The ZIMBABWE Situation
An extensive and up-to-date website containing news, views and links related to ZIMBABWE - a country in crisis
Return to INDEX page
Please note: You need to have 'Active content' enabled in your IE browser in order to see the index of articles on this webpage

Parties Agree to GPA Reforms

Thursday, 03 December 2009 20:10

THE Zanu PF negotiating team in the current round of talks with two MDC
formations has angered its party leaders after making critical concessions
on the media without consultation, in a move which could see President
Robert Mugabe's party losing its grip on the public media.

The situation has triggered uproar in Zanu PF which has left the party
divided on contentious issues at the negotiating table, while reinforcing
the main MDC faction's leverage in the increasingly problematic talks.

Sources close to the talks said Zanu PF negotiators Nicholas Goche and
Emmerson Mnangagwa, who was standing in for Patrick Chinamasa while he was
out of the country, surprised even MDC negotiators when they gave in on the
media reforms. MDC-T has tabled a number of proposals on media changes
including reforms of public newspapers under the Zimpapers group and the
state broadcaster ZBC. The party also wants sweeping reforms of media laws.

Sources said Zanu PF negotiators were backtracking on several other
outstanding issues on the talks agenda. The agenda has 27 items, 21 new
issues and six old ones. Negotiators have already ploughed through 15 items,
agreeing on 12 of those, while disagreeing on three.

The negotiators have clashed on the Roy Bennett, Johannes Tomana and Gideon
Gono issues and for now agreed to shelve the disputes until they have
finalised all other matters. An agreement has been reached on sharing of
provincial governors and what is left is working out dates for the
implementation of the decision.

Talks gathered momentum this week after the arrival of South African
President Jacob Zuma's facilitation team comprising Charles Nqakula, Mac
Maharaj and Lindiwe Zulu. The team arrived on Sunday and left on Tuesday
after meeting GPA principals and their party negotiators.

The team wanted to be updated on the talks, focusing on the agenda,
progress, problems and timeframes. Sources said all parties were impressed
by the Zuma team which has shown a different facilitation approach and
attitude from former President Thabo Mbeki's group. The South African team
briefed Zuma on their findings on Wednesday. Sadc executive secretary Tomaz
Salomao is in Harare.

However, the talks have thrown Zanu PF   turmoil amid accusations that
negotiators were incompetent or  were selling out. The issue has been
brought to Mugabe's attention for a decisive intervention.

"When the talks resumed last week Zanu PF negotiators, who included Goche
and Mnangagwa, were badly overrun by MDC-T representatives Tendai Biti and
Elton Mangoma," a source said. "They were outflanked on many issues, leaving
Zanu PF exposed at the talks," a source said. "While MDC-T negotiators
brought documents to support their positions, Zanu PF negotiators came
empty-handed. This left the Zanu PF team at sixes and sevens, hence the
urgent call for the party leaders to intervene to prevent disaster."

Sources said Mugabe was alerted on the lacklustre showing of his party's
negotiators at the weekend and steps were being taken to address the
situation which has already been partially rescued by Chinamasa's return.
Chinamasa's return would mean Mnangagwa's retreat to the background. MDC-T
negotiators were disappointed because they said Mnangagwa was open-minded
and progressive, but Zanu PF officials accuse him of "selling out".

When the media issues were tabled last weekend, Zanu PF negotiators, whose
performance was described as ranging from the perfunctory to the
incompetent, surprisingly gave in on MDC-T proposals to re-establish the
Mass Media Trust to run Zimpapers. They also agreed that ZBC must be run by
a board appointed by parliament's Standing Rules and Orders Committee from a
list supplied by the portfolio committee on the media.

The Mass Media Trust was formed in 1980 when the then new government bought
the Zimpapers stable from South Africa's Argus Group to house the majority
shares in the newspaper group on behalf of the Zimbabwean public. It acted
as a buffer between the government and the company which is listed on the
Zimbabwe Stock Exchange.

However, government has always run over the trust to ensure direct
interference in Zimpapers. The situation deteriorated at the turn of the
millennium when the Mass Media Trust was virtually disbanded to give
government a free hand to illegally interfere in the running of the company,
especially regarding its editorial policy.

Government officials from the Ministry of Media, Information and Publicity
are known to be interfering with the company's management and its editorial
departments. Earlier this year there were reports of government officials
seizing cash and fuel from Zimpapers for their own use. Officials also often
prescribe to editors directly and indirectly on what to write and not write.

The proposal to restore the Mass Media Trust to protect Zimpapers, agreed to
by negotiators last week although Zanu PF officials in government are
resisting it, is designed to curb such illegal practices.

Zanu PF negotiators also agreed last week to turn state broadcaster ZBC into
a public broadcaster. Currently ZBC, a state broadcaster which many in the
media say must be transformed into a genuine public broadcaster, is
functioning like a propaganda mouthpiece for the former ruling party or a
faction of it at least. During election periods Zanu PF virtually privatises
and monopolises ZBC for self-serving propaganda purposes.

Dumisani Muleya

Click here or ALT-T to return to TOP

Zesa Exports Power Cheaply Despite Blackouts

Thursday, 03 December 2009 20:02

AT a time when Zimbabwean households and industry are experiencing
persistent power cuts of up to 20 hours daily, Zimbabwe is exporting power
to Namibia at a discounted tariff to meet requirements of a US$50 million
sweetheart deal which has worsened the power crisis.

Under the deal signed in March 2007, Namibia, which provided Zimbabwe with a
loan of US$50 million, is supposed to receive 180 megawatts for a minimum of
five years as part of a power purchasing agreement between Zesa and Namibia's
power utility, Nampower.
The US$50 million was meant to refurbish and expand Hwange Power Station to
levels that would have resulted in a "significant" reduction in power-cuts
throughout energy-crisis-hit Zimbabwe.

But even after the huge capital injection, the power plant is in a
precarious state. Generation has remained low, plagued by machine
breakdowns, coal shortages and structural defects. Notwithstanding all this,
Zimbabwe still has to supply power to Namibia.

The Zimbabwe Independent understands that the deal between NamPower and Zesa
states that Zimbabwe will "meet its part of the bargain" regardless of the
electricity generation in the country.

"If they (Zesa) cannot generate the power to supply us, they still must find
the power elsewhere to fulfil their part (of the agreement)," NamPower
managing director Paulinus Shilamba was quoted as saying in the media last

Namibia started receiving power from Zimbabwe in January last year as Hwange
Power Station was hit by breakdowns. Sources at Zesa have said in instances
where the power station is down, Zesa has been forced to import power and
pay wheeling costs to satisfy the deal.

"We have had situations where we cannot import power to feed into our
national grid as priority is given to Namibia," a source said. "The benefits
(of the deal) to Zimbabwe at the moment are not there."

But Zesa boss Ben Rafemoyo defended the deal. "With regards to the NamPower
deal, people should look at the basis of the transaction. We (Zimbabwe) did
not have foreign currency and they did (Nambia). The refurbishment needed to
be done," said Rafemoyo.

Rafemoyo said in the event of increased capacity by industry "it was mostly
likely that households would not have electricity during the day to ensure
industry operates, but the opposite would occur during the evening".

The aberrations in the Nampower deal come amid real threats of a disaster
waiting to happen at Hwange where it is feared an unstable ash dam wall is
in danger of collapsing and completely destroying the power station during
the current rainy season.

According to a report by the World Bank released last month, failure to
urgently attend to the problem could result in the destruction of the entire
power plant which is situated in a valley directly below the dam wall.

"This would result in a loss of 450 MW at current generation levels to the
system with disastrous consequences to the Zimbabwean economy," reads the
report compiled at the request of the Ministry of Finance for technical

The World Bank said the country needs US$135 million for emergency
rehabilitation of Hwange. Out of that US$6 million is required to secure the
unstable ash dam.

The Kariba Dam south wall meanwhile is also in "urgent need of
rehabilitation to ensure dam wall safety", the report said.

This would involve refurbishment of the floodgate mechanism and
strengthening of the plunge pool to prevent further erosion backwards to the
dam wall.

"This work is extremely urgent to ensure that dam wall safety is not
compromised," the World Bank said.
The estimated cost for rehabilitation of Kariba south amounts to US$84

According to the report, the transmission infrastructure was in a poor state
of repair and requires huge investment to rehabilitate and reinforce the
network to an acceptable level. The cost for transmission emergency
rehabilitation amounts to US$561 million.

Besides this Zesa Holdings is saddled with a US$428 million debt which it is
battling to settle.

The power utility's cash woes are compounded by "unrealistic" tariffs over
the years in comparison to the viable rates levied by other utilities in the

Cash problems at Zesa Holdings also mean the country faces uncertainty over
future supply of power considering that the power utility has a daunting
task to raise US$385 million for emergency power needs.
Zesa Holdings' external debt stands at US$317 million while its internal
debt is at US$111 million.

Regional power utilities are reportedly reducing supplies to Zesa Holdings
due to technical problems and non-payment of debts.

Zesa is said to be getting about 100MW from Cahora Bassa in Mozambique and
50MW from Snel in the Democratic Republic of Congo.

The power utility's spokesperson Fullard Gwasira on Tuesday said the
national grid had lost 160MW that were being imported from Mozambique due to
a technical fault on that country's network.

The World Bank said there has been a decline in Zesa's operational,
commercial and financial performance since 1997 when the power supplier
collected 97% for accounts due.

Zesa currently collects an estimated US$20 million a month from its
customers, representing a 49% rate in account settlement by customers, but
this is hardly enough to cover its payroll.

Apart from low collections and sub-economic tariffs, the general downturn in
the economy and lack of access to financing has contributed to the power
utility's huge financial distress.

"Zesa's trade creditor arrears from power imports are about US$98 million,
of which US$69 million is over due by more than 128 days. Zesa's external
debt arrears stand at about US$317 million (domestic arrears at about US$111
million)," said the World Bank.

Zimbabwe has a capacity to generate about 1 960MW of which about 1 000MG of
non-firm power generation is available for production. Zimbabwe imports an
average of 300MW from the region.

No new power generation stations have been built in the country since Kariba
in the early 1960s and Hwange thermal power station which was completed in

Most households and industries in Zimbabwe are limited to less than 18 hours
of electricity supply daily because of lack of investment in power

Only about 30% of the country has access to grid electricity.

Despite advances in technology, power experts said a lead time of up to five
years is needed to build a power station.

The current power shortage also stems from failure by government to
implement numerous power generation projects.

In its System Development Plan approved by government 19 years ago, Zesa was
to build a new power station at Batoka Gorge between the Victoria Falls and
Kariba. Like Kariba, it was to have a north and south bank stations.

Batoka, which was to be a run-of-the-river station, had been planned to take
into consideration environmental concerns. There was no need to dam the
river. Batoka was to be built in conjunction with expansion at Kariba to use
the water optimally.

However, the Batoka project ran into problems as the Zambian government was
not keen on it then because its economy was unstable and was unwilling to
undertake a project with a neighbour they accused of short-changing them
during the sharing of the Central African Power Corporation (Capco) assets.
Capco was the predecessor to the national power utilities of the respective

About US$1,6 billion was needed for the north and south bank power stations
in 1996.

The next project in the system was the expansion of Hwange by adding two new
generators. To be known as Hwange 7 and 8, the project was to be financed by
the World Bank and tenders had been adjudicated when government decided the
tenders be given to YTL, a Malaysian construction giant.
The problem was that the YTL was not a power station construction firm.

