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US$300m feared lost in diamonds scam

Zim Independent

Dumisani Muleya

A MASSIVE diamond racket involving millions of hard currency is
feared after gemstones bought from Marange by the government-run Minerals
Marketing Corporation of Zimbabwe (MMCZ) could not be fully accounted for.

Mining sources said yesterday there were investigations
instituted by the government, which involved the central bank, to find out
the truth about diamonds bought and sold by the MMCZ, the sole selling and
marketing agent for minerals produced in Zimbabwe.

The country has 44 types of minerals which include gold,
platinum, emeralds and diamonds.

Zimbabwe is said to have lost US$300 million due to looting of
diamonds in Marange.

The MMCZ is a parastatal under the Ministry of Mines.

Sources said the MMCZ recently bought and sold for US$1,7
million, a parcel of 36 146 carats of diamonds from Marange. The parcel
contained 32 314 carats of industrial and near-gem rough stones and 3 833
carats of gem quality diamonds.

The gem quality diamonds fetched US$1 523 502,10 near-gem
stones, which were 1 192,86 carats got US$23 857,20 and industrial diamonds,
which were 31 128,14 carats, cost US$155 640,70.

This means the diamonds were sold at an average of US$47 per
carat, a value too low compared to current market trends since about 10
years ago. In 1997 a parcel of 50 carats of diamonds cost US$27 230 yielding
US$544,60 per carat. A parcel of four carats was selling for US$1 569,68 a
carat.

The current market value for a rough diamond of 9,75 carats is
US$3 000 per carat. The value for a cut diamond of 3,65 carats is US$9 000 a
carat. The value of diamonds depends on carat, colour, clarity and
cuttability.

Sources said diamond experts consulted by government on the
issue had queried the deal, saying the diamonds were "grossly undervalued".

It is said Reserve Bank authorities were worried the country
could have lost millions in foreign currency in the process.

An independent diamond expert said yesterday the MMCZ
transaction raised more questions than answers. He said government should
intensify inquiries into the issue to ascertain if there was fraud involved
in the diamond sales.

"The above figures and values show anyone who has an idea of how
diamonds are produced and sold that there was gross undervaluation of the
parcels," the source said. "This means a deal involving millions of US
dollars could have been at stake during the buying and selling of these
diamonds. Surely how can more than 36 000 carats of diamonds, which include
nearly 4 000 carats of gem quality, cost a mere US$1,7 million?"

Fears of a diamond scam came as it emerged Zimbabwe could have
lost nearly US$300 million to dealers and smugglers since the
state-sponsored invasion of British-listed Africa Consolidated Resources
(ACR) plc's Marange diamond claims. The diamond rush and subsequent looting
has attracted thousands of panners from all corners of the country,
including dealers from the region.

Repeated efforts to get comments from MMCZ CEO Onesimo Moyo and
public relations manager Pretty Murwisi were unsuccessful. The MMCZ
telephones went unanswered.

ACR is locked in a legal battle with the MMCZ over the diamond
claims in Marange. The British firm, which has local shareholders, has
written to President Robert Mugabe asking him to intervene to stop the
pillaging of the diamonds.

Mugabe has since appointed a cabinet committee to deal with the
issue.

ACR has also written to Mines minister Amos Midzi, Moyo and also
alerted the Kimberly Process Certification System, which regulates the
diamond trade, about the Marange diamonds situation.

Midzi was also not available for comment yesterday.

The Marange diamond claims initially belonged to Kimberlitic
Searches, a subsidiary of global diamond giant, the De Beers Group of South
Africa, whose EPO expired in March.

However, the MMCZ recently seized the claims through a special
grant, which ACR argues violates the Precious Stones Trade Act that
prohibits any licensed dealers like the MMCZ from engaging in mining
activities.


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Mutasa's diplomatic gaffe riles SA delegates

Zim Independent

STATE Security minister Didymus Mutasa last week ruffled the
feathers of a South African delegation attending the Joint Permanent
Commission on Defence and Security in Victoria Falls by using what the
visitors considered undiplomatic language at a state dinner hosted for them.

This is likely to worsen frosty diplomatic relations between
Harare and Pretoria.

Sources who attended the dinner hosted by the Zimbabwean
government to welcome the South African dignitaries said the visitors were
taken aback by Mutasa's attacks on SA ambassador Mlungisi Makhalima for
making representations to the Zimbabwe government on behalf of dispossessed
white farmers from his country.

Mutasa is also alleged to have uttered "sarcastic gibberish" on
South Africa's passing of a law legalising same-sex marriage.

This comes amid a diplomatic tiff last week after the state
media announced on Friday that South Africa had scrapped stringent visa
requirements on Zimbabweans wanting to travel to that country.

The South African government has since issued a statement
denying ever making such an undertaking at the Victoria Falls meeting.

"(The) South African government at no stage during the second
session of the Zimbabwe-South Africa Joint Permanent Commission on Defence
and Security, agreed to waive visa requirements for the Zimbabwe nationals,"
a statement from the home office said.

Mutasa's speech at the dinner, sources said, set a bad tone for
the proceedings as it was unprecedented at such a forum where politicians
usually exchange niceties about mutual co-operation.

Unconfirmed reports this week said South Africa was considering
launching a formal complaint with the Zimbabwe government on Mutasa's
remarks.

Mutasa headed the Zimbabwe delegation to the joint commission.
He was delivering a speech "to welcome" the South Africans when he started
to refer to issues to do with the land reform.

He told the gathering of about 60, which included SA Defence
minister Mosiuoa Lekota and four deputy ministers, of his meetings with
Makhalima to deal with the issue of dispossessed South African sugar
farmers.

Mutasa insinuated to the gathering that he had told Makhalima
that Zimbabwe was taking away land from white farmers and there was nothing
to stop him from taking land from white South African farmers whom the
ambassador was trying to represent, the sources said.

"He also told the gathering that South Africa was too legalistic
in dealing with land distribution, suggesting that Zimbabwe did not
necessarily follow the law in executing the land reform programme," a source
said.

Mutasa, according to a source, then opened up on the South
African government for passing the Civil Union Act which legalised gay
marriages. He indicated that such practices would never be condoned here and
was surprised why South Africa as an African country would legalise same-sex
unions.

The source said Lekota, who spoke after Mutasa, gave the
minister "a lecture" on why South Africa had passed the legislation.

"He said it was not a question of moral righteousness but an
issue of freedoms and democracy as enshrined in the South African
constitution. He said the issue of moral right or wrong was for God to judge
and not humans," the source said. - Staff Writer.


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Mpofu has case: Nkomo

Zim Independent

Shame Makoshori

SPEAKER of the House of Assembly John Nkomo yesterday ruled that
the Minister of Industry and International Trade Obert Mpofu must be charged
for contempt of parliament for allegedly lying under oath when he appeared
before a parliamentary portfolio committee in connection with the Zisco
looting affair.

Nkomo said Mpofu has a case to answer. If found guilty, Mpofu
faces a fine or up to two years in jail, or both.

This follows a complaint by the parliamentary portfolio
committee on Foreign Affairs, Industry and International Trade that Mpofu
committed perjury.

"The Speaker has had the opportunity to study the material and
rules that an offence exists. The minister, under oath, referred to
information that he said implicated other Members of Parliament (in the
Zisco looting). He however later denied the existence of the information
without retracting the previous statements," Nkomo said.

"These facts clearly disclose a prima facie case of falsifying
information before parliament and so there is a case of contempt of
parliament."

Ruling Zanu PF MPs reacted with general calm, while opposition
MDC MPs celebrated. MDC MP Job Sikhala shouted that Mpofu was "finished".
"Obert wasviba, aenda uyu, you are gone shamwari (your reputation is
tarnished and you are gone my friend)," he said.

Acting Leader of the House Emmerson Mnangagwa said a committee
must be appointed to try Mpofu. "I move a motion that a privileges committee
be appointed to investigate," he said.

The committee will hear evidence from members of the
parliamentary portfolio committee and from Mpofu himself. It will then
submit its findings and recommendations to the House which can either
endorse or reject them.

This is the same process which was followed when former MDC MP
Roy Bennett was jailed by parliament for a year after he floored Justice
minister Patrick Chinamasa in 2004.


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Fertiliser saga: Pazvakavambwa declines to sing after dismissal

Zim Independent

Augustine Mukaro

DISMISSED Agriculture permanent secretary Simon Pazvakavambwa
yesterday remained mum over the fertiliser saga, despite threatening to
spill the beans if he was fired.

The importation of inferior fertiliser, which sparked clashes
between Ministry of Agriculture officials and the Reserve Bank, claimed
Pazvakavambwa as its first victim when he was relieved of his duties on
Wednesday.

Chief Secretary to the President and Cabinet Misheck Sibanda
announced the sacking of Pazvakavambwa on Wednesday.

President Robert Mugabe proceeded to appoint Shadreck Sariri
Mlambo as Agriculture permanent secretary with immediate effect.

Contacted for comment on his dismissal, Pazvakavambwa said he
would not run his life through the press.

"I have a very secure and happy future," Pazvakavambwa said. "I
cannot run my life through the press, so I will not comment on this
development. Why don't you wait and watch the developments as they come?"

Pazvakavambwa appears to have been used as a scapegoat for a
botched deal in the importation and distribution of sub-standard fertiliser
to farmers through a Reserve Bank of Zimbabwe facility.

Of the 70 000 tonnes imported, 8 000 were deemed to be of
inferior quality.

Correspondence made public as the fertiliser saga unfolded
showed that Pazvakavambwa authorised the release of the consignment to the
Grain Marketing Board and its subsequent distribution to farmers on July 26.

In an analytical report to the GMB general manager,
Pazvakavambwa said results from tests carried out on the inferior fertiliser
were within the acceptable range.

Sources said Pazvakavambwa's dismissal was endorsed after a
National Economic Recovery Council (Nerc) meeting two weeks ago at which
Reserve Bank governor Gideon Gono clashed with several ministers, including
Economic Development minister Rugare Gumbo, Deputy Finance minister David
Chapfika and Industry and International Trade permanent secretary Christian
Katsande, who accused him of making arbitrary decisions.

Vice-President Joice Mujuru chaired the meeting at which Gono
was attacked. He later stormed out of the meeting, according to reports.

Pazvakavambwa is being accused of trying to distance himself
from the importation of inferior fertiliser from South Africa when he toured
and tested samples of the product at the Intshona workshop in South Africa.
He was also accused of failing to issue import permits on time.

Gono and Made were set to appear before a Parliamentary
Portfolio Committee on Agriculture this week to answer questions on how the
fertiliser was imported.


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Moyo defamation suit set to expose Zanu PF

Zim Independent

Loughty Dube

ZANU PF national chairman John Nkomo has fingered cabinet
ministers Emmerson Mnangagwa and Sithembiso Nyoni as individuals who poured
money into Tsholotsho, causing serious divisions in the party two years ago.

Nkomo was giving evidence on the second day of a civil lawsuit
in which former Information minister Jonathan Moyo is suing him together
with fellow politburo member Dumiso Dabengwa for defamation amounting to
$200 million.

Testifying, Nkomo alleged certain individuals had funded
officials in the Tsholotsho district co-ordinating committee (DCC). Asked by
the presiding judge, Justice Francis Bere, who the funders were, Nkomo
responded by naming the two cabinet ministers.

"People who were paying members of the Tsholotsho DCC are
Emmerson Mnangagwa and Sithembiso Nyoni. There was $2 million that was to be
availed by Nyoni in unclear circumstances," Nkomo told the court.

Nkomo said the problem in the Tsholotsho DCC was that other
members of the committee were paid foreign money while others were not paid,
which he said caused divisions in the committee.

"During the meeting we called in Tsholotsho in January 2005 to
find out what happened at Dinyane, revelations were made that some people
were paid monies and in one case a Mafu told the same meeting that he
travelled to Harare where he was paid monies by Mnangagwa," Nkomo said.

Nkomo denied defaming Moyo and said the allegations were
fabricated by Moyo to divert attention from his waning political career.

"These allegations are false and this is a case of someone
bringing issues in a bid to divert attention from his waning political
career. That is the reason he is coming up with such creations," Nkomo said.

