.

The defamation case arises from remarks allegedly made by John Nkomo and
Dumiso Dabengwa that Moyo had planned a coup. This was after six ZANU PF
provincial chairmen pitched up at the now infamous Dinyane meeting. The
chairmen's attendance incensed the party leadership, because their number
was enough to overturn a politburo decision that morning to impose Joice
Mujuru as vice-president. The presence of the six-provincial chairmen should
have been a clear signal to the party leadership that even people in its own
ranks wanted change. But instead, the six were expelled.

The 2004 congress should have chosen President Mugabe's successor, if he
really wanted to step down. The next congress is only due in 2009, more than
15 months after the 2008 presidential poll.

Moyo's defamation suit revealed that the Politburo's constitutional
amendment to stipulate that one of the co-vice presidents of the party
should be a woman had violated rule 253 of ZANU PF's own rule book, which
gave sole power to amend the constitution to the central committee, subject
to ratification by congress.

The rule states that any proposed amendment must be submitted to the
secretary for administration at least three months before the date of the
meeting of the central committee, at which the amendment is to be
considered. The secretary has to circulate the proposed amendment to
provinces at least two months before the central committee meeting.

A two-thirds majority of the central committee is required to adopt the
amendment. The same applies to the congress. A two-thirds majority is also
required to ratify the amendments effected by the central committee. But the
emergency politburo meeting that imposed Mujuru was held just three days
before the close of nominations, and two weeks before congress.

In court, Nkomo argued that the politburo was only implementing a resolution
agreed at the 1999 congress, but he could not explain why the politburo had
waited for five years to implement that resolution when the party had held a
special congress in 2000.

Moyo argued that the politburo had bulldozed its way because it wanted to
impose its own candidate and not one chosen by members. The politburo had
done the same thing at congress itself.

He said he had been nominated and approved for the party's central committee
by the district coordinating committee which had submitted his name to the
provincial committee. That committee had passed it on to the central
committee which had accepted his nomination. But Moyo's name was not on the
final list read out to congress. When asked who had removed his name when it
had gone through all the required stages in the party structures, Nkomo
could only say Moyo had been "vetted out" but would not say by whom.

When pressed to explain, he said ZANU-PF was a political party where the
leadership did what was best for the party. It was not "a church where
people had a Bible and in some cases written prayers which they could
recite."

Moyo's lawyer, Job Sibanda, argued that in its rush to amend the
constitution for Mujuru's benefit, stipulating that one of the
vice-presidents be a woman, ZANU PF had effectively shut out women from
becoming party president. Nkomo said his party had since realised this
anomaly and had rectified it. He did not say when or how this had been done.

Even the presiding judge, Justice Francis Bere, appeared astounded by how
ZANU PF operates. He expressed surprise that Nkomo, the party's national
chairman, had attended a district coordinating committee meeting to resolve
a dispute. He asked Nkomo whether it would not have been prudent for him to
delegate someone else because, as national chairman and also head of the
national disciplinary committee, he was supposed to be the final arbiter.

When Nkomo said he did not see anything wrong with what he had done, Justice
Bere said: "So you can investigate, prosecute and then judge. I thought you
should be more like an appeal court."

But that's not the ZANU PF way, as the conference will show again over the
next four days.


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People's Conference Indeed!



Financial Gazette (Harare)

EDITORIAL
December 13, 2006
Posted to the web December 14, 2006

Harare

THE ZANU PF annual conference, that yearly orgy of self-congratulation which
the ruling party grotesquely misnamed the People's Conference, begins
tomorrow in Goromonzi.

And it could not have come at a more appropriate time, if only ZANU PF, the
author of the country's severe economic and social dislocation, knew what it
means to be accountable to the people.

Much as we believe that the ruins must not obstruct the prospects, the truth
is that the country's once reassuringly resilient economy, which has been
condemned into historic contraction, is teetering on the verge of collapse
as mirrored through high inflation, falling industrial production and
employment. Not to talk of the acute shortages of food where an estimated
two million people are in urgent need of food aid, a crippling shortage of
fuel and the disastrous state of the health delivery system where thousands
of people are dying from preventable, treatable and manageable diseases.

And if it is a People's Conference, then it would be expected to discuss
real issues -- issues that are important to people -- coming as it does at a
time when the crisis that has spawned inevitable socio-economic
difficulties, stagnation and misery, is deepening. Indeed, the conference
should discuss bread and butter issues to resonate with 80 percent of the
population which is caught up in a poverty trap. This is the time when ZANU
PF, which forms the government of the day, should spell out how it intends
to restore local economic pride and promise with a sense of national purpose
and cohesion.

And what are these issues? Inflation, that is if ZANU PF understands that
curbing inflation is probably the most important factor in producing a
growing economy; parastatal decay and why all deals touted as saviours of
state enterprises have dismally failed; how to staunch the haemorrhaging of
skills; corruption which has weighed down the economy; why only less than 30
percent of the 2007 national budget expenditure is going into capital
expenditure when it is known that infrastructural development is a real
lifebelt that could turn the tide for the sickly economy; how to bolster the
dangerously shrinking production capacity resulting mainly from the ZANU PF
government's impractical policies and intransigent attitude; how the
increasingly isolated country which has been transformed into a land of
contagion, shunned by investors and international financiers, can be
re-integrated into the broader community of nations because it is not about
looking East or West but at the global village that is the world and last
but not least, the absence of basic rights and freedoms.

These are the pertinent issues that the conference should tackle if the ZANU
PF government understands the depth of the abyss from which Zimbabwe has to
find a way and if it is to come up with a triumphant response to the
worsening economic crisis.

Sadly, we do not have any high hopes for it. It will be a three-ring circus
at Goromonzi. We cannot expect, say the ZANU PF Members of Parliament, who
have hardly said anything meaningful in Parliament about the socio-economic
and political problems besetting the country in the belief that a ship in
the harbour is safe when that is not what ships were built for, to all of a
sudden pluck up enough courage and speak out for the people. Thus it will be
the same old story at this week's ZANU PF conference. There will be no
departure from the tradition of, as we have said before, erecting an edifice
of philosophy on a wasteland of sterile dogma.

So what will predominate the conference? The high-falutin phrases and empty
declarations that promise the proverbial pie in the sky; how ZANU PF should
continue to exploit the power of incumbency to remain in power until the
cows come home; how everything is supposed to revolve around the ruling
party's execution of the war of liberation as if the war is going to be a
rallying point for the future; the internal dispute between a new generation
of young radicals and the old guard which has stirred some discord within
the party; how the West's targeted sanctions imposed on the country's ruling
elite are directly responsible for the deepening crisis whose existence ZANU
PF previously denied and of course how the unbankable 99-year leases have
brought finality to the emotive land issue.

And that is precisely why to most Zimbabweans who usually keep their powder
dry ahead of important events, the ZANU PF conference will always remain a
non-event -- a damp squib.


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Law Society Says Government Has Bred a Culture of Violence



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Clemence Manyukwe
Harare

PRESIDENT Robert Mugabe's government has bred a culture of impunity that has
encouraged the torture of trade unionists and the illegal detention of
business executives, the Law Society of Zimbabwe (LSZ) said in its annual
report.

The organisation said it had been alarmedby the President's public backing
of beatings of the unionists following a foiled demonstration in September.