The plan later changed. Hwange was to be privatised by selling it to YTL.
The sale eventually fell through because YTL insisted they could not inherit
a US$800 million loan used to refurbish the station and improve its
operational efficiency provided by the World Bank.

The default plan was Sengwe in Gokwe north where there are coal reserves to
last for the next 100 years. Sengwe was to be developed by mining giant Rio
Tinto and the power station was to be built by National Power of the UK.

It had been planned that Sengwe would then generate power to replace the
capacity which would have been generated by Batoka and an expanded Hwange.

The souring of relations between Zimbabwe and Britain after 1997 got in the
way and Sengwe was never built. Plans for gas turbine runners to generate
power in Lupane south also suffered the same fate. The project was initially
linked to the British and later to the Chinese before it fizzled out.

The old thermal power stations built in the late 1940s in Harare, Bulawayo
and Munyati, despite their refurbishment in the mid-1990s, are too expensive
to run and are almost obsolete.

Zesa does not have funds to buy coal and bring it all the way from Hwange.

Rafemoyo told the Zimbabwe Independent that depending on the site, type of
generation station and amount of work, a power station takes between four to
seven years to construct.

Paul Nyakazeya

Click here or ALT-T to return to TOP

Muchinguri to Fight Back

Thursday, 03 December 2009 19:58

ZANU PF Women's League boss Oppah Muchinguri is reportedly planning to fight
from the floor at the party's congress next week against the nomination of
Vice-President Joice Mujuru as the party's second secretary ahead of her.
Sources in the party told the Zimbabwe Independent this week that the
congress was likely to be stormy because of increased factional fighting
escalated by last month's nomination of the presidium.

There are two main factions in Zanu PF fighting to succeed octogenarian
President Robert Mugabe. Defence minister Emmerson Mnangagwa's camp is
entangled in a bitter struggle for power with a faction led by former army
general Solomon Mujuru.

Mnangagwa's camp was ruthlessly crushed in last month's Zanu PF presidium

The majority of the 10 Zanu PF provinces sided with the Mujuru camp and
nominated Joice Mujuru and John Nkomo as the party's co-vice presidents and
Simon Khaya Moyo as chairperson.

Mnangagwa wanted Nkomo and Muchinguri as vice-presidents and Kembo Mohadi as

The sources said apart from Muchinguri's blazing guns, party secretary for
administration Didymus Mutasa with the backing of senior politicians in
Manicaland and Mashonaland West province wanted the congress to overturn the
nomination of Moyo as party chairman citing procedural irregularities.

Muchinguri, the sources said, has been mobilising resources and support to
mount a challenge against Joice Mujuru's nomination on the basis that it was

"Muchinguri has been to South Africa to mobilise resources to reverse Mujuru's
nomination," a senior politburo member said. "She has been all over the
provinces seeking support. She feels the nomination was un-procedurally

The Women's League boss was nominated vice-president by Masvingo province,
which later withdrew its support for her after results from other provinces
showed Mujuru had won in more than five provinces.

The move by Masvingo, the sources said, was irregular and should not have
been allowed.

In the case of Mutasa, the sources said, he would contend at the congress
that he failed to garner the required support after provinces were made to
believe that the chairmanship was reserved for ex-PF Zapu members in line
with the 1987 Unity Accord.

Apart from that, provinces such as Mashonaland Central and Mashonaland West
had initially nominated Mutasa chairperson before making a U-turn.

In Mashonaland West, Mutasa's supporters this week claimed that politburo
members misinformed the party that the province had nominated Moyo when it
had selected Mutasa.

Mashonaland Central switched to Moyo claiming that their decision was in
line with the unity accord.

Secretary for lands in Mashonaland West, Themba Mliswa, and Chief Zvimba on
Novermber 27 met Mugabe at the Chinhoyi University of Technology graduation
ceremony and complained about the unprocedural way Chombo handled the
nomination of the chairperson of the party.

Mugabe, the sources said, had since confronted one of the politiburo members
seeking explanation.
Mutasa this week confirmed that Manicaland, the province he hails from,
wanted the Wednesday politburo meeting to deal with how Moyo was nominated

He said the province felt that the nomination was not done properly because
many provinces had the misconception that the party chairperson should hail
from the Matabeleland region.

"There is no written law in the party which states that the party chairman
should come from the Matabeleland provinces," Mutasa told the
state-controlled media. "Manicaland province therefore feels that the
nomination for the chairmanship was not done properly. On the nomination
date, some provinces altered and delayed their nominations and we feel that
this was unfair."

The politburo discussed the nomination of the presidium but no final
decision was made. Deliberations on the matter are expected to be held at
another politburo meeting next Wednesday. The meeting will mark the
beginning of the five-day congress in the capital.

In Masvingo the first nomination of Muchinguri as Zanu PF vice-president
ahead of Joice Mujuru left the party split down the middle.

War veterans and members of the Mujuru faction have resolved that the
provincial executive led by Lovemore Matuke be axed for backing Muchinguri.

At the weekend, party members led by politburo member Celina Pote staged
demonstrations in Chiredzi calling for Matuke's executive committee to
vacate office because it was allegedly fanning factionalism in the party.

Muchinguri was not reachable for comment at the time of going to press.

Constantine Chimakure

Click here or ALT-T to return to TOP

Devolution of Power Overdue — Matinenga

Thursday, 03 December 2009 19:56

CONSTITUTIONAL and Parliamentary Affairs minister Eric Matinenga yesterday
urged Zimbabweans to talk openly about the devolution of power to provinces
saying there are “no scared cows” in the constitution-making process.

However, he said devolution of power should not be mistaken for secession
from the country.

“Issues of devolution of power cannot be ignored and people should openly
discuss them when crafting the new constitution,” Matinenga said.

“Devolution of power should not be mistaken with secession.”

Matinenga was in Bulawayo to drum up support for the constitution-making
process that has been stalled by financial constraints.

He said the current 1979 constitution agreed at the Lancaster House talks
should be replaced soon as it was a colonial document.

The constitution has been amended 19 times since the country’s Independence
in 1980 and critics say most of the changes have only helped to entrench
President Robert Mugabe and Zanu PF’s stranglehold on power.

Participants at the meeting said there was need for devolution of power as
that empowers everyone.
“Devolution of power is long overdue in Zimbabwe and it should not be taken
as a new phenomenon,” said one participant It is pronounced worldwide. That
is the only way to empower certain communities which for now are not
benefiting from natural resources.”

Participants said the call for the devolution of power should not be taken
as a Matabeleland issue because it would benefit every province.

Several leaders from the region said it had lagged behind in development yet
it is endowed with several natural resources.

On whether the global political agreement timeframe for the crafting of the
new constitution would be met, Matinenga said the parliamentary select
constitutional committee is “performing badly”.

“The three principals are also concerned on the delays and they are
discussing the possibility of extending the timeframe without going to
parliament,” said Matinenga.

Outreach programmes are set to commence on January 4 but the 560 people
earmarked to collect information were still to be trained, the minister

Nqobile Bhebhe

Click here or ALT-T to return to TOP

Minister Admits illegally Hiring 13 000 Youths

Thursday, 03 December 2009 19:20

YOUTH Development minister Saviour Kasukuwere this week admitted that his
ministry violated public service job recruitment regulations when it hired
13 000 youths just before last year's bloody presidential election run-off
to work nationwide as ward officers. Appearing before parliament's public
accounts committee on Monday, Kasukuwere said his ministry had between May
and June 2008 employed 13 000 youths, not 10 277 as first revealed by the
Comptroller and Auditor-General, Mildred Chiri, in her report to the House
last month.

"He admitted before the committee that the procedures (in hiring the youths)
were violated and the ministry was regularising," a senior member of the
committee said.

The regulations violated included the failure by the Public Service
Commission to advertise for the posts and also failure to open personal
files for the hired youths.

The ward officers did not have bank accounts to receive their salaries,
rather the ministry used an imprest account from which money could be paid
in advance to the youths.

"This was fraught with potential fraud risks," the committee member said.

Officials from the Finance ministry who also attended the meeting admitted
that they had erred by failing to check the list of employees before
releasing funds for their payment.

"The Public Service Commission was culpable for the ghost workers because
they waived proper procedures and abdicated their responsibility to the
Youth ministry, even to the extent of waiving O-Level requirements," another
committee member said.

As reported by the Zimbabwe Independent in October, Chiri in her report
exposed gross abuse of state resources by top government officials and the
unlawful recruitment of the youths.

Kasukuwere then accused the audit report of having many inaccuracies and
said he would make an official response once the ministry's accounting
officer was through with their own audit.

The parliamentary committee is compiling a full report on the recruitment of
the youths with remedial recommendations and this report would be tabled in
parliament before year-end.

Meanwhile, minister for Public Service Professor Eliphas Mukonoweshuro
yesterday told the Independent that results of a pilot human resource audit
in the civil service done in Harare, Midlands and Chitungwiza was expected
to be out early next week.

Mukonoweshuro said: "In those areas there was nothing out of the ordinary.
There's nothing that they were able to evaluate that would raise eyebrows."

He said delays in the compilation of the audit were because of the training
of numerators that starts today and will continue into the weekend, while
the main audit will start on Monday.

Wongai Zhangazha

Click here or ALT-T to return to TOP

Botswana Seizes US$3,1 million Zim Cigarettes

Thursday, 03 December 2009 19:17

BOTSWANA a fortnight ago intercepted cigarettes worth US$3,1 million from
Zimbabwe that were to be smuggled to Asian countries such as India and
China. The smugglers allegedly used undesignated entry points to Botswana
and were confronted by the police at Tshesebe but managed to escape leaving
the contraband behind.

Botswana police found 108 boxes with 54 000 cartons of Derby cigarettes, 133
boxes containing 66 500 cartons of Pacific cigarettes, and 128 boxes
containing 64 000 cartons of Sevilles cigarettes.

Sources at Plumtree Border Post on Tuesday said smuggling through the main
border post and several illegal entry points was rife as "truck drivers are
well connected".

"Smuggling of cigarettes has been on the increase since September but we
only hear about it when they are arrested in Botswana" said the source.

Drivers would produce fake declarations forms to immigration officials for
their smooth passage, said the source.

"A worrying trend has developed in that smugglers only come on certain days
when they know (immigration officials) who would be on duty," the source
said. "Secret operations to identify culprits at the border were once
conducted but no one was caught as information leaked."

Matabeleland South police spokesperson Tafanana Dzirutwe declined to comment
on the case saying it was a "diplomatic issue that can be handled in Harare".

Botswana is fast becoming a prime route for a cigarette smuggling syndicate
to Asian countries and South Africa.

Finance minister Tendai Biti on Wednesday expressed concern over high rates
of smuggling, mainly at Beitbridge Border Post.

Adam Molai, executive chairman of Savanna Tobacco, the manufacturer of
Pacific and Derby cigarettes, professed ignorance on the smuggling of his
company's brands.

"Unfortunately I'm not aware of this incident but I can comment on cigarette
smuggling in general," Molai said in a written response to questions from
the Zimbabwe Independent. "There is no product in the world, that I'm aware
of, that is smuggled as much as cigarettes. In a quest to circumvent paying
high excise duties prevailing in their countries of origin, various players
choose to attempt to smuggle cigarettes to try and make super profits."

He said due to resource constraints, his company was not represented in most
markets it exports to and relied on third parties to distribute its brands.

