Zim Independent
Dumisani
Muleya
SENIOR Zanu PF and opposition figures are pressing the
ruling party’s
politburo member Dumiso Dabengwa to step forward next week to
file
nomination papers and take President Robert Mugabe head-on in the
critical
March elections.
The last-minute bid to rope in
Dabengwa follows the failure by Zanu PF
officials and opposition activists
to propel another politburo member Simba
Makoni to the front ranks to
challenge Mugabe. This leaves Dabengwa with an
outside chance of contesting
the poll against Mugabe. MDC leader Morgan
Tsvangirai is seen as Mugabe’s
main rival but some observers think an
opportunity presents itself for
Dabengwa.
The Makoni bid collapsed before it could even get off the
ground
largely because of poor strategy and organisation. Makoni, who could
not
stand the heat in the cauldron of national politics, ended up going to
Mugabe to talk himself out of trouble when it became evident the initiative
was a stillbirth.
Sources said key members of the Zanu PF
faction led by retired army
commander Solomon Mujuru and opposition
activists are now pushing for a
united front of opposition forces led by
Dabengwa.
It is understood that Dabengwa is interested in taking up
the
challenge provided there is a concrete plan on the table. Meetings to
stitch
up the plan have been held in Harare, Bulawayo and Johannesburg, but
no
agreement has yet been reached.
The sources said Dabengwa, a
veteran of the liberation struggle and
former Zapu intelligence chief, told
those who approached him that he was
not afraid of challenging Mugabe as
long as there were structures to support
the bid. It is said he indicated
that there was a groundswell of discontent
in Zanu PF and the initiative
could get serious backing if properly planned.
"Dabengwa neither
agreed nor refused to take up the challenge," a
source who attended one
meeting with him said. "He asked questions and
basically gave signs he was
not afraid of Mugabe as long as there were good
structures on the ground to
support the plan."
In terms of the proposal, Dabengwa would lead a
united front
comprising opposition and civil society groups. He would be
supported by
opposition leaders, including MDC leaders Tsvangirai, Gibson
Sibanda and
Arthur Mutambara, the sources said. Initially, there was a
proposal to bring
Makoni into the initiative so he could work with Dabengwa
and MDC leaders.
"The organisers felt that if the issue was
carefully planned,
Dabengwa, Tsvangirai, Sibanda, Makoni and Mutambara could
form an effective
line-up to challenge Mugabe because they would bring
different sorts of
qualities to the team," another source said.
"Dabengwa would bring in liberation struggle credentials and
experience,
Tsvangirai his popularity as the founding MDC leader and Makoni
his image as
a reformer. Sibanda and Mutambara would play a major supportive
role."
The sources said the planners also wanted independent MP
Jonathan Moyo
to feature in the line-up. Former Industry and Trade minister
Nkosana Moyo,
who was involved in the Makoni project, was expected to
provide links to the
international community. The sources said Mujuru
supported the idea.
They said Dabengwa was targeted because last
year he led internal
defiance and criticism — including last week at a
politburo meeting — of
Mugabe. Dabengwa reportedly confronted Mugabe at the
meeting over war
veterans leader Jabulani Sibanda’s activities in Zanu PF.
He was supported
by Mugabe’s deputy Joseph Msika and party chairman John
Nkomo. After a
heated debate it was agreed the Zanu PF presidium must
resolve the issue.
Dabengwa tackled Mugabe at almost every
politburo meeting last year.
He was the leading light in pressing for Mugabe
to open nominations for the
party leadership at congress last
December.
The sources said the plan by the Mujuru faction and its
sympathisers
was to field Dabengwa as a candidate against Mugabe at
congress. It is said
that the proposal to replace Mugabe with Dabengwa had
been endorsed by the
three Matabeleland provinces, Masvingo, Mashonaland
East and Harare.
However, the plan fell apart after Mugabe and his
supporters picked up
the plot and launched a fierce counter-strategy. This
is where Emmerson
Mnangagwa and Jabulani Sibanda came in, it was
said.
Mugabe deployed Mnangagwa to frustrate Dabengwa through
technical
means involving the constitution and congress agenda. Mnangagwa
and Dabengwa
had a near row at a politburo meeting on November 28 last year
over the
issue.
Dabengwa charged that Mnangagwa was
manipulating the constitution to
ensure Mugabe is endorsed and confirmed as
party candidate in the 2008 polls
without the usual nomination procedures.
Zanu PF officials complained at
congress Mugabe was fraudulently endorsed.
This was not denied.
The sources said Sibanda was unleashed onto
the streets with his
solidarity marches for Mugabe to block the Dabengwa
group. At every meeting
he addressed Sibanda made veiled attacks on Dabengwa
and his group.
At the first meeting in Harare, Sibanda and his
followers chased away
Dabengwa and Mujuru from Zanu PF HQ. After that the
two boycotted all the
Sibanda-led marches.
Zim Independent
Augustine Mukaro/ Orirando Manwere
THE two opposition MDC
formations’ national executives meet today to
endorse Morgan Tsvangirai as
their candidate to face President Robert Mugabe
in the March
elections.
This is the first time they have met since their
acrimonious split in
2005 over the reintroduction of the
senate.
The standing committees of the two formations will table a
reunification pact reached under the chairmanship of Professor Brian
Raftopoulos in South Africa this week before the national executives
consider three key options of coming together. The pact proposes that the
unity could either be an electoral pact, a coalition or a total
reunification in readiness for the March 29 elections.
Sources
privy to the developments said both formations are pushing for
a coalition
led by a National Coalition Council composed of national
executive
committees from each formation. The pact also spells out the
criteria that
will be followed in choosing the presidential candidate, House
of Assembly
and Senate representatives under the coalition arrangement.
MDC
secretary-general Welshman Ncube yesterday confirmed the meeting
saying it
would determine the future course of the opposition.
"We will
resume our negotiations tomorrow following the visit to South
Africa by the
leadership of our counterparts (the Tsvangirai formation),"
Ncube said. "We
are expecting them back tonight (Thursday) and we should
meet tomorrow
morning to decide whether or not to participate in the
elections. Should we
decide to participate, we will also agree on the
selection of the
presidential candidate and candidates for the
parliamentary, senatorial and
council polls, including how the coalition
will be structured."
Under the coalition, the MDC formations have agreed that if they
decide to
contest the presidential election, the coalition will put forward
a single
candidate, and that candidate will be chosen by the formation led
by
Tsvangirai. The agreement implies that Tsvangirai would be the united
front
presidential candidate to face Mugabe on March 29. If the candidate
wins the
presidential election, he will appoint as vice-president a person
nominated
by the Mutambara formation.
The sources said Mutambara would be
declared a candidate for a safe
parliamentary constituency in Harare, most
likely the newly-created Harare
West constituency.
The meeting
will also endorse the selection of candidates set out in
the coalition pact.
The agreement sets out that if the coalition decides to
contest the general
election the question of which formation should put
forward a candidate to
contest a seat will be decided as follows: where a
member of one of the
formations holds a seat, that formation will put
forward a candidate to
contest it. Where a seat was not held by a member of
either formation, the
coalition will agree upon an equitable formula for
deciding which formation
should field a candidate.
The agreement implies that sitting MPs
will not be challenged, a
clause which has already riled aspiring candidates
from both formations who
had started campaigning.
Ncube said
the retention of sitting MPs was one of the proposals on
the table for
negotiation.
The pact also proposes that if the coalition decides
to contest the
senate elections, each formation will be allocated 50% of the
available
seats, ensuring that 50% of the chosen candidates in the senate
are women.
In the event of the coalition failing to win the
presidential and
parliamentary elections, the national coalition council
will meet to decide
the future.
Previous attempts to bring
together the warring formations collapsed
over these key
issues.
The standing committees, which met in South Africa for four
days
between January 17 and 20, reconvened in Johannesburg at the weekend to
finalise the unity deal after President Mugabe announced the election
date.
Zim Independent
Constantine Chimakure
ZANU PF politburo member Simba Makoni
last week reportedly blamed
former permanent secretary Ibbo Mandaza and the
Zimbabwe Independent for
linking him to a faction campaigning to seize the
party leadership from
President Robert Mugabe.
Sources said
Makoni — in a tense meeting with Mugabe at Zimbabwe House
last Monday
(January 21) — distanced himself from reports of him forming a
party to
fight the 2008 elections against the octogenarian leader.