But the LSZ also said the opposition was incompetent in the face of
escalating human rights violations.

"The encouragement from the President of Zimbabwe could only strengthen the
culture of impunity which is prevalent in Zimbabwe . . . instead of
apologizing to the International Labour Organisation (ILO), the executive
attempted to minimize and justify the attacks," Joseph James, outgoing
president of the LSZ, said in a report released after the society's annual
general meeting on Monday.

James said that a business community that had previously been critical of
those in opposition to the government "felt the full brunt of the
government's power" through arrests and detentions for alleged price control
violations.

"It is clear that these exercises by the police are unnecessary, uncalled
for and are encouraged by the pervasive culture of impunity," said the
report.

The report criticised a series of new repressive legislation tabled in
Parliament this year, such as the Interception of Communications Bill, the
Suppression of Terrorism Bill - which was withdrawn - the Criminal Law
(Codification and Reform) Act and the Gazetted Law (Consequential
Provisions) Act.

The LSZ said only an independent judiciary could now protect citizens:

"In Zimbabwe the opposition is ineffectual, and the legislature is an
extension of the executive. It is therefore especially important that a
strong and independent judiciary protects the ordinary citizen."

On a rare positive note, the society praised judge president Rita Makarau
"for making a positive and public effort to improve the administrative
system."


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Arms Crisis Leaves Cop Graduates Half-Baked



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Clemence Manyukwe
Harare

THE police have become a danger to the public due to a lack of proper
training in the use of firearms as a result of ammunition shortages, a
Parliamentary committee has warned.

In a report submitted to Parliament last week, the portfolio committee on
Defence and Home Affairs said the operations

of the Zimbabwe Republic Police (ZRP) could be seriously disrupted after it
was granted 79 percent less than its $840 billion bid in the budget.

The committee said the Zimbabwe Defence Industries (ZDI), the state owned
sole maker and importer of ammunition in the country, was failing to meet
demand for ammunition from the uniformed forces.

"ZDI has no capacity to supply the quantities required. This will result in
recruits passing out without the necessary training in firearms, which makes
them dangerous to themselves as well as to the public. Regular members also
need retraining in the use of firearms," the committee's report said.

The committees said police were unable to access foreign currency for
imports.

The police needed R31 100 000 for ammunition, and a further R122 313 073,
US$53 750 000, Euro 70 000 and Pula 7 478 173 for other equipment.

Apart from the lack of foreign currency, police also faced serious funding
shortfalls, resulting in shortages of training equipment and stationery.

Poor funding of the police, the committee found, also meant the the force
was still using typewriters.

Parliament heard that the police force had been allocated one percent of its
total requirements on capital expenditure, and 14 percent and 40 percent for
employment and programmes costs, respectively.

"There are acute shortages of housing and office accommodation. The
department was given $1 billion, that is 43 percent of a bid of $2,255
billion.

This is inadequate for the completion of these projects, which commenced in
year 2000," the report said.


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Desperate GMB Buys Rain-Damaged Wheat



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Harare

THE Grain Marketing Board (GMB) has begun buying even rain-damaged wheat in
a desperate bid to replenish its depleted grain stocks.

The GMB, which has a monopoly on grain trade, said this week it would now
accept all wheat, including that previously condemned after being spoiled by
the early summer rains.

Although the damaged wheat is unsuitable for human consumption, the GMB on
Tuesday called on farmers to deliver substandard wheat to its collection
depots where they would be paid $217 000 per tonne, even for the
rain-damaged grain.

"We are encouraging farmers to deliver all their wheat regardless of its
state. The GMB depot managers throughout the country have been instructed to
accept all the wheat and will unconditionally assist the farmers in this
regard," reads part of a statement sent to major depots on Tuesday.

Shortages of combine harvesters have left a significant portion of the
winter wheat crop exposed to the rains, pointing to yet more shortages of
flour ahead.

To date, the GMB has collected only a paltry 120 00 tonnes of wheat, against
national consumption requirements of 350 000 tonnes, leaving a wide deficit.

The GMB has had to enlist the services of the army to help in a mop up of
maize in a desperate bid to meet a clearly unattainable government target of
1.8 million tonnes.


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Even Tourists Find Zim Life Too Expensive



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Stanley Kwenda
Harare

A GROUP of Canadians that toured Zimbabwe last week as part of the Zimbabwe
Tourism Authority's (ZTA) marketing strategy says the country needs to have
a special tourist exchange rate higher than the official one.

The group, which included journalists and tour operators, gave rave reviews
of the country's tourism facilities, but expressed concern over the official
exchange rate which they said makes Zimbabwe an expensive tourist
destination.

"The money situation in this country needs to be resolved. The official
exchange rate of $250 to US$1 is not real. Where would I go if I wanted to
change money, and there was an option of the $250 official rate and another
that was 10 times more offered by someone who just comes and whispers in
your ear?" asked Jonathan Roth, a producer with a Canadian TV station, OMNI
Television.

"This $250 rate is a problem for tourists that you have to solve. There is
need to come up with a tourist rate."

The Canadians said currency had been a big problem for the touring group at
all the places that they had visited across the country.

Reserve Bank of Zimbabwe (RBZ) regulations require all tourists to pay for
services in hard currency. This law has not gone down well with tourists,
many of whom find it cheaper to pay in local currency. According to the
latest ZTA statistics, Zimbabwe's tourism packages are among the most
expensive in the world.

"When you go shopping in this country you need to carry a heavy wallet.
While a T-shirt goes for US$5 to US$10 in Canada, it costs US$20 here,
making us wonder what's going on," said another member of the group.

He added that nothing had changed in Zimbabwe over the past eight years.
"There are still long queues for fuel, and I wonder if I cannot bring my own
gas (fuel) along."

The group also said despite the beauty of the tourist resorts that they
visited, many of them were "frighteningly" deserted.

"There were very few tourists. If you are a tourist coming into Zimbabwe for
the first time, the more people you see the better tourism atmosphere is
created. But nothing of that sort was witnessed during out visit," said a
member of the group.

The tourists also urged the Zimbabwean government to mend strained relations
with the western media, which would in turn "tell the true story" about the
country as a tourist destination.


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Bread, Milk Producers Get Price Rise Nod



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Kumbirai Mafunda
Harare

THE Interim Price and Stabilisation Committee (IPSC) has granted bakers and
milk producers the nod to hike the retail price of bread and milk by up to
140 percent, a move that wipes away the little relief workers had received
from the budget's tax concessions.

Finance Minister Herbert Murerwa recently played Father Christmas to
Zimbabwe's struggling workers by widening the tax-free bonus and the income
tax threshold from $20 000 to $100 000 to boost consumers' sapped pockets.

But the cheers that greeted the announcement will now be short lived
following the decision to hike the price of milk and bread.

Industry officials told The Financial Gazette this week that the interim
committee, recently put in place to do away with

price distortions in the economy, had approved applications by both bakers
and milk producers to review the controlled price of the two commodities.

Industry had sought the price review arguing that stagnant retail prices
were edging them towards bankruptcy.

The new prices have now been handed to Industry and International Trade
Minister Obert Mpofu for final approval.

The IPSC is a precursor to the planned National Incomes and Pricing
Commission (NIPC), which is expected to be operational early next year.