"Whilst we take stringent measures to verify the authenticity of all
customers buying through extensive due diligence processes that also include
the embassies of the countries whose citizens are buying from us, we cannot
vouch for the veracity of the information we get from them," Molai
explained. "In addition to the due diligence process we undertake, we also
escort every truck carrying our brands to the point of exit to ensure that
our export documents are acquitted by Zimra given that cigarettes are an
excisable product. This also serves the purpose of ensuring that the goods
being exported have left the Zimbabwean territory as we remain liable for
local excise duties until our cigarettes have left Zimbabwe."

The scourge of smuggling, he said, also included counterfeiting of

"As recently as last year our Pacific brand, like all other established
brands, fell victim to counterfeiters in South Africa," Molai said. "Should
you go to the informal markets in Botswana, Zambia and South Africa you will
find large volumes of Madison, Kingsgate or Everest. These cigarettes are
not exported by BAT Zimbabwe, but still end up on the market in Botswana,
South Africa, and Zambia."

Nqobile Bhebhe

Click here or ALT-T to return to TOP

Chiwenga Intervenes in war Vets Wrangle

Thursday, 03 December 2009 18:59

THE commander of the Zimbabwe Defence Forces, Constantine Chiwenga, last
week intervened in the war veterans association dispute and ordered the
cancellation of a congress that was planned by a faction of the ex-freedom
fighters. Information to hand shows that leaders of the two factions of the
Zimbabwe National Liberation War Veterans Association (ZNLWVA) were last
Friday summoned to Defence House, Harare, by Chiwenga and told to stop
Chiwenga intervened because war veterans are considered a reserve army.
Zanu PF factionalism spilled into the war veterans association with the two
main feuding camps in the party fighting to wrestle control of the former
guerrillas considered an integral cog of Zanu PF's survival machine.
Retired army general Solomon Mujuru and Defence minister Emmerson Mnangagwa
lead separate factions fighting to succeed President Robert Mugabe.
War veterans aligned to Mujuru are pushing for the removal of its current
leadership chaired by Jabulani Sibanda and deputised by Joseph Chinotimba.
Retired Colonel Basten Beta is tipped to take over from Sibanda, while
former war veterans secretary-general Endy Mhlanga, Douglas Mahiya and
Moffat Marashwa are among those reportedly vying for top posts in the
Beta's camp had last weekend called for a congress in Chinhoyi to elect new
ZNLWVA leaders, but it was cancelled after the intervention of Chiwenga.
"Chiwenga summoned us to his office last week and asked us not to go ahead
with the congress," Mhlanga told the Zimbabwe Independent. "We agreed that
by going ahead with the congress against the wish of the current leadership,
it will be tantamount to running a parallel structure."
The Beta camp is baying for Sibanda's ouster arguing that his leadership has
failed to represent war veterans and allowed the ex-freedom fighters to be
abused by politicians during the chaotic 2000 land reform programme, yet the
majority of them did not benefit.
War veterans who spoke to the Independent this week said there were fissures
in the association because former fighters were not happy with how they were
treated after leading farm invasions countrywide.
The camp against Sibanda is also accusing the war veterans' leadership of
clinging to power and failing to hold congresses in almost a decade.
Mujuru was part of a committee that was appointed by Mugabe in 2004 to
restructure the war veterans association.
The committee was also made up of the late Vitalis Zvinavashe and Josiah
Tungamirai, and Dumiso Dabengwa. The war veterans however said dislodging
Sibanda would be a tall order because he enjoyed the backing of Mugabe.
"Sibanda will not be easy to dislodge, he has the support of Mugabe and his
trump card is his ability to organise war veterans at grassroots level and
those are the people who count as they are in the majority compared to war
veterans in urban areas," said one war veteran.
Sibanda last year led the so-called "one million men march" and also
mobilised war veterans in the violent and controversial 2008 presidential
runoff campaign to secure the presidency for Mugabe.
Efforts to contact Sibanda and Chiwenga for comment were fruitless.

Loughty Dube

Click here or ALT-T to return to TOP

Bhebhe set to Challenge By-elections Delay

Thursday, 03 December 2009 18:55

FORMER Nkayi MP Abednico Bhebhe has instructed his lawyers to file a High
Court application to compel President Robert Mugabe to call for by-elections
in vacant constituencies throughout the country. Bhebhe was expelled from
parliament alongside two other legislators after the MDC-M wrote to the
House asking for their dismissal on allegations of being sympathetic to
Prime Minister Morgan Tsvangirai-led formation of the party.

The ex-lawmaker told the Zimbabwe Independent this week that if his court
application succeeds, by-elections would be held in over 20 constituencies,
some of which have gone for over a year without representatives in both the
House of Assembly and Senate.

Thamsanqa Khumalo, the lawyer representing Bhebhe, confirmed that he was
working on the case.

"I have instructions from my client to pursue the matter on the holding of
by-elections, but I cannot shed any details at the moment," Khumalo said.

Bhebhe said he would seek a court order compelling Mugabe and the Zimbabwe
Electoral Commission (ZEC) to call for the by-elections.

"Parliament has long notified President Mugabe of the existing vacancies in
constituencies that need by-elections but he has not acted on that," he
said. "Since he is the one who is supposed to proclaim the by-elections,
this lawsuit will target him and ZEC."

At law, Bhebhe argued, Mugabe should call for a by-election within three
months of being notified of a vacancy.

Loughty Dube

Click here or ALT-T to return to TOP

HIV Positive Women Score Against Stigma

Thursday, 03 December 2009 17:16

THE earth is parched but pregnant clouds hang, threatening to burst into a
downpour anytime. In anticipation of the cloudburst the people run in all
directions for shelter, screaming joyously for the relief the rain will

This is in Epworth, a sprawling settlement southeast of Harare.

On a dusty football pitch is a group of middle-aged women having a good time
playing soccer, ignoring the threat from the sky.

It is not just an ordinary group of women, they are soccer champions. They
may not be as prominent as soccer teams such as Gunners or Dynamos whose
players don designer label jerseys and football boots, but they have changed
a lot of people's lives - not only in their community but nationwide.

The team - ARV Swallows named after antiretroviral therapy - has so far won
three soccer competitions.

In the middle of the pitch, an outstanding voice could be loudly heard
barking instructions. The voice belongs to ARV Swallows captain nicknamed

China, whose real name is Janet Mpalume, and her teammates live positively
with HIV and Aids and have defied all odds by fighting the stigma and
discrimination still associated with the pandemic through football.
Mpalume (32) tested positive in 2007 after she fell sick for a long time.

She said: "I accepted it, and I made my status public. Coming out in the
open helped me to be where I am now. When I tested positive my CD4 count was
131 but now it has been boosted to 469."

People with a CD count below 350 are entitled to get the life-prolonging

She said she went public to fight the stigma and discrimination associated
with HIV and Aids in her community.

"Soon after announcing my status, some people refused to share a cup I would
have used, or take anything I would have touched," Mpalume narrated to the
Zimbabwe Independent on Tuesday -World Aids Day. "It was painful for me but
through football we have managed to tone it down in Epworth, even now when I
am drinking a fizzy people rush to share it with me."

She said the community initially did not take the ARV Swallows seriously
because some of its players were deemed not fit to kick the ball because of

The team, according to Mpalume, is sending a strong message nationwide that
women should not see themselves as victims of the HIV and Aids disease, but
champions in the fight against the pandemic.

Issues of major concern raised during the World Aids Day were the worsening
plight of children and women living and affected by HIV and Aids.

According to the Zimbabwe Demographic and Health Survey women constitute 54%
of people living with HIV and Aids in the country and HIV prevalence is
higher among females aged 15-49 years (21,1%) than males (14,5%).

A study recently conducted by the University of Zimbabwe put HIV as the
number one cause of maternal deaths.

A report jointly done by Unicef and the Central Statistical Office said 100
children below the age of five years have been dying daily in the past five
years due to preventable diseases of which HIV and Aids topped the list.
This was a 20% increase from 1990.

Two thirds of infected children urgently requiring ARVs were reportedly
failing to access treatment and there was negligible coverage of HIV
treatment for children in the critical first two years of life.

Over 75% of about one million orphaned and vulnerable children in the
country were reportedly not receiving any form of formal external support
from government, private, religious, charity or community-based

Gladys Chiwome-Mudondo, Women and Aids Support Network (WASN) advocacy
manager, said there were biological and social reasons for higher HIV
prevalence among woman.

Chiwome-Mudondo said: "The first reason could be the biological make up of a
woman in relation to the way organs are positioned in a woman's body. If a
woman has unprotected sex with a man she is more likely to be in more
contact with the fluids than the man.

"There are reasons to do with sex and sexuality. Very few women can set
their own decisions for example deciding to use the condom during
intercourse, there is also very few prevention devices for women. The female
condom has proved unpopular with women due to poor marketing. Other issues
have to do with poverty which makes women more vulnerable."

She advised women not to look down upon themselves but fight for their
rights so that they protect themselves against HIV and Aids.

Founder of Women Empowerment Group in Epworth Farai Makoni said there was no
need to apportion blame when one tests positive, but map the way forward for
a healthy life and fight the stigma.

His organisation has initiated a project to rehabilitate commercial sex
workers in the neighbourhood.

Makoni said: "The objective was to support and change the lives of women who
were doing sex work by introducing to them other means of survival that they
could engage in so that they change their behaviour. By networking them with
different organisations we introduced them to small businesses like
cross-border trading and opening their own market stalls. Some have even
gone into preaching and peer education."

"Their campaigns have brought positive results in the community and of late
we get fewer cases of gender violence and sexual abuse being reported at our
offices. Some of the sad cases are of fathers who are raping their children.
It is a major concern here."

Unicef country representative Peter Salama this week said women and children
remain the missing face of HIV and Aids response in the country and called
for scaling up of the Prevention of Mother to Child Transmission services
and HIV and Aids treatment for women and children.

Salama said: "HIV and Aids is the number one cause of death for pregnant
women and children in Zimbabwe. In an era of massive funding and attention
for HIV treatment such a situation is unacceptable.

"We can not talk of universal access when mothers and children have little
access to basic services and continue being denied HIV services."

But for the ARV Swallows playing football in the rain is part of the fight.

Wongai Zhangazha

Click here or ALT-T to return to TOP

Golden Handshakes Fuelling Corruption –– Analysts

Thursday, 03 December 2009 16:12

FORMER Zupco chief executive officer (CEO) Gwinyai Chikowore was last year
sent on forced leave on allegations of financial impropriety involving
nearly US$1 million which the bus company had generated between February and
May. The Zupco board resolved to relieve Chikowore of his duties, allegedly
for failing to deposit the money into the company’s bank account, as well as
buying “sub-standard” bus accessories. Only US$210 000 was found in the
company’s account.

Chikowore was sent on leave with full benefits until the expiry of his
contract last December.

Analysts questioned the move to continue paying Chikowore when there were
serious allegations against him. They argued that the decision reflected
poor corporate governance at Zupco.

Last week Happymore Mapara, the group CEO of Aico Africa Ltd, left the
company with a golden handshake estimated to be US$1 million.

Mapara also left with top-of-the-range vehicles as part of the settlement
after falling out with key shareholders in the company after auditors —
KPMG –– produced a damning report on the company’s operations.

Among the findings of the audit were shocking underhand deals.

