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Southern Africa mulling 2 billion dollars in aid for Zimbabwe

Business News
Feb 26, 2009, 5:52 GMT

   Johannesburg - Southern Africa is considering injecting 2 billion dollars
into Zimbabwe to kick-start its economic recovery over the next 10 months,
the finance minister of neighbouring South Africa, Trevor Manuel, said

   Manuel was speaking a day after finance ministers of the Southern African
Development Community (SADC) met in Cape Town, along with the African
Development Bank, to discuss Zimbabwe's economic reconstruction and other

   The new power-sharing government in Zimbabwe had been reported to be
seeking 1 billion dollars to be able to restore basic services and pay
salaries in the short term.

   But Manuel told SAfm public radio that new Finance Minister Tendai Biti
had come to Cape Town with a request for 2 billion dollars - a
1-billion-dollar loan to stimulate business, particularly small and
medium-sized business activity, and another 1 billion dollars aimed at
ending emergencies in health, education, sanitation, energy, water provision
and other services.

   'This [the second billion] is a tiding-over to ensure they can improve on
the quality of services rendered,' Manuel said, singling out the cholera
crisis that has claimed close to 4,000 lives since August as an example of
the breakdown in services in Zimbabwe.

   Zimbabwe's request came as the global financial crisis starts to hit home
in the region, shrinking demand for the commodities on which many southern
African economies rely and forcing mass job cuts.

   South Africa's own economy contracted by 1.8 per cent in the last quarter
of 2008.

   The SADC finance and other government ministers are meeting again Friday
and Saturday to discuss Zimbabwe and other issues.

   Zimbabwean Prime Minister Morgan Tsvangirai has estimated his
government's long-term funding needs at up to 5 billion dollars.

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Zimbabwe to Hold Fresh Elections Within Two Years, Herald Says

By Brian Latham

Feb. 26 (Bloomberg) -- Zimbabwe will hold elections within two years, the
state-controlled Herald said, citing President Robert Mugabe.

The ballot will follow a referendum on a new constitution agreed on between
Mugabe's Zimbabwe African National Union- Patriotic Front and the Movement
for Democratic Change, led by Prime Minister Morgan Tsvangirai, the
Harare-based Herald said on its Web site.

Zimbabwe's current power-sharing government sworn in Feb. 13 is an "interim
arrangement," Mugabe told the Herald yesterday.

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Mugabe considers fixing currency to SA rand

    February 26 2009 at 09:33AM

Johannesburg - Zimbabwe will consider fixing its local dollar to the
South African rand but will not adopt it as its main currency, President
Robert Mugabe said in an interview published on Thursday.

"I do not see us adopting the rand as our main currency. Even in Sacu,
the South African Customs Union, the members have their own currencies even
though they use the rand," Mugabe told Harare-based The Herald Online.

"Botswana has its pula, Namibia has its dollar, Lesotho, Swaziland,
they all have their own currencies. But they base them on the rand and that
is something that we might consider doing here."

Mugabe said "at the moment we are using all international currencies".

"When it was first mooted, the idea of paying people in US dollars, I
was against it and I still am because we just do not have enough [foreign
currency]. It is a problem that confronts us even now.

"Personally, I think we should revalue the Zimbabwe dollar in a manner
that fixes its relationship with the rand for a while. We will protect it
for a while, for a while as we increase production. But we should protect

Mugabe said some Zimbabweans have started to speculate with the
Zimbabwean dollar.

"The problem is that the people of Zimbabwe have become speculators.
There are some people who, if you say the [Zimbabwe] dollar is four to one
with the rand, they will immediately make it eight to one and 10 to one.

"So there is this escalation on a daily basis. We should fix it [the
value of the local currency] legally and keep it there for now. I want to
discuss this with [Finance Minister Tendai] Biti.

"And how do you make it go? Through production in agriculture,
manufacturing, mining and the people get goods and services and then we can
expose it to the fluctuations of the market," said Mugabe. - Sapa

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African Development Bank praises Zimbabwe plan

Thu Feb 26, 2009 8:37am GMT

CAPE TOWN, Feb 26 (Reuters) - Zimbabwe has made an impressive start on an
economic recovery plan which warrants support from the international
community, African Development Bank President Donald Kaberuka said on

He also told reporters on the sidelines of a summit of southern African
finance ministers that the AfDB was prepared to set up a donor meeting for
Zimbabwe but said the country's $5 billion foreign debt needed to be cleared
to secure more aid.

Zimbabwe's new power-sharing government will be heavily dependent on foreign
aid and investment to salvage the country's ruined economy.

But Western donors have made it clear money will pour in only when a
democratic government is created and bold economic reforms implemented.

"It will require that Zimbabwe comes forward with a credible economic
programme. Now the first steps I have seen, listening to (Zimbabwean
Finance) Minister Tendai Biti is quite impressive and it merits support,"
Kaberuka said.

The new administration urgently needs to tackle an economic meltdown that
has led to the world's highest inflation, food shortages and a cholera

Prime Minister Morgan Tsvangirai said last week it would cost as much as $5
billion to repair the economy. (Reporting by Wendell Roelf; Editing by
Michael Georgy)

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Economic crisis poses challenge for Zim rescue plan

  Compiled by the Government Communication and Information System
Date: 26 Feb 2009

By Bathandwa Mbola

Cape Town - The global economic crisis poses a challenge with regard to the
South African Development Community's (SADC) rescue plan for Zimbabwe.

"The region will support Zimbabwe, however we need to take into
consideration what is going on (globally) ... so for sure it is a
challenge," said SADC Executive Secretary Tomaz Salomao.