The commission includes representatives from the Confederation of Zimbabwe
Industries (CZI), the Zimbabwe National Chamber of Commerce (ZNCC), the
Consumer Council of Zimbabwe (CCZ), the Reserve Bank of Zimbabwe (RBZ) and
Industry and International Trade officials. Norman Chakanetsa, the director
of research in the Ministry of Industry and International Trade, chairs the
committee.

National Bakers Association of Zimbabwe (NBAZ) chairman and Lobels chief
executive officer Burombo Mudumo confirmed that his association had
successfully applied to the Ministry of Industry and International Trade for
an immediate upward review of the price of bread from $295 to $700, a 137.2
percent increase.

"We applied for $700 after looking at all factors affecting the production
of bread," said Mudumo, who was released from jail on bail last Monday
pending appeal over a four-month sentence for flouting price controls.

Baking industry sources said Mpofu was supposed to have tabled the bakers'
proposal in cabinet this week.

Mpofu was not immediately available for comment.

Bakers held a meeting last Thursday in the capital where they deliberated on
the long delay by cabinet in granting a price hike.

Bread and milk supplies have been scarce in Zimbabwe since the government
began a crackdown on bakers and milk processors, whom they accuse of
overcharging.

But the defiant bakers say the official price cannot even help them break
even.

They say the shortage and soaring costs of ingredients such as flour, plus
increasing transport and packaging costs, were forcing them to hike prices
above government dictated prices in order to stay in business.


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Not Again, Minister Chombo



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Chris Muronzi
Harare

POLICE are investigating the use to which Local Government Minister Ignatius
Chombo put $14 billion worth of farm loans obtained from the central bank.

The focus of interest for the Criminal Investigations Department (Serious
Fraud) is Chombo's application, on October 1, 2005, for a $14 billion (old
currency) loan from the RBZ. The loan is said to have been availed under the
"Other Crops and Livestock Facility" and was disbursed through CBZ Bank.

James Ndoro, CBZ Bank head of Credit Monitoring and Control is understood to
have told police that the loan given to Chombo was a "special loan" from the
Reserve Bank of Zimbabwe and was made available through CBZ at 50 percent
interest per annum. The loan was to be repaid within 18 months.

Chombo's application says he needed the money to buy a 30-tonne truck worth
$2 billion, a 30-tonne trailer worth $1.5 billion, a 200 hp tractor 4WD, a
combine harvester worth $5 billion, a 52-dish roam disc valued at $1
billion, a 9-row Monosem planter worth $1.2 million, and a 2x500kg planter.
Police are still investigating whether this equipment was ever bought.

The money was released by the RBZ on December 13 2005 on the agreement that
it would not be used for non-eligible expenditure. Now, police have found
links between this loan and subsequent payments made by Chombo to buy some
of his luxury vehicles.

Two days after getting the RBZ loan, Chombo instructed CBZ Bank Borrowdale
Branch to transfer $4 billion into Equivest Asset Management, a development
that raised the interest of investigators as this would point to possible
abuse.

The Financial Gazette has obtained a copy of a letter, written in Chombo's
own handwriting, authorising this transfer. Car dealer Ajit Patel from whom
Chombo bought two Toyota Hilux Vigos and a Toyota Land Cruiser, impeccable
police sources said yesterday, had opened an investment account with
Equivest at the same time, and the opening balance was also $4 billion. The
asset manager bought shares in Old Mutual, PPC and Tractive Power on Patel's
behalf using the $4 billion.

Chombo also made a series of other payments, including one of $3 billion, to
Mandizha and Company legal practitioners on January 4 this year. This paper
exposed payments by Zupco to the same law firm for the legal expenses of
chairman Charles Nherera's corruption trial. The Financial Gazette has
copies of some of the cheques signed by Chombo.

"Investigations carried out have proved that $6.5 billion (old currency) was
channelled towards payment for two Toyota Vigos (and) $3 billion was paid to
Mandizha and Company from the loan funds. So far, this gives a total of $9.5
billion abused from the loan facility. The loan funds were channelled into
Dr Chombo's Borrowdale CBZ account number 20973050018 on 13 December 2005,"
the investigators concluded in a confidential document compiled last week.

The police are also probing the transfer last year of $1.5 billion from a
company called Multi-Muk Investments to an account held by car dealer Patel.

Our investigations revealed that Multi-Muk Investments is a wholly owned
subsidiary of Dande Capital Holdings, the company that denies reported links
to Vice President Joice Mujuru. David Butau, ZANU PF MP for Guruve, is
chairman of Dande. Evison Musanjeya, Dande CEO, is listed at the Company
Registry as a director of Multi-Muk. Yesterday, he confirmed to The
Financial Gazette that he had made a statement to the police on the matter,
but declined further comment.

In a recent interview, Patel was at pains to explain a US$22 000 discrepancy
between the price that was quoted for the Toyota Land Cruiser Chombo bought
from him, and the US$77 000 that was actually paid for the car. Patel
insists the additional US$22 000 was for extras.

At about the same time Zupco and his ministry were making frantic efforts to
secure a vehicle for Chombo, he was in the process of acquiring the two
Toyota Hilux Vigos from Patel. One of the two cars is registered in the name
of Pokelo Nari. She is to be questioned by police, according to sources.

The other car is registered to Runsgate Investments, a company owned by
Chombo's brother Nimrod Chiminya, who is also a Zupco board member.


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Army, Networks Head for War



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Stanley Kwenda
Harare

THE Zimbabwe Defence Forces (ZDF) is headed for confrontation with players
in the telecommunications sector following responses by the sector denying
claims by the army that mobile cellular companies pose a threat to national
security by using independent connections for international calls.

An industry expert told The Financial Gazette that the army has no business
in the activities of the industry other than taking care of the military
frequences allocated to it.

A senior army officer recently appeared before a Parliamentary Portfolio
Committee accusing the Postal and Telecommunications Regulatory Authority
(POTRAZ) for issuing licences to three mobile telephone service operators
using the wrong statute. But an industry expert who requested anonymity said
the army got it all wrong.

He said, "Although there has not been any official communication about the
intentions of the army except recent media reports, it is risky to change
laws just like that for a big industry such as this one. You can not run a
sector like that, there will be chaos in the industry. POTRAZ will face a
lot of lawsuits because these companies are registered to operate within the
confines of the law."

The government's determination to monitor private conversations became
apparent recently when it made moves to enact the Interception of
Communication Bill. But eyebrows are now being raised following the entry
into the discussions of the bill by the army.

ZDF Director of communications signal Colonel Livingstone Chineka told the
parliamentary committee that the licensing of mobile operators under wrong
statutes was preventing the government from monitoring international calls
made through mobile companies. The army colonel says this anomaly "was
deliberate and causes confusion."

He said the three mobile operators, Telecel, NetOne and Econet got their
operating licences under section 34 of the Postal and Telecommunication Act,
which is for fixed telephone operators when they were supposed to be
licensed under section 31, which is for mobile phone operators.

But the telecommunications expert said the army had no jurisdiction over the
operations of the sector.

"They are just like everyone else allocated a frequency and theirs is
protected and no-one can temper with it. It is known worldwide what kind of
frequencies the Zimbabwe army uses and they are able to know before us if
those are tempered with," said the expert.

He added saying that although the army had given POTRAZ an ultimatum to
extend a grace period to mobile companies to conform with the law requiring
them to re-route calls through the TelOne international gateway at Mazoe,
but no official government communication has been extended to the regulating
agency.