Many companies and parastatals have over the years paid senior managers
golden handshakes even when they would have committed fraud or acts of

Huge severance packages are also rampant in South Africa where most
executives in parastatals are rewarded for running down state institutions.
A case in point is that of the South African Broadcasting Corporation (SABC)
ex-CEO Dali Mpofu who was forced out of the company and later paid huge sums
of money as a severance package.

This was despite the fact that during Mpofu’s tenure, SABC suffered huge
losses and is currently looking for R1,2 billion for recapitalisation.

Questions have been asked why companies give these golden handshakes. Are
minority shareholders consulted when such decisions are reached? Why would
such companies opt to pay out such large sums of money at the expense of
declaring a dividend to shareholders?

Institute of Chartered Accountants in Zimbabwe (ICAZ) CEO Sonny Mabheju said
paying out golden handshakes if not properly managed could lead to

“People can underperform knowing very well that if they get dismissed, they
will still get a golden handshake,” Mabheju said. “This prejudices
shareholders and other stakeholders in that they can be stuck with a
non-performer who will cost a fortune to get rid of.”

ICAZ is one of the major accounting bodies in the country and in Africa.

“It is important in all these (golden handshakes) cases to ensure that the
legal aspects are got right at the time of employment to avoid further
problems at the point of termination,” Mabheju said.

Economist Eric Bloch said the paying out of a golden handshake depends on
whether or not the executive has a contractual entitlement, and charges are
of substance.

“If the latter, no golden handshake should be paid unless and until the
executive has been cleared of the charges, except if contractual obligations
render it obligatory that payment be made,” Bloch said.

Bloch said unless the golden handshake is of such magnitude as to have a
material impact upon the company, there is no obligation to consult
shareholders, the decision being in the purview of the board of directors,
except if the recipient is a director, in which event it is generally
mandatory that approval be sought of shareholders in general meeting.

Some analysts said golden handshakes should be inline with good corporate

Economist Brains Muchemwa said good corporate governance requires that
payment only be made if contractually prescribed or the charges of improper
conduct are unfounded or  if the recipient is a director. Payment should be
approved in terms of the charges being laid down.

“Non-compliance with that constitutes corruption,” Muchemwa said.

Mabeju said although good enterprise governance would require a manager to
comply with corporate governance and make the company achieve good business
governance it is necessary for the company to ensure that these are included
in the employment contract for them to be used as a basis for termination
without complying with the contract of employment.

“Otherwise a golden handshake may need to be paid to save the company from
further loss and avoid being sued by the employee for breach of contract
unless negligence or gross incompetence can be proved,” Mabeju said. “Where
an employee is guilty of improper conduct, the employer has a right to
charge them of that misconduct.  The employer needs not to resort to paying
a golden handshake to get rid of the employee in the circumstances unless
negligence or gross incompetence is proved.”

Mabheju said there may be instances where the contract is silent on

“It may be improper to terminate that contract on performance-related
issues,” he said.

The Australian government this year outlawed excessive “golden handshake”
payments amid outrage over huge bonuses collected by company executives.

Under new legislation, termination payouts would require shareholders’
approval, and curbs on severance pay could be linked to job losses.

“Golden handshakes, particularly when companies have not performed or where
workers are being retrenched, are simply a means of rewarding failure and
are absolutely unacceptable,” Australian treasurer Wayne Swan told the
Australian parliament in March. “So we are sending a very clear message to
corporate Australia — your actions are under scrutiny.”

Current Australian laws allowed company directors to receive termination
payments of up to seven times their total annual remuneration, which is
often much more than base pay, before shareholder approval is required.

The Australian government’s crackdown came amid outrage in the United States
after insurer AIG granted huge bonuses to employees who brought the giant
firm to the brink of collapse.

Swan called the payouts “frankly sickening”.

“What we have seen for the past decade, under laws we have inherited from
the former government, is the retirement gold watch replaced by a truckload
of gold bullion,” said Nick Sherry, Australia’s corporate governance

The move will extend the rules to cover a wider range of executives and will
place criminal penalties on those who flout the law. The government’s
productivity commission also held a nine-month inquiry into executive
remuneration and bonuses.

Paul Nyakazeya

Click here or ALT-T to return to TOP

Banks should increase lending or else — Biti

Thursday, 03 December 2009 18:47

FINANCE minister Tendai Biti has warned banks to increase lending to
productive sectors or face the music in a clear sign that government has
lost patience with the financial sector. Presenting the 2010 National Budget
before parliament on Wednesday, Biti said following a surge in bank deposits
to $1 billion in October from $475,5 million in April,  banks should shift
from a “conservative to aggressive” lending position to support  key
economic drivers — agriculture, manufacturing and mining.
Of the deposits, long-term deposits accounted for about US$15,8 million,
with the balance in short-term deposits.
Biti’s warning comes a week after Reserve Bank governor Gideon Gono last
Friday threatened foreign-owned banks with unspecified action if they
continued with the current lending pattern.
“However, given the short-term nature of deposits, financial institutions
were forced to structure their lending in short-term credit financing
largely comprising 90 days at effective annualised lending rates ranging
from 8% to 16%, which remains too expensive compared to the regional average
lending rate of 7%, Biti said.
The increase in deposits, the minister said, should see the loan-to-deposit
ratio spiking to 80% from current levels of 50%.
“Of the total lending, the distribution, manufacturing and agriculture
sectors collectively received about 70,6% of total loans and advances as at
30 October 2009… If persuasion does not succeed we will employ the powers we
were given in terms of Section 31 of the Banking Act. It is unacceptable and
it doesn’t encourage savings. We are imploring the banking sector to listen
to the words of wisdom.”
Banks pay an interest of between 0-3% on savings while the prime lending
rate is between 8-16%.
Referring to cash-rich foreign-owned banks that surpassed next year’s
US$12,5 minimum capital requirements for banks, Gono said the central bank
was “deeply concerned at the continued extreme aversion to lending by some
banks which are holding vast amounts of deposits without extending loans to
the productive sector of the economy”.
“These banks, mainly those with foreign ownership have not taken heed of our
moral calls to the banking sector for them to be more supportive of the
productive sectors of the economy through lending,” Gono said.
Meanwhile Barclays bank recently pledged to raise their lending commitments
by year end.

Bernard Mpofu

Click here or ALT-T to return to TOP

Indigenous Banks Scramble for Crumbs

Thursday, 03 December 2009 18:44

INDIGENOUS banks, which showed a lot of potential and promise a few years
ago, now survive on crumbs as the country's four big banks now account for
more than half of business. Latest banking figures show that deposits were
at US$1,016 billion in October with the traditional big banks, Barclays,
CBZ, Stanbic and Standard, accounting for 61%. This leaves the other 14
financial institutions scrambling for about US$390 million.

This situation is worsened by the fact that close to 90% of the funds are
transitory, lasting less than 30 days within the coffers of the financial

While the indigenous banks, the nouveaux riche at the turn of the century,
have met the minimum capital requirements with CFX Financial Services and
the Zimbabwe Allied Banking Group (ZABG) being the odd institutions out,
their future continues to be uncertain.

Analysts said while the bulk of business has since the introduction of
multiple currencies been going to the big banks, it may be premature to rule
out the indigenous financial institutions.

An economic analyst said it was not clear where the indigenous banks were
heading but was quick to point out that the biggest bank, in terms of loans,
deposits and other banking activities and aspects was CBZ which is an
indigenous bank.

"We need to look at what is happening in other countries and at the same
time ask the question why the big banks are getting that business," said the
analyst. "If you look at Trust Bank (one of the banks which faced
difficulties and was incorporated into ZABG), you would realise that they
were very flexible and very innovative, coming up with different products
which made them the dominant bank. This means that indigenous banks still
have a future if they are innovative though the playing field is tilted
against them."

This innovation saw Trust Bank as well as all the other banks which were
established in the 90s taking over business from the traditional banks which
were not flexible.

At its peak, Trust Bank took banking to the people, offering to collect
money from shops and industries instead of the traditional banking procedure
where money is taken to the banks.

Other innovative products included the Century Bank and OK Zimbabwe
partnership, the link between the retail outlets under Meikles namely
Barbours, TM Supermarket and Greatermans and Kingdom Bank.

However, at the moment the indigenous banks are faced with serious liquidity
problems and cannot come up with innovative products as they are worried
about their own survival.

Another analyst with serious interests in the banking sector who asked for
anonymity said it would take time before the indigenous banks recaptured the
market share as the banking public does not have confidence in them.

"It is not only the big corporates which have moved from the small
indigenous banks but the individuals as well mainly because they suffered in
2004 and 2005 when their funds were locked in financial institutions," said
the analyst.

"The issue of confidence would take time and it is also up to how the banks
move to the market, not the other way round, which would determine the time
it would take before they reclaim the market share."

Banking sectors in other countries were changing with non-banking activities
being incorporated, yet in Zimbabwe even those banks with foreign parentage
had continued to do business in the usual way giving room for those
innovative enough to take up the space.

Leonard Makombe

Click here or ALT-T to return to TOP

Are Budget projections achievable?

Thursday, 03 December 2009 18:41

TWO important events took place in the country in the last seven days. First
was the signing of the Bilateral Investment Promotion and Protection
Agreement (Bippa) between South Africa and Zimbabwe on November 27. This was
followed by the National Budget Statement that was presented on Wednesday.
The Bippa was supposed to be a defining moment for foreign investors.

This has not been the case as it is already entangled in controversy even
before implementation.

In South Africa, for example, the signing of Bippa did not generate as much
excitement as anticipated.

South African farmers who lost land during reforms in Zimbabwe argue that
the agreement ignored their property rights. But they failed to persuade a
South African court to stop the signing of the agreement.

However, the court ordered the South African government to protect the land
rights of its citizens in Zimbabwe and also to respect the rulings of a
regional court on the same issue.

Back home it does not seem that all parties in the inclusive government
freely supported the signing of Bippa.

That such a seemingly important event could only get low key publicity in
state media could be a sign that the agreement did not get everyone's
blessings particularly those long accused of disrespecting private property
rights. If the Bippa could unsettle some people, especially those with a
penchant to reap where they did not sow, then investors must view it as a
positive concession provided that it is respected.

The country's problem in the past was not the lack of bilateral investment
agreements, but rather the wanton disregard of these contracts. Several
farmers were evicted from their farms despite the fact that Bippas existed
between their countries and Zimbabwe.

This week, for instance, the German embassy reportedly wrote to the Zimbabwe
government requesting it to stop the takeover of a farm owned by a German
national. An investment protection agreement exists between the two

On the budget, it is encouraging to note that Finance minister Tendai Biti
did not change course in proposing economic policies that are friendly to
industry. When he presented his statement in July the state media accused
him of being anti-poor.

Lately, the minister has been vilified for failing to provide funds for the
2009/10 farming season. Considering all that pressure Biti could have easily
buckled under and constructed a populist budget.

The budget was production oriented although some of the targets are unlikely
to be met because of lack of resources. Projected revenues of US$1,4 billion
look overly optimistic. Currently, tax collections per month amount to US$90
million which translates to US$1 080 million annually.

Equally the projected 40% growth in mining for 2010 is unrealistic
considering that the sector needs huge capital outlays for it to operate
optimally and the forecast tobacco crop of 200 million kilograms also looks
overly optimistic.

Considering the existing consumption culture it remains to be seen how
investment and savings can grow from 4% of gross domestic product to the
projected 14,3%. As noted in the presentation 85% of the population is the
poor whom Biti described as "the submerged and drowning".