"When this young man (Moyo) joined the party the next thing he
was in the central committee and the next minute in the politburo and
suddenly he was a cabinet minister. He then became bigheaded. He came on
board at the speed of light and that confused him, he saw himself as a
genius."

Nkomo told the court that party members at the Tsholotsho
meeting of January 2005 told the Zanu PF national leadership that the
resolutions in Tsholotsho were to remove Joseph Msika as vice-president and
bring in Mnangagwa while Patrick Chinamasa was to replace Nkomo, and
Thenjiwe Lesabe was to come in as vice-president.

The defence team made several references to politburo minutes in
their bid to prove that Nkomo and Dabengwa did not defame Moyo.

Nkomo also testified that Moyo was never in the liberation
struggle.

"I never met him, I did know him and I have never met anyone who
says they know him. Even in the camps that he says he was I never had the
privilege of knowing he was there," Nkomo told the court.

Moyo in his evidence-in-chief indicated that he took part in the
war of liberation and had been in camps in Tanzania and in Zambia.

It also emerged in court that Matabeleland North was the only
province in the country that backed a party directive for Vice-President
Joice Mujuru to be voted into office.

The revelations came out in court where confidential and private
minutes of the Zanu PF politburo meeting of the first of December 2004 were
read out as part of evidence presented by the defence team.

The minutes indicated how unpopular Mujuru was during the time
and also show that there was serious whipping of provinces to back her into
her current position.

Extract 3.69 of the politburo minutes state that President
Mugabe was angry at why only Matabeleland North province had complied with a
party circular that was sent out to all provinces urging them to back a
woman candidate for the vice-president's position.

This meant that 11 of the country's 12 provinces did not
initially back Mujuru for the position.

The secret party documents that include politburo, central
committee and Zanu PF district co-ordinating committee minutes, are now used
as public records in court with each team using them to support its case.

The Tsholotsho saga caused serious ructions in Zanu PF that led
to the suspension of provincial chairpersons and Moyo's ultimate dismissal
from government over his alleged role in the foiled palace coup.

Senior government ministers and officials who include Chinamasa,
Abedinigo Ncube, Andrew Langa, and war veterans leader, Joseph Chinotimba,
are expected to testify in the case.

The case continues today at the Bulawayo High Court.

Moyo in his court papers claims that Nkomo and Dabengwa alleged
that he had "instigated, funded and led the hatching of a plot against
Mugabe and others in the top leadership of the party".


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Lid off Mujuru ally

Zim Independent

Dumisani Muleya

FORMER MP and businessman Tirivanhu Mudariki, who together with
senior government officials including Vice-President Joice Mujuru, have been
linked to the Ziscosteel looting saga, is a key business partner of the
Mujuru family.

Mudariki and the vice-president were named by the National
Economic Conduct Inspectorate (NECI) as some of the officials who benefited
from pillaging Zisco.

NECI says the two travelled together to Botswana a few years
ago, at one time in October 2003, on Zisco resources although their mission
had nothing to do with the government-owned company in their official
capacities.

Enquiries by the Zimbabwe Independent show Mudariki, who is
involved in mining, tourism and wildlife sectors, is a business partner of
Vice-President Mujuru's husband, retired army commander General Solomon
Mujuru.

Rtd Gen Mujuru and Mudariki, representing Kupikile Resources,
have lately been embroiled in a court battle over River Ranch diamond mine
with Bubye Minerals which claims to own 70% of the mine in Beitbridge.

Mujuru and Mudariki were appointed directors of River Ranch on
April 27 2004 following an annual general meeting held by majority owners of
the mine, Rani International Ltd.

Mujuru and Bubye officials have appeared before the
Anti-Corruption ministry to explain themselves over the murky dispute.

Bubye was originally given the right to operate River Ranch by
liquidator of the mine Peter Bailey of KPMG after its original owners,
Auridium of Australia, pulled out seven years ago citing falling diamond
prices on the international market.

Bubye's directors include Michael Farquhar and his wife Adelle,
and Sibonokuhle Moyo, wife to Zimbabwe's ambassador to South Africa, Simon
Khaya Moyo.

Bubye, which took control of River Ranch in 1999 following
Auridium's withdrawal, accused Rani International, Southern African
Development and Kupikile Resources of "unlawfully and forcibly" seizing the
diamond mine. But Rani International said Bubye was kicked out after it
failed to pay its debts.

Mudariki is a local director of Rani Resorts, a tourism
development company owned by Rani International which has interests in
Zimbabwe's mining, tourism, and wildlife sectors. Rani wants to invest in
Kariba and Gonarezhou national parks.

Apart from his travels to Botswana with Vice-President Mujuru on
Zisco resources, Mudariki is linked to Harare-based Rochive Consultants
which provided a bulldozer to the Redcliff-based integrated steelworks firm
for questionable payments.

"Rochive belongs to one T Mudariki. The company's association
with Zisco from records availed to NECI dates back to year 2002. The company
has been paid by Zisco for three years," NECI says in its Zisco report.

"It started from a modest $12 477 721,75 in 2002 to an
astronomical figure of $1 580 187 677 in 2004. The figure of $1,5 billion
paid to Rochive in 2004 is a huge amount of money paid for the services of
one piece of equipment, a bulldozer."

NECI questioned how Rochive was identified to provide its
bulldozer to Zisco. Sources say Mudariki and Vice-President Mujuru went to
Botswana in 2003 on a business mission which appeared to be connected with
Zisco albeit unofficially. It remains unclear so far what their interest in
Zisco was.

However, this has raised eyebrows because of reports that there
were politicians trying to buy Zisco's Botswana subsidiaries, Ramotswa and
Tswana Iron & Steel, collectively known as Unabo.

NECI investigators who went to Botswana to probe the Zisco graft
discovered plans were already under way to sell the two subsidiaries for
US$3 million to undisclosed buyers by repaying their parent firm funds that
were used to controversially purchase them in 2001.

Zisco was overpaid by the owners of the subsidiaries by more
than US$500 000 but Zisco officials have failed to explain who benefited
from this. It was suspected that this was a way of transferring money to
Botswana by Zisco officials on the pretext of acquiring the companies. It
remains a mystery who pocketed the US$500 000.


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Reality dawns on new lease holders

Zim Independent

Shakeman Mugari

THEY were launched amid fanfare, and President Robert Mugabe
said they were a "landmark event in the history of the country" as he handed
them over to elated new farmers.

But three weeks on, the excitement is dying down. The farmers
are beginning to wake up to the limitations of the new lease documents they
received from government on November 16. A close reading of the document
shows that it neither fully guarantees security of tenure nor can it be used
as collateral to get loans from banks.

Financial risk experts say the lease document is full of vague
and loose legal statements that pose a serious potential risk to any
financial institution that may want to accept it as collateral.

They say the lease is flawed and porous, opening it to political
abuse by government. They say even the security of tenure that the leases
were initially thought to provide is under threat from clauses that give too
much power to the government as the lessor.

Section 20 of the lease says government can cancel the lease at
any time under conditions it deems necessary. "The lessor may, at any time
and in such manner and under such conditions as it may deem fit, repossess
the leasehold or any portion if the possession is reasonably necessary in
the interest of defence, public safety, public morality, public health, town
and country planning or the utilisation of that or any other property for
purposes beneficial generally or to any section of the public."

Lawyer Chris Mhike said such sections scare away banks from
lending to holders of such leases.

"That clause is dangerously wide because it wipes away the same
concept of security of tenure that it is seeking to entrench for the benefit
of the farmers," Mhike said.

"The inclusion of wide and vague provisions in legal documents
and instruments is unreasonable and untenable in any democratic society," he
said.

Mhike said it was sad that a "government that pledged to be
revolutionary should give its citizens rights that are less than the ones
that the coloniser gave to himself".

The document goes further to erode the security by stating in
sections 23 that government shall not be obliged to pay or compensate the
farmer for improvements that it has not approved. That means a farmer can be
booted out of the property with nothing.

"This means that government has the right to compulsorily
acquire developments effected by the farmer under the flimsy reason that
they have not been approved," said Mhike.

Bankers are worried that the lease is not transferable without
permission from government.

An official from a local commercial bank said the fact that the
lease cannot be transferred and the right of government to repossess the
property make it impossible for banks to consider it as collateral.

"It's very difficult because it does not give us the guarantee
that the bank will be able to recover its money if the farmer defaults on
the loan payment," said the official.

The previous leases that were held by farmers before the land
reform could be auctioned if the farmer failed to pay. The new owner was
entitled to utilise the farm for the remaining portion of the lease's
duration.

Most banks have already given the lease document a wide berth as
a security asset.

But the scandal goes beyond land. Section 9.5 says no farmer
shall sell five heads of cattle without offering one to government. "Any
group of five or more head of cattle reared or pastured on his or her
leasehold at any time, the leaser shall, in writing, offer one in five head
of cattle from such group to the lessor (government)," says the lease.

It states that government shall have the first right of refusal
to buy the cattle. If government fails to take up the offer the farmer is
prohibited from selling the cattle at a price higher than what the
government was prepared to pay for them.

Simply put, this means that government is not only controlling
the price of cattle but is also giving itself the right to buy 20% of
national herd at a price that it sees fit.

The saddest part of the document, experts say, is that it does
not leave room to the farmer to challenge the cancellation of the lease.

Amendment 17 of the constitution says farmers shall not bring to
court land issues involving government. This means that farmers can lose
their land and improvements on it without any alternative for redress at
law.

Human rights lawyer Otto Saki said the lease does not have
checks and balances to deter government from using its authority to
prejudice the farmer.

"Such a document could be used as a political tool by government
to dispossess people who are perceived as not loyal to the party," said
Saki.

Even more worrying is that past experience with regard to land
has shown that government can tamper with tenure laws when it suits its
agenda.

For instance, after failing to win court cases against white
commercial farmers, government went on to amend the constitution which
effectively nationalised the land.

Saki said like most laws that have been created in the past six
years, the lease does not provide the required checks and balances that
protect the farmer.

"Because it lacks the required checks and balances to avoid
abuse, there is nothing that can stop the government from cancelling the
lease at any time especially when it is armed with such dangerous Acts as
Amendment number 17," said Saki.

"For example there is nothing that can stop the Minister of
Agriculture from cancelling a farmer's lease to bring in his connections."


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Nkomo's presidential ambitions rattle rivals

Zim Independent

Nqobani Ndlovu

THE Speaker of the House of Assembly, John Nkomo's bold
pronouncement that he would stand for the highest office in the land when
President Robert Mugabe retires from office has rattled his rivals and
sparked debate on his suitability for the post.

It has also disturbed the political machinations on the broad
and messy national chessboard on the succession issue.

Nkomo made the revelations when responding to a barrage of
questions from journalists at a function of the Bulawayo Press Club last
week.

When asked about speculation that he aspired to succeed Joseph
Msika as vice-president, Nkomo retorted: "Why stop at the vice-presidency?
Why not the presidency?"

Nkomo said there was no chance of him retiring from politics as
this was like a "cancer" in him.

He said he would need the equivalent of chemotherapy treatment
to cure him of "the political bug" that he claimed has afflicted him since
1954 when he joined politics.

Before Nkomo's unexpected pronouncements last week, the
political temperature in Matabeleland and throughout the country has been
heating up over who would replace Msika when he leaves office. There was
speculation that Nkomo was positioning himself for the post.

Other contenders who were touted to give Nkomo stiff competition
in the race include politburo member Dumiso Dabengwa, Industry and
International Trade minister Obert Mpofu and Zimbabwe's Ambassador to South
Africa, Simon Khaya Moyo.

Dark horses in the race were Small and Medium Enterprise (SMEs)
minister Sithembiso Nyoni and politburo secretary for education, Sikhanyiso
Ndlovu.

The declaration by Nkomo that he would have a go at the highest
office if chosen by the people is a twist in the tail in a succession debate
that is always undertaken in undertones.

By his open declaration, Nkomo has thrown his candidature into
the hat that already has the names of Vice-President Joice Mujuru, Emmerson
Mnangagwa and former Finance minister Simba Makoni.

Others vying for the presidency have not come out so openly,
largely for fear of Mugabe's reaction.