He was speaking on Wednesday on the sidelines of the regional Finance
Ministers meeting in Cape Town.

Finance ministers from the 15-nation organ are meeting to discuss an aid
package for Zimbabwe, where the new unity government faces a severe
humanitarian and economic crisis.

The Finance Ministers will also look at measures to soften the impact of the
world economic crisis on the region.

Once outlined, the measures will be submitted to the organisation's Cabinet
Council that will meet Thursday and Friday in Cape Town, said Mr Salomao.

The Finance Ministers meeting came ahead of the SADC Council of Ministers
Conference - to be held in Cape Town on Thursday.

"Where money will be coming from, we have a range of options, (such as it)
coming from those member states who have reserves ... I think that we can
also assist Zimbabwe in knocking on the doors of friendly countries who can
also assist Zimbabwe," he said, highlighting that the request must be

Western countries and donors have said that they would wait to see if the
new government was serious about tackling the country's economic malaise
before providing aid. Some are sceptical the arrangement can work while
President Robert Mugabe remains at the helm.

Last week, the Zimbabwean Prime Minister Morgan Tsvangirai said the country
needed at least $5billion to ensure recovery. Economic experts, however,
suggest $10 billion is needed for reconstruction.

Zimbabwe's economy collapsed under President Mugabe's leadership, and policy
failures have reduced the country to a failed state.

The economy, its agricultural base destroyed by violent land seizures, has
experienced 10 years of negative growth.

Its inflation rate is the world's highest, challenging efforts to rebuild
the country, its infrastructure - roads, airports, railway networks,
schools, hospitals and clinics, waterworks, power stations and bridges -
which are collapsing.

Meanwhile, the United Nations on Monday pledged to help Zimbabwe tackle its
humanitarian crisis. The country faces chronic food shortages and a cholera

The World Health Organisation last week said that 3 759 people who had
contracted the disease had died. A total of 80 250 cases had so far been

A visiting UN team promised to deal with the humanitarian situation gripping
the country after a meeting with President Mugabe on Monday.

UN Assistant Secretary-General for humanitarian affairs and deputy emergency
relief co-ordinator Catherine Bragg said the world body would step up
efforts to help Zimbabwe.

"We are focusing on cholera and any form of humanitarian assistance the UN
can offer," she said.

Ms Bragg visited cholera treatment facilities to assess the situation.

She also met the ministers of labour, education, health, agriculture and
foreign affairs. - BuaNews

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Right to change government was "negated" by Mugabe regime, U.S. says

By Stephen Kaufman, Staff Writer

Washington - In its annual human rights report, the State Department cited the Zimbabwean government's increased use of violence and intimidation against its citizens and political opposition during 2008, with leaders and supporters of the political opposition killed, beaten, tortured, abducted and arrested.

The department's County Reports on Human Rights Practices, first released in 1977, are submitted annually to the U.S. Congress in compliance with the federal Foreign Assistance Act.

According to the report, released February 25, President Robert Mugabe and the ruling Zimbabwe African National Union - Patriotic Front (ZANU-PF) engaged in "the pervasive and systematic abuse of human rights" during a year in which it was challenged by the opposition Movement for Democratic Change (MDC) in parliamentary and presidential elections.

"The ruling party's dominant control and manipulation of the political process through violence, intimidation, and corruption effectively negated the right of citizens to change their government," the report concluded.

"Unlawful killings and politically motivated Abductions increased. State-sanctioned use of excessive force increased, and security forces tortured members of the opposition, student leaders, and civil society activists with impunity," it said.

Zimbabwe's security forces refused to document cases of political violence committed by ZANU-PF loyalists against the opposition, the report said.

The State Department concluded that during 2008, Mugabe's government "or its agents" had killed more than 193 citizens in political violence, and the MDC claimed approximately 200 more of its members and supporters were "missing and presumed dead."

The report said Zimbabwe's security forces, paramilitary forces such as ZANU-PF youths and war veterans, and other ZANU-PF party supporters had engaged in politically motivated killings, and that there have not been any prosecutions or convictions in any of the nearly 200 cases.

Hundreds of opposition and civil society members also reportedly were abducted and tortured. The majority of victims were held for one or two days and then abandoned. At the end of 2008, 32 people remained either in police custody without charge or listed as missing.

The country's judicial independence was compromised by reports of government bribes and intimidation of judges, according to the State Department, and security forces also arrested and detained labor leaders, journalists, demonstrators and religious leaders during 2008.

Along with violence, corruption, harassment of minorities and intimidation of political opponents, the report also provided details on the government's killing of unauthorized mine workers in Manicaland Province and its hampering of nongovernmental organizations providing humanitarian relief.

It also cited continued human rights concerns over the situation of women and children in the country, such as women subject to violence and discrimination, child laborers and the human trafficking of both groups.

The full text of the report section on Zimbabwe ( )is available on the State Department Web site.

(This is a product of the Bureau of International Information Programs, U.S. Department of State.  Web site:

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Harare teacher: 'Relief to work again'
Thursday, 26 February 2009

Zimbabwean children in a classroom near Harare, Jan 2009
Zimbabwe used to have the highest literacy level in sub-Saharan Africa

A 40-year-old Zimbabwean primary school teacher in a high-density area of the capital, Harare, tells the BBC News website why he has ended his five-month strike after the new power-sharing government started to pay salaries in foreign currency.

A month ago, he explained how he could not afford to work, as his monthly salary of 30 trillion Zimbabwe dollars was only worth US$1 (71p) - enough to pay for a single bus fare to work.