Telecel Marketing manager, Rex Chibesa, could not comment on the matter.

"I can not comment on that matter because doing so would be subjudice since
its still pending in the courts," he said.

He also warned that the plan to re-route international calls through the
Mazoe base station spells doom for the country following the recent failure
by TelOne to meet its international financial obligations resulting in an
internet block in an out of the country.

No official communication could be obtained from POTRAZ as it did not
respond to questions faxed to its office.

At that time Econet Wireless and Telecel Zimbabwe sought recourse in the
courts against the using the government-owned earth station in Mazowe amid
fears that government intended to increase its eavesdropping on
international communications. The effect of the statutory instrument is that
private players would be prejudiced of foreign currency as Tel-One would
declare all calls passing through it as its own and the private companies
would get local termination rates in local currency. Econet and Telecel
would however be required to pay for outgoing traffic in foreign currency
although they would not be earning hard currency from incoming calls.


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Media Council of Zimbabwe to Be Launched Early 2007



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Nyasha Nyakunu
Harare

THE launch of the envisaged independent, self-regulatory media council is
now cast in stone following a series of strategic planning meetings and
overwhelming endorsement of the project by publishers, journalists, civic
society organisations, political parties, church groups and the business
community.

The self-regulatory body, which will be known as the Media Council of
Zimbabwe (MCZ), will be officially launched in Harare on January 26 2007 at
a ceremony that will be preceded by the election of nominees into the
11-member media council and the five-member ethics committee.

The nominees, 90 percent of whom have already accepted the nominations were
drawn from the judiciary, media, legal fraternity, civic society
organisations, church groups and the business community.

Among the nominees are retired judges, renowned newspaper publishers,
professors, doctors, lawyers, journalists, editors and respected citizens
who have served Zimbabwe at the highest levels of integrity and credibility.

The publishers, editors and journalists have been drawn from both the
private and the state media.

The setting of the launch date comes in the wake of extensive nationwide
consultative meetings that were led by the Zimbabwe Union of Journalists
(ZUJ) and MISA-Zimbabwe under the auspices of the Media Alliance of Zimbabwe
(MAZ).

MAZ comprises

ZUJ, MISA-Zimbabwe and the Media Monitoring Project of Zimbabwe (MMPZ).

Strategic planning and report-back meetings were also held with key
stakeholders, namely the Zimbabwe National Editors Forum (Zinef), Zimbabwe
Association of Editors (ZAE), MMPZ and the Federation of African Media Women
in Zimbabwe (FAMWZ) as part of the consultative process which kicked off
with the first meeting in Bulawayo on January 21, 2006.

Close to 400 signatories among them journalists, editors, publishers, civic
society organisations, representatives of political parties and Members of
Parliament from across the political divide endorsed the principle of media
self-regulation through the establishment of an independent regulatory body
as long overdue.

The consensus among those consulted including the Ministry of Information
and Publicity and the Parliamentary Portfolio Committee on Transport and
Communications during a series of meetings held in Harare, Bulawayo, Gwanda,
Bindura, Mutare, Kwekwe, Chinhoyi, Marondera, Masvingo and Gweru, was that
MAZ should proceed with the establishment of the independent body.

In a related development Margaret Chiduku, the Director of Policy and Legal
Research in the Ministry of Justice is on record advising the African
Commission on Human and Peoples Rights (ACHPR) during its session in Banjul,
the Gambia, in November this year, that the government had consented to a
self-regulatory mechanism for media practitioners in Zimbabwe.

She told the Commission that the launch of the Media Council of Zimbabwe
would go a long way in addressing concerns pertaining to the restrictive
provisions of the Access to Information and Protection of Privacy Act which
gave birth to the statutory Media and Information Commission.

Chiduku confirmed that the government had also received in "good faith" a
model Access to Information Bill which was submitted by MISA-Zimbabwe to the
government and Parliament of Zimbabwe, copies of which were availed to the
Commissioners of the ACHPR.

She said the model had already been submitted to the Attorney-General Sobusa
Gula-Ndebele.

Inputs from the consultative meetings have already been incorporated into
the proposed nationally-binding code of conduct and constitution of the
media council.

The two documents will be presented for further endorsement and adoption at
the convention in January next year.

The latest development follows a strategic planning meeting held in Kadoma
in October this year where representatives of MAZ, Zinef and ZAE agreed to
proceed as mandated during the consultative meetings and in line with the
regional and international declarations signed by Zimbabwe.

The 1991 Windhoek Declaration, for instance, stresses the need for southern
African countries to promote, free, independent, diverse and pluralistic
media while the 2002 Banjul Declaration on the Principles of Freedom of
Expression in Africa unequivocally states that self-regulation is the best
system of promoting high standards in the media.

Tanzania, Zambia, South Africa, Mozambique and Botswana are among some of
the SADC countries with functioning codes of conduct and media
self-regulatory bodies in compliance with the two Declarations.

lNyasha Nyakunu is Misa-Zimbabwe's Research and Inform-ation Officer


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RG's Office Earned Forex



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Stanley Kwenda
Harare

THE Registrar General's (RG) department, which shut down the passport office
last week, has been raking in considerable amounts of foreign currency from
external passport applications, but cannot account fully for the earnings,
The Financial Gazette has learnt.

The RG's office abruptly closed its offices to the public last Wednesday and
stopped issuing passport application forms throughout the country. Officials
claimed the move was meant to clear a backlog of applications stretching
over two years. But the RG, Tobaiwa Mudede, has said his department is
failing to meet its obligations due to lack of foreign currency.

Despite this official explanation, sources at the RG's office told this
paper that the department had been earning a considerable amount of foreign
currency from external applications but wondered where and how the money was
used.

"We have been dealing with a lot of external applications and have been
getting a lot of money in foreign currency from those applications but we
don't know where the money is going. People have been suggesting that we
raise the price of passports but our bosses have been resisting this but it
doesn't make sense to charge people $2 500 for a passport which costs over
$20 000 to process," said a source.

An ordinary passport costs $2 500 while an emergency passport costs $5 000.

Many people who are desperate to obtain passports have been forced to opt
for emergency travel documents (ETDs). They reportedly use the ETDs to
travel to neighbouring countries. From there they apply for passports and
pay for them in foreign currency. This expedites the process of obtaining
the document which has become critical for many Zimbabweans seeking to
escape a deepening political and economic crisis.

An external emergency passport costs US$100 while an ordinary one costs US
$60 for adults. Children below the age of 12 require US$50 and US$ 30 for
the emergency passport and ordinary one, respectively. The RG's office
accepts external applications on condition that passport seekers pay in US
dollars.

"If we were allowed to keep our own reserves then we wouldn't be having all
these problems. We could have been issuing other things such as identity
documents for free because that money from external applications could have
been enough to service our operations," said the source.

According to a rough estimate from the RG's finance department, about US$4
000 can be made a day from external passport applications.

Zimbabweans outside the country can apply for passports at foreign missions.

The RG's office began producing smaller passports and plastic identity cards
in a bid to conform to new international standards. But the move has
backfired as it is now saddled with a myriad problems.

Last week the RG told a Parliamentary Portfolio Committee on Defence and
Home Affairs that his office did not have adequate funding.