The
former Finance minister met Mugabe to pledge his loyalty to the
president
and Zanu PF.
"Makoni told Mugabe that Mandaza was going around
speaking of the
formation of a new party," one of the sources said. "He
denied ever
attending any meeting to either plot to oust Mugabe or to form a
political
party to contest the March elections."
Makoni, the
source added, claimed that apart from Mandaza, the
Independent published
articles linking him to the faction opposed to Mugabe
out of pure
hatred.
Mugabe reportedly did not buy Makoni’s explanation and
questioned why
the former Finance minister failed to publicly dismiss the
reports.
"Makoni said he was staying at his farm in Headlands where
he had no
easy access to newspapers," another source said. "He claimed that
the
Independent hate him and said he found no reason why he should have
responded to "false reports" from the newspaper. He also claimed that the
newspaper had at no time sought comment from him on the
subject."
A bitter Mugabe, the sources said, told Makoni that he
owed his
political career and stature he now enjoys locally and abroad to
him and his
government.
The veteran leader reportedly reminded
Makoni of the "mistakes" he
made when he was Energy minister in the early
1980s and when he was
executive secretary of Sadc’s predecessor Sadcc for
close to 10 years.
Makoni left Sadc in 1993, three years after it
was rocked by a $25 000
financial scam — a lot of money then — that saw
three finance officers
fired.
The officers implicated Makoni,
but he denied wrongdoing despite
accepting full responsibility for what
happened.
Makoni yesterday declined to comment on the
matter.
"I cannot talk to you over the phone regarding that issue.
How do I
tell over the phone that you are a news reporter. Call my office
and book
for an appointment," Makoni said.
Last week, the
Independent reported that Makoni’s presidential
ambitions had faltered after
he met Mugabe and then failed to implement his
three-phase plan to assume
the Zanu PF leadership at last Wednesday’s
politburo meeting.
Makoni, sources said, was supposed to have convinced the politburo
that
Mugabe was un-proceduarally endorsed and confirmed Zanu PF presidential
candidate at the party’s extra-ordinary congress in December.
He reportedly wanted the endorsement to be reversed and the matter
referred
to the central committee for nominations.
If the two phases had
failed, Makoni reportedly wanted to form a new
party based on the ideology
and principles of Zanu PF.
The mentioning of the Independent by
Makoni to Mugabe is not new in
Zanu PF politics. On September 5 last year,
Zanu PF’s secretary for science
and technology Olivia Muchena raised concern
in the politburo on the
reproduction of her report that she presented to the
206th ordinary session
of the decision-making body in the
Independent.
She said such leakage of information was enough proof
that the country’s
detractors had access to the ruling party’s
deliberations.
Muchena said she was concerned that discussions on
that day on the
then Constitutional Amendment No18 Bill would be equally
leaked. She was
right. The Independent got the details of the
meeting.
"In his intervention, the president and first secretary,
Cde RG
Mugabe, stated that there were some people who had friends in the
opposition
press," read minutes of the politburo meeting. "He (Mugabe)
castigated the
tendency to leak information and vent out fights through the
opposition
media. Furthermore, he questioned the morality and integrity of
such
actions."
Zim Independent
Lucia Makamure
HIGH Court judge Justice
Charles Hungwe yesterday said the Anglican
Diocese of Harare which fired
bishop Nolbert Kunonga purports to head cannot
exist at law outside the
constitution of the Church of the Province of
Central Africa
(CPCA).
Hungwe said this when he dismissed an urgent application by
the
diocese represented by Kunonga for a spoliation order against the CPCA
and
acting Harare bishop Sebastian Bakare.
Kunonga’s diocese
approached the court to bar the CPCA and Bakare from
using Anglican property
in the capital.
"Applicant (Kunonga’s Harare Diocese) cannot exist
outside the
constitution of first respondent (CPCA). It has no separate
constitution of
its own. It, therefore, has no structures of its own other
than those set
out in the constitution," Hungwe ruled. "The assets under
contention are
assets which respondent lays claim to. The question of
ownership of these
assets is not presently before me."
Hungwe
said it was clear to him that Kunonga’s diocese was nowhere
"near
demonstrating that it has placed itself within the purview of those
who
confess to be Anglicans and who abide by the constitution" of their
church.
"There is no claim that there was resolution of the
synod of the
diocese adopting this alleged breakaway (by Kunonga)," the
judge ruled. He
said Kunonga by breaking away from the CPCA violated the
constitution of the
church.
"What the papers do show is that
Bishop Kunonga and the diocesan
secretary and a handful of other worshippers
have decided to leave the first
respondent. They have, however, not followed
the church’s constitution, as
such they cannot seek to rely on a
constitution that they have so much
violated. They claimed they have been
despoiled by the acts of the second
respondent (Bakare) whose only offence
was to minister members of the first
respondent," Hungwe’s judgement
read.
Hungwe said Bakare did not despoil Kunonga and the Diocese of
Harare
of anything when he accepted invitations to conduct services in the
diocese.
"I am unable to hold that where a bishop of one diocese is
invited to
minister in a different diocese and accepts such invitation by
the faithful,
such services as he may conduct amount to unlawful
dispossession of whatever
rights are held by the ordained bishop for the
locality," the judge ruled.
"In my respectful opinion no unlawful
dispossession occurred in this
matter…for to argue that entry into a church
premise by a bishop of a
separate diocese constitutes dispossession would be
to stretch the mandament
too far."
Hungwe said the parties to
the dispute, being men of the cloth, ought
to resolve their disagreements in
a "God-fearing manner".
Zim Independent
Augustine Mukaro
SERIOUS infighting has erupted in virtually
all Zanu PF provinces as
aspiring candidates scramble for constituencies in
the inaugural joint
elections next month.
Senior Zanu PF
politicians are accused of using dirty tactics to block
aspiring candidates
challenging them in primary elections to stand as
candidates. The jockeying
for seats has sucked in senior politicians whose
political survival has
depended on President Robert Mugabe’s patronage.
Mugabe has often rescued
his favoured supporters through appointments in the
event of losing
elections. That will no longer be possible in the Lower
House where all
seats are now elective.
Prominent figures looking for "homes"
include ministers Emmerson
Mnangagwa, understood to have secured the newly
created Chirumanzi-Zibagwe
constituency, Paul Mangwana tipped for another
new constituency in
Zvishavane, Sikhanyiso Ndlovu, and Sithembiso Nyoni,
among others. Mnangagwa
was defeated twice in Kwekwe Central by MDC’s
Blessing Chebundo.
The ruling party is scheduled to conclude its
primary elections to
choose senate and parliamentary candidates on
Monday.
Reports from a number of provinces show that senior
politicians are
using the technicality of five years in provincial
leadership requirement to
sideline potential threats from contesting in
primaries. There are also
spirited efforts from the top leadership to block
applications for waivers
by emerging young turks who want to represent the
ruling party. The
development has prompted a number of local structures to
write to the party’s
national election directorate denouncing the imposition
of candidates.
Sources in Zanu PF said already the election
directorate is inundated
with complaints and appeals from aspiring
candidates citing irregularities
in the way they were barred from contesting
the primaries.
A classical example is in Manicaland where cabinet
ministers Didymus
Mutasa, Joseph Made and Patrick Chinamasa have ganged-up
against former
Finance Minister Simba Makoni, calling him a sell-out bent on
destroying
Zanu PF after he submitted his CV to challenge Chinamasa in
Makoni Central.
The Zanu PF Makoni District Co-ordinating Committee
in which the three
ministers are all members met on January 3 and parcelled
out parliamentary
seats among themselves: Headlands for Mutasa, Makoni West
for Made, Makoni
East for former Central Intelligence Organisation boss
Shadreck Chipanga,
and Makoni Central for Chinamasa.
Mutasa and
Chipanga’s declarations went in unopposed but Chinamasa and
Made were
challenged. Makoni’s CV is said to have been submitted in the
middle of a
meeting of the ruling party’s Manicaland Provincial Coordinating
Committee
that was processing the nomination papers while Made will have to
battle it
out with Nation Matongorere.
Makoni has been linked with an
apparent break-away plot by disgruntled
Zanu PF members opposed to President
Robert Mugabe’s quest for a sixth term.
