Cabinet tackles liquidity crisis

http://www.theindependent.co.zw/

Friday, 10 February 2012 10:01

Dumisani Muleya

CABINET on Tuesday took the deteriorating liquidity crisis in the market by
the scruff of the neck fearing failure to tackle the problem could leave
most banks, including big institutions underpinning the financial sector,
teetering on the brink of bankruptcy.

Industry and Trade minister Welshman Ncube yesterday confirmed cabinet on
Tuesday debated  liquidity problems during a presentation at the Independent
Dialogue Series, attended by business executives and the media, while
addressing problems affecting the country’s economic recovery.

“Government is seized with this matter. On Tuesday we spent well over two
hours debating the liquidity situation,” he said. “Banks have had no money
for clients since before Christmas. There is a very deep concern over the
current financial crisis. It's clear we have a problem in that regard and we
risk reversing gains made so far. We need a raft of measures to alleviate
this liquidity crisis.”

Information obtained from other dependable sources shows cabinet ministers
confronted the liquidity problems, which has been rocking the market of late
with banks failing to meet their obligations.

Banking sources said cabinet heard on Tuesday that most banks were now badly
struggling, closing daily business with paltry balances, some as low as
US$400. Only a few banks usually close with healthy balances, particularly
the medium-sized MBCA owned by Nedbank of South Africa which is understood
to average US$14 million.

Sources said Finance minister Tendai Biti on Tuesday tabled a report on the
banking and liquidity situation before a heated debate on the matter ensued.
Sources say while six out of 26 banks used to be strong a few months ago and
the rest were breaking even, the situation has now dramatically
deteriorated. This has sent alarm bells ringing and forced ministers to move
in quickly to deal with the situation before it reaches damaging levels.

The recent failure of ReNaissance Merchant Bank, which affected other banks,
was reminiscent of the 2004 crisis in which 13  banks  got into dire
straits. Between December 2003 and June 2004, five banks were placed under
curatorship, two liquidated and four placed in intensive care under the
central bank’s Troubled Banks Fund.

“Ministers were on Tuesday alarmed by the state of the banking sector and
the current liquidity crisis,” a senior government official said this week.
“There is need for urgent and radical interventions in the market to prevent
a full-blown crisis.”

One banking executive said government needed to move with speed to prevent a
run on banks, an overwhelming demand for cash by the depositors.
“Most banks are now failing to meet their financial obligations when they
are due,” he said.

“What is happening is that banks have lent lots of money to companies and
individuals who are failing to repay. That’s why the deposit to loan ratios
are so unsustainably high. Banks loans have been used to finance relatively
illiquid assets, while the institutions themselves fund their loans with
short-term liabilities. In this case one of the main challenges facing banks
is to ensure their own liquidity under such conditions and it’s very
difficult.”

It is also understood cabinet debated the issue of some banks maintaining
huge balances in nostro accounts. A nostro account is a bank account in a
foreign country held by a domestic bank, denominated in the currency of that
country. It is usually used to facilitate settlement of foreign exchange and
trade transactions.

“There was a heated debate on nostro accounts but differences emerged over
the use of the term externalisation which some felt had negative
connotations and smacks of what happened in the past when people were
accused and arrested on those accusations,” one source said.
“Externalisation in our case implies people stuffing cash in their suitcases
and taking it out without prospects of it circulating back in the local
market.”

Ncube said liquidity troubles and power shortages were negatively affecting
production, also indicating “there is deep concern over the current
financial crisis”. He said there was need for a “raft of measures to address
the liquidity crisis”.

Energy minister Elton Mangoma also addressed the Independent Dialogue
series, saying the country was facing serious power shortages because the
last expansion on energy facilities was done in 1984. Mangoma later
travelled to Zambia to deal with power problems.

Amid fears of looming bankruptcies in the banking sector, Biti and Reserve
Bank governor Gideon Gono recently moved in to calm the market, intervening
through a series of measures including boosting lines of credit and the
central bank’s lender of last resort function.

Gono said last week while the banking remains “safe and sound” overall,
there were serious problems posed to financial institutions by the negative
operating environment.

“The banking sector remained in a safe and sound condition in
2011notwithstanding underlying risks posed by the operating
environmentnotably volatile deposits, absence of an active inter-bank market
and lack ofan effective lender of last resort function, market illiquidity,
cash basedtransactions and limited access to external credit lines,” Gono
said.

“The weak and troubled banks in the sector are few, small and of lowsystemic
importance. Collectively, as at 31 December 2011, theseinstitutions had a
combined market share below 5%in terms of totalassets, deposits and loans.”

However, while he acknowledged current interventions to stabilise the
situation, Ncube said he did not think measures adopted so far were robust
enough and adequate to address the problem. He said the trouble was that
most of the interventions already made were “cosmetic”.

Biti recently said Treasury was withdrawing US$110 million from Zimbabwe’s
General SDR Allocation Account at the IMF to augment the 2012 national
budget.

He said the money, which would boost liquidity, would go towards
infrastructure, lines of credit, central bank lender of last resort position
and agriculture.

Clashes over Chihuri appointment intensify

http://www.theindependent.co.zw/

Friday, 10 February 2012 09:59

Faith Zaba

CLASHES among the principals of the inclusive government over the
reappointment of Police Commissioner-General Augustine Chihuri intensified
yesterday, with the three leaders issuing conflicting statements on the
police chief’s employment status and what transpired from their crucial
meetings this week.

While Prime Minister Morgan Tsvangirai and deputy prime minister Arthur
Mutambara said the principals agreed Chihuri was now working in an acting
capacity until the principals decided on his future, President Mugabe
insists the issue is resolved because his contract was extended to 2014.

In separate interviews with the Zimbabwe Independent yesterday, Mutambara
and Tsvangirai on the one hand maintained that the principals agreed on
Wednesday that Chihuri would remain in office as acting police
Commissioner-General until his regularisation by the Police Service
Commission (PSC), while Mugabe through his spokesman George Charamba said
the reappointment was done on the recommendation of the PSC, which he said
was operational.

Charamba said: “That (Chihuri’s contract) is not an issue anymore because
his contract was renewed. You can’t have a service chief staying a day
longer than his contract says he should. How then does he take instructions
from the President if he has no contract? His contract was renewed when it
was due.”

Asked to confirm that the contract was renewed to 2014, Charamba said: “Yes,
2014 it would be.”

Contrary to assertions by Tsvangirai and Mutambara that the PSC needed to be
regularised first before a new Commissioner-General was appointed, Charamba
said the commission was operational and “everyone in that commission is
alive”.

“There is a commission that is in place and that commission made
recommendations. There is no service chief who stays a day longer without a
contract, so that was not an issue when the president met the prime minister
and his deputy,” he said.

“What was at issue was the plea by the prime minister and his deputy for
inclusion, so that in the eyes of their constituencies they are respected.
That was resolved; the President is a politician and understood their
position,” added Charamba.

However, Tsvangirai’s spokesperson Luke Tamborinyoka dismissed Charamba’s
pronouncement as “utter rubbish”. Said Tamborinyika: “I don’t know which
sewage Mr Charamba is fishing that position from.To the best of our
knowledge, the term of office of the police commissioner-general expired on
the 31st of January. The position of the prime minister is now a public
record.They agreed on the necessary processes which must be followed, which
processes will eventuate in an agreement between the President and the Prime
Minister, which is the constitutional position.”

Tamborinyoka added: “In any case, the Police Service Commission is not
properly regularised. The principals agreed that that must be done first.
Two out of three principals articulated the position of the principals at a
press conference yesterday. Mr Charamba is at complete variance with common
sense and the principals’ position.”

Mutambara concurred, saying: “We stick to the content of our press
conference yesterday (Wednesday).We have documented records of our meeting
of principals done by the Chief Secretary to Cabinet (Dr Mischeck Sibanda).”

However, Charamba differed: “They were, however, told clearly that the law
does not require the president to consult (them) when renewing contracts but
he understood that they want to be informed out of courtesy. So all the
service chiefs including  Chihuri have contracts. It is not an issue.”

If he is reappointed, this will be the 14th time that Chihuri’s contract has
been renewed since his first term expired in 1997. Chihuri took over as
acting commissioner from Henry Mukurazhizha in 1991 before assuming the
position on a full time basis in 1993.

Chihuri and Zimbabwe Defence Forces Commander General Constantine Chiwenga’s
terms expired at the end of last month, while Prisons Services Commissioner
retired Major-General Paradzai Zimondi, Air Force commander Air Marshal
Perance Shiri and Zimbabwe National Army commander Lieutenant-General Philip
Sibanda’s tenures are due to expire at the end of February.

At the joint press conference on Wednesday Tsvangirai said: “I don’t know
what your information is, but the commissioner-General of police cannot be
appointed without the regularisation of the Police Service Commission, which
has not been constituted.”

The commission’s term is said to have expired in December. The PSC handles
the police commissioner-general’s contractual matters, although the
appointment is from the president in consultation with the prime minister.

Tsvangirai said: “If there is no position, there is an acting person and
Chihuri is there in an acting capacity until we finalise the process. All
these discussions are serious and let’s hope in 2012 will set a new tone as
we go for elections.”

POSB wants govt to sever CBZ ties

http://www.theindependent.co.zw/

Friday, 10 February 2012 09:57

Brian Mangwende

AS the shortage of cash to meet banks’ financial obligations deepens, one of
Zimbabwe’s oldest institutions, POSB, wants the government to sever ties
with its long-standing partner, CBZ Bank, accusing it of getting it
entangled in a myriad of problems.
CBZ is the biggest bank in the country where the government remits salaries
for all civil servants for forward transmission to other financial
institutions and when it sneezes the whole banking sector catches a cold.
Most banks, including the big ones, are reeling under liquidity crunch.

Preliminary investigations by our Investigative Desk indicate that since
October last year, POSB (formerly the Post Office Savings Bank) has been
having nightmares in getting government salaries from CBZ resulting in
complications in the manner in which its clients access salaries and
pensions.

POSB handles 344 000 accounts for civil servants, among them government
pensioners, war veterans, members of the state security and others.

During the same month last year, it has emerged, CBZ reportedly failed to
transfer all the government salaries via the Real Time Gross Settlement
(RTGS) forcing them to pay partly in cash.

When the  funds were finally transferred, it posed hitches in POSB’s
outlying branches because the funds are moved from the main cash centres in
Harare and Bulawayo.

It has since been established that last November, it was the same scenario
forcing POSB to utilise its resources to partly fund withdrawal requirements
from government employees and pensioners.

During December, investigations further show, the problem persisted and was
exacerbated by the fact that all civil servants except teachers got their
bonuses that month.

It emerged POSB resources were inadequate to cater for the resultant
deficit, hence some clients went for the Christmas holidays without
salaries.

At one time, POSB was forced to borrow from other banks including Standard
Chartered, Metropolitan and Stanbic at a premium to patch over the cracks.

Impeccable sources said as at January 23, CBZ owed POSB, which opened its
doors to the public in January 1905 and has never been placed under
regulatory sanctions, $8,6 million in civil servants salaries.

“Given the above problems, which affect POSB’s reputation as well as
compromising liquidity, the proposal was that since POSB holds a significant
amount of civil servants’ salaries, the government should operate an active
account with it from SSB (Salary Services Bureau) and pensions’ salaries for
all members paid through POSB would be deducted,” a source said.

“An account held at POSB, operated by the government and funded to this
level, will enhance efficiency in salary payments to customers as there will
be no dependency on another financial institution that happens to be
competing for the same clients.