I went back to work after my union urged teachers to end the strike.

To be honest it was a relief to be back. I teach 12-13 year olds and I had really missed the kids since I stopped working in September. It was exciting to see them all again.

The old regime didn't listen to teachers - now we have a dialogue with the government
However, a lot of work needs to be done.

When I returned to the school on Monday the headmistress called a staff meeting. She said we should brace ourselves for what the classrooms looked like now.

While we were away the school was vandalised. Doors were broken down.

People broke in and stole chairs and desks. The top of my table had disappeared.

I was shocked that members of the local community have behaved like this. Zimbabwe has one of the highest literacy levels in Africa. It surprises me that educated people do this sort of thing.

Luckily some of the parents have promised to raise funds to buy new furniture and repair the things that were broken.

No reprisals

My pupils seemed really happy to be back at school. I have 37 in my class and most of them showed up on Monday.

Children picking up maize spilt from a truck (December 2004)
School attendance fell to 20% by the end of last year
While their teachers were on strike and schools were closed, many of my pupils were asked to sell wares in the market to help their families get by. So of course they have all fallen far behind in the syllabus.

If they are going to sit exams this year, we will have to revise the calendar and change exam dates so they can catch up with their work.

Our headmistress has urged us to prepare for the challenges facing the school this year, and to help the children make up for lost time.

There will be no reprisals against teachers who have been on strike.

Most of my colleagues are hopeful that things will work out this time. A former colleague who now lives in South Africa phoned me yesterday. She has been working in a pharmacy there but the pay is very poor.

I urged her to return to Zimbabwe. I really feel that things are improving here. Even the black market is shrinking.


The ministry of education promised us that we would get paid in US dollars. And on Monday the government gave us vouchers which we exchanged for US$100.

That was quite a relief - enabling me to to buy meat and decent food for my family. I have two children, aged 13 and seven. While I was off work I survived by vending and a bit of private tutoring. I didn't like it much.

It feels good to be paid for being a teacher again. We have been told that in the first week of March we will receive around US$800. Eventually we should be earning about US$1,500 a month, which is the regional standard.

With this new unity government, there is now an ongoing dialogue between the teachers' union and the country's leadership. With the old regime, no-one in power listened to teachers.

I'm feeling optimistic at the moment. By paying us in US dollars, the government has taken a step in the right direction. It's showing commitment to the future of the education in Zimbabwe.

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Zanu-PF accused of creating ‘parallel force’

By Richard Lapper in Johannesburg

Published: February 26 2009 02:11 | Last updated: February 26 2009 02:11

Zimbabwe’s new coalition government was on Wednesday racked by a fierce
dispute, with Morgan Tsvangirai, the prime minister, accusing allies of
Robert Mugabe, the president, of creating a “parallel force” within the
structures of government.

Mr Tsvangirai, who heads the Movement for Democratic Change, said a decision
by Zimbabwe’s senior civil servant – who works in Mr Mugabe’s office – to
appoint permanent secretaries without consultation violated the constitution
and the terms of the unity pact under which the government was formed two
weeks ago.

He told foreign ambassadors that “no civil servant has the authority to make
such appointments or announcements” and that they were therefore “null and
The MDC denied reports it was threatening to quit the government over this
issue but admitted the situation was “tense” and said Mr Tsvangirai was
anxious to meet Mr Mugabe.

Many of the new secretaries have served in previous Zanu-PF governments or
benefited from their largesse.

“It is hardly a new broom,” the MDC said.

The dispute is one of several to have emerged since Mr Mugabe’s Zanu-PF and
the MDC agreed, under regional pressure, to form the coalition and,
according to analysts, undermines the government’s credibility when it is
desperately seeking to raise international funds to revive a stricken

“It is ridiculous,” said Tiseke Kasambala, Africa analyst at Human Rights
Watch in Johannesburg. “Things are not going smoothly at all. The MDC is now
in a corner.”

As well as potentially losing control over the civil service, Mr Tsvangirai
has been unable to secure the release from prison of Roy Bennett, his party’s
nominee for deputy agriculture minister, or that of more than two dozen MDC
and human rights workers.

He has also been powerless to prevent a new offensive against white farmers
in which senior government figures including the attorney-general and
military chiefs are said to have conspired with Zanu-PF activists to evict
dozens from their land.

Mr Tsvangirai said that “as long as these matters remain unresolved, it will
be impossible for the transitional government to move forward with the
reforms that this country so desperately needs”.

Meanwhile, finance ministers from the Southern African Development
Community, of which Zimbabwe is a member, met in Cape Town to discuss
economic aid for Zimbabwe. The MDC said South Africa was unhappy about
Harare’s failure to account for $30m (€23.5m, £21m) of aid extended to the
agricultural sector late last year. This would not affect efforts
co-ordinated by the SADC to secure money to repay more than $1bn owed by
Harare to multilateral development banks.

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Bill Watch 6 of 24th February 2009 [Constitution Amendment 19 Act Omits Schedule on New Constitution]


[24th February 2009]

The House of Assembly has adjourned to Tuesday 3rd March and the Senate to Tuesday 17th March

Update on Inclusive Government

The inclusive Government is now in place apart from the Deputy Minister of Agriculture designate, Roy Bennett, who is still in remand prison.  The SADC deadline for the swearing-in of the Prime Minister and his deputies [11th February] was met, but the deadline for Ministers and Deputy Ministers [13th February] was only met for Ministers.  Deputy Ministers were sworn in six days late [19th February].  MDC-T National Council conditions were not all met [abductees were not released before 11th February, the sharing of provincial governorships is still not agreed, and the position of the Reserve Bank Governor and the Attorney-General remains unresolved]. 