Chinamasa is one of the
ministers in cabinet on Mugabe’s patronage and
desperately needs a
constituency to win if he entertains any hopes of being
in the next
government.
Other ministers from the same province that have to go
into primaries
include Oppa Muchinguri who is being challenged by Unice
Mangwende, Munacho
Mutezo faces Charles Muresherwa, Samuel Undenge is being
challenged by
Edmore Siwela while deputy minister Morison Sakabuya has to
contain three
other candidates: Alice Chitima, T Mlambo and R Mlambo in
Chipinge Central.
War veteran vice chairman Joseph Chinotimba was
one of the few
candidates whose bid went in unopposed in Buhera South but
there are serious
contests in most of the constituencies.
Another interesting development was in Mashonaland Central where the
provincial leadership declared that no politburo members could be challenged
in their constituencies. The declaration, although not provided as part of
the criteria for choosing candidates, has already given ministers Elliot
Manyika, Chen Chimutengwende, Saviour
Kasukuwere and Nicholas Goche
automatic tickets as Zanu PF candidates.
Zim Independent
Kuda
Chikwanda
THE economy shrank by 6% in 2007, invalidating
predictions made by the
government in 2006 that it would grow by between
0,5% and 1%.
In addition, official inflation jumped to 26 470% for
November 2007,
according to Reserve Bank of Zimbabwe (RBZ) governor Gideon
Gono who
yesterday attacked government for embargoing inflation figures.
Gono however
did not disclose the inflation figures for
December.
In his Monetary Policy Statement yesterday, Gono revealed
that
declining production across all sectors had resulted in the economy
shrinking.
"The economy is estimated to have declined by about
6% in 2007," he
said. "This contraction in economic activity has been
mirrored in output
decline in all sectors of the economy with the exception
of a marginal
increase in agricultural output," Gono said.
He
attributed the declining production to critical shortages of
foreign
currency and government’s disastrous price blitz implemented last
July.
Gono’s revelations directly contradict government
forecasts for
economic growth in 2007 as he said all other sectors, apart
from
agriculture, shrank in 2007.
Former Finance minister
Herbert Murerwa projected overall economic
growth for 2007 at levels ranging
between 0,5% and 1%.
Agriculture grew by only 1,4% against
estimates made in 2006 that it
would grow by 6,4%. Mining, which Murerwa
forecast to record growth of 4,9%
in 2007, remained depressed on the back of
crippling power shortages that
saw gold production falling by 37% from 6,98
tonnes to 4,0 tonnes.
The huge variance between estimates made by
the government for the
2007 fiscal year and Gono’s statistics have now put
to question the
forecasts made by incumbent Finance minister Samuel
Mumbengegwi in his 2008
budget statement delivered two months
ago.
Mumbengegwi forecasted a real economic growth of 4% and said
his
estimates were based on "anticipated growth in the agricultural sector,
improved industrial performance and economic programmes by the grassroots,
including SMEs".
Gono painted a gloomy picture for the
manufacturing and mining sectors
saying they continued to face a number of
problems that included foreign
currency constraints and electricity supply
interruptions.
He indirectly attacked the Ministry of Finance,
which prohibited the
Central Statistical Office (CSO) from publicly
releasing inflation figures
since last September. By then inflation was at 7
892,1%.
"As monetary authorities, we call upon those whose role it
is to
collect, compute and publish economic statistics to do so timeously so
as to
preserve credibility of national accounts, as well as enabling proper
business planning," Gono said.
He said the failure to release
inflation figures had resulted in
distorted guesses by the
market.
"Yes, our inflation is the highest in the world, but this
should not
tempt us to sweep our blemishes under the carpet."
Zim Independent
Dumisani Muleya
MORE details emerged this
week on the liquidity crisis rocking the
banking sector and how banks have
tied up depositors’ funds in securities
and money market
instruments.
Information to hand shows nearly all banks, including
building
societies,
are in a liquidity emergency for various
reasons, including the
prevailing macro-economic conditions, difficulties in
payment of statutory
reserves and pouring depositors’ funds into speculative
securities and money
market investments.
While banks have made
muffled protests in a bid to deny reports that
they have routed depositors’
funds into securities and money markets,
detailed information shows that
most banks diverted funds into those
instruments.
Securities
are basically fungible or negotiable instruments
representing financial
value. They are usually categorised into debt
securities such as banknotes,
bonds, debentures, and equities.
Securities may be represented by a
certificate or an electronic book
entry.
Money market
instruments are short term debt instruments that may have
characteristics of
deposit accounts like certificates of deposit and certain
bills of exchange.
They are highly liquid and are sometimes referred to as
"near cash".
Commercial paper is also often highly liquid.
Documents show that
29 financial institutions — currently stricken by
the liquidity crisis —
have put funds in securities and other investments.
In the process,
the institutions committed an average of 26,33% of
their balance sheets into
those activities, leaving them heavily exposed to
the liquidity constraints
now prevailing in the sector.
According to the Banking Act it is
illegal for banks to own shares
unless they are held as a security for a
loan or are owned through swapping
debt for equity.
The
beleaguered commercial banks and other financial houses were this
week
scrambling to get unsecured loans from the Reserve Bank to cover their
precarious positions.
This confirmed banks were facing acute
liquidity problems. Almost all
banks are teetering on the brink of collapse
as a result.
Most banks have been unable to collect their cash
requirements from
the central bank to deal with cash shortages due to lack
of security. Banks
have also been unable to pay statutory
reserves.
While monetary authorities say the banks have put
themselves in
trouble, banks say they invested in securities and other
investments because
of the prevailing hyperinflation to protect the value of
deposits.
The banks argue keeping deposits in accounts under these
circumstances
in which year-on-year inflation, according to the
International Monetary
Fund, is 150 000%, could only result in wiping out of
value.
"What the banks did was rational even though it was
unlawful. Under
these economic circumstances any reasonable banker would
have done the
same," a top banker said yesterday.
"It’s true
some of the activities of the banks are illegal, but the
Reserve Bank itself
is also involved in unlawful activities such as buying
foreign currency in
the black market and outrageous quasi-fiscal activities.
The banking sector,
from the smallest bank to the Reserve Bank, are part of
the
problem."
However, monetary authorities say they have letters from
banks showing
banking executives were now admitting they diverted
depositors’ funds into
securities and other investments in a bid to protect
value and hedge against
inflation.
"We have a bunch of letters
from banks showing that they now admit to
have illegally put depositors’
funds into securities and money market
instruments in a bid to secure value
and their positions. This led them to
fail to pay depositors on demand," a
central bank official said.
"Some letters are very clear banks
stashed money in securities and
shares. Also apparent in the letters is that
most banks don’t have security
against which to borrow from the central
bank. That’s why they are now
pleading for unsecured borrowing. It is fact
banks have been engaging in
unethical and imprudent activities which partly
led to the liquidity
crisis."
Reserve Bank officials read the
riot act to bankers in a tense meeting
last Thursday over the current
situation. Banks were told that it was
unacceptable and unsustainable for
them to rely on central bank bailouts.
In the end it was resolved
only banks that have paid interest on
previous borrowings would be
considered for overnight accommodation at a
rate of 1 500%. This left most
banks still stuck in a financial quagmire.
Zim Independent
Shakeman
Mugari
THE Reserve Bank of Zimbabwe (RBZ) has put seven banks
under intensive
investigation to establish the root cause of their liquidity
crisis. Three
financial auditing firms have been appointed to investigate
the banks in a
situation which sources say is akin to the curatorships of
2004.
The central bank has hired Camelsa Chartered Accountants to
probe
Kingdom Bank, Zimbabwe Allied Banking Group (ZABG), Renaissance
Merchant
Bank and Genesis Merchant Bank.
Auditing firm KPMG has
been appointed to investigate Metropolitan Bank
and the People’s Own Savings
Bank (POSB). Barclays Bank’s books are being
scrutinised by BCA, a local
forensic auditing firm.
BCA recently concluded an investigation
into the affairs of NMB Bank
which lost US$6,2 million in a fraud case
involving officials in the
treasury department.
Although the
liquidity crisis is a sector-wide problem, the seven
banks are the worst
hit. Their balance sheets are seriously misaligned
making it difficult for
them to meet their cash obligations to depositors.
Zimbabwe’s financial
sector has been experiencing liquidity problems for the
past three months.