Mugabe has often reacted angrily to any debate on his successor
and several party leaders were reprimanded and some suspended from the party
after meeting at Dinyane School in Tsholotsho two years ago, which Mugabe
said amounted to a coup.

Mugabe alleged that those who met at Dinyane were plotting a
coup against him and the presidency.

He has also accused those seeking to succeed him of consulting
witches. However, there have been indications that there is serious lobbying
for the top position going on and camps have emerged in the ruling party
over who will succeed the 82-year old Zanu PF leader.

Political analysts this week had mixed feelings on the
statements by Nkomo, with some saying he had a fair chance of landing the
highest office while others dismissed him as a pretender.

John Makumbe, a University of Zimbabwe political lecturer, said
Nkomo was not suitable to run for the presidency as he did not have the
capacity to marshal support in Zimbabwe and lacked the political stature of
other national leaders.

"John Nkomo is correctly ambitious but suitability is another
issue," said Makumbe. "He lost elections in 2000 and he does not have the
popularity of someone aspiring to be president.

"He has not demonstrated a capacity to run bigger things than
parliament and he does not have the capacity to mobilise support in
Zimbabwe."

He added that nationally,Nkomo was not known compared to Mujuru
who has been on a whirlwind country tour to drum up support.

"We know Nkomo is related to Mugabe and maybe he hopes for a
continuation of the dynasty but democratically that would not work. Nkomo
does not have national stature in the mould of (the late) Eddison Zvogbo or
Amai Mujuru," Makumbe said.

More importantly, Makumbe raised the tribal factor in Zimbabwean
politics against Nkomo's ascendancy.

He said the Zezuru clique in the party would never allow a
situation where the party is led by someone from the former PF Zapu, and
worse still, a person from Matabeleland.

"The Zezurus would not allow anyone from PF Zapu to be Zanu PF
president.

"They are comfortable with Msika as vice-president because he is
a Ndau and not Ndebele and he stays in Chiweshe and not in Jotsholo,"
Makumbe said.

"The Zezurus in Zanu PF would never allow that. They make sure
they make whoever is vice-president from that camp to be as useless as they
have done with Msika," he said.

Max Mnkandla, a former sergeant in Zipra and now president of
the Zimbabwe Liberators Peace Initiative (ZLPI), said Nkomo did not have a
constituency and would find it difficult to identify his support base.

"Even in Matabeleland which he claims to represent he does not
have support. So how does he expect to get support in Mashonaland? It would
be difficult for him and he also has a bloat that he is related to Mugabe
and that relationship will taint him."

Political analyst, Ibbo Mandaza, said Nkomo's chances of landing
the presidency were slim.

"The actual positioning for the presidency took place in 2004
when the vice-presidents were elected and Nkomo only made it to the
presidium as national chairman and all this gives the two vice-presidents an
advantage over him," Mandaza said.

Former war veterans' national chairman Jabulani Sibanda, who was
suspended from Zanu PF by Nkomo, said the next president of the country must
be somebody who will adhere to the party and the country's constitution
without any reservations.

"I do not know whether John Nkomo can do that but he has a right
democratically to say that he wants to be the president. What we have seen
in the past is that Zanu PF can shut out leaders through unconstitutional
means," Sibanda said.


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ZBH fires duo over 'costly' air boobs

Zim Independent

THE Zimbabwe Broadcasting Holdings (ZBH) has dismissed two
broadcasting staffers over claims that one of them broadcast material that
was not supposed to be aired and another over a costly air boob.

Gilbert Nyambabvu, who has already left the country for the
United Kingdom, was forced off Newsnet after he referred to the First Lady
Grace Mugabe as the "late Amai Grace Mugabe" during a live news bulletin.

He was instantly removed from the main news bulletin for the
error. Nyambabvu was a presenter for Newshour, the country's main news
television bulletin.

Lenon Mutseura, a producer-presenter with This Morning edition,
was dismissed after he carried a story on the morning news revealing that
Barclays Bank were the new sponsors for the 2007 Premier Soccer League.

ZBH spokesperson Sivukile Simango confirmed the dismissal of the
two broadcasters.

"The disciplinary action taken against Lenon Mutseura that led
to his subsequent dismissal is that he repeatedly committed the same offence
even after several warnings," he said. "The offence which cannot be
tolerated in any work place let alone a newsroom calls for instant
dismissal."

On Nyambabvu he said: "Gilbert Nyambavu was temporarily removed
from air for committing an unpardonable gaffe while on air. That is a normal
disciplinary action for presenters at ZBH. He later resigned to join his
wife in Britain," Simango said. - Staff Writer.


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Zinwa water takeover: Govt in breach of Act

Zim Independent

Augustine Mukaro

GOVERNMENT'S decision to hand over water and sewerage management
to the Zimbabwe National Water Authority (Zinwa) is illegal as it directly
contravenes the Urban Councils Act which vests the management of the
services to local authorities.

This week, government allowed Zinwa to take over all water
functions in Harare that extend to distribution and billing of consumers
with effect from today.

Combined Harare Residents Association (CHRA) chairman, Mike
Davies said the Urban Councils Act does not provide that council may
alienate water resources to a third party.

He said CHRA was putting together a resistance programme to
force government to comply with the Act.

Davies said Part XIII of the Urban Councils Act which deals with
water gives council power to provide water to consumers and allowing Zinwa
to take over the responsibility was illegal.

"A council may provide and maintain a supply of water within or
outside the council area. And for that purpose the council may: (a)In
accordance with the Water Act [Chapter 20:22] take such measures and
construct such works, whether inside or outside the council area, as it
considers necessary for the purpose of providing and maintaining a supply of
water; (b) enter into agreements for the purchase and sale of water and for
any other thing necessary in connection with the maintenance and supply of
water."

Davies said Zinwa with the blessings of government had usurped
the powers of a local authority.

"There is no provision for the privatisation of water," Davies
said.

"These are statutory requirements of the local authority. To
make matters worse, water supplies in the city deteriorated to unprecedented
levels over the past year when Zinwa started meddling in the water affairs."

He said a CHRA general council meeting scheduled for this
weekend would come up with a resistance plan.

Government said from December 1, Zinwa would also directly
supply and bill residents of Ruwa, Epworth and Chitungwiza while work for a
nationwide takeover is underway.

Burst water pipes and the replacement of worn-out pipes are now
the responsibility of the water authority. Zinwa has also taken over the
administration of Harare's sewerage works with immediate effect.

All workers in departments dealing with water management who
until now were under Harare City Council would be transferred to Zinwa.

Zinwa has also been ordered to import chemicals directly from
manufacturers, effectively doing away with middlemen who have been fleecing
the water authority through exorbitant price mark-ups.

Water tariffs for consumers in Harare will, with effect from
this month, go up to $130 per cubic metre from $8, a 16-fold increase.

The price is for the first 20 cubic metres after which a
punitive price is charged to discourage wastage.The price will be reviewed
to $155 between January and March next year. Further adjustments of $180 per
cubic metre will be introduced for the period April to June next year.


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Respite for MDC officials

Zim Independent

Lesley Moyo

A GWANDA magistrate has remanded two officials of the pro-senate
Movement for Democratic Change (MDC) to next month to give them time to file
their application to have their charge of distributing subversive material
referred to the Supreme Court.

Paul Themba Nyathi, the director of elections, and Sithatshisiwe
Sibanda, the Matabeleland South administrator, are accused of distributing
subversive material allegedly meant to incite soldiers and the police
against government.

The two, who are accused of violating Section 30 of the Criminal
Law and Codification Act, were not asked to plead when they appeared before
Gwanda senior magistrate, Takudzwa Gwazemba, on Wednesday last week.

The two senior officials wanted to apply to have their case
referred to the Supreme Court for the interpretation of the constitution in
relation to the charges laid against them.

Nyathi and Sibanda, through their lawyer Thomson Mabhikwa of
Mabhikwa, Likhwa & Nyathi Legal Practitioners, argue that the section they
were charged under contravened Section 20 of the constitution which
guarantees freedom of expression.

However, Gwazemba remanded the accused to December 6 to give
them time to file their application challenging the constitutionality of the
charge against them.

The state's case is led by Admire Zvongouya.

The document the two are accused of distributing in Gwanda is
entitled: A message to our armed forces, which was said to have originated
in South Africa.

The state argues that the subversive material was likely to
cause defections and dissatisfaction among the members of the police and
army.


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No legal basis for RBZ to force banks to buy bonds

Zim Independent

Shakeman Mugari

A RESERVE Bank of Zimbabwe directive compelling banking
institutions to invest in bonds tied up to the sizes of their balance sheets
has no basis at law, private legal counsel to an unidentified financial
institution indicated.

The counsel was given by Advocate Adrian de Bourbon now based in
Cape Town.

The advice, a copy of which was obtained by businessdigest this
week, was given to a local commercial bank which sought legal opinion on the
central bank's order forcing banks to invest part of their assets in the
five-year Financial Sector Stabilisation Bonds and seven-year Economic
Stabilisation Bonds.

The Economic Stabilisation Bond was suspended following an
outcry by banks that take-up could throw financial institutions into
bankruptcies, while the take-up threshold for Financial Sector Stabilisation
Bonds was reduced over similar concerns.

The effect of the bonds was to lock up close to 90% of banking
institutions' cash resources in long-term instruments, leaving them without
funds to support short-term obligations.

Part of the money is locked up in statutory reserves kept by the
central bank at zero interest.

In his advice, advocate de Bourbon said there was nothing in the
Banking Act that gave the governor powers to force banks to invest their
money in the bonds.

"It is my view that there is nothing in the Banking Act or the
regulations made in terms of that Act which in any form regulates the
issuance of the bonds, or the directions given by the governor as to the
holding of the bonds," said de Bourbon.

He said the central bank did not have express authority under
the Reserve Bank of Zimbabwe Act to force banks to take up the bonds.

"The decision of the Reserve Bank is illegal in the sense that
it is made without statutory power both with regard to the creation of the
two types of the bonds and in relation to the mandatory obligation imposed
on the financial institutions to convert a large percentage of their assets
into bonds," said de Bourbon.

He said while the RBZ had a mandate to regulate financial
institutions and fight inflation, this had to be done within the parameters
of the law.

"It must be remembered that the Reserve Bank has a role as a
regulatory authority, but its role in that regard is one strictly stipulated
by the legislation, and it does not have executive powers outside the
legislation," he said.

"In my view, no statutory power exists to enable the Reserve
Bank to compel a financial institution to convert 45% of its asset base
shown in its balance sheet into particular instrument, no matter the
monetary policy motivation of such a decision," said de Bourbon.

He said while he acknowledged the role of the RBZ in
implementing monetary policy, "it is nonetheless clear to me that the powers
of the Reserve Bank in that regard are not unlimited".

Advocate de Bourbon said there were strong grounds for the banks
to challenge the RBZ's decision because the directive was "grossly
unreasonable", warning that if implemented it would have a negative impact
on the global ratings of financial institutions in the country.

He said the banks could argue that the bonds could lead to a
cash crunch that could force them to borrow from the central bank at
punitive interest rates to finance short-term obligations.

"With the recent increase in accommodation rates, this will have
a significant impact on financial institutions, but will undoubtedly benefit
the Reserve Bank as it will become a major profit-making institution," de
Bourbon said.

He warned that any legal challenge against the RBZ on the issue
should not be made by a single financial institution since this would
provoke the wrath of central bank governor Gideon Gono.


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GCR puts financial institutions on rating watch

Zim Independent

Dumisani Ndlela

GLOBAL rating agency, Global Credit Rating Company (GCR), has
placed Zimbabwe's financial institutions on a rating watch and abandoned
short-term ratings due to a highly volatile economic environment.

"All long-term ratings have been placed on a rating watch due to
escalating volatility in the Zimbabwean economy and the impact that this
will have on profitability across the sector," GCR said in a note to
financial institutions under its portfolio in Zimbabwe.

The Reserve Bank has made credit ratings by international rating
firms compulsory for all financial institutions following a liquidity crunch
that resulted in the closure or placement under curatorship of at least 15
banking institutions since 2004.

The placement of a rating watch on financial institutions'
long-term ratings means that GCR can call for a review of its rating on a
financial institution more regularly than before, a GCR official said from
the company's Johannesburg offices yesterday.