“This will result in POSB being able to plan for the salary days unlike the
current set-up where it has to follow CBZ plans which results in
inefficiency and inconvenience to both the client and POSB.”

Efforts to speak to CBZ Bank chief executive John Mangudya failed as his
mobile went unanswered, while his office said he was in meetings.

On the slow processing of RTGS transactions, CBZ early this week issued a
statement saying: “The bank advises its valued customers and the banking
public in general, that measures have been put in place to maintain the bank’s
normal turnaround times in processing customer payments”.

Investigations revealed that last month was the worst for POSB as the
salaries for education and civil servants were not funded by CBZ on time.
Discussions have since been held between POSB, SSB, Government Pensions
Office and the Reserve Bank on the way forward.

AirZim set for unbundling, retrenchments

http://www.theindependent.co.zw/

Friday, 10 February 2012 09:54

THE country’s national flag carrier, Air Zimbabwe, has been grounded for
close to two months now due to financial troubles. Zimbabwe Independent
Political Editor Faith Zaba (FZ) this week interviewed Transport and
Communications minister Nicholas Goche (NG) on the problems bedevilling the
airline and what government is doing to save it from liquidation.
FZ:What is government doing to revive the national airline?

NG:Air Zimbabwe has been operating on a deficit since 1994 but the inception
of the multi-currency system worsened the situation. This has resulted in
frequent strikes, grounding of operations, non-replacement of equipment,
huge debts, suspension from Iata, lease withdrawals and contract
cancellations, among others.

In light of the above challenges, the airline’s viability was greatly
compromised hence the call by the government to come up with possible
solutions to the challenges and measures to ensure resumption of the flights
by the airline.

My ministry has engaged the Ministry of Finance with a view to secure
funding to meet some of the pressing challenges at Air Zimbabwe. To address
this, the government financed the following:

Payment of Lufthansa technical for the repair of a Boeing 767 aero engine;

Payment of Aviation Insurance for the first quarter of 2010;

Payment of a lease deposit for the airline from Air Zambezi although the
company terminated the contract and
The government has resolved the following:

Pay the Air Zimbabwe debt;

That the airline be right-sized into a lean and effective organisation
through a process of retrenchment to be financed by government;

That the process to hive off the National Handling Services be expedited
and;

That steps be taken to secure a strategic partner to enter into a venture
arrangement with government for the running of the national airline as a
matter of urgency.

FZ:Why do you think the unbundling of Air Zimbabwe will result in a viable
and profitable airline? Where has this happened successfully, regionally and
internationally?

NG: An earlier attempt at restructuring Air Zimbabwe saw the birth of the
following strategic business units that were meant to improve the Airline’s
operations: Air Zimbabwe Passenger, National Handling Services, Galileo — a
Computer Reservations Company, Air Zimbabwe Cargo and Air Zimbabwe
Technical.

Air Zimbabwe Holdings has both unwarranted structure and bloated workforce
which has had negative impact on its resource base. In relation to this and
with reference to the corporate structure, there is need for rightsizing of
Air Zimbabwe Holdings to a suitable structure which is anchored on technical
partnership. In similar vein, a phased retrenchment exercise is unavoidable.

We have learnt lessons from airlines such as South African Airways, Ethiopia
Airlines and Kenyan Airlines to name just a few, where restructuring paid
dividends. Once unbundled, Air Zimbabwe will be streamlined and become
efficient.

FZ: Give us the Air Zimbabwe debt profile and how government intends to
retire it?

NG: The estimated debt for Air Zimbabwe is around US$149 million.  Foreign
creditors are owed about US$30 million, and the rest is owed to government
parastatals, such as Zimra and Nssa.

Air Zimbabwe’s debt is going to be taken over and warehoused by the
government, that is the Ministry of Finance.

FZ:  What do you say to Air Zimbabwe’s staffing levels?

NG:Air Zimbabwe has a bloated workforce of about 1 400 employees against an
ageing equipment and operational assets. The equipment is old and faces
breakdown, revenue earned through this equipment does not match the
expenditure levels of Air Zimbabwe. Therefore, there is a compelling need
for retrenchment since Air Zimbabwe is always having a huge deficit.  There
is need for a retrenchment exercise, starting with those that have agreed to
be retrenched. These now stand at 94 employees requiring almost $4,2
million. A total retrenchment for phase 1 is estimated at $11,5 million.

FZ: Aviation critics say government was largely to blame for the state of
affairs at Air Zimbabwe because (1) it failed to recapitalise the company
when we adopted multi-currencies; (2) or lease a new fleet of planes and (3)
government ministers and officials did not pay for their flights and
commandeering of planes. What is your reaction to this assertion?

NG:Most critics that you were referring to were  expressing their opinions
without having facts on the ground. It should be noted that the transition
to multi-currency system meant that the source of funding from government
through the budget dried up and Air Zimbabwe was left to fend for itself.
Government had no resource base, this was a national problem and we started
operating from a cash budget. There is no government minister or official
that owes Air Zimbabwe anything. There is nothing like that, all government
officials were paying for their flights. Let me state categorically that no
minister has authority to commandeer Air Zimbabwe, even myself as minister,
I don’t have that authority.

Those who allege that ministers or officials owe Air Zimbabwe is a euphemism
to try to refer to the Office of the President and Cabinet. However, it
should be noted that the chartered flights by the president have always been
fully paid for in advance, thereby contributing significantly to Air
Zimbabwe’s revenue.
FZ:Will the new Air Zimbabwe, you referred to, seek a strategic partner?
What will be the shareholding structure?

NG:Of course, yes, there is need for a strategic partner for the Airline and
the process to find one is currently underway. It is envisaged that proceeds
from the strategic partner’s equity contribution would be used to liquidate
the assumed debt or a portion thereof. There is need to involve either a
national or regional advisor from the start as there is no capacity in the
public sector to handle such transactions.

A strategic technical partner would assist in the process of re-equipping
the Airline particularly in respect of short haul aircraft to replace the
three aged Boeing 737-200 aircrafts and a long haul aircraft to complement
the two Boeing 767-200 aircraft.

The shareholding structure will be determined by strategic partners’ equity
contribution.

FZ: Are you to blame for Air Zimbabwe’s woes?

NG:  I don’t normally pass the buck or blame anybody for the problems that
we may be facing. I take full responsibility as the minister in charge for
whatever happens in my ministry.

Next week, Goche will speak on mobile service providers and on the state of
the country’s roads.

GPA negotiators complete task

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:54

Owen Gagare

THE negotiators of the Global Political Agreement (GPA) have completed their
task and have written to the Sadc-appointed mediator in the Zimbabwean
crisis, South African President Jacob Zuma, asking him to tackle the
principals on the implementation of the outstanding issues of the pact and
the election roadmap.

The negotiators, some of whom have expressed their disappointment over the
principals’ failure to implement the agreed positions and iron out sticky
points, told the Zimbabwe Independent they had briefed their principals and
the facilitator on all the agreed positions as well as the niggling issues
so that they implement them and also find solutions.

“Everything is finished, we have handed over the remaining matters to the
principals,” said Zanu PF negotiator, Patrick Chinamasa.

Zuma’s international relations advisor and spokesperson of his facilitation
team Lindiwe Zulu confirmed on Wednesday that the negotiators had completed
their job adding her boss would meet the principals, President Robert
Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur
Mutambara, soon to ensure they move with speed to implement the GPA. She
said Zuma would insist on the implementation of the GPA and the election
roadmap before any polls.

Zuma’s impending visit comes at a time when relations between the inclusive
government partners continue to deteriorate with Zanu PF pushing for
elections this year, with or without a new constitution, while Tsvangirai is
crying foul over Mugabe’s unilateral appointments and his failure to
implement agreed issues.

The principals met on Wednesday to resolve some of the bottlenecks.

Zuma is likely to visit Zimbabwe before the next Sadc summit which the
regional bloc’s executive secretary Tomaz Salomao said would be held later
this month. Salomao was quoted saying the summit would deal with trouble
spots in the region, including Zimbabwe, among other issues. He was,
however, not reachable yesterday to confirm the dates and specific agenda.

Zulu said Zuma would insist elections should only be held when all the
provisions of the GPA and the election roadmap have been met, in line with
Sadc’s position.

She said:  “It’s true the negotiators have finished their work. They have
presented a report to the facilitator and indicated they have done their
best and handed over the outstanding issues to the principals. The
facilitator agreed to engage the principals and would have done so last year
but was delayed because of the ANC centenary celebrations and African Union
summit.”

Zulu said Zuma had indicated he would dedicate time to his facilitation role
in Zimbabwe after the official opening of the South African parliament which
was scheduled for yesterday evening. She said her boss had not changed his
stance on Zimbabwe and was hoping all parties move with speed to ensure they
create an environment conducive for free and fair elections to avoid another
disputed poll.

“The agenda has not changed at all. The facilitator and Sadc still want the
GPA and the election roadmap implemented. We are hoping that this year
things will move faster so that we meet the process we agreed on,” said
Zulu.

“The facilitator is very clear and has made it clear for a long time that it’s
not up to him to decide when elections will be held. It’s up to Zimbabweans,
but one thing is clear and that is that the environment must be conducive.
The institutions which we agreed must be created should be in place and
functional before elections.The bottom line is that what happened in 2008
must never happen in the next election. We don’t want a repeat of that.”

Byo fund ‘a drop in the ocean’

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:54

Brian Chitemba

THE US$40 million Distressed and Marginalised Areas Fund (DIMAF) allocated
to resuscitate ailing Bulawayo firms is a drop in the ocean compared to the
financial requirements of the closed companies, the Confederation of
Zimbabwe Industries said this week.

CZI and the Zimbabwe National Chamber of Commerce (ZNCC) said over US$1
billion is needed for the revival of the Belmont industrial area which now
looks like a ghost town.

A report by a cabinet taskforce, which was set-up to revive Bulawayo
industries, indicated that 87 companies shut down due to viability
challenges, rendering 20 000 people jobless. The taskforce led by Industry
and Commerce minister Welshman Ncube (pictured) noted that 17 firms required
US$50 million to revive operations.

CZI Matabeleland chapter president Dr Ruth Labode said the US$40 million
could not sustain the firms scrambling to get a share of the cake.

She was, however, quick to point that although the fund was not adequate, it
would throw a lifeline to battling companies that have closed shop or those
that had scaled down operation.

“The US$40 million does not meet the financial needs of companies in
Bulawayo. It’s a far cry. But it’s better than nothing. It’s a positive
drive towards resuscitating companies,” she said.

The inclusive government has announced that out of the 87 closed companies,
58 will benefit from the US$40 million, leaving 29 firms closed and
thousands of workers jobless. Observers said after the disbursement of the
US$40 million, the 29 companies will continue struggling because the
coalition government has been pleading bankruptcy.

But out of the 58 shortlisted firms, only 28 have applied for the fund, amid
growing complaints that the conditions for qualifying to access the money at
CABS were prohibitive for the distressed firms. The Finance ministry said
the 28 companies would share US$15 million, meaning the other 30 firms will
share US$25 million.

But various organisations have forwarded proposals demanding a quota of the
US$40 million. The National Indigenisation and Economic Empowerment Board
(NIEEB) is clamouring for a 25% stake of the US$40 million to be set aside
for small to medium scale enterprises.

The Matabeleland Business Council, Association for Business in Zimbabwe
(ABUZ) and ZNCC have raised concerns over the application process and the
conditions being set by government for local firms to qualify for DIMAF.