This is the third such crisis in five years.
In 2004 three banks
—Trust, Royal and Barbican — went under because of
liquidity problems. A
dozen other asset management companies and financial
houses also
collapsed.
Central bank sources said the external auditors’ roles
will be to
investigate the liquidity crisis at the banks and find solutions
to the
problems.
The appointment of the external auditors is
part of the central bank’s
effort to rein in on errant banks which it
accuses of investing depositors’
funds into shares and foreign currency
resulting in the cash crisis.
The central bank has since directed
financial institutions to
restructure their balance sheet to ensure that
they are able to meet their
cash requirements. This comes as it emerged last
week that almost all banks
have trillions of dollars stuck in investments
and securities. An average of
26% of banks’ assets are in investments which
include shares, properties and
foreign currency.
The RBZ has
increased unsecured accommodation rates to discourage
banks from borrowing
from the central bank to cover their short positions.
Any amount
borrowed on secured overnight loan facility in excess of
$1t will carry an
interest rate of 1200% instead of the normal rate of 975%.
The RBZ
will also be strict on banks that want to roll-over loans
provided under the
accommodation window. The source said the RBZ has also
directed all bank
chief executives to issue signed copies of weekly
compliance certifications.
The certificates will be submitted to Gono every
week. In each certificate a
chief executive must certify that their bank has
not violated exchange
control regulations in the preceding week.
They must also
officially state that their bank has not violated
anti-money laundering
laws.
The banks will also be required to carry out weekly audits on
their
corporate and individual customers to monitor any suspicious
transactions
between accounts.
An audit of the bank’s employees
must also be done to certify that
each one of them is fit to continue
handling depositors’ funds. A chief
executive must also endorse that their
bank has fully complied with
statutory reserve payments and that the
financial institution is not using
depositors’ funds for speculative
purposes.
A chief executive who issues a certificate containing
false
information will be deemed unfit to run the bank, the source said.
They will
be asked to step down so that the bank’s operating licence can be
speared.
The certificate is meant to insure that bank bosses have full
responsibility
over their financial institutions.
Other
conditions include that any request for overnight accommodation
should be
accompanied by a comprehensive letter from the chief executive of
the bank
detailing how the institute fell into a short position in the first
place.
The report should be submitted to the central bank
governor who now
has the sole authority to decide on whether a bank gets
overnight
accommodation or not.
The monitoring system will
centre on banks’ assets and liabilities and
cash deployment strategies.
Financial institutions whose balance sheets are
skewed towards non-core
activities like properties, shares and foreign
currency will not be allowed
to borrow from the central bank to cover their
positions.
The
central bank also plans to evaluate the Automated Teller Machines
(ATMs) of
all banks to establish whether they have been reconfigured to
dispense high
denominations which were introduced two weeks ago.
Most banks have
not reconfigured their ATMs.
The RBZ also wants banks to install
generators in their banking halls
as a contingent plan against the
persistent power cuts. External auditors
will also be required to check if
banks have proper disaster recovery plans
and business continuity
arrangements. Sources in the banking sector said
Gono told bankers this week
that all excess liquidity on settlements shall
be locked-up in zero coupon
bills of up to seven day instead of the previous
270 days. The central bank
will also introduce 91-day treasury bills whose
interest rate of return will
reflect market liquidity conditions.
Zim Independent
Orirando
Manwere
STAKEHOLDERS have expressed concern over the Zimbabwe
Electoral
Commission’s (ZEC) capacity to run the March 29 harmonised polls
in one day
due to logistical problems, poor infrastructure and inadequate
voter
education on the new ward boundaries.
Hopes of a possible
postponement of the polls were last week shattered
after the proclamation of
February 8 and March 29 as the nomination and
polling dates of the
harmonised polls by President Robert Mugabe.
The inspection of the
voters’ roll begins today and ends on February
7.
The
Registrar-General’s Office (RG) is responsible for compiling and
printing
the voters’ roll under the supervision of the ZEC.
The Zimbabwe
Election Support Network (Zesn), opposition politicians,
individuals and
government officials said the lack of resources and voter
education would
affect the smooth running of the elections.
However, ZEC director
of public relations Shupikai Mashereni said the
commission had made the
necessary logistical arrangements for the elections.
He conceded
though that ZEC had not done enough on voter education and
would, with
effect from today, step up awareness campaigns through the media
and that
voter educators would be deployed countrywide.
Mashereni, who was
not in a position to explain what the commission
had covered so far, said
the ZEC had procured enough material for the
elections, such as ballot
boxes, indelible ink, polling booths, fuel,
vehicles, tents and gas lamps,
among others.
He added that the ZEC had recruited staff from
various government
departments to be complemented by teachers as polling
officers.
Mashereni could not be drawn to reveal the number of
polling officers
and stations needed for the elections, saying that would be
determined after
consultation with contesting candidates.
However, stakeholders argued that the majority of the electorate would
be
prejudiced due to several logistical factors.
Zesn national
director Rindai Chipfunde-Vava said the one week set
aside for the
inspection of the voters’ roll was not enough following the
introduction of
new wards and constituencies.
"This is the shortest voters’ roll
inspection period I have come to
know. Over the years when elections were
not harmonised, inspection would
take between three and four weeks," she
said.
"Given the magnitude of this year’s polls where there are
four
candidates and an increased number of constituencies and wards with new
boundaries which people are not yet aware of, one would have expected a
longer period."
She pointed out the working class in urban
areas would not have time
to inspect the rolls between 7am and 6pm, while
possible extension of the
closing time at the inspection centres to cater
for such people would
probably be affected by frequent power
cuts.
The Zesn director said there was need for vigorous door to
door
awareness campaigns by the voter educators in rural areas where people
had
no access to the media.
She said the decline in newspaper
circulations and the ever rising
cost of newspapers also affected
information dissemination even in urban
areas, hence the need for more voter
educators in both urban and rural
areas.
Her concerns on voter
education come amid revelations that only two
voter educators would be
deployed per ward owing to financial limitations.
Sources within
the ZEC said there were instructions to operate within
the budget allocated
for the elections.
A local government official said areas hit by
floods like Muzarabani
and the Lowveld where roads were badly damaged by
heavy rains would be
difficult to access.
Commenting on this
concern, Mashereni said ZEC had since liaised with
the Airforce of Zimbabwe
to provide helicopters should the need arise.
"We have air
transport in place for such places. We will also ensure
early deployment of
staff and delivery of material to these areas. We are
aware of these places
and our officials have put contingent plans in place,"
he said.
Opposition MDC (Morgan Tsvangirai formation) spokesperson Nelson
Chamisa
said his party was concerned about the way ZEC was preparing for the
polls,
adding that they had not received a copy of the delimitation
report.
"The whole thing is being done secretly by Zanu PF. The
report was
tabled in parliament on a ‘take note’ basis when in actual fact
parliament
was supposed to have debated it," Chamisa claimed.
"That is why we have always expressed concern over the way in which
the Zanu
PF regime is doing things. It looks like the report is just for
them alone
and it is tantamount to expecting us to write an exam without a
syllabus."
He said that was one reason why his party has been
advocating a
reconstitution of the ZEC to ensure integrity, transparency and
credibility.
The two MDC formations are scheduled to meet tomorrow
to decide on
whether or not to participate in the polls.
Most
people interviewed felt that the voters’ roll inspection period
was not
adequate and should be extended to two weeks.
"I registered at
Market Square during the mobile registration exercise
but I am not yet aware
of my new ward and which polling station I will cast
my vote at. I hope to
check on that over the weekend as I will be at work
during the week," an
Avondale resident said.
"I think this exercise has started rather
too late and I foresee a lot
of people being turned away at the polling
stations. There is need for more
publicity on the ward boundaries so that
those who fail to inspect, at least
know where they should go."
Mashereni however appealed to people who registered and those who did
not to
inspect the rolls during the inspection period.
"I need to
reiterate the importance of this inspection exercise
because these elections
will be ward-based and people need to know their new
wards where they will
cast their votes," Mashereni said. "There shall also
be the final voter
registration for these elections and those who did not
register should take
advantage of this period."
Contacted for comment on the provision
of security for the polls,
police spokesman Chief Superintendent Oliver
Mandipaka said the force would
mobilise adequate personnel despite a report
to the parliamentary portfolio
committee on Defence and Home Affairs late
last year by deputy commissioner
Levy Sibanda that recruitment to boost
staff was affected by lack of funds.