"This is standard practice under a volatile environment," said
Dave King, speaking on telephone from South Africa.

Zimbabwe is currently going through its worst economic crisis
characterised by runaway inflation and food, fuel and foreign currency
shortages that have disrupted normal economic activities in the country.

The ailing economy has suffered a cumulative gross domestic
product decline of more than 30% between 1999 and 2005.

This year, GDP is projected to decline by 5,1%, and by a further
4,7% next year, according to International Monetary Fund forecasts.

The IMF has also projected average inflation of 4 278,8% in
2007, suggesting increased volatility that could prompt more regular rating
reviews next year.

Inflation is currently at 1 070% year-on-year for October and
will average 1 216% this year, according to IMF projections.

GCR said the six-year economic recession had subverted the
intermediation role of Zimbabwe's banking institutions, with negative real
rates on deposits discouraging savings while lending had been constrained by
the high credit risk posed by the economy and the exorbitant credit costs
faced by a limited number of creditworthy borrowers.

As a result, banking institutions had shown a preference for
low-risk, high yielding government securities which have enabled them to
maintain nominal levels of profitability.


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Are property fair value adjustments really fair?

Zim Independent

By Admire Mavolwane

THE budget presentation is always an event to look forward to.
Not that we are fascinated by the famous briefcase photograph. Neither are
we excited about the budget proposals but of late the budget presentation
has come to be about the only occasion when some reasonably recent
statistics on the economy are made public.

However, a story carried by the Herald of November 21, in which
the Minister of Finance is reported to have admitted that line ministries
have not been submitting returns for the past six years, does not make good
background reading for budget day.

In essence, the Treasury knows only what the ministries have
been allocated, but is not in the picture as to how much has been spent and
how much, if any, has remained in the kitty.

He is also in the dark as to what happens to the leftovers. In
short, the books have never been balanced and the accounts/year-end
financials have not been signed off for over half a decade. We are, in a
way, not going into the 2007 from a position of strength, house keeping
wise.

As a recap, this is what the minister said in his half-year
fiscal policy statement with regards to GDP growth and the budget deficit.

For the second half of 2006, $140 billion (revalued) was
expected to be collected, against an expenditure target of $327,2 billion.
In other words, he expected government to spend 2,3 times more than it would
have collected. This means that the budget deficit for this period would be
$187,2 trillion.

By our calculations, the budget deficit for 2006 would have
amounted to 24% of GDP. Our figures excluded parastatal losses and other
quasi-fiscal expenses, which have not been comprehensively quantified as far
as we are aware, for a very long time. We will review the 2007 budget
proposals next week.

Moving away from the budget, last week we made remarks about the
investment market's discomfiture with the liberal and sometimes aggressive
application of accounting standards IAS41 and IAS40.

The former set the guidelines for the estimation of the value of
biological assets while the latter pertains to the revaluation of physical
properties classified as investment properties.

The difference in application is that the IAS41 is in the domain
of management and as long as the external auditors are happy with the method
of estimation it can be applied. For investment properties, professional
property valuers are roped in.

The issue that has come up with regards to IAS40 is that many in
the market are of the view that the property revaluations are rather
excessive especially when compared with the familiar bench marks; US Dollar
and the CPI indices, both official and independent.

For example, listed property entities Mash and Dawn in their
financials published yesterday did push through their income statements,
property fair value adjustments of over 4 000%.

By comparison, the year-on-year CPI inflation for September 2006
was 1 023,3% and the parallel market devaluation of the local unit of
approximately 2 000%.

It is rather unfortunate that the CSO is no longer publishing
the building materials index which would have acted as another crude
benchmark. Maybe at some future occasion the Real Estate Institute of
Zimbabwe will organise a workshop to educate the market about the
methodologies applied in arriving at property values.

We now turn to the actual results. Mash's turnover, which can be
appropriately termed rental income, went up by a sub-inflation 858% to $200
million, mainly on account of the structure of the lease agreements.

Strong performance in the "other income" line item from $14
thousand to $30 million, outpaced both the growth in cost of sales of 1 824%
to $43 million and the 805% growth in operating expenses to $94 million.
This saw operating income before revaluations increasing ten fold to $94
million.

Then came the contentious 4 345% growth in the value of the
property portfolio to $35,8 billion, which saw a colossal $34,4 billion fair
value adjustment being booked through the income statement.

Added to finance income of $85 million and $640 million arising
from the fair value adjustment of equities it greatly boosted the growth in
the bottom line. Attributable earnings of $24,4 billion were, in the end,
realised meaning that Mash shareholders are 4 974% wealthier than they were
in 2006.

Not to be outdone, for the six months to 30 September 2006 Dawn
also booked in a huge fair value adjustment. Unlike Mash, though, rather
than use external valuators the directors of Dawn did an internal valuation.
The outcome was a $88,8 billion appreciation in the value of their
properties with the same figure finding its way into the income statement.

Revenues grew 35 times to $300 million, driven mainly by the
commissions from the recently acquired CB Richard Ellis. Of this amount,
rental income, which is tied to Zimsun's turnover, amounted to $83 million.

Finance income of $17 million, coupled with other adjustment
gains of $56 million, saw attributable earnings of $61 billion being
realised.

In the aftermath of the results, the market seems to have
believed the numbers from Dawn, especially the contribution of CB Richard
Ellis and buyers were keen to add the counter to their portfolios.

Consequently, the price gained $2 to $40. On the other hand, it
appears some investors were keen to exit Mash, with the counter being
offered at $40.


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NRZ training SA drivers

Zim Independent

Pindai Dube

THE National Railways of Zimbabwe (NRZ) is training South
African Railways (SAR) train drivers ahead of that country's 2010 Soccer
World Cup, an official said this week.

The NRZ initiative comes at a time when the parastatal, said by
Reserve Bank of Zimbabwe governor Gideon Gono to be among a few state-owned
enterprises beginning to show life after huge capital injections by the
central bank in the past two years, has been plagued by fatal train
accidents largely blamed on antiquated railway equipment.

NRZ public relations manager, Fanuel Masikati, told the
businessdigest this week that 28 SAR train drivers were in the country for a
three-week training programme.

"SAR approached us last month to train their drivers and we
agreed to help them and as I speak, 28 drivers are already in the country
for a three-week training course which started on November 20," said
Masikati.

He added: "As you know we have got the best training centre,
experts and drivers in the Sadc region. SAR is doing it in preparation for
the 2010 World Cup they are hosting."

Masikati denied reports that the NRZ continued to lose
experienced personnel to SAR due to poor working conditions and salaries.


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Four months on, RBZ yet to set up exchange rate board

Zim Independent

Paul Nyakazeya

THE Reserve Bank has not yet established the much-awaited
Exchange Rate Impact Assessment Board (ERIAB), four months after central
bank governor Gideon Gono announced plans to set up the institution.

ERIAB was expected to regularly review the exchange rate in line
with inflation.

The local currency has been under sustained pressure due to
hyperinflation, currently at 1 070% year-on-year for October.

Although the local currency has depreciated by an average of 4%
against a basket of major trading partners' currencies since August,
analysts said this was far from reflecting the fair value of the currency
since a devaluation made in August.

ERIAB was expected to monitor and review the exchange rate
monthly and make recommendations to the Reserve Bank on the fair value rate
for the currency on the foreign exchange market.

Gono devalued the local unit by about 60% to $250 against the
benchmark US dollar from $101.

Sources indicated that there was no talk within central bank
corridors of any imminent establishment of the ERIAB, suggesting that Gono
may have completely changed his mind on the issue.

"The issue has not been a subject of discussion ever since the
governor made the announcement in July. He has not moved an inch in setting
up the board," a source said.

Sources said market players had lost confidence in the monetary
policy in respect to the management of the exchange rate given the
inconsistent and lukewarm approach to the issue by Gono.

Recently, the Chamber of Mines wrote a letter on behalf of gold
miners, saying the failure to depreciate the local unit on the foreign
exchange market posed a serious threat to the profitability of gold mining
operations.

The market had hoped that a professional body would recommend
"significant monthly devaluation" reflecting the hyperinflationary
environment in the country.

A local financial institution said in a recent commentary that
Zimbabwe's dollar "remained highly overvalued based on the purchasing power
parity argument".

Analysts said the purchasing power parity exchange rate should
be at $369 against the US dollar. The parallel market, which reflects demand
and supply fundamentals is trading the greenback at over $2 000.


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Consumer council attacks bakeries

Zim Independent

Pindai Dube

THE Consumer Council of Zimbabwe (CCZ) has attacked bakeries for
making expensive confectionary products and ceasing production of bread many
have said is of very poor quality. Trust Masarirambi, a CCZ spokesman, say
bakers were flooding the market with a wide range of expensive
confectioneries in a bid to evade bread price controls.

"We have since approached the Ministry of Industry and
International Trade about the issue. But we hope the negotiations between
bakers and government will come out positive," said Masarirambi.

He accused bakeries of making super loaf and a modified type of
half-loaf which costs between $500 to $600 and $260 to $280 respectively.

"We are not law-enforcement agents but we want to urge bakers to
desist from this practice of making the so-called super loaf and other
expensive confectioneries which are beyond the reach of many," Masarirambi
said.

"They have all the reason to bake it but we are appealing to
them to consider the fact that the majority of consumers are ordinary people
who can't afford the products."

Bakery officials said the industry faces collapse due to a host
of problems, chief among them continued government price controls which have
left them on the verge of bankruptcies.

Bread is one of the many products whose prices are controlled by
government. The regulated price for a loaf is currently $295. The controls
have resulted in a shortage of bread or production of poor quality bread
that can hardly be sliced.


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Budget 2007: a classic soap opera

Zim Independent

Dumisani Ndlela & Shame Makoshori

ZIMBABWE'S national budget has the characteristics of a soap
opera: an ongoing episodic work of fiction with several plots running
concurrently, intersecting, and leading into further developments.

But, while the twists in a soap opera make the audience laugh,
or more expectant, the turns in Zimbabwe's national budget leave
stakeholders in shock and awe, and, yes frighted of a gloomy future.

Known for being unpredictable like fiction because of policy
inconsistencies, Finance minister Herbert Murerwa last year promised
something many believed would have required some Houdini magic.

"The major policy imperatives and priorities in dealing with the
challenges (or national economic crisis) remain credibility and consistency
of policies and their timeous implementation," Murerwa said when he
presented the current national budget last year.

Indeed, Murerwa could get the kudos for a consistent budget
policy system achieved over the years: as expected, he was back in
parliament end of July with a shock supplementary budget three times bigger
than the principal budget.

But Isaac Kwesu, a University of Zimbabwe lecturer in the
graduate school of management, was blunt: "This is in itself a sign of
failure and it shows that the minister did not come up with proper forecasts
on inflation."

To many, this indicated the crisis of credibility in Murerwa's
proposals, signaled early in the year by accelerating inflation that had
topped the 1 000% mark by June, astounding his forecast of declining
inflation during the year which he projected to end 2006 at 80%.

"A lot of the promises, if not everything that he promised, were
not achieved. For instance, expenditure levels did not tally with targets.
That is the reason why he resorted to a supplementary budget," said Kwesu.

Murerwa has come under intense criticism for unfulfilled
promises, and recently took the flak from stakeholders for a failed
privatisation programme.

In his budget proposals, Murerwa said at least six parastatals
would be privatised. None has so far been privatised and the current budget
has only a month of its life left before another one for 2007.

"It will be embarrassing that the minister will come back to the
people with the 2007 budget without accomplishing these promises," said
Karikoga Kaseke, chief executive officer of the Zimbabwe Tourism Authority,
during a stakeholders' consultative meeting in Harare.

The International Monetary Fund (IMF), whose mission is
scheduled to arrive in the country a few days after Murerwa's 2007 budget
proposals, has said inflation will this year average 1 216%, and 4 278,8% in
2007.

Gross domestic product, projected by Murerwa to grow by 14% this
year, will, according to IMF projections, decline by a further 5,1% this
year and by 4,7% in 2007 after contracting by a cumulative 30% in the past
five years.

The civil service has not been streamlined as promised, while
the civil service salary and wage bill, which Murerwa promised to contain
within 30% of government expenditure, could now easily constitute 50% of
government expenditure after unplanned salary hikes during the year.