Companies are complaining that they are required to produce audited
financial results for the past three years and high collateral, which at
times surpasses the amount of money needed for recapitalisation.

‘Energy sector investors put off by indigenisation policy’

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:44

CONCERNS over Zimbabwe’s indigenisation programme are stalling the country’s
efforts to lure independent power producers (IPPs), who are desperately
needed to lift Zimbabwe’s electrical power output, which is critical to the
revival of the country’s industry and economy.
Energy and Power Development minister Elton Mangoma disclosed this at the
Zimbabwe Independent Dialogue in Harare yesterday held under the theme: “Is
Zimbabwe’s industry revival being stalled by the energy crisis?” The
minister was responding to criticism that there seemed to be no movement at
all on the roll-out of IPPs to augment Zesa’s strained capacity. A proposal
by Essar of India that it would have been on the grid by September was cited
as an example.

Although the Essar deal was reportedly now on course, Mangoma said concerns
over indigenisation and the general perceived political risk of Zimbabwe
stood in the way of several other potential power-generation projects. Zesa
last year published a list of potential power projects throughout the
country which included thermal, hydro and gas power stations. But the uptake
by potential investors, particularly foreign investors had been slow.

“The people prepared to do IPPs are not there… They are finding the economic
situation and political situation not acceptable to them. They are saying
‘We want to put in money only to lose 51%. Why should I bother when I can go
somewhere else?’” Mangoma said.

However, in an effort to encourage private power generation, the Energy
minister said he had directed that anyone who wishes to add to the national
grid be expeditiously granted the licence to do so. Previously, potential
investors in electricity generation had been frustrated by bureaucratic
bungling in the issuing of licences. The one stop-shop policy adopted by the
Zimbabwe Investment Authority, encompassed the issuance of power generation
licences.

Mangoma lamented that despite the bureaucracy, investment in the power
sector also faced formidable challenges in the form of corrupt tendencies by
Zesa staff. Describing the corrupt tendencies as shocking, he gave an
example of some employees who went to the extent of removing certain pages
on tender documents so that the bidders they didn’t want to win would be
disqualified.

Turning to the long-stalled Batoka hydroelectrical power project, a joint
venture with Zambia, Mangoma said he expected this to finally take off now
that the dispute between the two countries over its implementation had been
resolved. Zimbabwe had undertaken to pay Zambia US$70 million owing from the
time of the Federation when the two countries jointly embarked on the Kariba
hydroelectric project.

“We will now identify an independent power producer to do a BOT (Build Own
and Transfer) on Batoka. We have not yet agreed on the (full) concession,”
Mangoma, who was on his way to Zambia yesterday to firm up on the agreement,
disclosed. Meanwhile, government was also exploring other power sources such
as thermal and gas.

“We are also looking at thermal and gas. But we need to do a little more
exploration on the gas side,” said Mangoma. “We can start generating
electricity from gas while we are conducting the exploration, depending on
the quantities of the gas.” A delegate from the Industrial Development
Corporation expressed concern that if the gas option, particularly the
Lupane gas project was delayed, Zimbabwe stood to lose out to Botswana,
which was already exploiting the same resource.

Responding to questions on Zesa’s managerial challenges, including its
failure to efficiently collect money owed to it by users, the minister
pointed out that prepaid metres were now almost certainly on the cards in a
bid to deal with an alarmingly high rate of default among Zesa customers.
The winning bidder to supply the metres was required to first install them
before he could be paid.

Acknowledging the challenges that power shortages presented, Industry
minister Welshman Ncube, who was also a guest of honour at the function,
said Zimbabwe needed to come up with credible macro economic and investment
policies to attract investment, adding that the nation could not move
forward without a reliable and affordable power source.

He said with sound policies, Zimbabwe’s power situation would change.
However, in implementing existing policies, the unity government was facing
challenges in differences of opinion among parties. This was stalling
economic progress on many fronts.

He cited the Essar deal, where despite his ministry having given the nod to
the Indian company to take over Zisco and its mining rights, the Mines
ministry, run by Zanu PF, had delayed implementation of the agreement. Essar
were still awaiting the transfer of mineral rights from the old Buchwa Iron
Mining Company to the new entity –- New Zimbabwe Minerals.

“Sometimes you feel like ripping your hair off because of exasperation,” he
said. Ncube also expressed his frustration over the national debt issue,
where his MDC party and MDC-T believed Zimbabwe should apply for the
International Monetary Fund’s Highly Indebted Poor Country (HIPC) status,
which qualifies a country for debt cancellation, but Zanu PF was opposed to
this. As such, the US$7 billion external debt still hung over industrial and
economic recovery potential. HIPC provides debt relief and low-interest
loans to cancel or reduce external debt repayments to sustainable levels.

Zanu PF argues that Zimbabwe has vast resources and cannot accede to such a
“humiliating” status.

Said Ncube: “Some say we are a very rich country. Some say we have so much
resources. Others blame the sanctions. At the end of the day we are unable
to deal with this (the external debt issue). I doubt we will deal with this
issue in the current lifetime of the GNU.”

Responding to worries by delegates over surtax on goods that are not locally
manufactured, Ncube said he was against such unjustified protectionist
attitude, adding Finance minister Tendai Biti would soon revoke sur-tax.

Sur-tax is an additional tax on something already taxed, such as a higher
rate of tax on incomes above a certain level.

Ncube added he would launch the finalised Industrial Development Policy
(IDP) and trade policy in the next few weeks. –– Staff Writer.

Mujuru inquest: Contradictions, more suspicion

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:40

Faith Zaba/Wongai Zhangazha

THE inquest into former army commander General Solomon Mujuru’s death ended
this week at the Magistrate’s Court, with sharper contradictions and
inconsistencies, deepening suspicions of foul play. Harare magistrate Walter
Chikwanha  ruled that it was not his responsibility to order Mujuru’s
exhumation after a  request by Mujuru’s family to have the remains of one of
Zimbabwe’s most decorated soldiers re-examined.
The family wanted Mujuru’s remains exhumed to allow South African
pathologist Reggie Perumal to carry out a second postmortem.

The inquest into the mysterious death of Mujuru in a fire at his Alamein
Farm in Beatrice on August 16 2011 ended on Monday after 39 witnesses
testified.
But Zimbabweans are still puzzled as to the cause of the fire which burnt
Mujuru to ashes.

Testimonies from the forensic experts, pathologist, Harare Fire Brigade, and
the Zimbabwe Electricity Supply Authority (Zesa) said their findings were
inconclusive, while witnesses from the farm offered contradictory
testimonies. In addition, there is also the issue of the blue flame, which
was not unravelled.

The expert witnesses did nothing but raise more questions into the
circumstances under which Mujuru died.

If anything, the inquest has left Zimbabweans and Mujuru’s allies and family
crying “murder most foul”.

State of Mujuru’s remains

A postmortem carried out by Dr Gabriel Alvero deduced the cause of death as
“carbonation due to open fire, origin unknown.
“The tracheal mucosa was red and black with carbon inside demonstrating that
the deceased was alive when the fire started,” he said.

Postmortem findings were:

The right arm was complete but left arm was burnt to ashes up to the elbow
level

Both lower limbs were burnt to ashes up to the knee level

The lungs were severely burnt and could not be recognised

The large vessels such as the aorta and vena cava were burnt and could not
be recognised

The teeth were present but fragile and breaking off

The esophagus was severely burnt and could not be recognised

The stomach was burnt and absent

The pancreas was absent

The liver and gall bladder were present but severely burnt and charred

A portion of the bowel was present but damaged by action of the fire and
heat

The kidneys were absent

The bladder was absent

The prostate was absent

The spleen was absent

No endocrine organ was found

Body position vis-a-vis organs burning to ashes

The forensic report by the director of the Forensic Science Laboratory in
the Zimbabwe Republic Police Birthwell Mutandiro said indications were that
Mujuru died before the fire spread into the room where his remains were
retrieved. The body was lying face down on the floor in the north-south
position.
“The carpet beneath the body exhibited less fire damage compared to other
areas. The indication is that the body prevented the carpet from catching
fire,” he said.

According to his report presented in court: “This physical evidence
indicates that the body was lying in that position before the fire
progressed.”
However, questions have been raised as to how the late general’s internal
organs, such as the stomach, bladder, prostate and kidneys were burnt to
ashes while the carpet beneath his body where he lay face down was less
damaged.

Bungled postmortem

Alvero said he conducted the autopsy without adequate instruments. He said
he could not draw blood for examination given the charred state of the body.
This prompted the Mujuru family, who sought assistance from South African
pathologist  Ganas Reggie Perumal, to ask for exhumation and a second
postmortem.

Evidence compromised

A South African police forensic analyst, Seonyatseng Jack Maine, said due to
the poor packaging of debris collected at the burnt farmhouse evidence might
have been compromised therefore affecting results.

Maine who tested several things that include burnt ashes, black solid
material and cotton wool with black residue collected from different points
in the house for accelerants and inflammables said he could not detect that
such material was used.

But he was quick to point out that due to the fact that the debris was
compromised he could not rule out accelerants or inflammables. He could also
not tell what caused the fire from the evidence he analysed.

Mystery Passenger

There were contradictory statements as to whether Mujuru arrived alone at
the farm.

A security guard manning the entrance  gate to the farmhouse, Clemence
Runhare, told the court that Mujuru was accompanied by someone he assumed,
at the time, to be his driver. Runhare said there was a male person in the
front passenger seat.

But this was contradicted by police officers at the farm who said Mujuru was
alone. They said there was a jacket hanging in the car.
So the question many Zimbabweans are asking is could Runhare have mistaken a
jacket for a person? If indeed, he was in the company of a male person, who
was that person and what happened to him?

Gunshots

Runhare was the first to tell the court that he heard what sounded like
gunshots around midnight on the fateful night.
Rosemary Short, the maid at the farmhouse, concurred saying she also heard
what sounded like gunshots coming from the farmhouse while at her house,
about two to three kilometers away.

She thought it might have been the police officers who occasionally fired
gunshots to scare away intruders or snakes.

Missing Keys

There is also the issue of the missing front door key and car keys which
have not been recovered to date. This is in addition to the bunch of keys
which Mujuru told the maid he had left in Harare but ended up in the main
bedroom where they were retrieved after the fire. Mujuru also parked near
the front door whose keys were also missing, which the farm workers found
unusual considering that the general had been parking near the kitchen door
whose keys he had. What was also unusual was the fact that Mujuru left
groceries and his medication in the car, something which Short said “he
would never do”. The car door was unlocked.

Arson or not?

At the close of the inquest the cause of the fire could not be
established.Use of incendiary devices or accelerants could not be
determined.Experts testified but said their findings were inconclusive. This
left the family and the public even more confused. Fire brigade expert
Clever Mafoti revealed that there were two sources of fire - in the main
bedroom and the mini lounge, which he said was in most cases due to arson
and rarely as a result of an electrical fault. An electrical fault was ruled
out by Zesa expert Douglas Nyakungu, while Mutandiro also said he failed to
establish the cause of the fire and could not say whether or not a crime was
committed.

Inadequate security

Short also indicated that Mujuru wanted the police officers guarding the
farm house withdrawn. She said the police officers were not in the general’s
good books.

Gono’s move could destabilise the financial sector

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:17

Reginald Sherekete

THE recently-announced deadlines by the Reserve Bank of Zimbabwe governor
Gideon Gono for banks to finalise their recapitalisation initiatives and
conclude mergers and acquisitions could possibly destabilise the financial
sector given the general lack of liquidity, analysts have said.
They have criticised the move as being an overdose on an ailing sector,
given that numerous recapitalisation initiatives across all sectors of the
economy have failed dismally.