"In the 2006 budget, we were given 64 percent of what we had requested. At
the moment we don't even have a cent in our account. In the 2007 budget, we
were given 28 percent of what we had requested. The net effect is that we
will not be able to pull through up to May 2007. We might be forced to
ground all our operations," said Mudede.


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Govt Raids National Foods



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Kumbirai Mafunda
Harare

GOVERNMENT has stepped up its crackdown on businesses with a raid on
National Foods Limited, one of the country's largest food processors.

A joint unit of police and inspectors from the Ministry of Industry and
International Trade raided the Bulawayo depot of Natfoods under an operation
codenamed "Operation Hurricane", quizzing the company's two top executives
for allegedly flouting government-imposed price controls on cooking oil.

The unit interviewed and recorded warned and cautioned statements from
Charles Taylor, the depot manager, and sales manager Samuel Ndlovu, accusing
them of illegally hiking the price of cooking oil, which has been in short
supply over recent weeks.

Taylor confirmed his interrogation, but referred The Financial Gazette to
Natfoods' company secretary, Andrew Lorimer who was not available for
comment.

Cooking oil is only the latest basic commodity to disappear from the shelves
as manufacturers avoid the production of commodities whose prices are
controlled or monitored. Although government wants a 750 ml of cooking oil
to retail at $775, the few stores still stocking the product sell at over $2
000.

The raid on Natfoods, also a producer of grain-based household foods and
specialised livestock feed, is an escalation of a blitz the government has
carried out against industry since September. Government, which has in the
past accused business of being sympathetic to the opposition, is currently
working on legislation to force businesses to justify price hikes.

But business, which early in the year partnered government in the NEDPP, an
ambitious private-public sector partnership to revive the economy, maintains
that inflation, which reached 1098.8 percent in November, hard currency
shortages and fuel shortages are driving production costs up.

Representatives of industry fear that more than 600 businesspeople, who
include heads of some of the largest business operators, are under threat of
arrest and imprisonment under the current crackdown.

Fearful of arrest, industrialists have stopped the manufacture of goods
whose pricing can raise the interest of government. Bakers, on the other
hand, have shifted to manufacturing buns and rolls to steer clear of price
dictates.


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Towards a Viable Solution to the Corruption Problem



Financial Gazette (Harare)

OPINION
December 13, 2006
Posted to the web December 14, 2006

Tofireyi Sithole
Harare

CORRUPTION is the abuse of power, office and authority for private gain
through bribery, extortion, influence, nepotism, fraud, etc. It is a
phenomenon that is related to issues of ethics, norms, values and standards.

In this context, therefore, corruption raises its ugly head in societies
where there is a serious erosion or absence of acceptable ethics, norms,
values and standards of behaviour.

There are two types of corruption, grand and petty. On the one hand grand
corruption occurs when heads of state and/ or their political entourage
abuse and misuse their position for personal gain. Petty corruption, on the
other hand, relates to payments solicited by low level officials with the
objective of fast-tracking decisions thereby flouting administrative and
bureaucratic procedures and regulations. This type of corruption adversely
affects the poor and the weak to the extent that they pay for services they
are entitled to anyway.

As corruption discourages investment and the growth of the economy, its
eradication is crucial in developing an enterprise culture in the Zimbabwe.
More importantly corruption undermines the smooth functioning of markets in
three ways: as a tax, as a barrier to entry, and by subverting the
legitimacy of the state and its ability to build institutions that improve
the productive efficiency of the economy.

As a tax, corruption distorts the choice between activities and lowers
returns to public and private investments. As an entry barrier, corruption
discourages new entrants to an economy and hence it damages its growth and
development prospects.

Acceptance of existence of problem

In his July 27 2006 Mid-Term Fiscal Policy Review Statement, the Minister of
Finance alluded to the pernicious effects of the malpractice and thought
that it was driven by greed and indiscipline in both the public and private
sectors. He, however, hoped that the Anti-corruption Commission would act to
exterminate the scourge from our midst.

The governor of the Reserve Bank of Zimbabwe also acknowledged the
destructive tendencies of the malady and lamented that the economic
turnaround efforts were bedevilled by indiscipline, corruption, and
speculation. Among the numerous examples of corruption he listed the
following:

lIllegal foreign currency dealings

lSmuggling of precious metals

lUnderpricing of exports and overcharging of commission on exports.

lNon-repatriation of profits from cross-border investment accruing to
Zimbabwean companies.

lLeakages through money transfers

lSelling and renting properties in foreign currency which is not repatriated
to Zimbabwe.

Needless to say, the examples given above are in the domain of petty
corruption. The governor made no serious attempt to deal with grand
corruption which, in most circumstances, is a precursor of the petty
corruption.

As a result of this he, like many others subscribing to this school of
thought, concentrates on brutalising both the private individuals and the
corporate bodies whose major weakness is exploiting opportunities created by
the untouchables of the society. For them, it is easier or, perhaps, more in
vogue to direct acts of retribution at those who succumb to the symptoms of
the malady. The morally conscious and the more progressive people in the
society reject this stance in its entirety because analgesics have never
cured any cancer anywhere in the world. As a result, the current activities
of the Anti-corruption Commission may be described as puerile as they cannot
douse the flames of corruption in the country.

Major causes of corruption

A variety of factors combine to create an environment conducive to rampant
corruption in Zimbabwe. These include a weak policy environment;
concentration of power in a few hands; separation of powers and a weak
judiciary; lack of political will; and lack of adequate mass media freedom.

Weak policy environment

Economic policies that reward people and institutions for their efficiency
and productivity should be the hallmark of any society that discourages
corruption. Sadly, the absence of a truly competitive market economy has
cost the country opportunities in investment due to rigid regulations that
arrogate certain economic decisions to individuals and institutions that may
not be transparent.

Furthermore, the shortage of foreign currency in the economy and its
subsequent allocation by some authority is the origin of the black market in
the country. In fact, the difficulties experienced in getting the scarce
foreign exchange from the RBZ fuels the black market as both individuals and
corporates have had to find an alternative source of the resource needed to
keep them afloat.

Power in a few hands

Concentration of administrative power in the hands of a few individuals
creates conditions conducive to corruption. Typical examples are the
excessive controls arrogated to the Grain Marketing Board (GMB) in the
agricultural sector in the economy. Because of the exclusivity of its
trading activities, the GMB has created opportunities for highly placed
politicians and civil servants to use the parastastal for their personal
benefit.

Separation of powers and weak judiciary

Checks and balances in the public sector are necessary if corruption is to
be exterminated. It is easier to control corruption in economies where the
separation of powers is distinct. In Zimbabwe several complaints have been
raised against the concentration of power in office of the President. The
President appoints 20 percent of the MPs and the Chief Justice and judges of
the High Court and Supreme Court, and there is no provision in the
constitution that explicitly emphasises the right of Parliament to control
government and to supervise government operations. In addition, Parliament
cannot remove any individual member of government or government in its
entirety. This is the exclusive right of the President.

Lack of political will

Lack of political will to control corruption on the part of government
creates a perception that any pronouncement made against the scourge is mere
posturing. This general perception makes it difficult to contain corruption
as the practice may continue unabated. A typical example to illustrate this
point is a commission that was established to investigate the looting of the
War Victims Compensation Fund. We are all aware that the work of the
Commission had to be suspended as the President was either uncomfortable
with the mounting pressure from the would-be offenders or with the evidence
that the Commission was gathering. The issue is the precedence this creates
in the country.