In his plea for a vote on a supplementary budget, Murerwa had
told parliamentarians that rising inflation had translated into operational
costs for government ministries and departments, resulting in the need for
additional resources.

"There have also been financing challenges that arise as a
result of new projects and programmes outside the budget framework," Murerwa
said.He said new requests had emanated from operational requirements of line
ministries and projects under an economic revival project, the National
Economic Development Priority Programme, whose results are not visible eight
months since inception.

"The overall requests by line ministries, departments and
grant-aided institutions for additional funding to support recurrent and
capital expenditure as well as projects under the NEDPP, now stand at $614
trillion ($614 billion under the new currency system). This is against new
projected additional revenue of $140 trillion ($140 billion new currency),
taking account of the higher nominal GDP of $840 trillion," Murerwa said.

Kwesu said Murerwa had promised to rein-in profligate ministries
but all ministries spent their budgets within three months and were rewarded
with new budgets.


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Zim saddled with US$543,3 million current account deficit

Zim Independent

Paul Nyakazeya

ZIMBABWE is saddled with a current account deficit of US$543,3
million this year as major sectors of the economy such as manufacturing,
mining, agriculture and mining remain depressed. Presenting the 2007
national budget yesterday, Finance minister Herbert Murerwa said the country's
balance of payments (BOP) position continued to be under severe pressure,
against a background of declining exports, absence of BOP support, lines of
credit and foreign direct investment.

"Reflecting this, a current account deficit of US$543,3 million
is projected in 2006 as both manufacturing and mining performance remain
depressed," Murerwa said.

Murerwa said the country was however committed to honouring all
its external loan obligations, suggesting that the severe BOP position
partly arose from sanctions imposed on the country by the European Union and
the United States. This year, mining, manufacturing and agricultural exports
were projected to decline by 0,2%, 10,5% and 6,3%, respectively. The
under-performanced has resulted in an estimated decline of 6% this year.

"With agriculture and tourism still to fully recover, their
contribution to export growth remains limited," said

Murerwa said imports, which increased marginally by 0,2% last
year, driven by increased food, electricity, fuel and manufactured imports,
were projected to decline by 1,6% this year against a background of foreign
currency shortages.

"On the capital account, net inflows amounting to US$298,4
million was envisaged. Foreign direct investment into mining and some
parastatals under the Look East initiatives are the major factors
contributing to the positive capital account balance," Murerwa said.

Due to the total external debt outstanding of US$4,1 billion as
at October 31, external payment arrears stood at US$2,2 billion.


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Zim under siege: Murerwa

Zim Independent

Augustine Mukaro

IN a rare admission of failure to arrest the economic slide,
Finance minister Herbert Murerwa yesterday told parliament that the country
was under siege from lack of balance of payments support, skyrocketing
inflation and under-performing agricultural sector.

Presenting the 2007 national budget, Murerwa said it was no
secret that the country faced a crisis characterised by lack of balance of
payments support, lines of credit, foreign direct investment and "deliberate
efforts to undermine our economic turnaround initiatives". He blamed
sanctions by the West as one of the causes of current economic decline.

Murerwa said the country faced a number of economic challenges,
including ever-increasing prices, distortions in the pricing of key
commodities and utilities, unemployment and rising poverty levels.

Other woes include foreign exchange shortages, low industrial
capacity utilisation, underutilised land, rising corruption in both the
public and private sectors and deteriorating provision of basic public
services.

Murerwa lamented the poor maintenance of infrastructure,
inconsistent policy pronouncements, declining clarity over the role and
accountability of the key institutions of government and perceptions of lack
of commitment to effectively deal with the challenges facing the economy.

"One of the consequences of the above challenges is the
emergence of very large income disparities, with the majority of the lowest
paid workers earning below the poverty datum line," Murerwa said.

"The deterioration in the welfare of our people has seen their
capacity to access basic healthcare services, education, housing and other
amenities collapse overnight under the prevailing hyperinflationary
environment."

He said this was happening at a time when a small proportion of
the population was accumulating wealth, in part benefiting from the price
distortions arising from some of the policies and facilities meant to
protect the very poor.

"Regrettably, some of the wealth accumulation is a direct
product of the prevailing indiscipline in our economy. We have amongst the
citizens individuals benefiting from abuse of public resources and thereby
contributing to unnecessary public expenditures and economic hardships," he
said.


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Govt admits it cannot fund agriculture alone

Zim Independent

Augustine Mukaro

GOVERNMENT has no capacity to meet the total financing
requirements for the agricultural sector.

Presenting the 2007 budget, Finance minister Herbert Murerwa
told Parliament that government will continue to play its part, and expects
greater involvement of the private sector including the banking community to
fund the farming sector.

"Historically, the banking community has funded the operations
of commercial farmers," Murerwa said. "Under the auspices of the National
Economic Development Priority Programme, the private sector is being
encouraged to go into the production of their requirements of feedstock for
processing such as wheat and soyabean. I would like to challenge the private
sector to fully participate in this programme in the forthcoming season."

He said the banking community had raised concern with security
of tenure as a major factor limiting its capacity to support farmers.

"The issuance of 99-year leases to some of the A2 farmers by His
Excellency the president on November 9 2006 should allay these fears, and
introduce an environment conducive for banking sector involvement in the
financing of agriculture," Murerwa said.

He said the 99-year leases could be registered with the Deeds
Office like title deeds, thereby enabling banks to recoup their money from
the lessee or any other person to whom the lease might be transferred. The
land, however, remains state property and can only be transferred with the
consent of government.

"A1 model farmers will also soon be assured of security of
tenure through the issuance of usufruct permits, which give the legal right
to use and derive benefit from state land," he said.

Murerwa said government will monitor and review agricultural
producer prices, balancing this against changes in costs of production and
reasonable rates of return for the farmer. He said to attract and give
confidence to foreign investors, government was fully committed to honouring
all its international obligations under various protocols.


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It's back to trillions!

Zim Independent

Shame Makoshori

ZIMBABWE'S budget has bounced back to trillions of dollars,
three months after the central bank removed three zeros from the currency.

In August, the Reserve Bank slashed three zeros from the
Zimbabwe dollar after computer systems crashed for failing to handle
multi-digit transactions.

The decision adjusted the 2006 expenditure from the original
$451 trillion to $451 billion but rampaging inflation has continued to fuel
money supply.

Analysts have already said two zeroes are back on the currency.

Presenting the 2007 national budget proposals in parliament
yesterday, Finance minister Herbert Murerwa announced a $24 trillion budget
with a 17% deficit.

Real GDP growth was however expected to remain at marginal
levels of about 1%.

Most sectors of the economy were expected to either grow by
marginal levels or decline as a result of rampaging inflation and acute
foreign currency shortages.

One of the major driving sectors of the economy, mining was
expected to grow by a marginal 4,9 %, agriculture by 9,4 % while marginal
gains were expected in the key manufacturing sector. The 2007 budget
translated to a growth of 5 313% over 2006's anticipated expenditure outturn
of $451 billion.

Driving the anticipated high expenditure were the Public Service
Commission that was allocated $1,4 trillion for employment costs.

The Ministry of Education, trapped in operational problems that
have seen many schools failing to get books and other requirements, was
allocated $721 billion.

Agriculture's allocations were broken down as follows:
agricultural research institutions, $44,6 billion, training $6,2 billion,
irrigation rehabilitation $33,8 billion, tobacco production $16,2 billion
while $14,2 billion was committed to the 2006/7 summer crop.

Tourism was allocated $10 billion, with key emphasis on the
development of infrastructure in the Great Limpopo Transfrontier Park
while the Ministry of Health, reeling under a financial crisis,
got $590 billion.

As per tradition, Murerwa blamed the country's economic crisis
on sanctions that the west has imposed on Zimbabwe for violating human
rights, lack of balance of payments support and a culture of pillage that
has gripped Zimbabwe.

He promised to implement strong disinflation programmes,
currently in four digit levels, to bring it to between 350% and 400% by
December 2007 and subsequently to under 10% by December 2008.

"Failure to contain expenditures within the economy's financial
resource capacity would entail higher inflation, compromising prospects for
economic recovery and growth," Murerwa said.

"In order to achieve the inflation targets in the budget
framework, it is imperative that greater focus be placed on the containment
of monetary expansion, complemented by consistent and mutually agreed
mechanisms of determining prices and incomes," he said.


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Murerwa makes positive forecasts

Zim Independent

Shakeman Mugari

FINANCE minister Herbert Murerwa insisted in his budget
statement yesterday that the economy will grow despite the absence of the
key economic indicators and policies to support his claims.

In his multi-trillion dollar budget which analysts described as
a huge disappointment, Murerwa said he expected the economy to grow by
between 0,5 to 1% next year. He said the growth would be underpinned by
increased production in agriculture, mining and tourism.

"This is due to the anticipated improved performance in
agriculture and mining," said Murerwa.

However, judging by the trend in previous budgets, very few
people believe Murerwa's forecasts.

His predictions came at the same time as he was admitting that
his forecast last year that the economy would grow by between 1-2% had
failed.

The economy declined by 2,5% in 2006 despite claims that it
would grow on the back of a 23% increase in agricultural production. In 2005
the economy declined by 3,8%.

Murerwa said in his statement that the agriculture sector would
grow by 9,4% due to the timely supply of inputs and prospects of good rains.

"Against this background, and also taking account of forecasts
by the Meteorological Department of a near-normal rainfall season,
agricultural output is expected to register a growth of 9,4% in 2007," said
Murerwa.

This year the government was forced to revise its growth target
twice. Presenting the budget last year, Murerwa said the sector would grow
by 28%. He later backtracked during the supplementary budget and revised the
target to 23%.

Yesterday Murerwa changed the projection again saying
agricultural production would increase by 9,4%.

Analysts were sceptical of his forecasts in the face of
perennial shortages of inputs and tillage power.

Murerwa said the manufacturing sector would decline by 2% from
the 7% last year.

Indications are however that the rate could be higher because of
the continued closure of companies in the sector. This year alone more than
300 companies are reported to have closed shop due to viability problems
caused by lack of raw materials and foreign currency.

More than 30 exporting companies have shutdown. Nearly 20% of
companies in the bakery industry have closed down.

Analysts say the few companies that are still operating are also
in danger of closing because of government policies like price controls and
an unviable foreign currency regime.

Murerwa had "good news" on the inflation front, saying it would
come down to levels of 350-400% by December next year. This was despite the
fact that his previous target dismally failed. For instance, his projection
of 230-250% by end of this year is already wide of the mark with strong
indications that inflation will end the year above 1 000%.

The new target on inflation does not tally with those made in
the National Economic Development Priority Programme (NEDPP) which he said
the budget would support. Under NEDPP inflation was forecast to end the year
between 20-30%.

Murerwa also said the mining sector would rebound from a 14%
decline expected this year to register a 4,9% growth next year.


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If it's true, then we are finished!

Zim Independent

By Renson Gasela

HOW fake fertiliser was imported tells the nation, like no other
story, how state institutions have all been collapsed under the Reserve Bank
of Zimbabwe.

It is clear that the RBZ now runs everything instead of
facilitating. We hear that they have imported combine harversters, tractors,
ploughs etc. Who actually imported these?

It was reported last week that the RBZ was going to rehabilitate
agricultural equipment and farm machinery. Who is going to select the
companies that will do the rehabilitation?

Let me go back to the fertiliser. The unknown South African
company was given the order in June to supply Compound D fertiliser because
we are told that by June 30, the Chemistry & Soil Research Institute had
carried out tests on the fertiliser, presumably samples. The company was
given an order of US$45 million to supply the fertiliser.

We know that the local fertiliser industry requires around the
same amount of foreign currency to import raw materials to manufacture all
the fertilisers required in the country. Although this allocation was done
in June, if this was made to the local industry, at least they would have
been in full production half the year and produced more than half the
country's requirements.

The economic benefits of providing foreign currency to enable
local industry to operate should really be in the priorities of the monetary
authorities.

If it was necessary that manufactured fertiliser be imported,
the correct thing would be to go to tender, get samples tested by experts
and award the tender. Resources should have been made available to either
the Grain Marketing Board to import or to the local fertiliser companies.