Undercapitalised banks, just like listed companies on the Zimbabwe Stock
Exchange, have post dollarisation failed to raise adequate capital due to
the multi-faceted problems.

These problems emanate from sovereign and political risk, which are
impacting on the operating economic environment.

Some analysts believe there is still need to give undercapitalised banks
more time to finalise their deals, given that some of the banks were once
put under curatorship, a development which has dampened investor confidence.

“The move by Gono now seems to be more of a cleanout operation but there is
need to consider the fact that some of these institutions are from a
curatorship background and will need more time to convince investors to
provide capital,” an economic analyst said.

However, Gono believes that he has given these institutions enough time to
turn their fortunes around and some are failing to conclude their
transactions owing to the need to cling on to majority shareholding.

“Despite several extensions of recapitalisation deadlines, a few banking
institutions have failed to conclude their recapitalisation initiatives.
Bankers should be able to reduce their shareholding to allow for
capitalisation,” said Gono.

If bankers are to reduce their shareholding, will the recapitalisation be
consistent with the indeginisation laws whereby locals are expected to hold
51% shareholding, or there should be exceptions?

“Without a doubt, founding members of these banks wish to maintain majority
shareholding, but given the huge capital requirements of a minimum of
US$12,5 million for commercial banks, they would probably shed a significant
shareholding,” an analyst said.

Last year Gono advocated for banks to get a reprieve on the provisions of
the indigenisation laws and this paved the way for bankers to enter into
agreements with investors without fear of breaching the indigenisation
regulations.

Of those institutions that may fail to comply within the stipulated period,
questions hover on what is going to happen to depositors’ funds if the banks
lose their operating licences.

Some feel that depositors could be prejudiced if they had long term
investments.

“Accordingly, the undercapitalised institutions should do the honourable
thing and voluntarily surrender their licences to the supervisory
authorities, failing which they will be dealt with in line with the Reserve
Bank’s Troubled and Insolvent Bank Resolution Policy,” Gono said.

The RBZ will need to come up with a plan to ensure a smooth transition if
any banks go under so as to minimise the impact on the whole financial
sector, given synergies which exist among banks.

Some analysts feel the tone of the governor may have a negative impact on
ongoing discussions, adding financial institutions were given short notice
to deal with capitalisation initiatives.

“For the avoidance of doubt, all dispensations for compliance with minimum
capital requirements granted to non-compliant institutions are hereby
revoked with immediate effect, and superseded by the timeframes detailed
herein,” said Gono.

An economic analyst said: “In the announcement, the tone of the governor
could trigger a panic which may lead to a run on these undercapitalised
institutions, and such a development may impact negatively on any ongoing
negotiations.”

Banks facing the prospect of losing their licences include the disbanded
ZABG, Royal Bank and Genesis Merchant Bank.

ZABG is understood to be engaging investors and is optimistic it will meet
the February 14 deadline. Royal Bank announced that although the central
bank had initially set the deadline at 31 September 2012, the bank had set
its own deadline to December last year, insisting it is well on course to
meeting the new deadlines.

Economists dispute 9,4% growth rate

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:15

Happiness  Zengeni

SOME economic commentators have questioned the economic growth rates of the
Zimbabwean economy saying that the growth is being overstated.

Zimbabwe is officially projected to grow its gross domestic product (GDP) to
US$11,91 billion, a 102% increase since dollarisation in 2009 at US$5, 89
billion,according to  Economic Planning minister Tapiwa Mashakada.

Last year, the GDP is estimated to have closed at US$10,06 billion.

Mashakada told the Mandel/GIBS economic symposium held last Friday that the
prospects of a 9,4% economic growth look good if the key fundamentals such
as the use of multi-currency system, the firming of commodity prices and the
adherence to cash budgeting continues.

However,  economics  lecturer Prof Tony Hawkins and the World Bank country
economist Nadia Piffaretti differed with the minister, saying Zimbabwe’s
economy was not growing but had rather benefitted from a rebound effect as
it was coming of a low base.

Piffaretti said the economy was not yet in a growth mode but had experienced
a rebound effect, which was based on outside factors that government had no
control over. These outside factors included the multi-currency regime and
firming commodity prices.

She said the economy was still vulnerable to shocks as its gross official
reserves, including IMF SDRs allocation, were low at US$197 million in
December, representing 0,3 months of imports. The minimum reserves should at
least cover three months.

Hawkins said that his projections were more guarded than those of
government, with his own growth rate unlikely to exceed 6 or 7%.
This, he said was because the balance of payments was currently under
stress, with a current account deficit of 23,4% of GDP.

“A current account deficit of US$1,89 billion or nearly a fifth of GDP is
unsustainable.There is a large capital account ‘surplus’ of US$1,2 billion,
but US$800 million of that is offshore borrowing, half of it short-term.
This is not a sustainable business model for a country where foreign debt is
already 108% of GDP and where external arrears are 70% of GDP. As a rough
rule of the thumb, when debt exceeds 90% of GDP, output growth slows by one
percentage point a year,” Hawkins said.

According to the Ministry of Finance, the country’s debt is currently above
US$9 billion.

MACRO-ECONOMIC INDICATORS    2011    2012
GDP    7.0%    3.5-4.5%
INFLATION    6.5%    9.5%
EXPORTS    + 65%    + 20%
IMPORTS    + 100%    + 20%

Prof Tony Hawkins’  Macroeconomic indicators

Analysts say little has been done in terms of dealing with the fundamentals
that influence economic growth such as unemployment, reduction in recurrent
expenditure and an improvement in foreign direct investment.

Mashakada said the global economy had affected Zimbabwe’s performance as FDI
numbers had dried up.

He said: “There is reduced trade investment, decline in export demand
reduced aid inflows from Eurozone countries and limited credit lines.”

However, the biggest danger, cited by both Piffaretti and Hawkins was
politics, which remains the main pillar on which economic stability is
premised on.
Revenue, which excludes diamond revenue is expected to grow slightly to
US$3,4 billion from US$3 billion last year although its percentage of GDP
will drop slightly to 28,6% from 30% last year.

Mashakada said including diamond earnings, revenue would be US$4 billion.

The government is targeting year-on-year inflation of 5% for 2012. Mashakada
said this could be met if there is no upward pressure on utility costs,
wages, higher costs of funds, import tariff regime, food inflation and real
estate prices.

But Hawkins said that the CPI figures understated inflation considerably,
with his estimates at year end at 9,5% from a year-end figure of 6,5%.
Analysts said the state of the economy is reflected in the performance of
the stock market.

The main index on the stock market declined 7% last year as trading was
characterised by low liquidity from both foreign and local investors.
Economic growth is currently being forecast to be driven by firming
commodity prices in both mining and agriculture. Hawkins said even if
favourable influences were to apply, economic growth was unlikely to exceed
6% to 7%.

“Without substantial investment, especially in infrastructure and productive
capacity, the economy will not expand at rates of 9% plus,” said Hawkins.

Mashakada said government would this year seek to deepen infrastructure
development, engage international stakeholders and the Diaspora as well as
deal with debt and external arrears and speed up parastatal reforms.

Africa needs to invest to compete

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:13

Gamma Mudarikiri

AFRICA has to invest in fiscal, human and technical capacity for it to
become competitive in the global environment, UN resident humanitarian
coordinator Alan Noudehou told delegates to the concluding ceremony of the
African Building Capacity Foundation’s 20th anniversary celebrations in the
capital this week.
A plenary session held as part of the concluding celebrations resolved that
Africa has to adopt three notions which governments have to deal with;
urgency, competition and complexity.

It noted that although most African countries had been independent for 30-50
years, the continent still lagged behind in terms of development.
Africa Development Bank country representative Mahamudu Bawamia said Africa’s
time was now.

President Robert Mugabe said generally sub Saharan Africa had faced gloomy
macroeconomic prospects in the 1980s, fuelling talk of the lost decade and
even got the tag of a hopeless continent.  However, he said there had been
an improvement in economic performance with China’s presence in Africa.
Bawamia said that where Africa had fallen short was on legal capacity to
negotiate complex contracts.

“The legal capacity area has been neglected. In most instances governments
have entered into commercial agreements with onerous terms, which often
create problems in the future,” he said.

The AfDB had set up a legal capacity foundation to help African governments
on legal contractual agreements.

Employment creation and investment into technology were also important keys
in the delivery of capacity; “If you have to compete in skills then you need
to capacitate the skills function,” Bawamia said.

African countries, he said, were major net skill suppliers globally due to
the exodus of qualified professionals which are absorbed by market in the
developed world.

Noudehou said capacity must be linked to resilience.

He said: “Growth is good but only when it translates to improved economic
activity.”

ACBF was formed in 1991 supported by the World Bank, the African Development
Bank and the United Nations Development Programme. The main purpose was for
it to mitigate the severity of Africa’s need to build capacity.

The foundation has invested US$400 million to develop African countries.

Media system: More of the same

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:55

By Phillip Pasirayi

THE power-sharing government between Zanu PF and the MDC parties has failed
to pursue any meaningful democratic reforms since it was formed three years
ago. This coalition has performed dismally on media reforms as it failed to
introduce far-reaching changes on the media landscape, break up Zanu PF’s
monopoly of the airwaves or bring the repression of journalists to an end.
Recent threats by the Zimbabwe Media Commission (ZMC) to confiscate and ban
unregistered foreign newspapers using security forces should be viewed in
this context. Taken together with the failure to adopt meaningful political
reforms, it becomes apparent there is a clear and present danger of broad
democratic reversal as Zanu PF becomes more determined to maintain a
vice-like grip on the airwaves to halt its political decline and implosion
ahead of the next elections. Control of the media is now even more critical
to Zanu PF’s survival strategy.

Without reforms it would be difficult to ensure a smooth transition from
dictatorship to democracy. The problem is that of unreformed state
institutions that remain partisan and serving Zanu PF interests.

These fears were later captured and crystallised by Prime Minister Morgan
Tsvangirai himself when he complained about what he described as “residual
dictatorship”. The threat to Zimbabwe’s transitional process is largely
posed by these state institutions and public officials, including permanent
secretaries and other Zanu PF loyalists who continue to resist change and
cling to their old ways instead of embracing more civic and consociational
politics guided by inclusivity.

In this context, Zanu PF will not easily give up its monopoly on the
airwaves because radio and television represent major instruments for
disseminating and reinforcing the party’s hegemonic perspective. The
partisan exploitation or even abuse of the state media has created some
semblance of a party in charge and which still enjoys people’s support, even
though such mediated reality does not reflect the situation on the ground.

This drama on ZBC radio and television comes from the Zanu PF regime’s
ideologues who are always roped in by ZBC as news sources, political,
economic and social commentators. Some of these ideologues include the likes
of Vimbai Chivaura, Tafataona Mahoso, Isheunesu Mpepereki, Maxwell Hove,
Goodson Nguni, Gabriel Chaibva and Jonathan Moyo.

Despite their views being almost always out of sync with what is happening
on the ground and the popular mood, these commentators are often given acres
of space in print or long slots on the airwaves to push crude Zanu PF
propaganda packaged as “analysis”.