Cabinet has met twice – on Tuesday 17th and today – and the Council of Ministers met on Thursday 19th February.  Cabinet has traditionally met once a week on Tuesdays and it seems likely that the Council of Ministers are also going to meet once a week – on Thursdays.  The Prime Minister has been meeting Ministers separately, including the Ministers of Defence and National Security, and also representatives of the business community and other sectors of society to assess what needs to be done.

There has been a flurry of fund-raising appeals to international donors by new MDC-T Ministers, with the emphasis on the Inclusive Government’s promise to pay State employees at least partly in foreign currency.  The Prime Minister visited South Africa to discuss SADC funding of the new Government’s needs with President Motlanthe.  SADC Finance Ministers – including Mr Biti – will meet tomorrow to discuss a proposal for an SADC aid package.  Generally, the attitude towards the Inclusive Government among international aid agencies, seems to be one of cautious goodwill – wishing it well while waiting for firm evidence of real change before committing support.

Ministerial responsibilities and functions

The list of Ministerial portfolios is now known.  But for a proper understanding of how things will work with so many new Ministries, the public needs to know more than the bare names of the portfolios.  The names need to be fleshed out with details of portfolio content – the responsibilities and functions attached to each portfolio, including administration of Acts of Parliament.  There is already speculation about what so many Ministers will actually do and about potential overlapping between portfolios, for example between Foreign Affairs [ZANU-PF] and Regional Integration and International Co-operation [MDC-M] and between Media, Information and Publicity [ZANU-PF] and Information Communication Technology [MDC-T]. 

Even within an established Ministerial portfolio, the Ministry of Finance, where the Minister has statutory powers vis-ą-vis the Reserve Bank as specified by the Reserve Bank Act [electronic copy available on request], statements by the new MDC-T Minister of Finance and the Reserve Bank Governor have demonstrated sharply differing views on the scope of their respective responsibilities.

How is Parliament Going to Work?

With all three parties holding seats in Parliament now in the Inclusive Government, there is no opposition party.  [This leaves the lone Independent member of the House of Assembly, Jonathan Moyo, as the “opposition” and claiming the office of “Leader of the Opposition”!]  It remains to be seen how this will work out in practice, but there is an obvious danger of Parliament being sidelined.  For instance, it is possible that all meaningful debate on Bills and policies will take place, in secret, in Cabinet or Council of Ministers, with Parliament being expected to rubber-stamp whatever those bodies decide.  On the other hand, Parliamentary Portfolio Committees will still have a mandate to subject the operations of Ministries to critical scrutiny and to hear representations from members of the public and hold public hearings on important issues.  So, more than ever before, it is up to civil society and the public to keep democracy alive – to be aware of what is going on in Parliament and be ready to lobby to ensure that MPs listen to their constituents and exert their right to question and counterbalance the executive arm of Government.

Constitution Amendment No. 19 Gazetted as Act

The Constitution of Zimbabwe Amendment (No. 19) Act [No. 1 of 2009] was gazetted late on Friday 13th February, some time after the swearing-in of the Ministers of the Inclusive Government that afternoon.  The Act came into operation immediately.  [The Bill for the Act was passed by both Houses of Parliament on 5th February and the President’s assent was given on 10th February.]  [Electronic version of Act available on request]

Differences between the Act and the Bill - three Schedules missing

The gazetted Act differs considerably from the Bill that was gazetted on 12th December and presented to the House of Assembly on 5th February.  The last 18 pages of the Bill, containing the proposed new Schedules 9, 10 and 11 of the Constitution, are omitted, leaving only Schedule 8 in the Act.  [Schedule 8, the surviving Schedule, contains Article 20 of the Interparty Political Agreement spelling out how the Inclusive Government will function.]

As the Bill was not amended by either House, these omissions in the Act have raised questions.  The staff of Parliament offered the explanation  that the last three Schedules were included in the Bill as “a matter of public interest” and not intended as part of the Bill to be passed.  This is an unprecedented way of presenting a Bill and several MP’s have stated that they did not realise that they were not being called upon to pass the entire Bill as printed.  It is difficult to avoid the comment that, on so important a matter, greater clarity was essential.

Constitution making process left out  

The gazetted Bill’s Schedule 10 incorporated Article 6 of the IPA that lays down the procedure and time-frame for the process of producing a proposed new Constitution before the end of 2010.  Its omission from the Act is significant as now the process is not written into the Constitution.  Keeping this Schedule in the Act would have made sticking to the procedure and the time-frame constitutionally and legally obligatory.  Having been left out of the Act, the Constitution-making process becomes something the political parties can agree to change, to depart from, to delay, as it suits them.  There are other implications of the failure to incorporate the new Constitution-making timeframe into the present Constitution.  It has been widely assumed that a new Constitution would be soon followed by new elections.  Any delays in adopting a new Constitution would extend the term of this “transitional” inclusive government.

National Security Council Bill

The National Security Council Bill was rushed through both Houses of Parliament on the 10th February, but has not yet been gazetted as an Act.  Amendments were made to the Bill in the House of Assembly:

·   to change the Council’s name to Zimbabwe National Security Council

·   to make certain members of the Council “ex officio members” of the Council rather than “members” as originally stated.  These include Heads of Security forces.

·   to insert that the responsibilities of the Council must be exercised “subject to the Constitution”.