Another 13% whom the minister classified as the "floating or dog-paddling
middle class" is not much better off than the poorest class. The income
streams for these groups are low and most of it is spent on basic

Very little, if any, is saved and, better still, invested. Indirect taxes
such as Vat, excise and customs duties are likely to remain the main sources
of fiscal revenue for the next few years until industry fully recovers. In
2009 Vat and customs duties contributed 65% of the cumulative revenues of
US$685 million. Direct taxes on corporate and individuals contributed below

The fiscal discipline that resulted from strict adherence to cash budgeting
is commendable considering a past of uncontrolled spending.  Cumulative
revenues to October amounted to US$685 million against expenses of US$640,8

This implies a surplus of US$44,2million. The adverse impact of restricted
spending on service delivery by government ministries and departments cannot
be underscored but that has to be accepted as the reality. There is no money
to spend. In the 2010 budget expenditure bids amounted to US$12 billion
against possible maximum collections of US$1,4billion. The discipline
employed in the current year has to be carried into the future despite huge
expectations from government units.

The Zimbabwe Stock Exchange is expected to become competitive now that
transactions costs are to be lowered from 7,5% on both purchase and sale to
3,21%. The average in the region is 3,5%. In addition, the decrease of
withholding tax on dividends to 10% from 15% is expected to further enhance
the attractiveness of the local bourse. The other positive measure for the
market is the reduction of basic corporate tax from 30% to 25%.

Notwithstanding these few notable positives from the budget the year ahead
is not expected to be smooth. The country still faces what Biti termed
"humongous" problems chief among them a lack of funding. The global
political agreement should be fully implemented to restore confidence among
the providers of capital. Without that the budget projections will only be a
wish list.

Ranga Makwata

Click here or ALT-T to return to TOP

Exports to SA hit US$200 million high

Thursday, 03 December 2009 18:39

"NEW stamps, stamp-impressed paper, cheque forms and bank notes" have pushed
Zimbabwe's all commodities exports to South Africa to a new high of US$200
million as government projects a decline in exports. Information made
available by the Central Statistical Office (CSO) has shown that commodities
exports to the country's major trading partner grew US$272 million in
October compared to US$57 million recorded in January. This was buoyed by
"paper" exports.
Nickel ores followed a distant second accounting for 10% of exports made
during the period under review.
Nickel ores and concentrates; semi manufactured gold; tobacco and monetary
gold were also among the top foreign currency earners in the same month.
Granite, air pumps, table linen of cotton, electric conductors and chewing
gum among other commodities were the least contributors, accounting for
0,01% of the exports.
Imports according to the CSO figures dropped to US$217 million from US$302
million recorded at the beginning of the year. Petroleum oils; "other
personal effects"; vehicles and maize seed were the major commodities
imported from South Africa.
Trade between Zimbabwe and Zambia according to CSO figures shifted in favour
of the latter as shown by declining exports and an increase in imports from
the northern neighbour. Zimbabwe imported commodities worth US$10,7 million
from Zambia compared to US$6 million in imports.
Exports to Britain jumped from over US$2million in January to US$13,8
million in October after Mozambique. Zimbabwe according to official
statistics continued to be a net importer of Chinese products as reflected
by US$6 million exports while exports accounted for US$500 million in
Finance minister Tendai Biti told parliament during the budget presentation
this week projected a slump in trade.
"The country's exports shipments over the period January to October 2009 are
expected to decline by 17,7% from US$1,2 billion to US$1 billion, primarily
reflecting a decline in agricultural exports," Biti said.
"Imports are expected to decline by 15% from US$1,5 billion to US$1,3
billion over the same period." After admitting that the manufacturing sector
would fail to meet the 60% capacity growth projected in the Short Term
Emergency Recovery Plan, Zimbabwe will continue to be a major importer of
food, electricity and fuels, chemicals, manufactured goods and machinery.
Independent economic and planning consultant, Daniel Ndlela said government
should restore the country's dilapidated infrastructure and uphold property
rights to promote trade. On whether Zimbabwe's return to the Commonwealth
would boost trade between Harare and London, he said: "Surely joining the
Commonwealth has nothing to do with increasing trade volumes at least
directly since Zimbabwe was not on trade sanctions with the UK, the EU or
the rest of the world. A quick addition of the figures shows that in the
recent months - August, September and October -Zimbabwe has exported more to
the UK than we have imported from there, which is a good sign."

Bernard Mpofu

Click here or ALT-T to return to TOP

Biti Raises Royalties for Precious Minerals

Thursday, 03 December 2009 18:35

FINANCE minister Tendai Biti has proposed a five-basis point rise in mining
royalties for precious minerals as government attempts to boost revenue
generated by the sector.

This comes after the Chamber of Mines of Zimbabwe last month challenged
initial plans by the ministry of Economic Planning and Investment Promotion
to raise the quantum of royalties up to 10%.

Presenting the 2010 National budget this week, the treasury minister said he
made the decision after considering buoyant prices of precious minerals on
the world market.

Currently, royalties on precious metals, that is, gold and platinum, are
levied at a rate of 3% of the gross market value. "The international price
of gold increased from an average of US$800 per ounce in November 2008 to
about US$1 280 in November 2009, whilst, the price of platinum moved from
US$870 per ounce to about US$1 450 per ounce during the same period," Biti

"In order for the nation to benefit from the exploitation of these
non-renewable natural resources, I propose to increase the rate of royalties
on precious metals from 3% to 3.5% with effect from January 1 2010."

He added that with effect from next year the Zimbabwe Revenue Authority
would replace the Minerals Marketing Corporation of Zimbabwe in collecting
the levies. This would be the second change in the last 10 years since
Fidelity Refineries was suspended from collecting the revenue in 2004.

According to a draft Medium-Term Plan (2010-2015) - a policy document that
is expected to succeed the Short Term Emergency Recovery Programme (which
expires this December - government planned a ten-fold increase in royalties
charged on foreign-owned mining companies exploring base metals. Proceeds of
the mining levies according to the draft plan would be channelled towards a
yet to be established sovereign fund to hedge the sector from exploration of
the finite mineral resources.

Bernard Mpofu

Click here or ALT-T to return to TOP

Zimbabwe’s Debilitating Debt at US$5,4 Billion

Thursday, 03 December 2009 17:24

ZIMBABWE’S total debt including arrears was at US$5,4 billion as at October
31 2009 Finance Minister Tendai Biti said on Wednesday.

Cabinent has been deeply divided over the debt and arrears clearance
strategy proposals currently under government consideration, as Zimbabwe
battles to extricate itself from a huge debt trap.
“The country’s total debt including arrears as at October 31 2009 was
US$5,417 billion. Of this amount external payment arrears were US$3,839
billion,” Biti said when presenting the 2010 National Budget
“Government arrears alone are US$2,34 billion whilst parastatals accounted
for US$895 million, Reserve Bank, US$568,8 million and private sector
US$34,4 million,” he said.
The division between Zanu PF and Movement for Democratic Change ministers
has left Biti’s debt-relief proposal facing stiff resistance from his
colleagues who claim it is “ill-advised”.
Biti had produced a comprehensive document on debt and arrears clearance
which is under government discussion.
The proposal sparked a fierce row among cabinet ministers. The situation is
fuelled by clashes over the International Monetary Fund (IMF)’s US$510
million liquidity bailout for the country.
Biti and Reserve Bank governor Gideon Gono as well as ministers are fighting
over the control and utilisation of the money.
Zimbabwe currently needs up to US$10 billion for economic recovery. It is
officially estimated the country needs US$45 billion for the next 10 years
to recover to 1997 gross domestic product (GDP) levels.
In his document, Biti had proposed four debt and arrears clearance options
which entail using internal revenue inflows, resource-based debt
restructuring, Paris Club debt-rescheduling, and the Heavily Indebted Poor
Country Initiative (HIPC) for consideration by cabinet. He however suggested
that HIPC was the best option because the other options did not offer
Zimbabwe a “holistic and viable approach to its debt and arrears problem”.
Biti has been proposing that Zimbabwe should adopt HIPC because it has some
advantages which could reduce the country’s debt burden by 90% after full
delivery of debt relief.
He is on record saying it is based on the experiences of 35 countries for
which packages have already been approved and debt servicing declined by
2,5% of GDP between 1999 and 2007.
Biti argues debt relief would reduce constraints on economic growth and
poverty imposed by the debt-servicing burden.
He said before adopting HIPC, eligible countries were on average spending
slightly more on debt than on health, education and other social services.
Biti further says the huge debt overhang is increasing Zimbabwe’s
credit-risk profile while undermining investment and growth.
The IMF will this month review Zimbabwe’s overdue debt as it emerged that
the country is failing to cooperate on payments to the global lender.
Zimbabwe owes the IMF special drawing rights 89 million (about US$139
million) from the Poverty Reduction and Growth Facility Exogenous Shock
Facility (PRGF-ESF) Trust.
The country was recently allocated US$510 million by the IMF as part of a
bail out package for all the institution’s members in response to the global
financial crisis.
But Biti and Reserve Bank governor, Gideon Gono have differed on how the
money should be deployed. Biti says if used recklessly the money would
worsen Zimbabwe’s foreign debt.
According to a recent IMF paper — Review of the Fund’s Strategy on Overdue
Financial Obligations — three countries namely Zimbabwe, Somalia and Sudan
remained in protracted arrears to the fund as at the end of June 2009.
Protracted arrears are those that have been outstanding for six months or
Two members, Somalia and Sudan, have accumulated arrears dating back to the
mid-1980s and account for 18% and 75% of total arrears to the fund
Zimbabwe, which has been in arrears to the PRGF-ESF Trust since February
2001, accounts for the remaining 7 %.

Paul Nyakazeya

Click here or ALT-T to return to TOP

‘Sin duty’ Hits Spirit Drinkers

Thursday, 03 December 2009 17:05

ZIMBABWE’S drinkers will not pop and gulp as much as they would have wanted
to in the new year following government plans to raise excise duty on
spirits. Finance minister Tendai Biti on Wednesday doubled the “sin duty”
charged on heavy alcoholic beverages as government battles to raise revenue
in the coming year.

But it will not be entirely gloom and doom for boozing Zimbabweans this
season. Biti also granted a US$400 tax-free bonus, a gesture analysts say
will fatten workers pockets ahead of the season.

“Honourable members would recall that during the Mid-Term Fiscal Policy
Review I announced an upward review of excise duty on spirits from 15% to
20%,” Biti told parliament.

He added: “Notwithstanding the upward review, the rate of excise duty
remains relatively low compared to levels obtaining in the region. I,
therefore, propose to increase the rate of excise duty on spirits from 20%
to 40%, with effect from January 1 2010. Furthermore, measures to strengthen
anti-smuggling will be put in place.” The proposed increase on excise duty
will double prices of spirits currently as low as $3 for a 750ml bottle.

After experiencing a not-so merry festive season last year due to
hyperinflation and a liquidity crisis, prices will be determining factor in
choosing the plethora of spirits currently stocked in supermarkets and
bottle stores across the country.

“Excise duty collections amounted to US$44,6 million against a target of
US$42, 6 million. Major contributors to this revenue head include fuel,
beer, wines and spirits which accounted for US$37,5 million,” Biti added.

“The bulk of excise duty collection was contributed from fuel and growth in
volumes of beer, as a result of increased capacity utilisation from 25% in
January to about 75% by September 2009 for these sub-sectors.”

Already retailers and departmental stores are singing jingle bells in
anticipation of more sales.