It was reported that a delegation of senior personnel from the
Ministry of Agriculture and the GMB went to inspect the quality of
fertiliser. What do those senior officials know about the chemical
composition of the fertiliser other than looking at the composition as
written on the bag?

If what was reported on ZimOnline that Agriculture ministry's
permanent secretary Simon Pazvakavambwa in reply to a letter from the RBZ on
November 7 stated that the ministry did not know the suppliers of fertiliser
as they were known or selected by the RBZ is true, then this country is
truly finished. Is it not the role of the RBZ to ensure compliance? If it is
now the importer, who will dare challenge it?

* Renson Gasela is MDC Secretary for Lands and Agriculture.


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Women human rights defenders bear brunt of govt oppression

Zim Independent

AS the world commemorated International Women Human Rights
Defenders Day this week, Zimbabwe Lawyers for Human Rights (ZLHR) takes the
opportunity to highlight some of the hazards faced by such activists in
their work to protect and promote human rights.

From March to September this year, ZLHR represented over 550
individual women human rights defenders charged with various offences
ranging from obstruction of traffic to conduct conducive to public disorder,
all in their attempt to petition local and national leadership on social,
political and economic issues which continue to bedevil our country. Not a
single successful prosecution of these women human rights defenders has been
recorded since 2003 when ZLHR embarked on the human rights defenders
project. This has confirmed our perception that laws are being used in
Zimbabwe as a tool of persecution rather than of prosecution.

The accounts of the arrests, harassment, conditions of
detention, assaults and torture exemplify the typical treatment meted out to
women human rights defenders in Zimbabwe when they attempt to assert their
rights, and the culture of impunity and disrespect by the law enforcement
agents for the fundamental rights of the people they are obliged by law to
protect:

* On May 10 2003, 46 women were arrested during a march to
commemorate Mothers' Day in Bulawayo. They were detained at Bulawayo Central
and Nkulumane police stations. ZLHR lawyers attended at both stations, but
were told that the Law and Order Section at Bulawayo Central was closed and
nobody knew where the women were being held. The lawyers were not allowed to
have sight of the detention book and the duty inspector advised them to see
a senior police officer who was equally unhelpful. To avoid spending the
night in custody and to buy their freedom, the women were forced to pay
fines of contravening section 7 (b) Miscellaneous Offence Act (MOA). The
fines were subsequently challenged in court.

* On June 14 2004, 43 women, including some with breastfeeding
babies, were arrested at a community hall in Bulawayo while discussing
potential self-help projects. Legal advice had been sought and provided to
the women to the effect that, in terms of the Public Order and Security Act
(Posa), police notification was not required. The women were detained
overnight at Bulawayo Central police station for contravening section 24 of
Posa which criminalises the holding of public political meetings without
notifying the regulating authority. They were released after the magistrate
ruled that meetings such as the one in which the women had participated were
exempted from notification.

* Following the government's introduction of the
Non-Governmental Organisations Bill which sought, among other things, to
criminalise human rights work through the proscription of receipt of foreign
funding for such activities, 50 women were arrested on October 5 2004 for
attempting to hand over a petition to parliament against the promulgation of
the Bill.

Among the arrested women were journalists who were covering the
demonstration. The women were whisked to Harare Central police station where
ZLHR lawyers were denied access to their clients and had to sneak into the
holding cells under the guise of seeing another client. The attempts were
unsuccessful, as lawyers failed to interview all their clients. On the
morning of October 6 2004, lawyers succeeded in accessing the women human
rights defenders who complained that the holding cells were filthy and
overcrowded and that the police continuously harassed them verbally and
physically.

The Officer-In-Charge admitted during a meeting with the lawyers
that the charges were frivolous and would not stand in a court of law but
refused to release the women. On the next day, officers from the
Attorney-General's Office indicated that they were prepared to prosecute the
women under section 19 and 24(1) of Posa. Bail for the detainees was not
opposed. The accused appeared in court and were granted free bail and
remanded to November 11 2004, on which date the charges were withdrawn
before plea, confirming the use of Posa as a tool of harassment and
repression.

* On March 31 2005, over 300 women gathered in Africa Unity
Square in Harare on the eve of the parliamentary elections to pray for a
peaceful polling and post polling environment. Around 1800 hours, the women
were arrested, and ZLHR lawyers who were deployed to attend to them were
informed by the police that they were not allowed access to their clients
until the next morning.

The following day the lawyers reported to the police station,
where it was established that over 265 women had been arrested and were
occupying the backyard parking lot of the police station. The officer
commanding Police Internal Security Intelligence (PISI), Inspector Ndou,
indicated that they had arrested the women for allegedly contravening a
section of the Miscellaneous Offences Act (MOA) or the Road Traffic Act in
that they had blocked a thorough-fare or pavement.

The police finally settled on charging them with contravening
section 3(2) of the MOA which provides that any person who encumbers or
obstructs the free passage along a street, road, thoroughfare, side walk or
pavement shall be guilty of an offence liable to a fine or imprisonment for
a period not exceeding three months.

The police were not keen to take the women to court to answer to
the charges alleged. After much consultation with the women the detainees
were forced into paying admission of guilt fines in order to buy their
freedom. This position was agreed to by all the women as they had been
subjected to cruel and inhuman conditions of detention such as the use of
one toilet, sleeping in the open all night, and also being assaulted by law
enforcement officers during arrest. Some of the women were hospitalised and
treated for various injuries and complaints were lodged in relation to their
ordeal with the police and in the police cells. A fine of $25 000 was agreed
for each of the 265 women but later successfully challenged the payment of
the fines in court.

* On May 4, members of the Women of Zimbabwe Arise (Woza) staged
a demonstration in Bulawayo protesting against the exorbitant increase in
tuition fees for primary, secondary and tertiary institutions. Over 166
people were arrested including 77 school children who were released on the
same day.

The activists were detained at different police stations in and
around Bulawayo - Bulawayo Central, Queenspark, Mzilikazi, Hillside,
Donnington and Sauerstown. The recording of warned and cautioned statements
only began on May 6 after the detainees had already spent two days in
detention. The docket was taken to the Public Prosecutor on May 8, but he
declined to prosecute and ordered the detainees to be immediately released.

The police had intended to charge the women human rights
defenders with contravening section 7C of the MOA which relates to any act
that is likely to lead to a breach of the peace or to create a nuisance or
obstruction. The women reported death threats by police officers against the
leadership of the women's group, and ZLHR lawyers were forced to deliver a
formal letter of complaint to the police with a request to launch an
investigation into the alleged death threats;
and

* On September 11, 107 Woza members were arrested during a march
to Town House. The women had been carrying objection letters and placards
with them to Town House demanding better service delivery in Harare, more
affordable rates and the dissolution of the illegal commission currently
running the city of Harare. The women were met at the entrance to Town House
by police and were arrested. Five police trucks ferried those arrested to
Harare Central police station where they were separated and taken to six
different police stations in Harare - Braeside, Mbare, Glen Norah,
Highlands, Chitungwiza and Harare Central in an effort to frustrate the
efforts of their lawyers in securing their release.

Some of the women were tortured during detention and a pregnant
woman among those arrested went into labour and was rushed to Parirenyatwa
Hospital where she later gave birth. Fifty-six women required medical
treatment for bruises and skin diseases and upper respiratory tract disorder
which they acquired in detention. Many exhibited signs of mental distress.
They were charged under the Criminal Law (Codification and Reform Act),
which was immediately challenged as unconstitutional.

These cases handled by lawyers and members of ZLHR provide a
shocking picture of the operating environment for women human rights
defenders in Zimbabwe and the abuse to which they are consistently
subjected. ZLHR is appalled at the comprehensive and systematic desecration
of human rights accorded to human beings in general and women in particular.
There has been an overt intensification of repression by key state actors
against women human rights defenders over the last few years. This growing
tendency to restrict political and social space has been consolidated with
startling impunity, selective application of the law, and the continued
promulgation of laws which inhibit the enjoyment, promotion and protection
of fundamental rights by women human rights defenders.

Further, the existence of conservative and fundamentalist
prejudices as embedded in traditional views alongside general human rights
aspirations has meant that women human rights defenders have led a war on
two fronts, the national and the domestic. With such convenient excuses as
"national security" and "culture", a vicious and voracious clampdown on such
defenders has been perpetrated by both state and non-state actors.


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Mangwana's puerile theatrics unhelpful

Zim Independent

News Editor's Memo

MINISTER of State Enterprises, Anti-Monopolies and
Anti-Corruption Paul Mangwana made headline-grabbing remarks at the weekend
in the press when he claimed corruption allegations against top government
officials in the Ziscosteel scandal were "red-herring cases".

Speaking head-in-the-clouds in the Herald, Mangwana said it was
irrelevant that government officials had allegedly abused public funds on
extravagant hotels bookings, air tickets, food and drinks, and entertainment
allowances on missions that had nothing to do with Zisco.

Mangwana said reporting accusations against his government
colleagues meant people's attention would be shifted away from the "correct
focus". He also suggested that exposing them for graft was "scoring cheap
political points". The media, he said, should focus on the activities of
Zisco managers, not those of the ministers. It was indeed a dramatic
performance by him.

This means Mangwana is not concerned about political corruption,
an abuse by government officials of their office for illegitimate, private
gain. The end-point of political corruption is a kleptocracy, literally
"rule by thieves".

Here we are with a minister of "Anti-corruption", currently also
acting as Information minister, describing very serious allegations of
corruption as "red-herrings" and exposing graft as "scoring cheap political
points". This is the same minister who in September told us in an interview:
"Very soon we will take action and police will arrest those involved in
corruption at Ziscosteel."

Can the minister tell us who has so far been arrested in
connection with Zisco? Will there ever be a probe into the issue when he
describes pillaging of public funds and key leads into possibly deep-rooted
corruption as non-issues?

To dramatise his antics, Mangwana at one time in September told
the Voice of America that he would not discuss the NECI report on Zisco
because it was a "state security document".

How does a report which exposes corruption and abuse of public
funds become a state secret? Is hiding blatant corruption in the interest of
state security in Mangwana's view?

Is that what he wants to tell taxpayers and investors when
explaining government policy on corruption?

Besides that, it would be interesting to know why Mangwana is
speaking on behalf of the Anti-Corruption Commission - which is a statutory
body established in terms of the constitution - when it actually has its own
staff and chairman.

Everytime he does this he actually undermines the commission
because it is supposed to be an independent constitutional body that
discharges its functions without interference from him or anybody for that
matter.

The commission is empowered under the Anti-Corruption Commission
Act to "combat corruption, theft, misappropriation, abuse of power and other
improprieties on the conduct of affairs in both the public and private
sectors". It also has the mandate to exercise its powers concurrently with
those of the police, meaning it is authorised, working with police, the
courts and the Attorney-General's Office, to raid premises, search and seize
documents in its normal course of duty.

The commission can do this on its own initiative, according to
the law. So why is Mangwana pretending to be its CEO and spokesman?

Mangwana's role, in terms of the law, is largely administrative.
He is only supposed to receive reports from the commission and then to
report to parliament. He is also expected to deal with the regulation,
funding and staffing of the commission, not its investigations and the
contents of its reports.

In the end what Mangwana has been doing posturing as a
ministerial investigator under the Anti-Corruption Commission may very well
have been illegal.

By the way, what does Mangwana understand by corruption? Our
understanding is that corruption is a general concept describing any abuse
of public or private office, position or trust for personal gain and other
illegitimate forms of self-enrichment.

There are different forms of corruption, including rent-seeking
which is the process where an individual or organisation seeks to benefit
through manipulation of the economic environment, rather than through trade
and production. There is cronyism, nepotism, patronage, extortion, bribery,
embezzlement, money laundering, drug trafficking, and organsied crime. Most
of these flourish in Zimbabwe today.

Effects of corruption on politics, public administration, and
institutions are very critical. Corruption undermines democracy and good
governance by flouting or even subverting formal processes.

It also thwarts development because it causes considerable
economic distortions and inefficiencies. Economists argue that one of the
factors behind the underdevelopment of Africa and Asia, apart from current
global dynamics and historical circumstances, is corruption. This claim is
given credence by Mangwana's virtual defence of corrupt activities as he did
on Saturday.