Note: Ex officio members are not excluded from voting.  An ex officio member of a body is a full member, unless the rules of that body specifically state the contrary.  The Bill does not in any way limit the functions or powers of these ex officio members of the Council; it follows that they are full members, with a full voice in the decisions of the Council – and the ability to block any decision with which they do not agree, as the Bill requires the Council to make its decisions by consensus.

Statutory Instruments Gazetted Recently

SI 15/2009 – this places the purchase, export and sale of platinum, diamonds and emeralds under the control of the Reserve Bank rather than the Minerals Marketing Corporation [into force 13th February]. 

SIs 16 and 17/2009 – this enacts new fees, all denominated in US dollars, under the Inland Waters Shipping Regulations and the Road Motor Transportation (Public Service Vehicles) Regulations.

SI 18/2009 – Presidential Powers (Temporary Measures) regulations amending penalties for crimes involving harm to the national economy [into force 18th February].  The amendments affect theft, fraud and bribery under the Criminal Law Code, and various offences under the Exchange Control legislation.  [These regulations will expire at midnight on 17th August; so Parliament has until then to pass an Act or Acts making these temporary measures permanent.]  [Electronic version available on request]


Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.

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A 25-Minute Work Week on Zimbabwe's Stock Exchange
Traders at the Zimbabwe Stock Exchange in Harare.
Traders at the Zimbabwe Stock Exchange in Harare.
Tsvangiray Mukwazhi / AP

The intensity with which the spiffily attired investment brokers of the African Banking Corporation stare at their computer screens is misleading: A closer look reveals that they're either fiddling with iTunes, or playing solitaire. Still, their boss, Seti Shumba, who moonlights as chairman of the Zimbabwe Stock Exchange, offers them smiles and pats on the back — he's just glad they showed up to work.

These men would have once spent their days barking out orders for shares on the trading floor (actually an u-shaped conference table in a nondescript downtown office) of the Harare bourse, but Zimbabwe's central bank forced the exchange to shut down last November amidst allegations of fraud and rampant speculation — allegations deemed spurious by Zimbabwe's small investment broker community. To be sure, the exchange was producing annual nominal returns of 23 sextillion percent, but Zimbabwe's inflation rate is even higher, rendering the bourse's real return close to -35%. Still, the government was taking no chances. "People took every shortcut to get instant riches," Gideon Gono, Zimbabwe's central bank governor, tells TIME. "We were protecting the innocent." (See pictures of Zimbabweans go to The polls.)

What Gono didn't mention is that the government has been one of the largest investors in the market, in which the lag between the implied currency exchange rate on the floor and the black market rate on the streets still creates opportunities for quick gains. Other big players include local investment banks and wealthy individuals. The 80 stocks listed on the exchange range from the country's most popular cellular phone carrier to Zimplow, which manufactures "animal-drawn farming implements," and includes companies producing a cross-section of commodities such as timber, wine, nickel, tobacco, even bacon.

The government's move led Munyaradzi Ruzvidzo, one of the 38 licensed stock brokers on the exchange, with little to do. Where once he enjoyed the frenetic lifestyle of a much-sought-after banker, he has spent most of the past three months working "about five minutes" a day. He would show up at the exchange to post sell orders, but there were never any buyers — the hostile political climate has scared off even the most battle-worn investors. "It's only procedural," he says. "I come into the office, and there's just nothing going on."

Still, the traders are lucky to even have jobs in a country where four out of five people are unemployed, and seven out of ten eat one meal per day or less. Governor Gono's incessant printing of Zimbabwean dollars has deepened the country's economic woes, turning what was once the breadbasket of Africa into a financial basket-case. Just last month, he unveiled a series of trillion-dollar notes. The Cato Institute estimates the country's hyperinflation, one of the worst in history, exceeds 89 sextillion percent, or roughly a doubling of prices every 24 hours. Rather than admit to economic mismanagement and corruption, government officials are scapegoating the stock exchange. "There have been attempts to blame 'speculators' and 'rogue traders' for a sharp depreciation in the Zimbabwe dollar and rising inflationary expectations," says Shumba.

Gono insists that he "had hardly printed money, yet the growth in the money supply was phenomenal," blaming stockbrokers for generating inflation. He went on to describe a covert mission last November, in which he used secret agents to buy stocks that he then demanded to be converted into cash. When the stockbrokers couldn't produce the sextillion Zimbabwean dollars, he shut down the whole thing.

Trading on Zimbabwe's volatile stock market made Wall Street's dubious derivatives look like Treasury bills. With an economy locked out of the global financial system, daring foreign hedge funds and institutional investors saw this obscure market — much like emerging investment funds in wine and fine art — as an opportunity to diversify, or seek "exotic beta" in finance parlance. Though real returns may occasionally hit the high double digits, says Shumba, investing here can seem like playing Russian roulette: the exchange is highly fickle and illiquid, with a total market capitalization that has fluctuated ten-fold in the last year, and a trading volume less than one-hundredth the size of the Johannesburg exchange (itself a modest operation by global standards). And then there's the risk that the government could simply confiscate your money. "It's one of the riskiest stock exchanges in the world," Shumba admits.

As dire as their situation has been, the brokers of the African Banking Corporation and their peers are hoping that better times are just around the corner. A new power-sharing agreement between the opposition and President Robert Mugabe's ZANU-PF party could see progress on restarting Zimbabwe's moribund economy. And, it's rumored, Gono's job may be on the chopping block. Foreign investors are eager to dive back into the fray, sensing major opportunities in an economy that will have to be rebuilt almost from scratch. One client of African Banking Corporation is ready to multiply its investments by a factor of 20 once the dire political situation stabilizes. Others remain cautious: "When we see a solid set of reform processes with realistic objectives put into play by the government, then we'll be encouraged to increase our exposure," says Jamar Evans, who manages a Chilean hedge fund with investments in the Zimbabwean exchange.