Media freedom

Finally the existence of a polarised media is one of the major reasons
perpetuating corruption in the country. Zimbabwe does not have independent
radio and television stations. Attempts to establish these have been
persistently frustrated by government. While there are independently
published weeklies, the government has managed to limit dailies to those
that support government. As a result, media coverage of cases of corruption
are minimal and hence the scourge is not getting the exposure it deserves.

Framework for addressing the problem

In view of all the issues raised above, no piecemeal approach can rid the
country of the existing levels of corruption. In addition, attempts to
implement superficial solutions to the problems can only act to merely
suppress the scourge of corruption. It is suggested that creating economic
conditions that reduce the chances of corruption is a viable remedy to the
problems bedevilling this economy.

Accordingly, a holistic approach to the solution of the problem needs to be
implemented immediately and for such an approach to be used, there is need
for government to accept and introduce economic policies which facilitate
the development of a true market economy; promote policies that reduce
excessive government controls; facilitate the implementation of policies
that encourage foreign direct investment; promulgate policies which
guarantee property rights; and ensure that fundamental human freedoms are
respected. Furthermore, the growing tendency to centralise decision-making
should be discontinued. A serious commitment must be made to revisit the
concerns raised by many on the flaws in the country's constitution
particularly those which relate to the presidential powers and those
relating to the independence of the judiciary and rule of law.

Lastly, government needs to swallow its pride and urgently mend its
relations with the West. We cannot continue to live in our cocoons, reject
those countries and institutions that have supported the growth of this
economy in the past, and hope to achieve much as a nation. The inescapable
fact is that the country is reeling from the worst crisis ever experienced
in its economic history. Accordingly, with meagre resources, weak economic
policies and lack of political will, corruption is here to stay.

lTofireyi Sithole is a member of the Zimbabwe Economics Society. ZES
articles are coordinated by Lovemore Kadenge


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Gono Increases Cash Withdrawal Limits



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Kumbirai Mafunda
Harare

RESERVE Bank Governor Gideon Gono has raised limits on cash withdrawals and
increased the thresholds for transactions through the Zimbabwe Electronic
Transfer and Settlement System (ZETSS) for both individuals and businesses.

Cash withdrawal limits for individuals have been reviewed to $500 000, up
from the $100 000 fixed on July 31. The ZETSS threshold for corporate to
corporate payments went up from $1 million to $5 million. Cash withdrawal
limits for corporates were reviewed from $750 000 to $1 million.

"The above measures are by no means a deviation from our ultimate goal of
reducing use of cash and paper based payment instruments, as we move more
towards electronic systems," Gono said in a memo to bankers Tuesday.

Gono said there had been "challenges" emanating from the lack of integration
between financial and commercial transaction flows, the current
centralization of ZETSS operations in banks' head offices and the
unwillingness by some players to embrace electronic means of payment.

The move, which on the eve of the festive season, is expected to ease
nightmares for customers who had seen values being eroded owing to
out-of-control inflation, which reached 1 098.8 percent in November.

"The banking sector players are hereby called upon to abide by these
requirements and to report offenders to the Anti-Money Laundering Unit of
the central bank," read part of Gono's memo.

Gono, who is battling to encourage Zimbabweans to go on cards and cheque,
criticised merchants that remain averse to any other modes of payment
outside cash.

"Such elements always demand cash regardless of the amount involved and with
total disregard for the current cash withdrawal limits. This cash, no doubt,
is used to support parallel market and other illegal activities."

Gono said he was to launch a new system to smooth out transactions.

"In line with central bank's goal to achieve operational efficiency and
improve access to real time transaction information as well as integrate
financial and business transaction flow a financial industry initiative
called the Straight Through Processing (STP) Project will be launched soon.

Through this development, individuals and corporates will be able to
ultimately initiate funds transfer and payment instructions using their own
computer portals."

Gono also announced in his memo that he had approved the payment by cheque
of duty at border posts, subject to ZIMRA guidelines.


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Govt Delays Stall WFP Food Aid Distribution



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Zhean Gwaze
Harare

THE government is yet to grant to the World Food Programme (WFP) permission
to distribute food aid to an estimated two million Zimbabweans facing
starvation, it has been learnt.

Earlier estimates had put the number of vulnerable people at 1.4 million,
but new assessments have pushed that figure up to 1.9 million.

The Financial Gazette understands that the government has not yet responded
to a WFP application made in October to feed vulnerable people until the
next harvest in April 2007.

Food assessments by aid agencies, including WFP, revealed that although
there had been an improvement in this year's crop yields, districts in
western and southern Zimbabwe required food aid until the next harvest in
April 2007.

Aid agencies are required to apply to distribute food. Government has
previously accused aid groups of using aid to turn villagers against ZANU
PF.

A WFP official this week said there had been no word from the government
since October, but added that the organisation's director for Zimbabwe,
Kelvin Farrell, was expected to engage government soon on the objectives of
the programme.

Social Welfare Minister Nicholas Goche recently said he had not seen the
application by the aid agencies and referred all questions to the director
of social welfare, who was said to be on leave.

"The government has not yet okayed us to feed the vulnerable people, but we
are hoping to get approval soon. Our director will engage government soon on
the objectives of the feeding programme," the WFP official said.

This week, UN special envoy James Morris urged President Robert Mugabe to
ensure food security in the country to halt the country's economic meltdown.

Morris, who was in Zimbabwe as part of his final tour of southern Africa
before stepping down next January, also met with international aid agencies,
donors and government officials to assess the humanitarian crisis in the
country


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Mbeki's Chance to Show What He's Made of



Financial Gazette (Harare)

ANALYSIS
December 13, 2006
Posted to the web December 14, 2006

Mavis Makuni
Harare

THE eyes of observers will be on South African president, Thabo Mbeki, to
see how he deals with two important issues currently in his "in" basket.

The first is the African Peer Review Mechanism (APRM) report on his country
and the second is the call that has been made by the Eastern Cape branch of
the ruling ANC for him to stand for a third term as party president.

The Peer Review report, compiled by a panel led by Nigerian academic,
Professor Adebayo Adedeji, is reported by the South African paper the Sunday
Times to be critical of the high rate of crime and unacceptable levels of
poverty and unemployment. South Africa's Minister of Public Service and
Administration, Geraldine Fraser-Moleketi, who led the country's self
assessment initiative is reported to have been incensed by the APRM report
possibly because she expected it to be more complimentary of what the
country has achieved since the end of apartheid 12 years ago. But
differences of opinion and perception are healthy in this sort of exercise
as the main reason for being assessed by peers is that countries rarely see
themselves as others see them. Moreover, South Africa, the continent's
economic powerhouse, may seem to have been judged too harshly because it was
reviewed against its potential rather than on the basis of the performance
of the rest of its peers. It is a case of more being expected from those to
whom much has been given.

Nevertheless, despite expressing concern over the issues referred to above
as well as the government's shaky response to the HIV/AIDS pandemic, the
panel is reported to have praised South Africa as a beacon of hope for the
rest of Africa. The APRM report, to be released into the public domain in
January, cites South Africa's constitution, commitment to human and social
rights and sound economic management among 18 ideas that should serve as
benchmarks for the rest of the continent. What South Africa does with the
report in the few years remaining of Mbeki's final term as president will
thus be crucial in signalling whether the peer review mechanism will become
a force for positive change or remain an academic exercise like many other
African Union initiatives before it.