Apart from introducing sin duty on booze, Biti also had pleasant news for
the economy projecting Zimbabwe’s economy would grow by 7% next year.

Bernard Mpofu/Chris Muronzi

Click here or ALT-T to return to TOP

Inputs Provision Crucial to Farming Targets

Thursday, 03 December 2009 17:03

GROWTH projections of 10% in agriculture next year and the subsequent season
can only be achieved if resources are made available on time, players in the
sector have said in response to the 2010 National Budget proposals announced
on Wednesday by Finance minister Tendai Biti. Agriculture is expected to
grow by 10% next year after a cumulative decline of 85,7% since 2002.
Budget allocations of US$55 million for the 2009/2010 agricultural season
would not be enough to revive the sector thus more resources should be made
available for the 2010/2011 season which may become the defining season.
Director of the Zimbabwe Farmers' Union, Aaron Zacharia, said apart from
making more funds available, it was also imperative that there were policy
changes to encourage investment in the sector.
"It is not just the money that we should be looking at but policies as well.
We want policies which would lead to the development and revival of the
sector," said Zacharia. "We want policies which would give value to the land
so that the farmers would be able to borrow from the financial institutions
against the value of their pieces of land."
It was also important that the budget highlight how compensation for the
former farm owners was going to be made as a way of concluding the land
reform issue, said Zacharia.
"We also need to note that any economic revival would be underpinned by a
resuscitation of agriculture and at least 10% of the budget should go to
agriculture if we are to achieve the projected growth levels in gross
domestic product," said Zacharia. "However, if we allocate only 5% of a very
small budget to agriculture, then we have to work very hard to achieve the
growth levels."
At least US$847,6 million is required to fund agriculture next season with
the bulk of the amount going towards tobacco, but this is still below the
US$1 billion plus which is required to have a successful farming season.
Area under tobacco during the 2010/2011 season is expected to grow to 75 000
hectare with a 200 million kg yield up from the 65 million kg this season.
This, Biti said, would require up to US$600 million.
Small-scale farmers, who used to contribute close to 70% of grain in the
country, would get support to the tune of US$95,3 million while at least one
million vulnerable rural households would get maize seed, compound
fertiliser as well as ammonium nitrate.
Past vice-president of the Zimbabwe Farmers' Union Edward Raradza said the
budget allocations were welcome if followed.
"We are happy with the allocation but they should be fully implemented if we
are to meet the targets which have been set," Raradza said. "We would be
very comfortable if resources were made available on time as this would
enable farmers to plan. We hope that seed, fertiliser and chemicals are
available by October for the next season."
Extension services would also be revived with the procurement of vehicles,
motorcycles and bicycles for use by workers.
Generally, the agriculture sector is faced with serious problems with
farmers holding on to their produce, citing uncompetitive prices against a
background of very high productive costs.
This presents a paradoxical situation as the buyers are not prepared to pay
more than US$170 per tonne of maize, for example,
yet farmers would incur losses if they sold their crops for anything less
than US$250 per tonne.
High productive costs mean locally-produced crops are not competitive, not
only within the country, but in the region.

Leonard Makombe

Click here or ALT-T to return to TOP

Beware of too Much Teeth, Violence

Thursday, 03 December 2009 17:10

"IF it was all up to me, Jomic's power would be increased by 200%," said
MDC-T provincial chairman Morgan Femai.

He was taking up a theme raised by a participant at the first interparty
provincial leadership conference convened by the Joint Monitoring and
Implementation Committee (Jomic) in Harare on November 27 2009.

Other party representatives to the conference echoed the same view.

They wondered why Jomic, given its centrality to the subsistence of the
inclusive government, did not have a legal instrument conferring on it power
to enforce its decisions or at least to compel the parties to the GPA to
adhere to its provisions.

To me the comments showed not only growing awareness of the limitations
imposed on Jomic but also frustration with the slow pace of transition by
the coalition government from bickering over power-sharing to substantive
policy issues.

As one participant observed, while people talked glibly about low rate of
inflation, price stability and the abundance of goods in the shops, very
little of this made sense to ordinary people who were unemployed and could
not afford the goods. It's a recipe for chaos.

The conference was itself historic in several ways. For the first time Jomic
managed to bring to one venue at least 30 delegates each from the three
political parties to the global political agreement (GPA).

The provincial chairpersons sat shoulder to shoulder at the high table while
the delegates competed to ask questions after presentations by Jomic members
Innocent Chagonda, Frank Chamunorwa and Oppah Muchinguri.

The participants told their leaders point-blank that it was politicians who
were responsible for much of the violence plaguing society.

There were however differences over whether the process of national healing
should start at the top and cascade to grassroots structures or the reverse.
It was evident though that there is still a lot of tension in the
communities. There is uncertainty about whether what is needed is mere
restorative or retributive justice for those still smarting from the
violence they suffered ahead of last year's elections.

One could sense latent anger in the conference if it appeared that one
political party was being allowed to ask more questions than others. For
some strange reasons, the delegates chose to sit as close as possible to
fellow comrades so that they could "caucus" about issues being raised by
their "opponents".

At some point there was grumbling when one of the delegates used the word
"comrades". I don't know how Zanu PF has managed to appropriate that word to
itself. I remember Winston Churchill using it in one of his great speeches
during the Second World War to refer to Britain's allies. The row died down
when delegates were reminded that they also use the word at their party

There was unanimity on the need to form interparty liaison committees to
spread the gospel of peace and unity. All the parties fully endorsed the

What I however found sad was that for the majority of the delegates the
so-called outstanding grievances were what they read in the newspapers and
none of the issues which affect them on a daily basis such as power outages,
water shortage, unemployment and a shortage of drugs in hospitals, which to
me more closely reflect the slow pace of economic turnaround envisaged under
Article 3 of the GPA.

Instead, everyone was an expert on pirate radio stations while the other
camps had enough ammunition to explain the reasons for their existence!

One could also not miss the usual confusion about democracy when it comes to
dealing with biased local newspapers and TV and radio stations. There is a
meeting of the minds of all the parties. Editors are the problem. This is
evident from the way everyone thinks the only way to "correct" the problem
is "talk" to them.

In a democracy you don't talk to editors. It is the politicians who must
convey the right or correct message. You cannot fight for democracy by
muzzling the media unless they go out of their way to fan or incite
violence, hate speech or racial or ethnic hatred.

The real tragedy we have in Zimbabwe is that media themselves have abandoned
ethical principles to align themselves with political parties. Thus one
political party sees nothing wrong with abusive language or racist speech in
the papers so long as it is directed at their opponents or rivals and get
furious when the same language is used against them in some other paper.

They want that paper shut down or to have the editor "talked" to, an
expression which has very sinister connotations for freedom of expression.

Nothing better illustrated the hostage mentality between Zanu PF and MDC-T
than the issue of agricultural inputs and the land audit on the one hand,
and how to use the US$510 million from the World Bank on the other. Suddenly
everyone put on their true colours.

Zanu PF delegates accused Finance minister Tendai Biti of trying to sabotage
economic recovery by refusing to release money for agricultural inputs.
MDC-T delegates felt excluded from farming and seemed to believe the money
had been released to their party, not the coalition government.

So why should their party finance agriculture before a land audit which must
yield them free farms?  Some kind of grievance, some kind of war!

Talking about colours, I believe it did help a lot that the parties did not
bring with them party regalia to the conference. There were also loud calls
for delegates not to chant party slogans. It was even suggested that party
slogans calling for the death or killing of political rivals were
anachronistic and in desperate need for "change", a word the MDC formations
have appropriated as stealthily as the open palm.

Finally, it was time for a hearty meal and the spirit of camaraderie was
revived. Political foes who before the conference were wagging fingers at
each other were hugging and holding hands like homeboy rivals who have just
met in a foreign country. It was a sight well worth to behold. We hope it
holds. We have more such meetings lined up.

To those who insist that Jomic should have "teeth" our prayer is really for
Zimbabweans to have more brains than teeth. Too "much teeth" often disposes
one to violence.

Joram Nyathi is Jomic communications manager.

By Joram Nyathi

Click here or ALT-T to return to TOP

Muckraker: Zanu PF milks World Cup visit dry

Thursday, 03 December 2009 16:21

SO, there are now 27 items to be adjudicated by the South African mediators,
as distinct from the eight that dominated the agenda a few weeks ago in
Mozambique. Muckraker doesn't want to get bogged down here in all these
issues. Suffice it to say many could be dealt with on the basis of what was
agreed in last year's Global Political Agreement and in the January Sadc
summit in Pretoria.
The Herald's informants are trying to make a distinction between issues and
"real issues". The MDC-T, for one, it says, has refused to call for the
lifting of sanctions and done nothing about "illegal broadcasts of hate
messages into Zimbabwe from outside the country".
Meanwhile, the MDC-T's land-audit proposal is seen as an attempt to reverse
land reform.
Zanu PF is evidently terrified of anything that would expose the greedy
chefs who have acquired more than one farm for themselves. But there will be
no lifting of sanctions until Zanu PF stops behaving badly. No Western
country will support a rogue regime whose members help themselves to other
people's property under the guise of addressing historical anomalies.

The whole point of Sadc's intervention was to prevent a gang of political
barons in Zimbabwe from blocking reform and creating a regional crisis.
Members of the gang are among the chief land grabbers and have invented the
fiction that "pirate" radio stations are pumping "hate messages" into
It doesn't say what these so-called "hate messages" are. Only that the MDC-T
is supplying these stations with "false data to discredit President Mugabe
and his party".
Zanu PF doesn't need the MDC-T to do that.
In reality these stations are simply providing the public with the facts
they need to make up their own minds on what is happening in the country. In
other words providing a variety of viewpoints.
The GPA is quite clear on this. Once ZBC starts offering an impartial and
professional service, there will be no need for external stations. But the
minister cannot bring himself to make a public statement that journalists
working for these stations will not be subject to reprisals if and when they
return home. Nor does he or his underlings seem able to insist on improved
standards at the national broadcaster.
The South African mediators are said to be unimpressed with the mushrooming
of new issues. The answer is simple. Stick with what was agreed in the first
place. Or is that asking too much?

We were interested to note the Mail & Guardian's comments on the appointment
of Menzi Simelane as South African Attorney-General (National Director of
Public Prosecutions). This is a "thoroughly unsuitable" appointment, the
paper said, given Simelane's role in the demise of the Scorpions, his bid to
frustrate the arms deal investigations, and disastrous interference in the
Jackie Selebi investigation.
The M&G referred to President Zuma's "curious choice" of the prosecutions
chief in the light of former parliamentary Speaker Frene Ginwala's "damning
findings about Simelane's dishonesty and lack of integrity".
Ginwala chaired an enquiry into Simelane's predecessor Vusi Pikoli's fitness
for office following his suspension by Thabo Mbeki.
Pikoli came out of Ginwala's inquiry unscathed, but others weren't so lucky.
The Public Service Commission had reportedly recommended that the Justice
minister take disciplinary action against Simelane. But it later changed its
mind and instead he was appointed to high office!