Last Thursday, the Zimbabwean exchange reopened with a massive sell-off. It remains to be seen whether the new government can restart Zimbabwe's economy, but the effects of their efforts are being felt among Harare's stockbrokers. The 25-minute working week may finally be over.

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New Cabinet Ignores Quota for Women

By Davison Makanga

HARARE, Feb 26 (IPS) - Women's rights activists in Zimbabwe are outraged by
the low representation of female politicians in the new unity government.
Only four women are part of the 35-member cabinet, laughably short of the
equal representation of women in decision-making that Zimbabwe signed onto
at a regional summit in September 2008.

Zimbabwe is a signatory to the Southern African Development Community (SADC)
Protocol on Gender and Development, which stipulates that women should hold
equal positions to men in both public and private sectors by 2015.

The director of the non-governmental organisation Women in Politics Support
Unit (WIPSU) described the gender-biased selection of cabinet members as
"shocking" and "sad".

"Regional and international instruments (for gender equality) that Zimbabwe
is a signatory to have spoken to the need to ensure that we have better
representation of women in decision-making positions, but at such an
important democracy-building stage like this, the three political parties
have not committed to what they had promised", lamented WIPSU director
Cleopatra Ndlovu.

She challenged the political parties to implement their quota systems by
granting women opportunities to exercise real power. At the same time,
Ndlovu urged women to claim their rights and shift from being "mere voters"
and "campaigners for political parties" to political decision makers.

Prominent Zimbabwean gender activist Thoko Matshe, who heads the Feminist
Political Education project in Harare, said the road to gender parity now
looks longer following last week's setback. Matshe took a swipe at the MDC,
a party she says she used to believe represented real change for women.

No real change

Between them, the two formations of the Movement for Democratic Change, in
line with the negotiated agreement on power-sharing, the MDC factions led by
Morgan Tsvangirai and Arthur Mutambara appointed 16 ministers, and chose
three women, including Theresa Makone as minister of public works, Paurina
Mpariwa as minister of labour and Priscilla Misihairambwi-Mushonga as
minister of regional integration and international trade. The Zimbabwe
African National Union-Patriotic Front (ZANU-PF) only contributed one woman
to its cabinet complement of 15; Olivia Muchena was allocated the women's
affairs department.

Matshe complained it was "by default" that a woman should head the women's
affairs department, while the three other female politicians also oversaw
departments that were not the most vital. Male politicians, in contrast,
have been chosen to head all key departments, such as national security,
finance or home affairs.

"Morgan Tsvangirai comes from the Movement For Democratic Change. If I take
the change, it indicates that we should do things differently. But if among
14 nominees from his party we have just two women, it really means we should
take the democracy out of the name of the party", said Matshe.

Apart from the four female cabinet ministers, another four women were
appointed as deputy ministers last week, but without cabinet seats, their
roles are largely ceremonial. According to the Zimbabwean legislative
framework, they cannot be acting ministers in the absence of their
superiors, for example.

Misihairambwi-Mushonga said she was disappointed by the low numbers of women
in cabinet, but confident that her colleagues and herself would make their
marks by championing women's issues during their tenure: "Whilst we have a
few women in cabinet, most of them are women's activists. I'm sure we will
be able to speak out."

"As a feminist, I am very disappointed, but existing political agreements
have set a foundation for the feminisation of many issues, including health,
food security or HIV and AIDS. So there is hope that this discussion around
gender equality will be taking place", she added.

Vice president and ZANU-PF member Joyce Mujuru, in contrast, believes women
should fend for themselves instead of rely on quotas to get into power. She
told the state-run Herald newspaper the low representation of women in high
positions was unfortunate, but blamed women for not fighting hard enough for
decision-making positions. Because many women lack confidence, they are
their own worst enemies, Mujuru told the newspaper.

Women sidelined

To ensure women's empowerment and gender equality are not sidelined again,
Zimbabwean women's rights group have now started to prepare inputs for the
country's new constitution, which, according to constitutional amendment
number 19, will be promulgated during the next 18 months.

Rutendo Hadebe, chairperson of The Women's Coalition, a grouping of
Zimbabwean women's rights organisations, says the coalition will take
advantage of the constitutional reform process to lobby for progressive
provisions that will empower women and "close a past of inequality". The
coalition plans to collaborate with the four, female cabinet ministers to
spearhead the process.

"We are grateful for the four that are there, it's better than nothing. We
will do whatever we can to support them and work with them", said Hadebe.

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Tsvangirai Orders Rule Of Law

Harare - Zimbabwe's Prime Minister Morgan Tsvangirai has tasked the
country's two ministers of Home Affairs to act on restoring the rule of law
in the country.