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'Believe at own risk' caveat would help Herald readers

Zim Independent

Muckraker

GOVERNMENT wins fees battle," proclaimed the Herald ecstatically
last Friday. The story was in response to a High Court ruling against the
Association of Trust Schools who sought the court's intervention to increase
school fees after government said they could not.

The judge ruled that the trust schools had not exhausted all the
relevant channels before seeking the intervention of the court. She said the
Trust should follow the Education Act, according to which if schools are
denied the right to increase fees by the Secretary for Education, they can
still appeal to the minister.

The court ruled therefore that it could not "usurp" the powers
of the minister. Fortunately that's about as far as the government's victory
goes. The court ruling does not absolve government of blame for the problems
that have caused the need for constant fee reviews amid an unstable
macroeconomic environment. That victory can only be temporary and the war is
far from over following this week's Supreme Court appeal.

In a similar vein, on Monday there was a report that child and
maternity mortality rates had gone astronomical. This, said Health and Child
Welfare minister Dr David Parirenyaywa, was a result of prohibitive service
fees at hospitals, shortage of equipment, drugs and skilled personnel.

Parirenyatwa revealed that the maternity mortality ratio had
spiralled from 283 deaths per 100 000 live births in 1994 to 695 deaths per
100 000 by 1999. This represents a shocking increase of nearly 145%
mortality rate in a space of five years. Even then, Parirenyatwa said the
2002 census indicated that the rate had "risen tremendously", implying that
the 145% was a conservative estimate.

Other media reports show that at the national level, the life
expectancy for a Zimbabwean man has plummeted to 37 years while that for a
woman is down to 34 during the same period.

These figures trash any claims of a reduction in HIV infection
rates from about 24,6% to 18%. You also need to be utterly heartless to
maintain the illusion that the land reform has been a tool of empowerment
when close to 70% of the poor are dying like flies because they cannot
afford basic treatment. Which is where a leader who cares for his people
should show his mettle.

Incidentally, what has become of the witchdoctors who were
touted as an alternative to the collapsing health system?

These figures should give Zanu PF chairman John Nkomo moments of
sober reflection following his ebullient interview in which he said politics
had become for him a cancer that could not be cured.

Nkomo told journalists at the Bulawayo Press Club that for him
there was no half-way house. He was ready to run for the president's post
once he was chosen by the people, he said.

What we liked about his comments is that he didn't need to
apologise for his ambition, which is often treated as if it were a crime to
want to be president of the country.

He was however less convincing in his claims that before
quitting politics one must make sure those taking over would not waver. He
said the current leadership had invested a lot in getting the country to
where it is, adding: "We do not want to hand over the baton to people who
later divert (deviate?) from the proper path."

Millions of Zimbabweans who have been pauperised by government's
inept policies are in fact itching for a change of "path". They missed the
golden era that majority rule promised as Parirenyatwa's revelations
demonstrate.

There were reports of a frenzied scramble last week for farm
equipment imported by the Reserve Bank. The Herald reported that the usual
gang of "influential" people was already throwing their weight about to make
sure they grabbed the bigger portion of the cake.

This would not be tolerated, warned Reserve Bank governor Gideon
Gono when told of Ali Baba's 40 thieves milling around the equipment at Nijo
farm, 20km northeast of Harare.

"It would definitely be a tragedy if this equipment gets
misdirected to benefit a few prominent members of society, more so if they
are people who have already benefited from other past programmes or those
who have the means to buy the equipment from their own resources," lamented
Gono.

The aura of de javu is overwhelming. It is very likely that it's
the same gang that seized the best farms, the best farmhouses, the best
irrigation equipment and the best vehicles during the land invasions that
now wants to be the first to get more free equipment for their relatives and
multiple spouses. They have been so accustomed to getting everything for
free from government, it's a miracle that they still buy themselves
underwear.

One can only hope that the screening procedure will be tighter
this time around.

We liked the fact that the Herald had its eyes and ears open to
respond timely to the din of the stampeding thieves before the equipment was
looted Zisco-style. It's a pity Nathaniel Manheru thinks anyone who exposes
corruption is out to discredit President Mugabe as head of a "rotten
administration". And Anti-Corruption minister Paul Mangwana calls all such
exposes "red herrings". It tells you all you need to know about government's
commitment to fighting the scourge.

Then there was an angry little piece in the Herald about the
African Leadership Prize sponsored by Mo Ibrahim, a tycoon from Sudan. He
proposes to give prize money to African leaders for two major objectives:
firstly, that they try to do well in their political positions, secondly
that they appreciate that there is virtue in leaving office at the height of
one's popularity.

The Herald writer said the prize money was "an insult". Which it
would be if the leaders' conduct did not invite ridicule, but he imputes
wrong motives.

"The award," the angry author wrote piously, "is rooted in the
white supremacist doctrine that Africans are little children who should be
rewarded for being good Africans like students who are given prizes during
speech and prize-giving days."

This is a case of a badly mixed metaphor. Prize-giving
competitions are neither white nor supremacist but are meant to groom
students to be good citizens. It is therefore demeaning to claim those
school occasions are bad for the students.

The real tragedy of African leaders is that having been taught
how to be good citizens as students, they fail so badly as adults in
politics that somebody has to find it necessary to cajole them with money
just to do well and to induce them to leave office.

One hopes that the Herald writer has heard about the Nobel Peace
prize, the Pulitzer Prize for Literature, the Noma Award and even the CNN
African Journalist of the Year Award to know that there is nothing white or
supremacist about promoting and rewarding talent.

We know if the Nobel committee, sitting in Stockholm, had
awarded Mugabe the Nobel prize for revolutionary leadership in Africa, there
would be wild celebrations in official circles that he had been vindicated
"for his principled stand on the land issue".

The writer has forgotten how his paper feted GMB boss Samuel
Muvhuti's dubious leadership award received in Spain earlier in the year.

The disgraceful conduct of our leaders is father to Mo Ibrahim's
prize. It is anguished desperation for a self-respecting, principled
leadership. Rather than the prize, it is the leaders who refuse to grow up
who constitute an insult to the African personality.

There was an interesting story on Tuesday titled "Sadc resists
EU pressure on Zimbabwe" in the Herald. The resistance being celebrated was
that the European Union had "failed to resolve the situation in Zimbabwe"
and wanted Sadc to help, but the latter had refused to interfere in our
internal affairs.

The Zimbabwean delegation to the joint EU-ACP parliamentary
assembly in Barbados was led by Masvingo South MP Walter Muzembi who brought
us the good news of Sadc's resistance.

The head of the Namibian delegation cheekily asked if the EU
would fund his country's land reform programme in exchange for help in
resolving Zimbabwe's simmering crisis.

This "insult" was rejected, to which he responded: "Therefore
for us in Africa we feel that we cannot assist you (EU) in resolving the
situation in Zimbabwe because of the same reasons you are refusing to fund
the land reform programme in Namibia."

What are we supposed to make of this posturing? First, it is the
first time Namibia has acknowledged that there is a situation that needs to
be resolved in Zimbabwe. Second, it is the first time we have been told they
have a magical solution to that situation.

As for Zimbabwe, it's hard to see how the position adopted by
Sadc helps our cause when the same neighbours are themselves doing roaring
business with the EU. What's a sauce for the goose should a sauce for the
gander isn't it?

Ironically, the same edition of the Herald led with a story on
police arresting 2 189 Zimbabwean "border jumpers" between November 13 and
25 alone trying to cross the Limpopo River. No need to say which direction
they were heading, which makes it a Sadc problem more than an EU one. Mind
you these figures don't include the hundreds who are deported from South
Africa and Botswana every week.

How this national humiliation can be turned into a victory
against the EU boggles the mind.

Manheru this week promised to give us a few lessons in future
about packaging news. He is most welcome.

Meanwhile, we are getting a few advance notes from the Herald
while we wait for his scholarly input. On their page 5 on Wednesday they led
with a story in which an exuberant Ignatious Chombo said he was "impressed
by the calm" at Town House. Harare had turned around in terms of service
delivery and all the squabbles had ended, he enthused. All that was needed
was to maintain the momentum, he told council employees whom he said
deserved residential stands for sterling performance.

Then came the killer punch: "Cde Chombo commended the acting
director of waste management Mr Leslie Gwindi for keeping the city clean,"
the Herald intoned dutifully.

Directly opposite Gwindi's head on page 4 was a huge picture
whose caption read: "Time bomb . A Dzivaresekwa man walks past a heap of
garbage which has made this road impassable by motorists. The disposal of
garbage in street corners, which is common in most parts of Harare, poses a
health hazard to residents."

To Manheru we say charity begins at home. We can safely tell
Chombo he is talking garbage.

Last week the Herald reported that South Africa had relaxed
stringent visa requirements for Zimbabweans. This falsehood was denied
before the week was out. This week it claimed the Chinese were waiting in
the wings to pour US$3 billion into troubled Ziscosteel. Again, before the
week was out it was vehemently denied by the Chinese.

"There is nothing like that," said Metallurgical Corporation of
China in an interview with Reuter news agency. Is there a conspiracy here to
expose the Herald for what it truly is - a conveyor belt of lies and
propaganda?

Still undaunted, the paper on Tuesday claimed Thompson Tsodzo
was permanent secretary for Higher and Tertiary Education!

Luckily for them, when such things happen Tafataona Mahoso
conveniently goes deaf and mute. Perhaps all Herald stories should end with
a caveat for readers: "Believe this story at own risk."


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The budget speech that wasn't

Zim Independent

Eric Bloch Column

By Eric Bloch

IT is a natural trait for most always to desire more. When life
is good, they wish it better, and when it's bad, they wish it good. And that
is particularly so when an economy is in great distress, resulting in
hardships for almost all, and extreme poverty, misery and life-endangerment
for many.

So great has become Zimbabwe's economic oppression that even the
desire for positive change has been suppressed among many of the population
who, having experienced an ever greater decline over almost 10 years,
believe that poverty is now endemic and cannot be reversed, but can only
intensify.

Nevertheless, some remain with eternal hope and expectation,
aware that ever since creation there has always been evolution and change,
albeit sometimes inordinately slowly.

In Zimbabwe, that hope and expectation has been particularly
pronounced ahead of the annual budget statement in recent years because the
state of the economy has been so horrendous that the yearning for change has
intensified exponentially, and there is deep-seated belief that the budget
is potentially the greatest catalyst for such change.

Imagine the nationwide joy and excitement that would have
characterised hearing the Minister of Finance, Herbert Murerwa delivering
his budget statement yesterday, had he said instead of that which he did
say: "Albeit belatedly, government has recognised that the dismal economic
circumstances afflicting Zimbabwe were not, as it has been believed until
now, occasioned by Tony Blair, George Bush, the European Union, sanctions
(illegal or otherwise), white farmers, industrialists, retailers, the
political opposition, or the independent media. Government has now realised
that, in fact, it has been its own policies, its policy inconsistencies, and
its blatant disregard for well-intentioned sound advice, that has caused the
cataclysmic collapse of the economy!

"And, believe it or not, as government's second-greatest wish is
to achieve well-being for all, it is determined upon achieving essential
change, even if transformation requires diametrically different policies
than heretofore (of course, government's greatest wish is to survive, in
power, intact and free, with unhindered power and wealth!).