The broadcasting media environment in Zimbabwe largely mirrors the
repressive Rhodesian media system. At Independence in 1980, the then Zanu
inherited a media system that was designed to serve the interests of the
minority Rhodesian Front (RF) government. In Rhodesia, an alternative media
which sought to provide a platform for blacks and liberal whites was closed
under the Law and Order (Maintenance) Act of 1960 and other security laws.
Ironically, this law was to be inherited by the Zanu PF government and used
harshly against black Zimbabweans.

The Rhodesian state-controlled what news and issues the Rhodesian
Broadcasting Corporation (RBC) could broadcast to the public through the
Information ministry at one time run by the notorious PK van der Byl, at
some point also Foreign Affairs and Defence minister. This legacy of
state-control of radio and television broadcasting, supported by repressive
legislation, has persisted in post-independent Zimbabwe under the inclusive
government. In Rhodesia, the media served the interests of the minority
government and this was demonstrated not only in programming but also the
targeted audience, mission, content and management of news.

RF leader and Rhodesian Prime Minister Ian Smith used broadcasting to
legitimise his government during the Unilateral Declaration of Independence
(UDI) in 1965, and to fend off criticisms of his government from liberation
movements and sections of the international community that were supportive
of the liberation movement.

The appointment of RF political party functionaries to key positions in the
state media and the vilification of certain groups which do not agree with
the ideology and views of the ruling elite is now synonymous with Zanu PF
rule. In the 1970s, RBC vilified the Zanla and Zipra guerilla armies through
radio and television broadcasting, portraying the nationalists as “communist
terrorists” and a threat to “Christian civilisation” and the “Rhodesian way
of life”.
The voice of African nationalists was choked and black opposition was
obliterated from television completely while some of the nationalist leaders
were driven into exile. Despite this repression, the liberation movement
created alternative communicative platforms to air their grievances and
communicate with the masses.

Zanu thus had the Voice of Zimbabwe, Zapu Voice of the Revolution and
independent broadcasts by the British Broadcasting Corporation (BBC), Radio
Netherlands, Radio Moscow and the Voice of America (VOA) became key in
helping the liberation movement to reach the masses during the 1970s.

Since 1980, public broadcasting has exclusively served the interests of Zanu
PF, not the public. During the early 1980s ZBC was at the forefront of
denigrating liberation icon Joshua Nkomo and the Zapu leadership, just like
they are doing to Prime Minister Tsvangirai and the MDC, two decades later.

Tracing these footsteps and the history of state-owned broadcasting in
Zimbabwe is important to understand how Zanu PF has kept the same hegemonic
media system it fought against during the war of liberation.  In 1980, the
new Zanu PF government inherited a repressive media system and appointed
political party functionaries, some of whom had worked for Zanu’s Voice of
Zimbabwe in Mozambique, to key positions at the state broadcaster. This lies
at heart of the rot at ZBC.

As a result of this approach, state control of the media has persisted in
Zimbabwe, three decades after independence. It is thus fair to conclude
there has been the “Zanufication” of the media rather than its
democratisation in the past three decades. On the electronic front, Zanu PF
is not willing to give up its monopoly of the airwaves, moreso as it faces a
watershed election which threatens to consign the party to the dustbin of
history. The ongoing issuing of new broadcasting licences to pro-Zanu PF
companies and individuals is just a ploy designed to maintain monopoly of
the airwaves by default. In reality nothing has changed.

Pasirayi is a PhD candidate at the Department of International Development,
University of Oxford, UK. He can be contacted at:
phillip.pasirayi@sant.ox.ac.uk

MuckRaker: Only one escape now, that is the GPA

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:46

RWANDAN President Paul Kagame has described China’s donation of a new
African Union (AU) headquarters as a reflection of Africa’s bigger problems.
Kagame said that while the Chinese donation was welcome, African countries
should focus on working towards economic independence  that allowed them to
be in charge of their own affairs.

“China donated this to the continent for the use of the continent –– but it
is very pathetic …the continent of Africa, very rich in terms of all kinds
of resources, and Africa being where it is today, is a problem,” Kagame
said.

“Maybe you can see it in terms of this donation, but the problem is much
bigger than that..”

We couldn’t agree more. How can we be proud that a building as symbolic as
the AU headquarters is designed, built and maintained by a foreign country?
Where are the African architects, engineers and builders in all this?

The only contribution by Africans to this enterprise was the usual cheap
labour. Yet we complain when foreign actors interfere in our internal
affairs.

The Nyasa Times reports that embattled Malawian President Bingu wa
Mutharika, whose government is dogged by economic and governance challenges,
last week flew to Harare “seeking wisdom” from President Robert Mugabe on
“survival tactics”.

The Times quotes a senior Malawian official who goes on to state that: “The
president was consulting his comrade to seek wisdom since President Mugabe
has been in the situation Malawi is facing when donor funds dried up.”

Here are some interesting facts Cde wa Mutharika could do with knowing:
Zimbabwe is now a net importer of grain, wheat and other food products, a
far cry from the “bread basket of Africa” tag.

Thanks to President Mugabe’s policies, Zimbabwe has no currency of its own,
having to resort to the currencies of “imperialists”.
That cannot be the place to seek “wisdom” can it Cde wa Mutharika?

Meanwhile, Nigerian Nobel Prize winner for literature, Wole Soyinka, said
heads of state who are trying to cling to power suffer the same fate as the
dictators who were swept away by the Arab Spring.

Soyinka cited the example of Senegalese President Abdoulaye Wade and
President Mugabe, describing both of them as “irremovable octogenarians” who
try to hold on to power “when clearly they have already served their time”.

“But what happens to them to think that if they leave power, the earth will
stop spinning?” Soyinka asked.
According to the Nobel prize winner: “In the end, those who treat their
people as inferior, with their clans, will face the same kind of violence
that we have seen in what we have noted in the Arab world.”

ZBC “analysts” this week were at it again. This time they were slamming
Prime Minister Morgan Tsvangirai whom they accused of being “double-faced”.

“Political analysts have blasted Prime Minister Morgan Tsvangirai for using
lies and political grandstanding in order to assume political office,” we
are told.
“This follows his failure to fulfil promises he made to civil servants when
he was soliciting for their votes and soon after assuming political office.”

Political “analyst” Jonathan Kadzura, who apparently found time from his
busy schedule as chairman of the floundering AirZim, described Tsvangirai as
a “trickster” who took advantage of the plight of civil servants to enter
into office.

Meanwhile AirZim shudders with the spectre of liquidation hovering above the
airline. We wonder what AirZim employees think of their chairman on whose
watch the airline has become a laughing stock.

We were amused by an opinion piece on the ZBC website penned by an anonymous
writer. Entitled “Rushwaya: we will never trust her with our balls again”,
it gored into former Zifa CEO Henrietta Rushwaya for being a “sell-out”
because of the Asiagate scandal.

“And so from 2007 (god knows what happened prior to that) until 2010 the
‘iron lady’ of Zimbabwean football was grazing to her pocket’s content every
time the warriors were on an international assignment.

“Together with her lieutenants, she made sure the country’s representatives
had as many international assignments as possible, particularly in the
Middle East and Asia, where she would engineer, directly and indirectly, the
Warriors’ defeat in matches that have now become known as ‘Asiagate’,” the
writer notes.

Muckraker thinks the writer should have also chastised the media, including
ZBC, which hung on every word Rushwaya said without so much as a whisper of
a query.

The article ends with the words: “Rushwaya should never be allowed anywhere
close to our balls. We will never trust her with our balls again!”
Phew! Thank goodness for that!

Seasoned diplomats in the Soviet era would be skilled at reading between the
lines of Pravda and Izvestia to understand what the real story was.

That is what is happening now. Experienced diplomats read between the lines
in the Herald and Sunday Mail to find out what the official mind is
thinking.

For instance, we are being told President Mugabe was the authentic voice of
African nationalism at the AU summit in Addis Ababa. He paid tribute to the
founders of the OAU and compared their role with that of today’s leaders who
were in many cases, he charged, simply fronts for Western powers.

In particular Mugabe castigated France and its president Nicolas Sarkozy for
its role in the Libyan revolution. The Libyan NIT regime should never have
been admitted to the AU summit, he fulminated, because they hadn’t passed
the democratic test of elections.

Two points here. Is Mugabe qualified to talk about elections given Zanu PF’s
role? And why should African nations be expected to speak in indulgent
terms of Col Muammar Gaddafi who attempted to slaughter his own citizens? It
was precisely because Africa did nothing that Nato intervened.

Mugabe was evidently horrified by the circumstances of Gaddafi’s demise. But
Zanu PF propagandists couldn’t care a less about the murderous behaviour of
the Gaddafi regime in its final year.

As for Mugabe draping
himself in the mantle of the AU’s glorious past, we were told that the
summit didn’t exactly embrace this narrative. It was in the corridors of the
conference centre where sympathy was expressed for Mugabe’s stance. And, it
seems, there was not much of it there either!

One significant report told us Zimbabwe’s bid to secure support for early
elections made no headway. Very simply, African states are fed up with this
whole charade of Zimbabwe seeking support outside the parameters of the Sadc
process. Those days are over. There is only one escape now and that is the
GPA. That is the position of the AU and Sadc.  No bleatings in Addis will
change that.

And there is no point hoping Michael Sata will make a difference. His
maladroit remarks will create a momentary diversion but it won’t be long
before his regional colleagues spell out the cold realities.

There is nothing democratic about holding elections when the country is not
ready for them; when violence and electoral chicanery persist. The whole
purpose of the Sadc engagement was to avoid a regional contagion.  Sata
needs to understand that.

The GPA was agreed to by Zanu PF. They signed along the dotted line. Why
should they be allowed to escape from those terms now things are not going
their way? Mugabe derives his legitimacy from the GPA. Why does Sata think
it’s okay to renege on that?

Muckraker was surprised that the Herald editor let a bit of a howler through
this week. Isdore Guvamombe fired a broadside at ZUJ, describing it as a
“circus” and challenged its leaders to prove him wrong. This was in the
context of the death of journalists.

“They must prove this villager wrong by telling the nation or the fraternity
what they have done for Freedom Moyo,” Guvamombe declared. “It is akin to
giving a button stick to a clown who abandons the track and runs into the
mountains. This villager does not wish to follow into the mountains, grab
the button stick and continue the race.”

Leaving aside the issues raised, which are entirely legitimate, Muckraker
would ask Guvamombe what a “button stick” is and whether it is any relation
of a baton stick? We would also remark that when quoting from Eddison Zvobgo
it is important to properly attribute the quote in question.

In the same edition of the Herald on Monday, we learn there is another of
those dubious Zanu PF organisations popping up its head. This one is called
the “Patriots of Zimbabwe” and is headed by one Dr Patrick W Mamimine. It is
clear this “patriot” is tasked with filling space in the Herald. But In
doing so he raises some interesting issues.

He quotes President Mugabe for instance as saying “If the choice were made,
one, for us to lose our sovereignty and become a member of the Commonwealth
or remain with our sovereignty and lose the membership of the Commonwealth,
I would say let the Commonwealth go.”

What Mamimine appears not to know is that Mugabe and his ministers made
frantice efforts to prevent Zimbabwe’s eviction from the Club in December
2003. All that the organisation required from them was that they adhere to
elementary tenets of good governance and human rights as set out in the
Harare Declaration of 1991. Our sovereignty was never in doubt.

This, it appears, was a step too far. Most members from both the old
Commonwealth and the new agreed that if Zimbabwe could not conform to its
principles then it should go. Zimbabwe jumped before it was pushed to avoid
humiliation.