"The rule of law continues to be flouted by some sectors of the
economy and this must stop immediately, in particular a new wave of of
disruptions of farming operations in contravention of the Memorandum of
Understanding and undermining our ability to revive our agricultural sector
and restore confidence," said Tsvangirai in an address to journalists at his
Munhumutapa offices Wednesday afternoon.
Tsvangirai was flanked by one of his deputies, Arthur Mutambara, who
also heads a smaller arm of the Movement for Democratic Change (MDC) and
Gordon Moyo, the Minister of State in the Prime Minister's office.
Under the unity agreement signed last year on September 15 paving the
way for the establishment of a unity government, the country's two parties
agreed to share the Home Affairs ministry.
Tsvangirai told journalists that he had instructed the two Home
Affairs ministers to act to restore rule of law in the country.
He said, "I have tasked the Ministers of Home Affairs, Giles Mutsekwa
and Kembo Mohadi to bring the full might of the law down on the perpetrators
who continue to act within a culture of impunity and entitlement. No person
in Zimbabwe is above the law," said Tsvangirai.
Recent media reports suggests that  Zimbabwe is stepping up the
confiscation of white-owned farms with several Zanu PF officials pin-pointed
as being at the fore-front of the current wave of land grabs.
A host of aricultural officials, soldiers and police loyal to
President Robert Mugabe have seized 77 white-owned farms within the last few
weeks although this is largely viewed as a sign of opposition to Prime
Minister Morgan Tsvangirai, who is an arch critic of the haphazard

The Commercial Farmers Union (CFU) President Trevor Gifford reported
to the international media this week that the invasions are  being carried
out by a clique of ZANU-PF loyalists who were "using their offices to ensure
ethnic cleansing can take place before the primeminister is able to
stabilize the country.

"This is being led by members of the old regime in ZANU-PF who are not
willing to see the transition take place to a new unity government," Gifford
told the media.

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LonZim shares suspended, Lonrho stake buy reviewed

Thu Feb 26, 2009 8:42am GMT

* Adviser Collins Stewart resigns

* Related party transaction not disclosed correctly

* Shares in Lonrho down 33.5 pct in early trade

LONDON, Feb 26 (Reuters) - Zimbabwe investment group LonZim Plc (LZM.L) has
had its shares suspended on Britain's junior AIM market while the company
investigates the acquisition of a stake in related African investment firm
Lonrho Plc (LONR.L).

Collins Stewart has told LonZim that it is resigning as the company's
nominated adviser and broker as it "was not consulted nor made aware by
LonZim of its intention to make these acquisitions, the basis therefore, nor
that the acquisitions had taken place."

LonZim said in a statement on Thursday that it had acquired just short of 60
million shares in Lonrho over three months, the bulk of which were bought
during a private placement.

LonZim said it now owns 7.8 percent of Lonrho and paid 2.95 million pounds
($4.20 million) for the stake.

However, the transaction was not disclosed in the form required by AIM
rules, it said.

Lonrho, meanwhile, owns 24.25 percent of LonZim and provides it with
management support services. Three of LonZim's executive directors are also
executive directors of Lonrho.

At 0840 GMT Lonrho shares were down 33.5 percent to 3.25 pence. LonZim
shares were untraded. (Reporting by Rosalba O'Brien; Editing by Victoria
Bryan) ($1=.7020 Pound)

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Zimbabwe: Tariffs - Zesa Must Be Realistic

Published by the government of Zimbabwe

26 February 2009


Harare - ZIMBABWEANS need to pay the correct price for their electricity so
Zesa can afford to generate power and can afford to service the loans it
will need to build more power stations.

No one will argue with that. No one wants to see ever more blackouts;
everyone wants industry to rebuild without energy constraints.

We all know that Zesa has to repair quite large sections of its network and
basically rebuild the mechanical and electrical equipment at Hwange Power
Station, its largest, catching up on years of skipping maintenance in the
shortest possible time.

But that does not mean Zesa can soak its customers and destroy the
opportunity to rebuild commerce and industry through gross overpricing.

Nor does it mean that Zesa can force customers to pay for its own
incompetence or lack of planning.

Zesa had, as dollarisation came to the fore, received permission to charge
an average tariff of 9USc a kilowatt hour, an incredible figure by world and
regional standards.

Eskom, the giant in the region, charges less than 3USc a kilowatt hour and
unlike Zesa has to generate almost all its power from coal and nuclear
plants. Zesa has the very cheap Kariba South Power Station, cheap now
because the dam wall and the civil engineering works are all paid for and
the "fuel" for the station is free, being the water in the river.

The new Minister of Energy and Power Development, Engineer Elias Mudzuri,
obviously feels the same as we do.

The fact that he wants commercial customers to pay one-third of their new
bills suggests that he, too, is looking at something close to parity with
South African rates for Zimbabwe.

We hope that he and his ministry will, in fact, once they have done their
calculations, come up with an average tariff close to what Eskom is allowed
to charge. South Africa has a special board to set tariffs and a complex
process to arrive at a fair figure. The Eskom tariff includes the need to
fund new power stations so that process can at least be a starting point
when calculating a fair Zimbabwean tariff.

Something close to parity with Eskom, or just marginally higher, will give
Zesa a significantly larger margin over running costs than that utility,
because Kariba South, even when Hwange is on full stream again, will provide
almost half Zimbabwe's power.

Zesa can generate power at Kariba South for a lot less than Eskom can at any
of its power stations -- coal, gas or nuclear -- and so can with reasonable
management obtain the extra money it needs to catch up on maintenance and
start planning for expansion.

One problem Zesa may have, as with many other Zimbabwean parastatals, is an
oversized headquarters, too many people sitting behind desks rather than
having the bulk of the staff in the form of engineers and technicians in
overalls doing the work.

Engineer Mudzuri might care, when doing his sums, to compare the percentage
of expenses spent on administration by Zesa with accepted international and
regional standards. He may well have to force Zesa to be efficient through
setting such a percentage.

There has been a tendency in Zimbabwe, as dollarisation enters a sector, for
managers to pluck a figure out of the air.

We saw this in the first sector to dollarise -- the retail sector. Over the
last few months prices have fallen steadily there as business owners and
managers start, under the impetus of competition, to do far more accurate

Zesa has no competition, so the spur has to come from the ministry.