It is good to see our friends in the South African media exercising such
robust vigilance over the appointment of unsuitable and partisan individuals
to the top office in the prosecution service.
Ginwala slammed Simelane in her final report, calling him arrogant and
condescending. She labelled his evidence before her inquiry as
"contradictory and without basis in fact or in law" and blamed him for
suppressing the disclosure of information, according to the M&G last week.
Constitutional expert Prof Pierre de Vos, the M&G notes, wrote in his blog
that the NDPP must be a "fit and proper person" with due regard to his
"experience, conscientiousness and integrity to be entrusted with the
responsibilities of the office concerned".
"Unfortunately we know from the report of the Ginwala inquiry that Simelane
is not honest. Neither is he reliable, nor does he possess the necessary
truthfulness and uprightness required by the (NPA) Act," De Vos said.
When a country gets it wrong in appointing its chief law officers, we would
add, it leaves the system open to manipulation and partisan interference.
That in turn subverts public respect for the office which is crucial to its
proper functioning. The South Africans will learn the hard way!
Simelane, by the way, went to Prince Edward School.

It was inevitable perhaps that the cowards who write for the Herald's
opinion columns should take pot shots at two genuine heroes of Zimbabwe's
struggle for democracy, Jenni Williams and Magodonga Mahlangu.
These two Woza women were honoured in a ceremony at the White House for
their courage and determination in exercising their right to demonstrate
against injustice and tyranny.
President Barack Obama said the women of Woza had shown that they can
"undermine their oppressors' power with their own power, that they can sap a
dictator's strength with their own".
Then we saw in the usual places occupied by the regime's spokesmen
statements that the duo didn't really represent the women of Zimbabwe.
"Mahlangu and Williams, like the poor women they pay to march, are black
faces to the white man's agenda," we were told by the all-too-familiar
letter-writers' club in Munhumutapa Building and other such spooky hideouts.
This disgraceful case of sour grapes, published last Friday, seeks to
denigrate two incredibly brave women who have stood up for human rights and
been treated abominably by a vicious state. And if their courage inspires
nothing but spitting indignation from the cowards in our midst, let them
spit and rant. It simply exposes them as the sore losers they are.

The visit of the World Cup to Harare last Thursday evening provided some
amusing moments for those present or watching on TV. Zanu PF turned it into
a party-political rally, waking up the poor old chiefs and requiring them to
attend. The First Family was also present at what was clearly seen as a
soccer highlight even though Zimbabwe had not actually scored.
Many ministers also thought it would be a good idea to attend although David
Coltart had difficulty getting himself noticed. Finally, in desperation, he
thrust out his hand as the president walked past to make his speech. That
did the trick. He even managed to exchange a couple of words as the
president moved on, smiling.

Walter Mzembi certainly got noticed with his funny little joke about the
Victoria Falls. He was often asked which country the Falls belonged to, he
said. It was like a beautiful woman asleep, he suggested. Her backside was
in Zambia and her front in Zimbabwe.
Well, this was clearly the funniest joke the president had ever heard. He
threw back his head and roared uncontrollably with laughter. Grace was
equally amused.
At risk of sounding prudish, Muckraker thought the joke a tad off-colour and
that Mzembi was at risk telling it, especially with the first kids present.
But it went down so well nobody could complain. In fact Mzembi could well
find himself promoted in the next cabinet reshuffle, especially after all
that praise-singing he managed to squeeze in!
We hope Happison Muchechetere was listening to the national anthem. It was
totally ruined by ZTV's poor sound control. In fact the technical side of
the broadcast was a disaster. And this came after Muchechetere's indignant
claims of professionalism recently in response to criticism from the MDC-T.
Please Happison, it is now 30 years you have been getting technical help
from the Germans, the Iranians and everybody else. Can't you do a simple
outside broadcast? What we need is less Zanu PF propaganda and more
elementary journalism and broadcasting skills.

Last Friday the Herald carried a headline entitled "PSC to weed out parallel
appointees". It was based on a statement by PSC chairman Dr Mariyawanda
Nzuwah. It was clearly aimed at the MDC-T.
Shouldn't the heading have read "PSC to weed out partisan, unprofessional
appointees"? That includes those advertising their credentials in the
There are so many of them this may take a while. One of these unprofessional
appointees was telling Herald readers that "ministers, as political
figureheads, had no authority to recruit their own staff".
It hadn't occurred to this ubiquitous spokesman that the MDC-T was only
forced to cast its net wider because the existing pool of senior officials
was so badly contaminated with people like him!

Click here or ALT-T to return to TOP

Eric Bloch: Bippa Signing a Non-event

Thursday, 03 December 2009 16:17

LAST week, with intense governmental and state-media acclaim, and in the
presence of many of Zimbabwe's and South Africa's business leaders, a
long-awaited Bilateral Investment  Promotion and Protection Agreement
(Bippa) was entered into between Zimbabwe and South Africa. Spokesmen for
both governments heralded the conclusion of the Bippa as a stupendous action
which would reinforce the close ties between the two countries, would be a
major catalyst for Zimbabwean economic recovery, and especially so as it
would motivate very considerable South African investment into Zimbabwe.

It is indisputable that investment is a key element of a substantive
recovery of Zimbabwe's long distressed and greatly oppressed economy.

Sadly, however the governments of Zimbabwe and South Africa are deluding
themselves, and are striving to delude others, by their contentions that the
execution by them of last week's Bippa will considerably facilitate
investment into Zimbabwe.

The hard and tragic fact is that most potential investors from South Africa
consider the Bippa to be a non-event, and that it will accord no protection
to any investments they would make in Zimbabwe.

The potential investors are fully aware that, progressively over the nearly
30 years of Zimbabwean independence, many Bippas have been entered, in the
main (but not exclusively) with numerous countries within the European

But they are aware that those Bippas did absolutely nothing to protect the
nationals of those countries from the expropriation of their farms in
Zimbabwe in which they had extensively invested over many years.

Not only were they not given their lawful entitlement of Bippa protection,
but they suffered the loss of their farms, their crops, their homes, their
moveables, and many other assets, without any compensation from Zimbabwe, to
which they were lawfully entitled.

Moreover, in many cases, the expropriation of their investments was effected
with brutal force and violence, in contemptuous disregard for the
fundamental principles of law and order, justice and international norms of
human rights.

Zimbabwe has demonstrated such disdain for its Bippa obligations that the
authorities have not only stood idly by whilst those obligations were being
blatantly disregarded but, in innumerable instances, have been part and
parcel to the violent theft of land and all the assets thereon.

Zimbabwe has sought to justify such theft by recurrent specious allegations
that the actions were naught but reversal of prior theft of the land by
evil, self-enriching colonialists, and by legislating state acquisition,
redistribution and resettlement of the lands.

Even if there was substance to those governmental contentions and
allegations, government apparently espouses the concept that "two wrongs
make a right". In trying to substantiate that philosophy, it steadfastly
denies any compensatory obligations, categorically stating that any
compensatory obligations are those of the former colonial power.

It does so without distinguishing between those lands which have been
occupied and utilised in the pre-colonial era, and those that were wholly
unoccupied and devoiAd of usage.

Zimbabwe's government pursues its land policies with flagrant scorn not only
for the Bippas entered into by it, but also with arrogant unconcern for
determinations by regional and international courts.

Rulings by those courts that the lands be restored to those ousted from
them, or that full and just compensation be paid, have been studiously
ignored by the government, save for spurious statements dismissing the
authority of the courts.

In the main, government has stubbornly even failed to acknowledge such court
determinations but, when rarely commenting thereon, have challenged the
validity of the rulings on grounds that the expropriation of the lands was
merely a righting of a previous wrong, and was wholly in accord with
prevailing law.

Concurrently, it has denied that the courts have any jurisdiction to hear
the cases, let alone determine upon them, notwithstanding Zimbabwe's
obligations to recognise jurisdiction in terms of its United Nations and
Sadc memberships.

Therefore, the general reaction of South Africa's investor community is that
the newly-executed Bippa will, in practice, yield no investment protection.
Admittedly, South Africa's Industry minister, Rob Davies, who attended the
Bippa signing ceremony, contended otherwise, and highlighted imminent
investment funding into Zimbabwe by the Industrial Development Corporation
of South Africa, and by the Development Bank of Southern Africa (although,
as South African governmentally influenced bodies, such investment is not
reflective of private sector investor perceptions).

The reservations and concerns of potential South African investors are
further intensified by the recurrent Zimbabwean government statements on
intended indigenisation and economic empowerment policies. Whilst, almost
without exception, foreign investors are supportive of the principles of
indigenisation and economic empowerment, they are not prepared to be reduced
to the roles of junior partners in investments funded and developed by them.

Recent statements that not less than 51% of all foreign-owned companies must
be owned by indigenous Zimbabweans give no confidence to potential investors
that Zimbabwe is a desirable investment destination. Nor do reported
statements by Zimbabwe's Economic Planning and Development minister, by its
Finance minister, and by its Mines minister, of intended massive escalations
in rates of mining royalties, encourage investment into Zimbabwe's mining
sector, despite its vast potential.

Similarly, the very one-sided Zimbabwean labour legislation, and the extreme
confrontational nature of much of Zimbabwe's trade unions and labour force,
does not constitute an incentive to invest in Zimbabwe. Investment security
is grievously in jeopardy when there is a massive divide between employers
and labour, when there are recurrent threats of industrial action by labour,
and when productivity is markedly jeopardised.

If the Zimbabwean government wishes to attract South African (and other)
investment, which it should do if it has any real concern for the wellbeing
of Zimbabwe and its people, it needs belatedly to honour all its Bippas.

It needs to comply with the rulings of regional and international courts, to
make good on its innumerable Bippa defaults, and demonstrate its intent to
fulfil any and all obligations that it has under the international
agreements to which it is a party.

It needs to reform and modify its programmes of land acquisition,
redistribution and resettlement to those as are just and equitable, and
productive.  It needs to demonstrate, beyond any doubt whatsoever,
compliance with, and enforcement of, law and order and respect for property
and for human rights.

If it does so, South African investment into Zimbabwe will be very
substantial, and will contribute greatly to Zimbabwean economic success. If
it does not, then last week's Bippa signing will prove to be an investment
non-event, for investment inflows from South Africa, and elsewhere, will be


Click here or ALT-T to return to TOP

Candid Comment: 2010 Budget Bemoans ‘resource curse’

Thursday, 03 December 2009 16:48

MOST sub-Saharan African countries’ budgets are donor funded. This is not to
say that these countries are poor. The tragedy is what Professor Paul
Collier calls the “resource curse”.

The resource curse is occasioned by the failure of governments to benefit
from the revenue dividends of their resources or wealth — the failure to
plan during economic booms for worst cases in the near future.

In many ways the 2010 National Budget bemoans this resource curse for

The Budget statement reveals clearly that Zimbabwe’s revenues have been
hamstrung by the mining sector which has not been contributing to the
national fiscus.

Imagine all the platinum, gold, chrome, nickel and diamond mines that we are
all proud of. Yet to think that no cent is contributed to the treasury is
quite shocking.

We need to unlock value from our wealth and increase our fiscal space.
Unfortunately, the Budget statement fell short of outlining measures to deal
with this situation.

However, what is more instructive is that for the first time the truth has
been exposed. Going forward we trust that Chiadzwa Mines will be used to
define a new policy which will enable the mining sector to be the anchor of
our national revenue. The thrust of the 2010 Budget is a working thrust.

The Budget is underpinned by a steady improvement in the macroeconomic and
fiscal space.

A growth of 4,7% in 2009 which is forecast to increase to 7% in 2010 and an
average inflation rate of 0,9% gives a good macroeconomic landscape to
launch a growth trajectory which the 2010 Budget does.

Given the slow but sure return of banking confidence as shown by total
deposits of over US$1 billion in 2009, I think all is set for the growth of
the economy in 2010. Hence the 2010 Budget is dubbed: Stabilisation with
Equitable Growth and Reconstruction.