Of the 25 countries that have so far signed up for assessment by their
peers, South Africa is the fourth to be reviewed and the first to receive
its report card. The APRM panel has completed similar reports on Ghana,
Rwanda and Kenya but details have not been released. Mbeki's handling of the
report is crucial because he is regarded as the driving force behind the
push for good governance. The APRM is an arm of the New Economic Partnership
for Africa's Development (NEPAD), the brainchild of the South African
leader. All eyes will be on Mbeki to see whether he is willing to practice
what he preaches by setting in motion the process of addressing the concerns
raised in the APRM report before he leaves office in 2009.

The next question is whether Mbeki will indeed relinquish power when his
current term expires in 2009. The Sunday Times reports in its current issue
on plans mooted by the South African Parliament to build a $325 million
banqueting hall in time for Mbeki to deliver his last state-of-the-nation
address. Another press report, however, details how the Eastern Cape branch
of the ruling ANC has asked Mbeki to stand for another term as party
president at the ANC's national conference next year. The branch is the
largest voting bloc in the conference and its views could prevail. If Mbeki
bows to pressure and accedes to the wishes of supporters from his home
province, this could raise various issues.

One is how spontaneous requests for a leader to stay on are and whether
these should override existing consensus or rules limiting the number of
terms a candidate should serve. While it is true that Mbeki is being asked
to continue only as party president, come 2009 a new resolution could be
crafted urging him to continue as state president for another term or for
life. Such a scenario has emerged in Zimbabwe where President Robert
Mugabe's ruling ZANU PF is to ask him at its ongoing conference to remain at
the helm for life. The ANC's succession plans are murky at present, muddied
by the controversy surrounding Jacob Zuma's candidature and suitability
following his brushes with the law. Whatever Mbeki decides to do, he knows
that as Africa's Renaissance Man, he has an obligation to set an example by
practicing what he preaches. His decision will focus attention on the issue
of whether a leader should entertain requests from a section of the
electorate to stay on after the expiry of his mandated term when he may have
ignored more vociferous calls for his departure from office.


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Charamba Flexes Muscle At ZBH



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Nkululeko Sibanda
Harare

INFORMATION and Publicity Permanent Secretary George Charamba has poured
scorn on attempts by new Zimbabwe Broadcasting Holdings (ZBH) chief
executive Henry Muradzikwa to make management appointments without the
authority of his ministry.

Muradzikwa told journalists this week that the announcement of new
management had been delayed "by the need to clear a few bureaucratic
problems." He did not elaborate.

Last month, Muradzikwa had scheduled a press conference during which he was
to announce the new appointments, but the briefing was later cancelled.

ZBH communications officer, Sivukile Simango then said the cancellation was
due to Muradzikwa's emergency trip to Iran with President Mugabe.

"We still have to clear some bureaucratic issues and problems amongst
ourselves. Once those have been cleared, I don't know when, I will be able
to convene another briefing and make the announcements," said Muradzikwa
this week.

It has however emerged that the bureaucratic hitches referred to by the ZBH
boss are a reference to disagreements over the names of people expected to
occupy the top positions in Muradzikwa's new structure.

Yesterday, Charamba, in remarks that appear to confirm his differences with
ZBH's new management over appointments, said the ministry had a keen
interest in the appointment of managers at the national broadcaster.

Because government was the sole shareholder of ZBH, it must have a say in
the appointment of staff.

"Government is the sole shareholder at ZBH. As a matter of corporate logic,
we have an interest in the appointment of people to management positions.
Government, by virtue of being the sole shareholder, has to be interested
when management appointments are done. We have to know who is appointed to
what position because that is what corporate governance requires of anyone
who funds any corporate entity," said Charamba.

He added that his office would not let Muradzikwa do as he pleases while
they watched from the periphery.


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TNF - Labour, Business Ready, Wait for Govt



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Zhean Gwaze
Harare

HOPES for the revival of the Tripartite Negotiating Forum (TNF) now hinge on
government after indications from business and labour that they are ready to
resume collapsed talks.

Representatives of government, labour and business earlier this year
appeared close to signing the Prices and Incomes Stabilisation Protocol to
curb runaway inflation and rejuvenate the

country's economy when deliberations hit a deadlock in May after the
Employers Confederation of Zimbabwe (Emcoz), refused to award workers wages
and salaries indexed to the Poverty Datum Line (PDL).

Officials from business and labour this week told The Financial Gazette that
they were now waiting for TNF chairman Nicholas Goche to call for new
meetings. Goche could not be reached for comment at the time of going to
press.

"We are waiting for the TNF chairman to call for the meeting because as
labour we can not convene the TNF. We feel we are at a deadlock and that's
why we are now engaging in parallel forces," said ZCTU.

Emcoz chief executive Kenias Mufukare said his organisation had completed
consultations with members and was now ready for new negotiations.

"We are hopeful that TNF might resume shortly. We have also noted that the
only sustainable solution to the country's economic problems is social
dialogue," Mufukare said.

He added that he was hopeful for that the talks would this time make some
progress, as players had managed to agree on the terms of reference and
concepts or the TNF at a meeting held recently in Nyanga.

However, the sticking point of whether wages should track PDL is likely to
return to haunt any new talks.

While government and labour back the use of the PDL as a factor to determine
wages, business says the ability of a company to pay PDL level wages,
productivity and inflation should instead be considered first in any
negotiations for a minimum wage.

The Central Statistical Office (CSO) said Monday an urban family now
required over $228 000 per month for basics.

Last week, the ZCTU pledged fresh protests over the worsening economic
crisis characterised by high inflation, low wages, high taxes and a lack of
access to anti-retroviral drugs to fight the HIV/AIDS pandemic.


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This is Getting Embarrassing



Financial Gazette (Harare)

OPINION
December 13, 2006
Posted to the web December 14, 2006

Gondo Gushungo
Harare

THE indissoluble political and liberation war ties between President Robert
Mugabe and members of his Cabinet have widely been seen as a chink in the
President's armour.

This is probably why for the better part of his 26-year rule, President
Mugabe, who, as I have said in previous instalments, gives one the feeling
that he is more disappointed and disillusioned by some of his lieutenants,
than he is ever prepared to publicly acknowledge, has not been able to
chastise, let alone sack some of his Cabinet Ministers.

But, in what many see as a decisive rupture with tradition, this has changed
over recent months. That is if President Mugabe's public statements and
elaborate tones over cronyism, corruption, incompetence and ever-shrinking
accountability of his ministers is anything to go by.

Only last week he delivered a withering public rebuke to Finance Minister
Herbert Murerwa over what he called bookish economics, during a meeting with
political leaders in Matabeleland North. I read this to mean that President
Mugabe was telling Murerwa in no uncertain terms that the minister is a
waste of space. But I will return to this some time in the future.

The President's remarks came as the constant bickering between two key
government departments, The Reserve Bank of Zimbabwe (RBZ) and Ministry of
Finance has now played out into the public domain. The bone of contention is
the funding by the central bank of parastatals and other government
departments outside the national budget.

Let me state right from the outset that even though I don't know much about
economics, I have always felt that the RBZ, in keeping the ailing
parastatals on a life-support system, was throwing good money after bad. I
have said as much time without number. In my own estimation, the bailout
packages were a sheer waste of public resources because they never restored
viability to these monoliths.