Afterwards its publicists attempted to portray this episode as a victory for
the old “white” Commonwealth.  Obviously it was difficult to pin that tag on
Nigeria. Or Barbados!

Zimbabwe, by the way, is still in violation of the Commonwealth’s norms and
won’t be readmitted any time soon.
Meanwhile, perhaps Dr Mamimine could tell us something about his outfit,
unheard of before now but making its appearance when an election is looming.
What a coincidence! Who was it that said “patriotism is the last refuge of a
scoundrel”.

UN Secretary-General Ban Ki-Moon made some intreresting remarks at the AU
summit in Addis Ababa. He said the Arab Spring was a reminder that leaders
must listen to their people.

“Events proved that repression is dead,” he said. Police power is no match
to people power seeking dignity and justice.”
These remarks came as Zimbabwean journalists were threatened with arrest if
they questioned the police chief’s term of office!

Also last week, an outfit called the Zimbabwe National Youth Service
Graduates Association, a Zanu PF-aligned youth militia, invaded Kuimba Shiri
bird garden at Lake Chivero demanding that the owners put up a portrait of
President Mugabe. They also objected to the birds being held captive.

A similar invasion last year by war veterans had resulted in Vice-President
Joyce Mujuru intervening. She said it would never happen again. The ZTA also
denounced last year’s invasion.

“Why are the police not investigating this?” owner Gary Stafford said. “This
is political and a clear case of trespassing.”
Please don’t let us hear again about Zimbabwe’s declining tourism sector
being a victim of sanctions. This was self-inflicted damage by Zanu PF
thugs.

On the subject of lawlessness, we were interested to hear Minister Patrick
Chinamasa’s remarks on white magistrates leaving the country at
Independence, in what he termed a “mass exodus” leaving the country
literally without magistrates.
He was addressing the Joint Command and Staff Course at the Staff College in
Harare. We would have welcomed his views on the exodus of white judges. What
led to their departure after 2000 and in particular what were the
circumstances of Chief Justice Antony Gubbay’s exit from the bench?

Eric Bloch Column: Merits of the monetary policy statement

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:40

OVER the last seven years, very many Zimbabweans in general, and those in
the business community in particular, have developed such an intense hatred
for the Reserve bank of Zimbabwe (RBZ) that they cannot conceive of that
central bank ever doing anything right and constructive.  So pronounced is
their contempt for, and criticism of, the RBZ that they have total disregard
for the fact that the majority of the actions and inactions which were the
source of that contempt and criticism were imposed upon the RBZ by
government and by the political hierarchy, and that the RBZ was obliged to
comply with the directions given to it, notwithstanding any objection it
might have had thereto, and no matter the extent to which it  strove to
resist such directions.

It is irrefutable that many of the policies and actions of the RBZ between
2005 and 2009 were most ill-advised and were contrary to the normal and
usual functions of a central bank.  It is equally irrefutable that most of
such policies and actions were adverse to the critically-needed economic
recovery and in diverse instances intensified the progressive decimation of
the economy.

That this was so should not have been wholly attributable to the RBZ
hierarchy, for, in the majority of instances, their political superiors
determinedly insisted on having their own way, irrespective of any the RBZ
views to the contrary.  However, criticism of the RBZ is endemic within the
majority of the Zimbabwean populace, especially so within the spheres of
commerce and industry and other economic sectors.

They berate the RBZ for its failure to accumulate and maintain reserves to
support that which was the country’s currency, for spending far beyond its
means, particularly so in the provision of motor vehicles, houses and other
perquisites to senior civil servants, judges and others, and of farm
implements and inputs to selected beneficiaries.  They have that which
verges on hatred for the RBZ for its expropriation of foreign exchange
receipts of individuals and businesses, and for recurrent default in the
settlement of debts.

That they do so is wholly understandable, and cannot be dismissed in a
cavalier manner, save that the critics wholly disregard the pronounced
extenuating circumstance that, with a few exceptions, such deplorable
policies and actions were not conceived by the RBZ but forced upon it by
superiors who were so driven by own interests that they blatantly
disregarded and dismissed the independence and autonomy that should vest in
a central bank.

And so great are the critical perspectives of most in the private sector
that they automatically perceive only further economic evils and injustices
in anything that the RBZ may say or do, including almost all contents of
each and every Monetary Policy Statement issued by the RBZ.  That has
already very widely been the reaction to the latest of such half-yearly
statements issued by the central bank on  January 31 2012, but in some
significant respects, unjustifiably so.

Although various of the RBZ’s operations prior to 2009 were deplorable
insofar as they were being conducted by the bank and not, as should have
been the case, by government (if they were to be done), since then the RBZ
has progressively, and more and more, been engaged in the primary functions
of a central bank, although financial and other constraints have not yet
enabled it to fully do so.  The recent Monetary Policy Statement accords
with the ongoing transformation, notwithstanding that the transformation is
not yet absolute, primarily due the bank’s virtually non-existent
capitalisation.

A key function of a central bank is to supervise banks and other financial
institutions and their operations, ensuring compliance with international
security considerations (such as the Basel II convention).

In that respect the Monetary Policy Statement records the general soundness
of the banking sector “notwithstanding underlying risks posed by the
operating environment” including “volatile deposits, absence of an
inter-bank market and lack of an effective lender of last resort function,
market illiquidity, cash-based transactions and limited access to external
credit lines”.  Of especial import is the RBZ’s assessment that “the weak
and troubled banks are few, small and of low systemic importance.”

The statement records that such banks had a combined market share below 5%
in terms of total assets, deposits and loans.  But the RBZ is not complacent
about the circumstances of those few troubled banks, it recording its
concern with the gradual deterioration in asset quality as reflected by the
level of non-performing loans, and therefore it is now vigorously
prescribing, and enforcing, that such banks recapitalise and become safe and
secure.

As at December 31 2011, Zimbabwe had 26 operational banking institutions, 16
asset management companies and 157 microfinance institutions, all under the
RBZ supervision.  Of the banks and asset management companies, five were not
compliant with prescribed minimum capital requirements, with one of the
banks imminently becoming compliant by virtue of a concluded
recapitalisation agreement.

One of the non-compliant banks has already been placed under curatorship by
the RBZ and the rest have been ordered to be fully compliant by no later
than March 31 2012, failing which they will not be permitted to conduct
banking business.  Moreover, the RBZ states that the existing banking laws
will be amended to strengthen the Troubled and Insolvent Bank Resolution
Framework.

The RBZ has, for some time, prescribed that all banks should periodically
conduct stress tests as an element of their risk management, but with effect
from the end of the current quarter, all banks will be obliged to submit the
test results to the RBZ, pending which it is conducting independent stress
tests targetted at gauging the potential vulnerability of individual banks
and the entire banking system.  Concurrently, the RBZ is emphatically
pursuing the implementation of utmost corporate good governance in all banks
and other financial institutions, including prescribing that with effect
from  March 1 2012, they must all have loan provisions adequate to absorb
all reasonably anticipated losses.

Fundamental to the security and soundness of any country’s banking resources
is that the central bank be a Lender of Last Resort, providing overnight
loan funding to any bank with transitional illiquidity.  However, for many
years, the RBZ has been devoid of the resources to fulfill the Lender of
Last Resort functions.  Belatedly (but better late than never), this
negative circumstance is being addressed.

Government has provided the RBZ an amount of US$27 million, where US$20
million is about to be transferred to the RBZ to supplement US$7 million
previously provided, and negotiations are apparently at an advanced stage
for Afreximbank to provide the RBZ a lender of last resort facility of US$80
million.

Concurrently, government has undertaken to issue tradeable bonds in order to
relieve the RBZ of US$83 million of outstanding statutory reserve balances,
although total resolution of the RBZ’s critical insufficiency of capital
resources will be contingent upon further measures for the recapitalisation
of the Reserve Bank to satisfactory, viable levels.

Thus, the RBZ continues to be confronted with diverse illiquidity
constraints but nevertheless, to a significant extent, the
governmentally-driven erosion of its capital resources is being belatedly
addressed.

ZEC, RG’s hand in sham elections

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:35

By Pedzisai Ruhanya

THE administration of elections, their context as well as the content under
which they take place have been contested issues in post-Independent
Zimbabwe and so are some of the individuals managing the elections.
In any critical political transition relative to the management of credible
elections it is important to address both the institutional and personnel
inadequacies of the systems governing the process.

Elections in Zimbabwe should not be reduced to a simple issue of “free and
fair” because this does not do justice to the process which is far more
complex than that.

The Commonwealth has argued phraseology such as “free and fair” or
“representing the will of the people” has largely been abandoned by
international election observers over the past decade. Instead, they call
elections either “credible” or “not credible”.

It is in this context that I seek to interrogate the credibility or
otherwise of Zimbabwe’s electoral institutions and the personnel involved.

It is the constitutional responsibility of any citizen to scrutinise
democratic processes with credible arguments and evidence as long as it does
not border on slander against public officials responsible for running
public institutions.

In this regard, the personnel of the Zimbabwe Election Commission (ZEC) and
the Registrar-General’s office should be subjected to public scrutiny with a
view to increasing public accountability and transparency in the political
systems relative to the administration of elections.

These two institutions and the individuals running them have been part of
the crisis the country is faced with, not forgetting the political players,
the repressive or coercive apparatus and other institutions such as the
media, churches, compromised and “Zanufied” intellectuals and the arts
sector.

I will concentrate on the ZEC, the Registrar-General’s Office and the women
and men who make these institutions fail the nation.

Joyce Kazembe has been with the ZEC since its predecessor the Electoral
Supervisory Commission (ESC) as its vice-chairperson. She has been with the
electoral management body since 1996, which makes 16 years now.

This means Kazembe was involved in the 1996 presidential run-off in which
President Robert Mugabe contested alone after the late nationalist
Ndabaningi Sithole pulled out alleging electoral malpractices.
Registrar-General Tobaiwa Mudede was also part of the electoral team as the
Registrar of elections.

Kazembe was also part of the 2000, 2002, 2005 and the 2008 violent and
hotly-disputed presidential election run-off deemed not credible by
Zimbabweans, the Southern African Development Community (Sadc) and the
African Union (AU), leading to the signing of the Global Political Agreement
(GPA) in September 2008, and consequently the consummation of the inclusive
government in February 2009.

During the 2008 election, Kazembe was vice-chairperson of the ZEC,
deputising retired Brigadier-General George Chiweshe, now High Court Judge
President. Chiweshe got promoted to the current post after running the sham
June 2008 poll.

These are the five elections Kazembe was involved in. It is crucial to note
that in two of the presidential elections, Mugabe was a lone contestant in
1996 and June 2008. Kazembe and her colleagues did not see anything untoward
about such processes and they declared Mugabe the winner.
In the 2002 and 2005 elections Major-General Douglas Nyikayaramba — recently
promoted by Mugabe  — was the ESC chief elections officer. Kazembe was
deputy chair to Sobusa Gula-Ndebele.

It was during that period that Nyikayaramba allegedly recruited intelligence
officers, soldiers and Zanu PF activists into the secretariat of the then
ESC, now ZEC. Kazembe and Gula-Ndebele did not raise issue with a serving
army general running an election in which his commander-in-chief, Mugabe,
was a candidate. How bad can things get?

The 2002 presidential election process and outcome was disputed on account
of violence, intimidation and political murders as well as the involvement
of the security apparatus outside the provisions of the Defence Act and the
Electoral Act. It was a controversial victory for Mugabe that Kazembe and
her colleagues presided over and declared “free and fair”.

So why should the public trust people like Kazembe with running elections
again given their appalling record?