"Therefore, your government has devised new economic policies,
which it is going to implement forthwith, determinedly and dynamically,
bringing about the greatly overdue metamorphosis. Key to those polices are:

* Immediately, government is going to deregulate the economy,
allowing it to be driven by market forces, which have been recurrently
proven, in every one of the world's successful economies, to be the only
forces that actually work. Hereinafter, government will only regulate the
economy to the extent necessary for national security (such as control on
the production of nuclear weapons!), for national health, and for the
preservation of national moral well-being. In all other respects, the
economy will drive itself, steered by its operators, save that in order that
there will be a sufficiency of market forces, government will vigorously
stimulate and incentivise competition;

* As it is critical that government lives within its means, and
thereby not be the trigger of ongoing, soaring hyperinflation, it has
decided that it must immediately cut its spending, which has been grossly
excessive, and often misdirected, for many years, and that that cut must be
of very great substance. This is to be achieved in many ways. First and
foremost, it is time that we recognise that the only war in which Zimbabwe
is engaged is an economic one, and therefore we do not need the continuing
gargantuan defence expenditures to which we have resorted for years.
Forthwith, we will not purchase any further fighter aircraft, which fulfill
no purposes other than image-building, prestige and self-edification, mainly
by use in dramatic fly-pasts on national occasions. Moreover, we will sell
some of those that we already have. In like vein, we will cutback heavily on
other equipment and ordnance purchases. And, progressively, through natural
attrition, we will reduce the numbers in the armed forces;

* Moreover, in order to win one of the economic battles, we will
use our capable forces on economically constructive infrastructural
development, desolated land reclamation, and the like;

* Government has become aware that much of its expenditure is as
a result of massively widespread corruption, involving the misuse of state
assets, misappropriation of state services, inflated prices on governmental
procurement, and numerous similar actions. With immediate effect, government
will cease talking about containing corruption, and will now energetically
fight it at all levels, without fear or favour, and unhindered. Prosecutions
and dismissals will become the order of the day;

* Further, to reduce the costs of government, His Excellency the
president has agreed that the size of government be considerably reduced,
with the number of ministers and deputy ministers being halved forthwith,
and a corresponding reduction in the behemoth infrastructures of the
ministries. In addition, only those with requisite skills and willingness to
use them constructively will be accorded ministerial office. Others,
irrespective of how well they may be politically connected, will not be
active in the transformed government which is to restore Zimbabwe's economic
fortunes;

* Hand in hand with the cost-reduction measures, government is
determined that from now on the long underpaid public service should be
properly remunerated on a market-related basis but doing so shall be
directly inter-related with the civil servants giving market-related
services. Salaries will be aligned with the private sector, both as to
quantum and as to performance. Those that do not perform will forfeit their
employment and that, combined with natural attrition, will soon markedly
reduce the gargantuan size of the public service;

* With the further intent of substantial expenditure reduction,
international and regional travel by persons at all levels of government is
to be rigidly curbed. Not only will travel be stringently contained to the
absolute essential, instead of prestige building and self-enjoyment, but the
sizes of delegations will be markedly reduced, and all travel will be on
commercial airlines, instead of chartered, exclusive flights.

* Government has long talked of total or partial privatisation
of parastatals and their alignment with appropriate strategic partners. With
a few exceptions, government has resorted only to talk, and not action,
resulting in economically destructive parastatal inefficiencies and
incompetencies, and even more fiscal burdens upon the state. It is time -
nay, it is overdue - for action instead of talk. Government has therefore
decided to privatise the parastatals by immediately handing over to leading
private sector business, financial and management consultants, the mandates
to restructure and dispose of parastatals, in whole or in part;

* However, of the few costs which government must allow
increase, one is the cost of tax collection. Progressively, the state has
abdicated responsibility of gathering - in taxes to the private sector. It
is that sector that now collects employment-related income tax, through
PAYE, collects VAT, withholds taxes on dividends, interest, various payments
to non-residents, transactions with parties without Tax Clearance (ITF263)
and much else. The private sector not only does so without recompense, but
also is subject to punitive penalties and interest when in default. And the
costs to the private sector as governmental tax-collectors are great, with
consequential negative economic repercussions. Hereinafter, in recognition
that the labourer is worthy of his hire, the private sector will be fairly
compensated;

Of course, such a budget speech was, and is, naught but wishful
thinking!


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The fiction of wise investors from the East

Zim Independent

Comment

THERE is very little reason for us to believe officious
announcements on Zimbabwe's diplomatic victories or investment deals sealed
following President Mugabe's foreign currency guzzling trips to the East.

As direct foreign investors continue to thumb their noses at
Zimbabwe's wretched economic policies, our rulers have resorted to inventing
funny little stories of gargantuan investment deals purportedly sealed with
investors from newly-found friends in China, Russia and of late Iran.

There is also official adulation over supposed diplomatic
victories by Zimbabwe over its foes in the West and in the region. Two key
events over the last seven days have helped to expose government's infantile
plans.

Last Friday, the official media screamed that South Africa had
scrapped stringent visa requirements on Zimbabwe. The celebratory tone of
the story appeared to suggest that South Africa had acquiesced to a
diplomatic onslaught by Zimbabwe to liberalise the visa regime.

The story turned out to be a BIG lie because there has not been
such an undertaking from Tshwane. The South African government had to run
press adverts to correct this deliberate disinformation.

Then on Monday, another parcel of state disinformation came out
in the form of a story that suggested that Metallurgical Corporation of
China (MCC) was taking a US$ 3 billion at the corruption-peppered
Ziscosteel. In a bid to convince a generally sceptical populace, Zimbabwe's
ambassador to China Chris Mutsvangwa talked of Zisco regaining "its status
as the biggest steel manufacturer in Africa south of the Sahara".

MCC was quick off the blocks the next day to tell the world
through news agencies: "There's no such thing. We haven't bid for it at
all."

It was another BIG lie and an embarrassing one for government as
the confutation came from a supposed close friend.

This kindergarten exercise of building castles in the air is
being perfected into an art-form in a bid to bribe our conscience that the
economy is about to turn the corner as a result of diplomatic victories and
investment in mining and power generation.

The denial by the Chinese that they were taking a 60% stake in
Zisco is a key event which casts doubt on the truthfulness of other
announcements by government that it had secured investment.

The denial also raises questions about the value to the country
of President Mugabe and his huge delegations' trips in search of investment.
They have very little to show for it. What is apparent is a well-beaten path
leading to a morgue of failed deals predating the current phase of the Look
East thrust in which the Chinese have been elevated to the pedestal of
messiah.

We recall that the initial phase of the Look East policy had
Malaysia and Indonesia featuring prominently and how the experience of the
Asian Tigers was perceived to be the panacea to our problems. Don't we
recall businessman Enoch Kamushinda's plans to establish electronic
factories in Harare with the help of Malaysian investors? We have still not
been told what became of plans which "were at an advanced stage" four years
ago.

Can President Mugabe and his delegations to Malaysia justify the
foreign currency spent in hiring planes and staying at expensive holiday
resorts in the East?

The same drama is being replayed but with China having now
replaced Malaysia as the flavour of the month. The Big lie concept is still
being employed religiously.

Vice-President Joice Mujuru came back from China in August to
announce that Zimbabwe had signed a US$1,3 billion energy deal with that
country. The deal involved the exploitation of coal in Dande and the
establishment of thermal power plants in the area. This was another flight
into fantasy.

Had the MCC not responded quickly to clarify the status of the
Ziscosteel deal, our government could have added this dud agreement onto the
list of achievements of the National Economic Development Priority Programme
(NEDPP). There is now every reason to believe that the NEDPP is premised on
imaginary deals in the mould of failed Malaysian tie-ups.

But our government continues to be blind to the basic fact that
there is no substitute for prudent economic policies and the rule of law
when it comes to attracting investment.

Our rulers would rather resort to fiction.


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Mugabe & a homegrown constitution

Zim Independent

Candid Comment

By Joram Nyathi

BUT we said: "Why, won't you send troops, British troops?" He
said, word for word: "Ah, because the British public would not stand for
it."

We said: "Kith and kin issue?"

He said: "Well, you know what happened when the Suez War was
fought, and this was by the Conservatives, the British public was against
it."

But we said: "No, we are not here negotiating with the British
public, we are negotiating with the government, and it is government action
we want."

The "we" was President Robert Mugabe in a 2002 interview with
editor of New African magazine Baffour Ankomah. The occasion in question was
a meeting in October 1965 between members of the newly-formed Zanu and
British prime minister Harold Wilson to discuss whether the British
government would send troops to stop Ian Smith's plans for UDI. Wilson said
the threat of an oil embargo against Rhodesia would do the trick. It didn't.
More importantly, he said the British public was against the use of force.

When President Mugabe recently said the Lancaster House
constitution was homegrown, that it was "sacrosanct" even, I was not just
shocked but expected spirited objections from politicians and opposition
parties currently lobbying for a "homegrown" basic law. I expected NCA
leader Lovemore Madhuku to lead the protest, given his crusade for such a
new constitution.

Not in Zimbabwe where selfishness and greedy self-enrichment
have become pastimes.

What intrigued me most about the Ankomah interview was a trait
that has become a hallmark of Mugabe's - his brazen contempt for what Wilson
calls "the public" and Mugabe calls "our people". Back then in 1965 Mugabe
couldn't understand why the British government should bother itself about
public opinion in sending troops to Rhodesia. Wilson as prime minister was
supposed to make a unilateral decision regardless of the amorphous creature
called "the public".

That attitude has not changed a bit if one considers how
Zimbabwe found itself fighting a costly foreign war in the DRC in 1998
without parliamentary approval. It was the same with the payouts to war
veterans without a budgetary allocation in 1997. In a similar vein, he said
he let the war veterans break the law during the land invasions to spite
Wilson who had refused to use the British army against Smith. At least
George W Bush and Tony Blair had to produce "sexed up" reports to sway
public opinion and the people's representatives in favour of the Afghan and
Iraqi invasions.

Mugabe was furious when the bishops who produced the Zimbabwe We
Want document said the Lancaster House constitution was not homegrown. They
said the constitution did not represent the consent of the people. Their
reasoning was that those who participated in the Lancaster House
negotiations did so on behalf of "the people" but they were not elected
representatives. But Mugabe was there and he believes he is "our people".
People should not be consulted.

Nobody disputes the crucial role played by war veterans and our
leaders in the liberation of this country. Each one of them made sacrifices
either as a group and severally for a better Zimbabwe. Each one of them left
the country when the call to national duty could not be resisted. It was a
dangerous plunge into an uncertain future. Many have not been accounted for
to this day, hence the symbolic significance of the Tomb of the Unknown
Soldier at the National Heroes Acre.

But to then claim that a homegrown constitution could be cobbled
together in the musty halls of Lancaster House in England is to stretch the
metaphor of representation beyond belief. That up to 18 amendments have had
to be made to that document since 1980 bears enough testimony to the
inadequacies of the negotiation process, and those defects reflect the power
imbalances between those involved and the compromises that had to be made
for the sake of progress and to hasten majority rule.

More fundamentally, to say the Lancaster House constitution is
homegrown is to suggest that government sometimes plays frivolous games like
setting up the 1999 Constitutional Commission and conducting a costly
referendum in February 2000. It is to trash the votes of thousands of
Zimbabweans, chiefly war veterans and other Zanu PF supporters, whom
government persuaded to vote for its draft constitution.

The truth about Mugabe's umbrage is that a new constitution
would trim the powers of the president or even reduce his office to a
ceremonial one in favour of an executive prime minister. It's nothing to do
with speeding up decision-making, otherwise we would not have reverted to a
bicameral system of parliament.

Second but equally important, a new constitution would strip
Muagbe of the power to appoint 18 unelected parliamentarians who give him
the same advantage as the 20 reserved seats for whites in the original
Lancaster House constitution. He can't conceive of a future beyond himself.
Double-standards. Or am I raising the moral bar too high for an African
government!

The point I am making is simple: Is it democratic that a few
individuals fighting an independence war outside the country can thereafter
return to foist a constitution on the nation without putting it to a
referendum, and then declare it non-negotiable? Can that same constitution
equitably and adequately address the traumatic experiences caused by the
need to change property relations in the upheaval of the current land
reform? What are the views of constitutional experts on Mugabe's claims?

Secondly, what exactly was Mugabe referring to by "sacrosanct"
and "non-negotiable"? Was it the constitution or Zimbabwe's sovereign right?
How far constitutional is it that a head of state can foreclose debate on
any issue of national significance?

Then there is the opposition's response to the National Vision
document. Arthur Mutambara says it lacks "economic vision" while Morgan
Tsvangirai says everything depends on Mugabe and Zanu PF reforming
themselves for the good of the country.

The basic error they and other critics of the document make is
to view it as a rival roadmap to "challenge" their own. It is not. The
bishops' vision is an end, the ultimate paradise, it is the destination. It
is a "vision" in the classical biblical sense. What Zimbabwe needs are the
transformative processes and forces to get us there, the combatants and
strategists to lead us towards that vision. That is the task at hand.

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