Pouring public money into the parastatals without reforms had no chance of
success. For me, only restructuring is the right approach. I am here
reminded of what Nicholas Brady, the former US treasury secretary under
Ronald Reagan once said. You cannot bail out a boat with a big hole. It will
never sail. And how so true.

I was therefore not surprised when Murerwa was applauded when he said he
would end the quasi-fiscal activities of the RBZ. In his 2007 budget
presentation, Murerwa argued forcefully that the RBZ's quasi-fiscal
operations must, though necessary to compensate for budget shortfalls, be
stopped. Why? Because they are stoking inflationary fires.

And he could very well be right! It doesn't take a rocket scientist to know
that money supply growth levels in Zimbabwe are not consistent with real
economic growth and that there can never be a vibrant economy without sound
money.

But for only one omission! The Minister did not say who had authorised or
directed the RBZ to engage in those quasi-fiscal activities. I have always
said that a lot is said by the unsaid. The deafening silence on that aspect
alone somehow pointed an accusing finger at the central bank. Thus although
he did not say it in as many words, Murerwa was, to all intents and
purposes, saying the RBZ engaged in the quasi-fiscal activities without
prior permission or authorisation from the relevant authorities.

I hold no brief for either Murerwa or RBZ governor Gideon Gono, who are at
the centre of the controversy. But why the political-point-scoring
blame-game when it is clear who did what?

Of course Gono offered a diplomatic explanation for Murerwa's dishonesty and
hypocrisy. "What is disturbing is the silence from the Ministry of Finance
officials and inability to tell the Honourable Minister . . . that he is the
one authorising most of these quasi-fiscal activities . . ."

It is understandable that Gono does not want to criticise or offend his
Minister. But it did not wash because something does not add up here.

Indeed, it is inconceivable that Murerwa was unaware of the more than 14
letters from the Ministry of Finance requesting the RBZ to, among other
things, provide advance payment for Tokwe Mukorsi Dam, funding for ZINWA,
bridging finance for dam construction, bridging finance for the agricultural
sector as a whole, bridging finance for tobacco production, funding of
winter wheat, jatropha bio-diesel projects, DDF, Operation Maguta, among
others.

As it turns out, it is the Minister who ordered and authorised those
quasi-fiscal activities. So why should he shirk or shift his responsibility?
Patting him on the back for his moves to end the quasi-fiscal activities of
the RBZ is no different from giving a man a Nobel Peace Prize for ending a
war that he would have started!

However, after all is said and done, Murerwa's actions are hardly
surprising, especially around this time of the year. And what he said about
the RBZ's quasi-fiscal operations must be seen for what it is: a placatory
remark to appease a visiting International Monetary Fund team. This is more
so given that the international monetarists, known for their missionary zeal
for fiscal rectitude, have voiced their concerns over the quasi-fiscal
operations of the central bank.

This is exactly what the Minister did in November last year when he
intimated government's intentions to press on with the long-stalled job cuts
in the increasingly inefficient civil service. He categorically stated that
the economy, on a downward trajectory, could not sustain the bloated civil
service. Only to turn back in August this year saying; "The civil service is
not huge at all. What we need instead is better training of our workers and
improved working conditions in the civil service. The savings would not be
much even if we rationalised the public service".

The timing of his remarks was once again curious. A visiting IMF team had
just expressed concern with the government's profligacy, especially the fact
that the civil service gobbled up 50 percent of revenues. So Murerwa
pretended that government was taking the scythe to the civil service to trim
the fat and retain a leaner and more efficient civil service. Why? Simply
because the IMF had said that, given the high spending ratio, the bulk of
any adjustment would need to come from spending cuts, especially in the wage
bill! Thus this time around the Minister is just being his usual self: a
bundle of contradictions too anxious to placate and soothe the IMF, which is
not however fooled, hence his embarrassing inconsistencies


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Bulawayo Warns Residents On Water



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Charles Rukuni
Bulawayo

Council has appealed to its residents to conserve water because Entumbane,
Cowdray Park and Emakhandeni could soon run out of water as people are using
more water than is flowing into the city's supply dams.

Bulawayo is currently under water rationing but the council believes some
residents are exceeding their daily limits because they can afford to pay
penalties for breaching the water rationing regulations.

It said if the heavens fail open up, residents of the city will experience
untold hardships because the council cannot do anything with the money paid
in penalties.

"We wish to appeal to residents not to consider their ability to pay
penalties for breaching the water rationing scheme as a licence to exceed
their allocations willy-nilly but rather the emphasis should be on water
conservation," the chairman of the Future Water Supplies and Water Action
Committee, Clr Garreth Mahlangu, said.

"When the heavens do not open up and residents do not embrace water
conservation, the city will experience untold hardships with all the moneys
we would have paid in the form of penalties."

He said indications were that the situation could be worse next year if the
dams did not receive significant inflows.

The committee visited supply dams last week to assess the situation and
discovered that though the dams had received an inflow of 4.7 million cubic
metres, the dams had less water on December 4 than they had on October 28.

The volume of water in the dams had declined from 127.3 million cubic metres
on 28 October to 124.9 million cubic metres on 4 December.

The city had a serious water crisis last year which saw residents,
especially of high lying areas such as Entumbane, Emakhandeni, Cowdray Park,
Lobengula, and Emganwini go for months without water.


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Judges an Unhappy Lot



Financial Gazette (Harare)

December 13, 2006
Posted to the web December 14, 2006

Clemence Manyukwe
Harare

HIGH Court judges have described their conditions of service as "hostile"
and the state of court buildings as deplorable, minutes of their meetings
show.

The judges said the courts were now a health hazard due to poor sanitary
facilities.

"Most judges were concerned about the sanitary conditions which they felt
were a health hazard. They felt that their conditions of service were
hostile as compared to those of others in the lower courts," the minutes
say.

"The courts are in shambles. There is no lighting, or if there is, it is
inadequate. Furniture is crumbling and there are no recording machines in
most courts."

The meetings were attended by about 20 Harare High Court judges who deal
with serious crimes such as murder and electoral issues. They also said
their vehicles were not being serviced on time, resulting in them getting to
work late.

"Judges complained about conditions when one goes on circuit court. They
were not getting enough funding to

meet their needs while they were away from their stations," reads part of

the minutes.

Responding to concerns over poor sanitary conditions, the Clerk of the High
Court, Charles Nyatanga, said the High Court had 238 offices, 21 toilets and
10 courts but only six office orderlies who were failing "to cope with the
cleaning."

"Some judges still had no drivers. Mr Nyatanga highlighted that posts were
frozen and the ministry was not in a position to recruit drivers. (Nyatanga)
suggested that they could, through the ministry, ask for secondment of
drivers from the Department of Prisons," the minutes read.

The minutes also say lawyers and litigants had complained about delays by
judges in handing down judgments due to their frequent absence from work.
However, the judges argued that their absenteeism had been exaggerated.

The head of the Judicial Services Commission, Chief Justice Godfrey
Chidyausiku, said this week the judges' concerns had not been formally
brought to him.

"That has not been formally brought to me. On the issue of delays in handing
down judgments, a meeting was held recently between the judge president and
the law society to find ways of improving the situation," Justice
Chidyausiku said.

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