"I am not worried by the
figures you are talking about. All I can tell
you is that we will endeavour
to provide enough officers to cover the
polls," he said.
Earlier reports indicated that the Zimbabwe Republic Police needed to
boost
its manpower from about 25 000 to 50 000 to cover the elections but
recruitment during the last quarter of last year had been affected by lack
of funds.
At least four police officers are expected at each
polling station.
Zim Independent
Shakeman
Mugari
THERE is no respite for Zimbabwe’s struggling banks
despite a 10%
reduction of the statutory reserves rate
yesterday.
In his first quarter monetary policy review Reserve Bank
governor
Gideon Gono reduced statutory reserves for all financial
institutions to
ease their liquidity problems.
Gono slashed the
statutory reserve requirements by an average 10%. The
problem, however, is
that the central bank also increased the secured
lending rate for banks from
975% to 1200% making it more expensive for
financial institutions to borrow
from the RBZ under the overnight
accommodation facility.
Unsecured accommodation rates were increased for the second time in
two
weeks to 1 650% up from 1 500% further hitting the banks that might want
to
borrow from the central bank without security.
Gono reduced the
statutory reserves for commercial banks on call and
demand deposits from 50%
to 40%.
This means that for every dollar that a client deposits
with a
commercial bank the central bank will take 40 cents for security in
the
event that the financial institution fails to meet its obligation to the
depositor.
Statutory reserve requirements, on time deposits and
buybacks were
reduced from 45% to 35%. Merchant banks will now pay 40%, down
from 50% on
call and demand depositors.
Statutory reserve
requirements for discount houses have been reduced
from 45% to
35%.
Banks have been accused of investing trillions of dollars of
depositors’ funds into properties, foreign currency and shares resulting in
the liquidity crisis. An average 26% of all banks’ balance sheets are said
to have been
put into investments and securities.
This
has resulted in almost all banks failing to honour their cash
obligations to
the depositors. The result has been long queues because of
the cash crisis.
A number of banks are facing a serious liquidity crisis.
Seven
banks have since been put under special monitoring systems by
the central
bank to establish the root cause of their liquidity problems.
The
banks are Kingdom, Metropolitan, Barclays, ZABG, Renaissance,
Genesis and
POSB.
For their part banks have accused the central bank of
demanding a huge
portion of the depositors’ funds to hold as statutory
reserves.
This, the banks say, has forced them to find other
illegal methods to
recover the value of the depositors’ funds in order to
meet their
obligations.
According to the Banking Act it is
illegal for a bank to invest in
shares unless if it is holding the
investment as security for a loan or the
shares have been acquired during
underwriting.
Analysts say the reduced statutory reserves might
offer some relief
for banks but they still have to contend with the
increased lending rates
being charged by the central bank for overnight
accommodation.
"It’s a step in the right direction but we will
still struggle because
the RBZ’s rates are still very high," said a chief
executive with a
commercial bank.
"As monetary authorities, we
once again wish to reiterate to the
banking sector that the Reserve Bank has
no appetite for injecting
inflationary liquidity into the system through the
accommodation window,"
Gono said.
"In order to promote
discipline in the banking sector’s
assets-liabilities management regimes,
all interest for previous
accommodations have to be paid in full prior to
any new borrowings or
roll-overs of past loans."
The central
bank also reduced the rate at which it mops up excess
liquidity in banks at
zero rate.
"In order to consolidate the assets-liabilities
management positions
in the banking sector, with immediate effect, the tenor
on the excess
liquidity management, zero coupon bonds has been reduced from
270 days to
seven days."
Zim Independent
Nhlanhla Nyathi
THE financial services sector
has plunged into another liquidity
crunch reminiscent of the 2004 banking
crisis that saw the fall of iconic
indigenous banks and the subsequent
restructuring of the sector by the
Reserve Bank of Zimbabwe
(RBZ).
This time around, what initially started as a cash crisis
feeding off
an unprepared monetary authority in rapidly absorbing
inflationary pressures
through the introduction of higher denominated bearer
cheques or further
slashing of zeros has taken an unexpected
twist.
It appears to be the making of unethical banking practices
within the
financial services sector. After mounting pressure from a
restless banking
public since the onset of the cash crisis late last year,
the RBZ governor
last week made revelations that monetary authorities had
over $100 trillion
in cash uncollected in their vaults because banking
institutions did not
have the security to access the money to meet their
customer withdrawal
requirements.
At that point the blame for
the cash crisis shifted entirely from the
RBZ to banking institutions and
the manner in which they invested liquid
depositor funds. It appears many of
them were guilty of violating provisions
of the Banking Act and invested
liquid depositor funds into relatively
illiquid speculative investments that
put them at risk in the event of a run
on deposits facilitated by a massive
increase in daily withdrawal limits for
individual and corporate account
holders.
The manner in which most of these financial institutions
structured
their balance sheets now puts their very existence at risk
because of the
prohibitive interest payments that they will have to make to
the RBZ for
accommodating them during this liquidity crunch. The ordinary
man on the
street might be probably cursing banking institutions for
engaging in
illicit operations that have caused them so much discomfort, but
the
question that remains unanswered is: what gave banks the courage to
venture
into the same unethical speculative tendencies that claimed the
scalps of
Trust Bank and many others in 2004 and are they solely to
blame?
Should the RBZ bail them out to preserve the institution of
banking
that has been shaken far too many times? To find answers to these
complex
questions, we need to understand the effects of the economic
recession on
the banking sector and the impact of the regulatory environment
on
profitability before passing judgement.
The economic
recession presented an operational challenge dimension
for all sectors of
the economy. The banking sector has been no exception and
consequently fell
victim to the economy wide culture of corporate
cannibalisation wherein
business entities engaged in more lucrative non-core
business activities to
remain viable.
In normal circumstances, the banking sector thrives
when other sectors
of the economy are doing well. However, during the
economic recession core
business activities have fallen by the way-side
because of stifling
government controls and reduced business activity in the
commercial sector.
For instance departments in banking institutions
such as corporate
finance, corporate banking, and international banking have
been drastically
affected because of a depressed commercial trading
environment.
Adding to this, the RBZ instituted punitive statutory
reserve
requirements on all deposits made to banks of up to 50%, implying
that what
every investment finally made by the banks has to cover for the
50% that is
earning 0%.
In addition, the RBZ had of late been
issuing 270 days non-negotiable
certificates of deposits at 0% to banks that
had surplus positions in their
books at trading day end.
Unfortunately with the thrust in government being that of low interest
rates
to facilitate growth of the productive sector, it was impossible for
banks
to secure high yielding instruments within the confines of traditional
banking to cover for the non-performing portion of bank deposits held by the
RBZ at zero cost.
Perhaps such punishing requirements
contributed to the errant
practices of banks to trade part of depositor
funds in more lucrative
equity, property, and currency markets to compensate
for the non-performing
portion of deposits held by the central
bank.
Obviously banks being private institutions, the profit motive
cannot
be ruled out. Whatever the case, the urge to trade in other markets,
unethical as it might have been was part of the survival strategy given the
difficult circumstances that the economic recession has presented for
everyone. Obviously the massive portfolios controlled by banks through
non-core operations did not materialise overnight.
The RBZ bank
supervision and surveillance department ought to have
known about this
errant behaviour. The suspicion is that they conveniently
turned a blind eye
to it.
Given that they had allowed this culture to develop in the
sector, the
RBZ should have given financial institutions time to regularise
their
illiquid positions before drastically hiking withdrawal limits that
obviously created a situation akin to a run on deposits, in the process
destabilising the stock market.
Prior to the massive increase
in withdrawal limits, banks could count
on a significant portion of their
deposits not being withdrawn over a short
period of time hence having some
semblance of control over their positions
which in a way gave them latitude
to explore the equity, property, and
currency markets as
alleged.
The current situation has shaken the people’s confidence
in the
banking sector and has created a dangerous situation whereby
investors feel
the stock market can be literally swayed in any direction by
the RBZ.
Integrity of the markets needs to be protected at all costs because
it’s a
game of confidence at the end of the day.