Significant allocations have been made to the key enablers of growth which
are infrastructure and energy (US$52 million); transport (US$26,3 million);
rural electrification (US$5,5 million) and agriculture. However, lip service
was paid to export promotion.

In the 2010 Budget poverty eradication has been underlined as another major
theme. In this regard, the 2010 budget focuses on pro-poor growth.

As the Finance minister put it, 85% of our population can be classified as
the “drowning poor”. This large number of  “drowning poor” constitute part
of what Paul Collier calls the global “bottom billion”. These people live on
less than a dollar a day. It is therefore important to note that the Budget
tries to address the plight of millions of Zimbabweans through allocations
to the housing guarantee fund, agricultural inputs as well as health and

In addition, the newly created vote of US$8 million set aside for
constituency development funds will also help leverage development in
constituencies. This is a revolutionary initiative.

The 2010 Budget also puts more money into the people’s pockets. Paye has
been slashed from 37% to 35% for the highest paid tax bracket. The tax-free
threshold has been increased from US$150 to US$160 and the first US$400 of
bonus is now exempted from taxation. Corporate tax has been reduced from 30%
to 25%.

I think this is a commitment towards reducing the rate of taxation which is
one of the highest in the world. These reductions may appear modest but to
me they are significant given the narrow revenue base. In 2009, the treasury
only managed to collect US$685 million out of a revenue target of over
US$700 million.

Duty concessions on small pickup trucks (25%) and small vehicles with engine
capacity of less than 1500cc (25%) as well as on basic commodities will also
boost SMEs and increase food supply into the country. All these are positive

However, the biggest challenge the US$1,4 billion Budget still faces is how
to deal with employment costs which already constitute over 60% of the total
budget against a background of subdued earnings. The only solution is to
grow the cake — that is increase GDP.

The present revenue structure where corporate tax only accounts for a mere
4% is worrying. This can only tell us that the so-called improvement in
capacity utilisation is just nominal and superficial.

As long as Vat constitutes 39%, customs duty 26% and Paye 15% of revenue, it
means that the economy is structurally pointing towards consumption. We need
to increase domestic savings in order to create investable surplus. Domestic
savings are key to growth.

In fact the so-called Asian Miracle was premised on high savings of over 30%
of GDP. We also need to restore normal relations with the international
community so as to pave way for new investment which is critical for growth.

Finally, we are happy to see that the Special Dra wing Rights, instead of
just lying idle are now being channelled towards supporting the real sectors
of our economy, notably agriculture.

We hope that ministries will now formulate specific strategies to implement
the 2010 budget in a manner which spurs growth and reduces poverty. Overall,
I think the Budget brings confidence into the economy.
However, the Ministry of Finance should consult more widely in future,
especially parliament.

Mashakada is deputy secretary-general of the MDC-T.

Click here or ALT-T to return to TOP

Comment: Pro-poor Budget Step in the Right Direction

Thursday, 03 December 2009 16:44

FINANCE minister Tendai Biti on Wednesday tabled in parliament the 2010
National Budget which can be broadly described as regenerative.

The Budget was announced a year after the signing of the global political
agreement between Zanu PF and the two MDC formations and the subsequent
formation of the inclusive government in February which gave a much-needed
boost to confidence in the country.

The official introduction in January of multi-currencies in the country's
payments system saw the economy slowly and painfully emerging from a
vegetative state.

The economic "little green shoots", to use Biti's language, must be nurtured
and the momentum for growth and stability must continue to rise next year.

This can only be achieved by a stimulative budget like the one Biti
announced on Wednesday.

By definition a National Budget is a plan of revenue and expenditure that
provides the development priorities of a country.

Given the global economic crisis and that Zimbabwe had just emerged from a
bruising internal political conflict, Biti crafted a growth-oriented Budget
framework which should be implemented to the letter if the country is to
sustain the recovery momentum.

Biti told the House that his US$2,2 billion Budget was meant to "save the
drowning vulnerable and poor groups" by developing and creating a functional
economy capable of consolidating the Short Term Emergency Recovery Programme
objectives, generating adequate investment in the country's productive
sectors as well as infrastructure and guaranteeing improved delivery of
public services.

The 2010 National Budget, the minister said, would deal with the challenges
through a vehicle he termed Reconstruction with Equitable Growth and
Stability. In short, he said, "a pro-poor broad-based and inclusive
development framework". The budget puts strong emphasis on education,
health, and social services and the continuation of "a strict and
disciplined macro-economic stabilisation" programme.

The harsh macro-economic environment, which was the order of the day in the
past decade, compounded the vulnerability of the poor. This was worsened by
the scourge of HIV and Aids that has claimed many breadwinners leaving
children wallowing in abject poverty under the custody of grandparents.

Speaking on social protection programmes in the budget, Biti said the HIV
and Aids pandemic has seen an increase in child-headed households where
elder children are forced out of school to look for jobs so that they can
look after the needs of their siblings. School dropouts up to grade five are
at 38% detrimental to the country's developmental goals and objectives.

In response to this, Biti allocated US$23 million towards social protection
programmes run by the Ministry of Labour and Social Welfare.

The vote would go towards supporting 160 000 secondary school students under
the Basic Education Assistance Module (Beam) basing on US$30 a term.

Cooperating partners of Beam have committed US$25 million earmarked to
support 625 000 primary school-going children.

"This level of support bears testimony to the goodwill our cooperating
partners have towards the people of this country. The rest of the allocation
is targeted towards supporting the disabled, the elderly, and the
chronically ill and other vulnerable groups under various programmes.

Biti should be commended for coming up with broad-based policies that
mitigate or minimise the effects of the global financial crisis on the
vulnerable and marginalised sections of society.

The parliamentary portfolio committee on the budget, finance and investment
promotion had proposed to Biti that he adopt a pro-poor and gender-sensitive
National Budget framework placing emphasis on labour intensive strategies to
absorb the large reserve pool of labour, while at the same time promoting
macroeconomic stability to protect incomes.

Robust growth must be translated into employment growth which is the key
nexus between growth and poverty reduction. The key pillars of this growth
are infrastructure development, export promotion, investment social

Economic growth on its own does not necessarily ensure poverty reduction. It
only leads to poverty reduction when accompanied by rapid growth of
productive and remunerative employment. Most countries that have succeeded
in reducing poverty have followed strong employment- creation policies.

"Heavy investment in the human capital of the poor will yield two benefits
on poverty reduction," the portfolio committee said. "It will increase
economic growth and it will make growth more pro-poor. In the High
Performing Asian economies, high human capital accumulation spurred economic
growth and poverty reduction". So did family savings which there is no sign
of here. Zimbabwe clearly has a lot of work to do to catch up with its Sadc
neighbours. Biti's Budget at least provides a start.


Click here or ALT-T to return to TOP

Editor's Memo: God’s Lost Generation

Thursday, 03 December 2009 16:23

THEY are God’s Lost Generation: there is no sparkle in their eyes and they
walk like the elderly with stooped shoulders; a shadow hovers over their
heads. In the school grounds other children frolic about chasing all sorts
of balls and flying insects, jumping over water puddles. They watch
withdrawn, eyes cadaver-like. The radiance of childhood is missing; they don’t
know whether they will live.

Their eyes mist over as they look at the surreal world. Does reality exist
for them? The affected behaviour of their peers and their teachers worsen
the stigma making them feel the kind of inferiority they can never overcome.
The childhood confidence other children exude is alien to them in its place
a void left by the lack of love and hope and spirituality. They feel God’s

They are orphans and they are also HIV positive; and painfully, most already
have full-blown Aids.

December 1 was World Aids Day, celebrated with pomp and circumstance round
the globe. Truckloads of money and goodwill were pledged and a very good
number of people have vowed to dedicate their lives to the orphans.

But it is my view that these children, victims of the sexual liberty and the
moral indifference born of the disillusionment and perennial civil strife
that visited Zimbabwe in the years of its political and economic decay need
much more.

A few weeks ago I visited Jonas Clinic in Seke about 35 km south of Harare
where 50 families received food handouts from the Jesuit Relief Fund which
operates from Silveira House in Chishawasha.

Each of the children, mostly orphaned through Aids, and living in
child-headed families received 10kg of maize, 5kg of corn-soya blend, 4kg of
beans and 750ml of cooking oil. The corn-soya blend is a nutritious powder
that can easily be made into porridge.

The Jesuits, among other projects assist Aids orphans and people living with
Aids. The programme’s main thrust is to provide supplementary food
assistance and help the orphans with their educational requirements by
providing school fees and stationery. The programme also teaches the orphans
life skills such as dressmaking, leatherwork and blacksmithing.

Another intervention is to provide sanitation by building toilets in the
homes of child-headed families.

The programme benefits 1 500 people in Seke Rural, Marondera Rural and
Svosve areas.

It works through District Aids Action Committees which identify the orphans
and helps distribute the food and monitor the payment of school fees and the
procurement of stationery.

The greatest challenge the project faces, however, is the high numbers of
children needing assistance.
In this area the Jesuits  are assisting only 50 people although there are a
lot more in need but they simply do not have the resources to help more

The programme is looking at supporting child-headed families by giving them
inputs such as seed and fertilisers — and skills — so that they could
produce their own food through gardening and cropping.

I talked to Gogo Margret Marimbi who looks after six orphans. She was very
happy with what the Jesuit fathers were doing but her tale was as sad as
they come.

“Three of my children and their spouses died of Aids leaving six orphans
with me. Besides running a small garden I have no other means of fending for
the children so this project is a godsend.”

She said she sold the vegetables from the garden at Jambanja market in Seke
township about an hour’s walk from her home. “But what I get is not much.”

Accompanied by her grandson Wilson Marimbi, who is 10 years old but looks
six, Gogo Marimbi said two of her grandchildren had full-blown Aids so
besides feeding them she also had to take them to Chitungwiza General
Hospital now and then where they got their anti-retroviral treatment.

Nursing sister Mary Munemo, who runs Jonas Clinic, said the incidence of
orphans who are also living with Aids is very high.

She said the clinic catered for 18 000 people in 20 wards of whom 800 were
Aids orphans. The number could be higher but there was still a lot of denial
among some people.

Sharon Chipere (35) who brought her HIV-positive son Bradwell said there
were many cases in her village of people who attributed their children’s
illnesses to witchcraft but more and more people were becoming aware of the
prevalence of HIV and Aids.

She said she hoped more and more people would, like the Jesuits, come
forward and help the people living with and Aids.

“Because of the ARVs my son has to take he has developed a huge appetite so
there is never enough food in the house. I wish more and more organisations
would come forward and help us with food.”

Chengetai Munzvekure who is 15 but looks 10 said she was a Form 1 pupil at
Chikonde Secondary School but had difficulty attending class because she did
not have school uniforms and shoes.

Kudos for the Jesuits and all the other organisations that are helping
children orphaned with Aids especially those who are HIV positive or have
full-blown Aids.

However, I have this nagging feeling that these children need something else
over and above the food, the clothing, the skills and the latrines; and I am
not taking away anything from the philanthropists.

How can they be made to come to terms with the shadow of death that hangs
above their heads? It is this threat more than the stigmatisation that makes
their lives miserable, empty and meaningless. The next intervention in the
fight against HIV and Aids should address the hollowness of these children’s
existence. They deserve dignity, equality and justice.

Nevanji Madanhire

Back to the Top
Back to Index