What further boggles the mind are purely arrogant and misguided outbursts by
Kazembe that the ZEC  secretariat is professional and her claims there is no
infiltration by the security forces. Such kind of arrogance is deplorable.

Let us take a look back at how the ZEC  administered the March 2008
elections including the sham June presidential poll run-off. Kazembe was at
the time deputy to Chiweshe.

The June 2008 run-off was marked by just about everything the Electoral Act
forbids; political violence, abductions, enforced disappearances, arson and
killings. Before that there were suspicious and alarming delays in releasing
the results of the first round of the presidential election.

The ZEC, under Chiweshe and Kazembe, did not see anything wrong with all
this. It took the majority of political players, ordinary citizens, Sadc and
the AU to say the run-off was not credible and thus Mugabe’s “victory” was a
sham.

The point is that Zimbabweans are not fools; they are not ahistorical, they
know their electoral history and those who are part and parcel of the
problem.
It is not only ZEC staff that cannot administer credible elections but some
of the commissioners like Kazembe who should be stopped from running
elections not only because we have hard evidence of past incompetence and
malpractices, but also current inadequacies.

Kazembe should tell Zimbabweans why they endorsed discredited electoral
outcomes as credible. Is she not bothered her name is now associated with
disputed election results? Has she not had enough of the job having been
there for more than a decade now? 

These same questions should be asked of Tobaiwa Mudede, the
Registrar-General who has been in his post for a longer period. Apart from
the 1980 elections, Mudede has been involved in the administration of polls
since 1985 which took place amid the Gukurahundi massacre. How can an
election that takes place under circumstances of genocide and crimes against
humanity be deemed credible? The 1985 election was the worst so far,
followed by the June 2008 run-off.

It is vital that when Zimbabweans, especially political players, human
rights and political activists talk about the need for credible elections
they not only focus on the ZEC. Focusing on the ZEC while leaving out
critical players is not helpful and would not assist the country secure
necessary reforms and democratise our electoral institutions.

When dealing with political transitions, it is important to learn something
from the theory of elite continuity so that there are no face powder changes
that fail to produce desired institutional renewal. As reforms take place at
the institutional level, it is also imperative to make sure that the elites
that preside over repression and electoral malpractices also pack their bags
if they are not willing to reform and adopt a new political culture of
transparency and democratic accountability.

The elite continuity theory postulates that in most transitions, there are
considerable continuities in both institutions and personalities between the
old regime and the new establishment. In the case of the media, the
institutions that emerged after the fall of a prior regime are controlled
and influenced by the new political elite. There is a high degree of
continuity in structures and personnel, political interference into
broadcasting and a partisan state-controlled press, just as is the case at
the ZEC.

Zanu PF, like the Rhodesian Front, has staffed institutions such as
state-controlled ZBC and Zimpapers with party surrogates who sing for their
supper and do hatchet jobs for their incompetent and illegitimate political
handlers.  The party workers in these institutions and their ideologues who
masquerade as commentators in newspapers, radio and television are part of
this well-orchestrated process to control and run state institutions in
service of these elites.

These continuities also replicate themselves at the ZEC and the
Registrar-General’s office. This is all designed to ensure Zanu PF elites
continue to cling to power by brute force.

These and others are well-crafted and thought out processes by Zanu PF to
entrench itself in power without the democratic consent of the people of
Zimbabwe.  

Ruhanya is a PhD candidate in Media and Democracy at the University of
Westminster, London.

The disastrous effects of Global Fund slashing

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:33

By Sisonke Msimang

AS the Global Fund to fight Aids, Tuberculosis and Malaria marked its 10th
year at the end of January, it did so against the backdrop of growing
protests against global inequality. World attention has been trained on the
Occupy movement that has challenged the “one percent” of the global
population that exercises disproportionate influence on economic and social
policy from Lagos to New York. But many activists from the developing
world — the biggest beneficiaries of the Global Fund — are more concerned
with the future of the Global Fund as more and more donors desert it.

When the Global Fund was established in 2001 it was heralded as an
innovative new institution — the creation of a movement that was coalescing
around the idea that poor people need not die of preventable and treatable
diseases simply because they happen to have been born on the wrong side of
the planet or on the wrong side of town. Indeed, many thought that is was as
close to an activist entity as was possible for an international body
because it was created as a response to three devastating and somewhat
interconnected epidemics, which had economic and social inequality as their
common denominator.

The Global Fund promised the world that it would not become yet another
bureaucracy staffed by grey men in grey suits. Instead, it pulled together a
diverse staff of smart young management consultants; people living with HIV
and Aids who had battle scars from years of activism; committed health
workers with extensive public health experience; and economists and lawyers
who had cut their teeth on drug company lawsuits that forced the prices of
medicines down.

Together they represented a super-charged force, convinced that if they
worked hard enough to demonstrate impact they would continue to raise
resources for the hopelessly under-funded global response to Aids, TB and
malaria.

And while the Global Fund was championed by activists, it was also embraced
by the governments of poor nations. After years of structural adjustment
programmes, the health systems of many developing countries — especially
African countries — had been ravaged, with 30-50% vacancy rates, threadbare
dispensaries and queues that seemed to never end.

Most importantly, the Global Fund represented a remarkable new system of
funding, which encouraged collaboration between states and civil society
organisations, and insisted that science rather than morality and politics
should drive the agenda for resourcing national Aids programmes. So
governments that had been reticent about extending Aids drugs to sex
workers, gay men and refugees were forced to acknowledge that these
populations have a right to services. And even if communities voted for the
“wrong” political party, they would still receive insecticide-treated
bed-nets to curb the deadly threat of malaria.

The governance structure of the Global Fund board is as innovative as its
approach to funding. It comprises donors, communities of people affected by
the diseases, civil society organisations from developed and developing
countries, and governments. Each group has an equal vote, the right to table
issues, and the power to hold the executive management of the Global Fund to
account.

And yet today, despite the Global Fund’s track record of managing its funds
well, demonstrating impact and acting swiftly to deal with corruption,
donors have cited “bad governance” — as is the case with Zimbabwe — as an
excuse for withholding further commitments. Others have blamed the global
financial crisis.

The irony of this has not been lost on activists who deal with the drivers
of Aids, TB and malaria on a daily basis. In the last two years, the Global
Fund’s biggest donors — the US and the UK — have been able to bail out badly
managed banks and other lending institutions, despite overwhelming evidence
of unethical behaviour, abuse of power and “bad governance” by senior
management. Furthermore, as the economist Jeffrey Sachs has pointed out, the
US defence budget amounts to US$1,9 billion a day — just three days of that
would plug the gap facing the Global Fund.

The reality is that the Global Fund —  and I suspect, other development aid
programmes — will bear the brunt of the rage of Western publics, incensed
that good money has been thrown after bad to bail out large banks and then
to save the eurozone, which irresponsible countries have brought to its
knees.

If aid budgets are cut, and financing mechanisms as effective and innovative
as the Global Fund are trimmed, the “one percent” will have much more to
worry about than the Occupy movements. In the long run, if they insist on
being penny wise and pound foolish, donor countries may contribute to
outbreaks of more virulent strains of HIV and TB than they ever imagined
possible. And like the economic contagion that has spread throughout Europe,
these epidemics will have little respect for national borders.

In the end, rich or poor, we all lose if the Global Fund is not supported to
live up to its full potential.

Sisonke Msimang is Executive Director of the Open Society Initiative for
Southern Africa (Osisa).

Mugabe’s regional charm offensive faces hurdles

http://www.theindependent.co.zw/

Thursday, 09 February 2012 16:37

Owen Gagare

PRESIDENT Robert Mugabe is trying to reclaim waning support in the region as
he pushes for an early election which he wants later this year. He is hoping
to bounce back from his recent setbacks on the diplomatic front.
The recent visit to Zimbabwe by Malawian President Bingu wa Mutharika and
comments by Zambian President Michael Sata, who described MDC-T leader
Morgan Tsvangirai as a “stooge” of the West, might be an indication that
Mugabe is making a comeback on the regional front after Sadc chastised him
last year for failing to stop political violence and his reluctance to
embrace necessary reforms.

Sata described Tsvangirai’s calls for security and electoral reforms in
Zimbabwe as unnecessary. He went further to say he would not block Mugabe
from holding early elections, despite current efforts by South African
President Jacob Zuma to ensure that electoral and constitutional reforms
come first.

With Sata and Mutharika now seemingly in his corner, Mugabe can now also
target his sympathisers such as Namibian President Hifikepunye Pohamba,
Mozambican President Armando Guebuza and the DRC President Joseph Kabila for
support.

However, political analysts believe the veteran leader still has an uphill
battle to convince Sadc leaders to side with him in his decade-long battle
with the MDC formations, given they have grown weary after mediating in
Zimbabwe’s unending political crisis.

The coming to power of Sata, who shares the same nationalist ideology as
Zanu PF, has, however, given Mugabe something to smile about. His
predecessors, Rupiah Banda and the late Levy Mwanawasa were sharp critics of
Zanu PF and played a crucial role in Sadc adopting a tough stance on
Zimbabwe.

Mutharika has always been an admirer of Mugabe as evidenced by his naming of
one of the country’s major roads, Midima Road, after Mugabe in 2006. The
strained diplomatic relations Malawi is having with Britain have pushed him
further into the arms of Mugabe, making him an important ally for a man
desperate for friends in the region.

Political analyst Professor Eldred Masunungure believes Sata and Mutharika
will be important allies for Mugabe in Sadc as he tries to persuade regional
leaders to endorse his calls for early elections.

He said Zanu PF will also bank on the sympathy of the liberation movements
in the region as it battles to push through its agenda.

“It’s clear that Zanu PF and Mugabe appear to be winning the diplomatic war
in the region,” Masunungure said. “Even if they are not winning they are in
the ascendancy. Two thousand and twelve has started well for Zanu PF and
badly for the MDC formations, especially MDC-T. Mugabe appears to be
repairing the damage that was done in 2011 and this may be a product of
intensive diplomatic incursions in Sadc.”

Masunungure added that: “With Zambia, this has been facilitated by the
change of political leadership. Sata comes from the same political
generation as Mugabe and this has given the president an ally who will side
with him in Sadc.”

Mugabe has been desperate for allies in the region after Zuma, the Sadc
appointed mediator in the Zimbabwe crisis, took an uncompromising stance
against him and convinced other leaders to be hard on the Zanu PF leader.

Sadc leaders last year insisted on an election roadmap, thwarting Mugabe’s
bid for early elections. They also called on all parties to put an end to
violence.
Mugabe responded by sending his emissaries across the region to present his
side of the story ahead of the Sadc Summit which was held in May last year
in Windhoek, Namibia, where Zimbabwe was, however, struck off the agenda
after Zuma failed to attend as his ANC party was facinglocal government
elections.

Mugabe had a meeting with Pohamba before the summit. He had also sent
Vice-President John Nkomo to South Africa and Botswana on a fence-mending
exercise after his outbursts over the outcome of the Livingstone summit in
March last year, which strained relations with other regional leaders.
Masunungure said despite the gains made by Mugabe it will be almost
impossible for him to have the sympathy of all Sadc leaders who are now
tired of dealing with the never-ending crisis.

“It’s a question of whether he has not exhausted the sympathy of his wartime
allies. Zanu PF shares a lot with Angola, Namibia and Mozambique and to some
extent South Africa, but after a decade of them trying to mediate and
failing largely because of Mugabe’s intransigency, it may have eroded the
sympathy they have,” he said.