When the
current RBZ governor, Gideon Gono, took office he initially
adjusted and
linked commercial banking capital requirements to a foreign
currency amount
of US$10 million. Looking at it now, the banking sector
would have not been
able to maintain such capital requirements from strict
banking practices
that required them to invest in low yielding TBs and other
government stocks
obviously out of sync with inflation and the parallel
market.
If banking institutions towed the line
as had been expected, we would
have had the frequent situation were
banks went back to their shareholders
time and time again for rights issues
to remain in sync with US$10 million.
In a way this also pushed banks to
pursue other unofficial markets in
violation of the Banking Act.
At the end of the day, people need to
make their own informed
decision. However, going forward, it is important
for people to understand
that most of the banks experiencing the current
liquidity crunch do not have
structural balance sheet faults that cannot be
fixed. What might actually
bury many of them is the continued payment of
punitive accommodation rates
to the RBZ if this unfortunate period is
extended unnecessarily. The RBZ
needs to act fast and bail out many of these
banks through a more amicable
process that does not perpetuate their fall.
In essence, the RBZ cannot
allow these institutions to fold without denting
its own bank supervision
and surveillance image in the public eye because
they allowed the contagion
to take hold in the sector unabated.
* Nyathi is a director of a private equity firm. He can be contacted
on 0912
250 092 or kexhe@yahoo.com
Zim Independent
Constantine Chimakure
OVER 990 transactions by commercial banks
and building societies
valued at $34 trillion were dishonoured by the
Reserve Bank last week as the
liquidity crunch at financial institutions
deepened after they illegally
routed depositors’ funds into the stock
exchange and money market.
Confidential documents in the possession
of the Zimbabwe Independent
revealed that as at January 23 the central bank
refused to honour 999
transactions valued at $33,9 trillion from 18
commercial banks and building
societies due to lack of funding by the
financial institutions.
The transactions were done through the wire
transfer scheme, Real Time
Gross Settlement (RTGS).
The
liquidity crisis prompted banks to write to the RBZ seeking
expensive
unsecured accommodation to meet depositors’ demands.
An average of
22% of depositors’ money was invested in shares, money
market investments
and other securities by almost every bank and building
society in the
country.
Most of the dishonoured payments were from Standard
Chartered Bank
which had 374 transactions valued at $14,6 trillion, followed
by ZB Bank
with $5,8 trillion for 149 arrangements, and Beverley with $4
trillion for
80 dealings.
Kingdom had five dishonoured
transactions valued at about $1,7
trillion, followed by ZABG with $1,5
trillion for 42 dealings and
Intermarket Building Society with $1,5 trillion
for 18 arrangements.
FBC had its 11 transactions valued at $,1,2
trillion referred to
drawer, Barclays Bank had three dealings worth $947
billion dishonoured
while CBZ had six transactions valued at $698 billion
rejected.
The RBZ also refused to honour Tetrad’s 92 transactions
valued at $614
billion, Premier Bank’s 184 dealings worth $566 billion and
ABC’s five
transactions valued at $405 billion.
The central
bank further declined to honour Genesis’ six transactions
valued at $167
billion, Renaissance Bank’s four dealings valued at $123
billion, Metro’s
five arrangements worth $105 billion, CFX’s seven
transactions worth $68
billion, NDH’s six dealings valued at $50 billion and
Interfin’s two
transactions worth $31 billion.
"With such huge dishonoured
payments, there is likely to be a public
outcry emanating from clients whose
payment instructions are not being
executed by banks," reads one of the
confidential documents on the state of
the financial sector in the
country.
The document revealed that the RBZ would not allow this to
continue as
it may dampen the confidence in the RTGS system, pushing more
people back to
the use of cash.
"The series of the letters that
are being sent to the Reserve Bank
clearly shows how banks, large and small,
are admitting to misallocation of
depositors’ funds, leading to inability to
payout withdrawal requests," the
document read. "It is clearly explanatory
in some of the letters in the
governor (Gideon Gono)’s possession that some
banks are admitting to having
stashed money in shares."
Also
apparent in the document was confession by the banks that they do
not even
have security against which to borrow from the central bank, hence
their
pleas for unsecured borrowing.
"The critical value of this
exposition is that it underscores monetary
authorities’ point that some
banks have been and are engaging in unethical
and imprudent behaviour, in
the process imposing intolerable frustrations to
depositors who would have
worked so hard for their money," the document
added.
In
response, the RBZ with effect from January 25 tightened its
accommodation
policy in a bid to force banks to shun "selfish and
self-serving tactics
that needlessly tie up depositors’ funds in dark
corridors" not easily
reachable when people want their money.
The central bank came up
with a stratified accommodation policy that
dictates that all secured
borrowings by banks of up to $1 trillion shall be
at the prevailing
unchanged overnight rate of 975%.
Any excess secured borrowing over
and above $1 trillion would be at
the escalated deterrent accommodation rate
of 1 200% overnight, up from
975%.
All unsecured borrowing
would attract a penal rate of 1 500%
overnight, a rate which came into
effect on January 23, up from 975%.
"On all loans provided under
the Reserve Bank’s accommodation window,
interest on all prior accommodation
must be paid in full before any
consideration for a new loan or roll-over is
done," the document read.
Last week, the Independent revealed that
some banks, among them
Kingdom and ZABG, were facing serious liquidity
problems and owed the
central bank trillions of dollars in non-payment of
statutory reserves and
interest.
ZABG became one of the first
banks to write to Gono last week
requesting $2,5 trillion for unsecured
accommodation.
The bank revealed to the RBZ that it had
underwritten two initial
public officers by under performing property firms
— Pearl Properties and
Zimre Properties.
ZABG has over 8,5
million shares in Pearl Properties and 5,2 million
shares in Zimre
Properties.
The bank said it would repay the RBZ through the sale
of its shares in
the two real estate companies.
Zim Independent
Paul Nyakazeya
THE Reserve Bank of Zimbabwe
(RBZ) said it announced a low key
monetary policy yesterday because it is
working on a comprehensive Post
Elections Monetary Policy Blue
Print.
The blue print will cover 24-month recovery plan which will
run from
May 2008 to April 2010.
In his 2008 first quarter
monetary policy statement yesterday, the
Reserve Bank governor Gideon Gono
said the post election monetary policy
will dovetail into other government
fiscal and economic blue prints under
preparation by the relevant economic
and sector ministries.
"As monetary authorities, we have chosen a
silent issuance of this
Monetary Policy Statement for strategic reasons
whilst we prepare for the
post-elections policy programme," Gono
said.
Gono said the bank’s economic imperatives programme will
focus on the
removal of economic pricing distortions in areas such as fuel,
agricultural
inputs and outputs, multiple interest and exchange rates,
electricity, water
and other municipal, and parastatals service delivery
charges.
Gono said the policy will "remove untargeted general
subsidies in
favour of targeted and specific subsidies. Promote inward
investment from
across the globe, with bias towards the East, in line with
government’s Look
East Policy but without excluding desirable investment
which meets the
country’s criteria from other investors".
The
post election monetary policy will also seek to re-modify
investment laws;
protection of investment; respect for private property and
implementing a
sustainable indigenisation framework.
Finding common ground for the
immediate and long-overdue lifting of
sanctions against the country and
securing balance of payments support from
willing and cooperating partners
are some of the issues Gono said will be
highlighted in the blue
print.
"Uplifting productivity through incentives in mining,
agriculture,
tourism, manufacturing and other primary and tertiary sectors
of the economy
will be contained in the document," Gono said.
Zim Independent
Jesilyn Dendere
THE Reserve Bank of Zimbabwe (RBZ) has said the
National Incomes and
Pricing Commission (NIPC) should not interfere with any
other products other
than the three controlled products — bread, cooking oil
and mealie-meal.
In his 2008 first quarter monetary policy
statement Reserve Bank
governor, Gideon Gono should also concentrate on
monitoring the 16 products
which were approved by government. Gono said the
NIPC should exercise
extreme caution to avoid the repetition of yet another
price blitz by
interfering with basic commodities which are not on the list
of the three
controlled goods and the 16 monitored products.
"Our recommendation and advice is that the NIPC confines its
operations
around the three controlled products and the 16 nationally agreed
products
on the monitoring list, and not concern itself with tourism
products, air
travel, entertainment, beer and other product prices," said
Gono.
NIPC chairman Godwills Masimirembwa had told the
businesdigest on
Wednesday that his commission had the power to control
every product and
prices of imported goods.