On the other hand, Zimbabwean consumers, residential and commercial, must
accept that power is not cheap, let alone free. If they want electricity 24
hours a day they must be prepared to pay a fair price and if they want to
reduce their energy costs they must seek more efficient use of power and cut
out waste.
We cannot argue with Zesa there.

But the final tariff must be fair and 9USc a kilowatt hour is not fair by
any standard. We hope Engineer Mudzuri can quickly come up with a tariff
that is fair to both consumers and Zesa and that he can force Zesa to
implement whatever reforms it requires.

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See how they have all become US dollar-crazy

February 25, 2009

By Sibangani Sibanda

I FIND it interesting that, just days before the Government of National
Unity (GNU) is formed in Zimbabwe, a self proclaimed government whose
declared and much vaunted defense of Zimbabwe's "independence and
territorial integrity" is well documented should, at the stroke of a pen,
render Zimbabwe's national currency obsolete.

In a move that appeared calculated and deliberate, a budget, presented by an
acting Minister of Finance whose financial credentials are questionable, to
say the least, is tabled before Parliament, effectively "dollarising" the
Zimbabwean economy. After all, we are told, this is what we have wanted.

The new Prime Minister and the new Finance Minister find themselves
inheriting an economy that has just been turned on its head!

Part of the rationale behind allowing every body to trade in foreign
currency was that the limited licensing of wholesalers and retailers had
been such a success that prices had actually started to come down. That is
true. But it is also true that competition in these sectors played a major
role in controlling prices. Zimbabweans, long used to buying whatever they
can get, suddenly had a choice. Supermarkets that were quick to respond are
doing brisk business and their new found buying power means that they can
negotiate better prices with their suppliers!

Unfortunately, the new dispensation now allows even the inefficient,
mismanaged and much plundered state monopolies to also trade in foreign
currency in a "liberalized" environment! They have been allowed to charge
what are called "economic" prices in a market in which they are the only
players! There is no obligation on their part to actually provide the
services that they are charging for either.

Our telephones at home, for example, have not worked for a year, but we
still pay rental on the lines, fearing that failure to do so would mean that
we get cut off completely and may find it difficult to get reconnected. Now
we have to pay those rentals in foreign currency, although I have been told
by TelOne, the service provider, that there are no immediate plans to fix
our telephones!

At the office, we had the ludicrous situation of the Zimbabwe National Water
Authority (ZINWA) - which I thought had ceased to exist - coming to cut our
water supply off for non payment. We have not had running water for several
months! In any case, our landlords advise that all bills were paid on time.
The problem may be in the record keeping of our service provider!

But try telling that to a spanner wielding operative whose only mandate is
to shut you down!

The enthusiasm with which these organizations are suddenly chasing payment
is surprising, considering that, for years, part of their problem was that
they did not collect debts effectively even at a time when they were
actually providing services. Most surprising, however, are the levels of
charges they are levying for their non existent services. Not only are their
charges way above charges elsewhere (TelOne, I understand, is charging
US$0.30 per unit); they are far beyond most Zimbabwean pockets. People who
are fortunate to make a couple of hundred American dollars a month are
finding themselves faced with bills of several hundred - sometimes running
into over a thousand  - American dollars.

At a time when most people's life savings in Zimbabwe dollars have reverted
to being the paper that Gideon Gono printed on, most Zimbabweans are now not
able to afford basic services like telephones, electricity, water, medical
aid and so on. Trying to pay those bills means that there will be no money
for food, bus fares, school fees - teachers are demanding two thousand
American dollars per month - hospital fees and so on. What are the chances
that the state monopolies will be able to collect? It seems to me that in
their rush to try and recover losses from years of mismanagement and theft,
they have pitched their prices at levels where people will not pay not
because they are protesting at the high prices (which Zimbabweans never do
anyway), but because it is not possible for them to pay.

But why would a government that, for years has obsessed over price controls
and affordability of services suddenly let go and liberalize even more than
the Western Capitalists that they so hate? I think it is because they want
to show that price controls work. They want to gain political capital from
the perception that the new government has "embraced" the policies of the
Movement for Democratic Change and "look how much poorer you are for it".

I have decided not to pay those bills. I, like many others, will get cut off
and Zimbabwe will go back more than a hundred years, or the parastatals will
come to their senses.

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Residents headed for a fight

Wednesday, 25 February 2009
MASVINGO - A showdown is looming between residents and the city
council following the latter's decision to increase charges, without
The council had initially pegged the monthly charges at ZAR50, but
residents were shocked when they received bills ranging from R200 to R300.
The Masvingo United Residents and Ratepayers Association (MURRA), a
group, said the residents will hold demonstrations at the council
buildings next week if the charges are not reversed.
"We agreed that the council would charge us in forex long before the
economy was dollarised. We settled at ZAR50, but now we are surprised to see
increased in the charges as if we are paying in local currency," said MURRA
spokesperson, Tendai Mutungira.
"They did not consult the residents like they did when they sought
approval for forex payments. This did not go down well with the residents,
who want to stage a demonstration at the town house. Others have vowed not
to pay the amounts," said Mutungira.
However, Masvingo Mayor, Alderman Femius Chakabuda, said the local
had not increased its monthly charges, but the figures for this month
higher as they covered defaults.
"We did not increase the monthly charges, they remain pegged at R50.
But the amounts may be higher for some who had not paid for previous months.
They are being fined. The only difference is that the fine is being charged
in foreign currency, even though the residents were paying in the local
currency for the months in question," said Chakabuda. - RadioVOP

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