“It’s a big minus on his side. Most countries in Sadc have reached a
threshold where they say enough is enough.”

Masunungure said Mutharika desperately wants tips from Mugabe after being
left vulnerable when Britain and other donors withdrew aid to his country
following a diplomatic fallout between the two countries.

Relations between Malawi and Britain plummeted last year when Malawi
declared British high commissioner Fergusen Cochrane-Dye persona non grata
and booted him out of the country after he said in diplomatic cables
released by WikiLeaks Mutharika was becoming “ever more autocratic and
intolerant of criticism”.

Britain retaliated by expelling Malawi’s high commissioner from London.

The withdrawal of aid saw Malawi’s economy going on a downward spiral as the
country depended on donor aid, which was up to 40% of its development
budget.

Political commentator Blessing Vava said Mutharika had no choice but to run
to Mugabe since they share similar problems.

“In a way he is in the same predicament as Mugabe,” Vava said. “His people
are increasingly becoming hostile to him. The West has raised human rights
issues and cut funding due to corruption. He has reacted to strikes with a
heavy hand and people have died.

“The opposition is becoming stronger because the living conditions of the
people are deteriorating every day, civic society is gaining ground in
raising human rights violations by the state. He is a desperate man today
and he will be desperately trying to hold on to power. He will obviously
find solace in Mugabe and Mugabe will obviously be saying to him it’s the
West that is fighting you and that’s what he wants to hear at this point.He
is an admirer of Mugabe to the extent of naming one of the main roads in
Malawi after him.”

Vava, however, said despite the friends he is making, he does not believe
Mugabe will divert Sadc from the path they have taken.

Another political analyst Charles Mangongera said while Mugabe was trying to
divide Sadc so that he can push his bid for early elections, he was destined
to fail with Zuma as his major stumbling block.

“There is no doubt that Mugabe is on a radical diplomatic offensive to
convince Sadc and the AU to allow him to call an election,” Mangongera said.
“His political strategy is to target countries where he thinks he can
re-kindle old friendships as a way of dividing Sadc on the issue of
elections,” he said.

Independent Comment: Govt tinkering with problems

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:32

PRIME Minister Morgan Tsvangirai yesterday delivered a speech in Harare at a
special Council of Ministers to adopt the 2012 Government Work Programme
(GWP), saying key priorities for the current administration remain the need
to promote economic growth and ensure food security.
Tsvangirai also said the other priorities include the need to guarantee
basic services, strengthen and ensure the rule of law and respect for
property rights, advance and safeguard basic freedoms through legislative
reform and the constitutional process and to normalise international
relations.

While Tsvangirai was speaking at the GWP workshop where it would have
appeared government has finally put its ducks in a row and is now geared to
deliver, two senior ministers, Welshman Ncube and Elton Mangoma, were
addressing business executives at the Independent Dialogue Series meeting
across town admitting government is dysfunctional and struggling with
current economic problems.

Listening to Tsvangirai would have given one the impression that at least
there is some serious work being done to sort out the problems, but taking
note of the two ministers’ remarks would have shown a government in discord
just tinkering with issues.

Even business executives at the Independent Dialogue Series voiced serious
concerns, warning as long as the government is paralysed by internal power
struggles and endless squabbles it would be difficult to tackle prevailing
economic problems effectively.

The fight over key appointments and controversial policies like
indigenisation are some examples showing disharmony and paralysis in
government.
Although Tsvangirai’s GWP wish list for 2012 is good, the situation on the
ground is rather different. The trouble is ministers don’t actually take
their work seriously. Some are also corrupt and incompetent.

The other drawback is that government does not implement its own programmes.
Government leaders are good at making promises but useless on delivery.

Apart from the fact that President Robert Mugabe and Tsvangirai himself, as
we gathered yesterday, were a few days ago locked in secret talks — until
they were stopped in their tracks by SA President Jacob Zuma — on taking the
country to early elections, there are many other manoevures fuelling
political and macro-economic instability.

Unless the issue of elections ishandled properly, government risks reversing
all the gains made in the past three years and plunging the economy into a
tailspin again.

The consequences of renewed political uncertainty and macro-economic
instability are already with us and manifesting themselves through various
ways, including the current liquidity crisis. The liquidity problem has now
reached emergency proportions and become the single most critical problem
facing this government.

This has put Zimbabwe at a crossroads again.

Business leaders yesterday wanted to know how then do we resolve this
problem? The answer is clear, Ncube said, we need fresh elections to choose
a legitimate government but only after political reforms, including a new
constitution, have been finalised to create conditions for credible polls.

In the meantime, government must stop tinkering with problems and fix the
situation. Coming up with cosmetic interventions won’t help anything.

Stronger policies, now under threat, and a favourable environment had helped
nascent economic recovery since 2009. This was after the previous regime had
ruined the economy and left it in rubble through leadership and policy
failures, worsened by exogenous factors.

Structural impediments weighed heavily on manufacturing and utilities, which
used to be the locomotives of growth and employment creation.

Due to power shortages and many other problems, economic recovery remains
fragile and enormous challenges persist. Government urgently needs to make
hard but necessary policy choices to avoid another meltdown.

Editor’s Memo: Tomana’s duplicity laid bare

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:26

Constantine Chimakure

ATTORNEY-General Johannes Tomana last week made startling pronouncements
that once again give credence to questions about his professionalism and
competence as the country’s chief law officer.

Tomana declared that it was the sole constitutional prerogative of President
Robert Mugabe to appoint or re-appoint the Police Commissioner-General and
constitutional bodies without consulting anyone apart from the Police
Service Commission. He then took it upon himself to write the epitaph of the
Global Political Agreement (GPA), which gave birth to the current inclusive
government, saying the pact had expired.

His utterances were triggered by the expiry of Police Commissioner-General
Augustine Chihuri’s contract and contentions that it could not be extended
by Mugabe without consulting Prime Minister Morgan Tsvangirai in line with
the GPA. Tsvangirai and the two MDC formations in the inclusive government
want the top cop to vacate office for his alleged partisanship, selective
application of the law and human rights abuses by his force, among other
vices.

Tomana said media reports on Chihuri’s future in the police force were
“criminal”, adding that the Commissioner-General’s office “was the only
executive authority that the head of state uses to guarantee security in the
country”.

“No one should interfere with that institution, except the president who is
answerable to the people for its success and failures. Breaches of the
constitution from now on around that office would not be tolerated,” he was
quoted saying. “The same applies to all other constitutional offices through
which the presidency uses to deliver the constitutional protection that
citizens of this country are entitled to.”

Contrary to Tomana’s claim, the three principals in the inclusive
government — Mugabe, Tsvangirai and deputy premier Arthur Mutambara — met in
the capital on Monday and Wednesday and decided to uphold provisions of the
GPA, not only on Chihuri’s issues, but on an array of toxic issues of the
pact signed in September 2008.

The principals unequivocally agreed to follow due process. In Chihuri’s case
the Police Service Commission should make recommendations to the president
for Chihuri’s reappointment. Mugabe and Tsvangirai will then “discuss” the
proposals before the reappointment. From the deliberations of the principals
and their reading of the GPA and the constitution, Mugabe does not have the
sole mandate to reappoint Chihuri or any other service chief.
Reappointments of service chiefs would be a collective responsibility of the
inclusive government and they are not guaranteed. The principals laid bare
Tomana’s duplicity on such an important matter.

The outcome of the principals’ meeting was however thrown out the window by
Presidential Spokesperson George Charamba who claimed yesterday that Mugabe
told Tsvangirai and Mutambara that he has the sole responsibility of
appointing Service Chiefs. He also claimed that Tsvangirai and Mutambara had
pleaded with the president to inform them of such appointments for the sake
of appeasing their constituencies.

As we have said and will continue to say the GPA was poorly couched and as
such Tomana wants to exploit its ambiguity on the appointment of officials
to key positions. The pact is not explicit on what the key positions are.

Our Attorney-General stands accused by the MDC formations and civic society
of having made several questionable decisions since his unilateral
appointment by Mugabe. No one can begrudge them making such disparaging
allegations given his latest attempt to gag the media from tackling national
issues like the Chihuri contract. His public declaration that he supports
Zanu PF muddles the situation — whose interests is he serving? Does he
deserve to continue as Attorney-General given his shenanigans?

The principals’ meeting also debunked claims that the GPA had expired a long
time ago because there was never a sunset clause in the agreement. If the
GPA had expired, why is the inclusive government still subsisting when it is
a creature of that agreement?

On a parting note, I salute readers and advertisers of the Zimbabwe
Independent for supporting the newspaper under my editorship for close to
two years. It was an eventful and enjoyable experience. We will meet again
in the columns of NewsDay. Cheerio!

Candid Comment: Solving Zimbabwe’s debilitating energy problem

http://www.theindependent.co.zw/

Thursday, 09 February 2012 17:24

Itai Masuku

ONCE again the issue of energy has taken its rightful place in terms of
public debate. At the Independent Dialogue Series held in the capital
yesterday, a volley of questions were fired at Energy minister Elton Mangoma
on where the country is in terms of electrical power generation.
The theme of the dialogue was “Is electrical energy slowing down industrial
development?”

The answer is an obvious “yes”. So the rest of the discussion was on how
this was affecting recovery and what needed to be done to correct the
situation. In the same way as questions had been thrown at the Energy
minister, solutions were also bandied around. All it took is for one to
figure out which of the sometimes emotionally-charged statements and
questions contained solutions.

But before we come to that, it was also surprising how under-represented
industry was. Save for a few executives there was hardly anyone from
industry. Most people were from the services sector, the financial sector in
particular. One can surmise that the financial services sector wanted to
hear from the horse’s mouth what really was going on in terms of energy
provision.

One assumes bankers are being told day in and day out by industrialists that
power outages are affecting production, hence they are not meeting their
targets and therefore the companies are failing to pay back their loans.

Could their loans be extended? The bankers must have been surprised that the
same manufacturers were not present to air their grievances directly to the
minister concerned.

Desperate times call for desperate measures, and one of the possible
solutions that came out is that some firms could opt to run their operations
after 9pm to dawn, when demand was at its lowest.

According to minister Mangoma, what they call base energy, which is
electricity generated from coal-fired turbines such as those at Hwange, and
whose generators cannot be just switched off at a whim, was not being used
at all. He offered cheaper tariffs for companies that operated then: A
possible solution.

The question is, as entrepreneurs, do our industrialists need to be told by
a civil servant that this window of opportunity exists? Shouldn’t they
already have seen this, started operating graveyard shifts and, in addition,
ask for the reduced tariff they’re now being offered?

One observer pointed out that industry wastes about 20% of its electricity,
which could total more than 200MW.  One of the captains of industry did not
take kindly to this assertion and was very defensive. Yet, if the merits of
the statement were examined, therein lay another possible solution. Yet one
of the most glaring examples of failing to tackle electricity challenges is
the use of renewable energy, particularly solar energy. Again, this requires
a new mindset.

Two decades ago, a leading Zimbabwean solar expert pointed out that 40% of
electricity consumed in the country went towards water heating and this
could be solved by using solar water heaters. He also pointed out that
Zimbabwe lay on the optimum path of the solar belt and yet was not taking
advantage of this. This was one of the reasons why the Solar Summit was held
in this country.

And what of wind energy? When I was growing up, you could identify a farm by
the existence of a rudimentary windmill, primarily to pump water. But apart
from saving energy for pumping water by using this technology, modern
methods can get this to also generate electricity