Gono said the NIPC
should also concentrate on being "beneficial as
opposed to being a threat
and a risk to businesses".
"The full machinery and expertise of the
NIPC will be concentrated for
maximum beneficial impact, as opposed to the
potential risk of this key
institution being spread too thinly across too
many products, regions and
markets, in the end degenerating into a vehicle
of disruptive distortions,"
he said.
"Specifically, through the
work of the NIPC, extreme caution should be
exercised to ensure that this
does not degenerate into yet another
unintended catastrophic blitz exercise
and fight between government and
business that impairs business operations
and breed a spirit of mistrust
among stakeholders."
Zim Independent
Paul Nyakazeya
TOBACCO production for 2008 will
decline by 20% due to heavy rains,
shortage of fertiliser and diesel, the
Zimbabwe Tobacco Growers Association
(ZTGA) said this week.
ZTGA had earlier projected a total tobacco yield of 120 million
kilogrammes
for the current season.
In an interview with businessdigest this
week ZTGA president, Julius
Ngorima, said the initial target of 120 million
kg of tobacco in 2008 would
not be achieved due to a combination of factors
which includes late
planting, shortage of diesel and fertiliser and heavy
rains.
"There is no way the initial projection of 120 million kg
can be
achieved. We are now expecting an output below 100 million kg,"
Ngorima
said.
A total of 73 million kg of tobacco valued at
US$170 million was
achieved last year.
"A significant hectarage
by farmers who planted in November was badly
affected. Despite the farmers
applying fertiliser the crop has failed to
recover," he said.
Ngorima said the heavy rains which the country received over the past
two
months will affect tobacco which was planted late.
"The shortage of
diesel affected some farmers’ production including
those who planted early,"
said Ngorima.
Other organisations are however expecting the yield
to be much lower
than 100m kgs. The Zimbabwe Tobacco Association (ZTA),
which also represents
tobacco farmers, said the tobacco for this year will
go down to as low as 70
million kg.
"We’re expecting a crop of
less than 70 million kg because drought
earlier in the season and incessant
rains more recently have affected the
crop," said ZTA president, Andrew
Ferreira.
"Some growers have opted out of tobacco because of the
problems
related to obtaining inputs," said Ferreira. Zimbabwe’s Tobacco
production
has plummeted since 2000 when the country produced a record 236
million kg.
Zim Independent
Alex T Magaisa
A STORY is told of one
judicial officer in a certain African country.
The man of the law was known
to have a habit of demanding "a small fee" from
litigants appearing before
him. The word was that he even had a "tariff"
indicating the cost to a
litigant of obtaining a favourable judgement
depending on the type of
matter.
To avoid detection during surprise inspections, the judge
would
deposit his illicit proceeds in the rubbish bin located his office. He
would
later collect the total proceeds at the end of the day. On this
occasion,
however, the office cleaner came earlier than usual whilst the
good judge
was in court. He collected the bin to dispose of the rubbish,
whereupon he
stumbled upon a substantial amount of cash. The cleaner could
not thank his
ancestors enough for this unusual generosity.
Upon his return later that afternoon, the good judge noticed that the
bin
had been emptied. He was not a happy man. He found the cleaner and a
dispute
ensued over the fate of the bin’s contents, which neither could
mention in
exact terms. A colleague who offered to arbitrate enquired into
the
subject-matter of the dispute. The judge claimed that the bin contained
valuable "things" that belonged to him and the cleaner argued that it was
not his business to verify the value of a bin’s contents before chucking
them. A crowd had gathered to witness this extraordinary scene of a judge
and cleaner fighting over a bin’s contents. A few who were familiar with the
judge’s ways struggled to suppress laughter.
This may be an
extreme illustration of the problem but cases of
corrupt judicial officers
are fairly common, especially in countries where
the judiciary is generally
under-resourced and judicial officers are poorly
remunerated. But bribes do
not always take the straightforward form. There
is concern that they can be
clothed in the form of gifts and other acts of
charity to the
judiciary.
Compared to last year, Judge President Rita Makarau’s
speech at the
opening of the 2008 Legal Year in Harare passed with limited
media coverage.
Last year’s unprecedented pleas for assistance on behalf of
the judiciary
drew widespread media interest. Even the Governor of the
Reserve Bank of
Zimbabwe was reported to have taken it upon himself to
address the concerns
of the forgotten arm of the state -- assistance coming
in the form of
four-wheel drive automobiles, computers, etc.
A
point picked from the otherwise diverse speech this year is that the
judiciary appeared to be more complimentary, expressing gratitude to public
institutions such as the RBZ to private organisations that had chipped in
with assistance. That the pleas of the judiciary have been heard by members
of society is surely to be applauded. But it is also not without question,
not least because of the concern that gifts and alms can in some cases
camouflage more sinister intents.
A very good reason why the
remuneration of judges is drawn from the
Consolidated Revenue Fund as
provided for under the Constitution is that
there is a definite and neutral
source from which the judiciary draws its
income. Of course, it would be
preferable if the judiciary had total control
of its budget. The provisions
for judicial remuneration are designed to
safeguard the judiciary not only
from the arbitrary conduct of the executive
but also from exposure to
overtures of a commercial nature from both public
and private persons,
especially big business.
If there were other sources from which
they draw their income, it
would raise questions about its impartiality.
Whether or not the other
sources are well-intentioned is often immaterial –
the very fact that they
are seen to be giving gifts and alms to the
judiciary creates wrong and
dangerous perceptions about the judiciary’s
capacity to dispense justice
without bias, especially when the benefactors
are potential litigants.
The problem is there is no real limit as
to who among those other
sources is acceptable as a donor to the judiciary.
And where there is a
limit questions are raised about the criteria. There
must surely be great
caution where the person (natural and artificial) is a
potential litigant.
The reality is that such alms can only come from the
well-heeled members of
society and corporate citizens that can spare
resources. The indigent
members of society have reason to feel
uncomfortable, especially when they
are locked in battles with these rich
benefactors to the judiciary. It
creates an unfortunate perception of
promoting the "rule of money" rather
than the "rule of law".
Confidence in the impartiality of the courts is shattered when it is
clear
that one of the litigants is a large benefactor of those that sit in
judgement. How can an employee of a bank that has donated lavishly to the
judiciary feel at ease when he has an employment dispute with the bank?
There was recent controversy in Botswana, when it was reported that the
local entity of the large diamond multinational company, De Beers donated
100 000 Pula to the Botswana judiciary. At the time, the company was also
locked in a dispute with the Botswana Mineworkers Union over the sacking of
more than 400 workers. Such a gift may have been well-meant but one can see
the concerns raised in those circumstances.
The problem, of
course, is that the Zimbabwean judiciary is
under-resourced, especially at
the lower echelons of the system. It is not
unusual for magistrates and
prosecutors to be seen jostling with suspects
and witnesses at commuter
omnibus ranks. How those members are expected to
dispense justice fairly and
impartially when they are exposed to the
temptations resulting from a
penurious existence is very difficult to even
imagine.
Members
of the judiciary occupy an important role in society and they
discharge a
unique responsibility. It is, therefore, important that they
maintain a
standard of living that is both respectable and commensurate with
their
status. It is no secret that one of the main reasons why most senior,
experienced and competent members of the legal profession are reluctant to
accept judicial office is that the judiciary is financially under-resourced.
As a result, the judiciary has long been deprived of more quality and
experience that would greatly benefit justice delivery and the development
of the law.
There are at least three ways to deal with this
problem:
First, private persons or public institutions should be
cautious not
to promote a "gifts culture" among members of the judiciary.
The line that
separates genuine assistance from corruption is unhelpfully
thin. They
should be wary of creating impressions of currying favour with
members of
the judiciary;
Second, the judiciary should be take
a careful approach to acceptance
of these alms and gifts from various
sources. Tempting though they may be,
given the hardships the judiciary
faces, one can never be sure of the wider
intentions, not least the security
breaches that may arise especially where
information technology is involved.
They have had similar problems more
recently but I am advised that the
Constitutional Court of South Africa has
a way of dealing with this issue of
gifts.
There exists a Trust, set up to receive the acceptable
donations which
are then channelled towards the Trust projects like
furnishing the court
library. The Trust Accounts are audited and available
for public inspection
and the trustees are drawn from a large pool of
retired and sitting judges,
practising lawyers, academics, accountants, etc.
Having a structure with a
public face can only be a good starting
point.
Third and most importantly, the opportunity to give or the
temptation
to accept such gifts could easily be minimised if the judiciary
is given
adequate control over its budget and is adequately resourced by the
state
which is required to do so by the law.
Otherwise, if this
"gifts culture" is left unchecked scenes such as
that of the judge wrestling
with a cleaner for the contents of a rubbish bin
may easily become
commonplace in Zimbabwe’s judiciary. The issue of gifts is
particularly
important as Zimbabwe prepares for crucial elections. One does
not have to
throw bones to predict that there will be electoral challenges
before the
courts of law in the aftermath of the elections. People will
watch closely
who is giving what to the judiciary. It also happens to be a
key period for
salary increases. Of great importance is the need to prevent
the risk of
promoting the "rule of money" in place of the "rule of law".
* Dr
Magaisa is based at Kent Law School and can be contacted at
a.t.magaisa@kent.ac.uk or wamagaisa@yahoo.co.uk
Zim Independent
Kuda
Chikwanda
THE Reserve Bank of Zimbabwe (RBZ) has come under
intense criticism
from the banking sector which says it is being "milked
dry" to finance a
cash-strapped government.
Bank executives who
spoke to the Zimbabwe Independent this week on
condition of anonymity said
the central bank was the instrument government
was using to force the
banking sector to finance its excessive borrowing
which shot up to $21
trillion in November last year.
The executives accused RBZ governor
Gideon Gono of vindictiveness
hence their unwillingness to be named. Gono,
together with Finance minister
Samuel Mumbengegwi, last week accused banks
of being responsible for the
cash crisis and threatened unspecified action
if corrective measures were
not taken by this week.
Mumbengegwi
went to the extent of asserting the banking sector as
over-banked and issued
threats of a government crackdown on the sector,
saying cabinet was
concerned about the cash shortage.
However, bank executives and
economists have attributed the cash
crisis to the RBZ saying the central
bank was now trying to pass the blame
on to the banking sector.
University of Zimbabwe economist Tony Hawkins laid the blame squarely
at
RBZ’s door which he accused of failing to print enough money to put into
circulation.
"The fact that there is not enough cash is RBZ’s
responsibility. It is
a realistic projection banks will go bust. The fact
banks are being forced
to take up negative yielding instruments points to
how RBZ is funding
government on the back of banks’ sweat," Hawkins
said.
Hawkins was harsher in his assessment of the crisis, accusing
the
central bank of engineering the crisis to prove the existence of cash
barons.
"RBZ engineered the crisis trying to prove the
existence of cash
barons," he said. "While I am a bit surprised that banks
would admit playing
the equities market, I believe there is a very real
problem that 50% of
their money lies with the RBZ at negative yielding rates
and when they want
to borrow back their money, they are charged penal
interest rates."
The Banking Act prohibits banks from buying shares
on the Zimbabwe
Stock Exchange except when underwriting
listings.
But the executives admitted that they had been forced to
trade in
equities occasionally to avoid going bankrupt, meet client needs
and to
preserve shareholder value.
"In the face of record high
inflation, a rapidly depreciating dollar
and silence from the central bank,
we had to do something. We faced
bankruptcy and we still do if solutions do
not emerge from RBZ," one banker
said.
Other bankers said the
cash crisis had been precipitated by the
central bank’s refusal to adopt
policy measures geared to preserve value in
times of
hyperinflation.
An analysis of claims made by the executives
reveals one thing — that
the RBZ is no sacred cow. The central bank has been
fighting excess
liquidity on the market and introduced a number of measures
to do so.
However, despite an obvious liquidity crunch that has
affected the
sector, the RBZ has continued holding on to half of all demand
deposits from
banks.
"If there was excess liquidity justifying
the use of these RBZ
instruments, we would not be facing a liquidity
crunch," said economist John
Robertson.
Robertson accused the
RBZ of holding onto statutory deposits of 50%
and charging punitive rates of
975% for secured lending as a means of
providing funding.
"They
simply wanted cheap funding and that’s why the RBZ will not
reduce the
statutory deposits. Those demand deposits are financing
government
expenditure and subsidies through cheap financing options offered
by the
RBZ," Robertson said.
He said the Agricultural Support Enhancement
Facility and the Basic
Commodity Supply Side Intervention (Baccossi) funds
were coming out of
statutory deposits.
The bank executives also
claimed that apart from inflation, these
"excess-liquidity mopping" measures
had managed to worsen the crisis.
Besides the high statutory deposits, the
RBZ has also used Treasury Bills
(TBs) and Non-negotiable Certificates of
Deposit (NCD) instruments.
The RBZ also holds statutory deposits of
50%, meaning that at any
point in time, half of any banks’ demand deposits
are with the central bank
at 0% interest. As lender of last resort, the RBZ
charges punitive interest
rates on banks faced with shortages. Currently the
RBZ is charging 975%
interest, compounded daily on secured
lending.
"RBZ holds half of our money in statutory deposits, and
yet when we
face a shortage," one banker said. "It charges us 975% daily for
that money.
It is daylight robbery, and if everyone demands their money at
once, we pay
975% for storing it with the RBZ where it earns no
interest."
Robertson said because of high inflation, the money held
as statutory
deposits was fast losing value and in the process, weakening
banks.
"That money loses value faster because of inflation," he
said.
"Government does not want to hear inflation figures of 150 000% and
yet
those are the ones operating. This leaves banks in a very precarious
position having been unfairly robbed of their deposits."
In the
name of fighting excess liquidity, the RBZ outlawed banks from
holding
surpluses at the end of a trading day.
Banks are supposed to use
their trading surpluses to buy TBs with
negative yielding interest rates of
340% per annum or to lend to other banks
facing shortages under inter-bank
trading or to lend to clients.
Since the cash crisis set in some
three months ago, the latter option
has been unfavourable with banks as they
all have been facing liquidity
problems. Lending to clients requires a
minimum of 90 days before the bank
can recover its money and has also proved
very unpopular given the rampant
inflation.
"The risks of the
inter-bank market cannot be overstated," another
banker added. "What if
another bank fails to pay you on time in this
liquidity crunch? Lending to
clients means money is tied down for a minimum
of 90 days. We have to think
on our feet to survive."
Zim Independent
Comment
'THERE are no secrets better kept than the secrets
everybody guesses,"
says Sir George Crofts in the third act of George
Bernard Shaw’s Mrs Warren’s
Profession. One of the specific secrets the
deceptively genteel Irish comic
dramatist referred to was Mrs Warren’s
profession as the world’s oldest.
Sometimes it is hard to keep a secret. As
one of America’s most influential
founding fathers, Benjamin Franklin said:
"Three may keep a secret, if two
of them are dead."
In
diplomacy however a worn argument in support of secrecy is that
well-publicised negotiations tend to become hostage to the very conflict
they are trying to solve, hence the insistence by diplomats that the best
results in conflict resolution are achieved through secret
negotiations.
It is without doubt that secrecy is an integral part
of diplomacy and
governance. We are familiar with the tendency to
over-regulate which has
really never been beneficial. Excessive secrecy has
significant consequences
for the national interest when, as a result,
stakeholders are not fully
informed, government is not held accountable for
its actions, and the public
cannot engage in informed debate.
By the same token, it is true that secrecy is vital to save lives,
bring
miscreants to justice, protect national security, and engage in
effective
diplomacy. Yet the best way to ensure that secrecy is respected,
and that
the most important secrets remain secret, is for secrecy to be
limited to
its necessary role. Secrets can be protected more effectively if
secrecy is
reduced overall. Negotiators in the now-flopped South
African-mediated
dialogue to solve Zimbabwe’s political logjam stretched
their luck too far
when they substituted effective diplomacy with too much
secrecy.
The negotiators Tendai Biti and Welshman Ncube from
the divided MDC
and Nicholas Goche and Patrick Chinamasa of Zanu PF were
sworn to secrecy at
the start of the talks. They believed that they could
contribute to the
Thabo Mbeki-led process without necessarily telling the
whole nation what
they were up to. So the negotiators did not take kindly to
the Zimbabwe
Independent making revelations about the content and scope of
the dialogue.
The negotiators regarded our coverage of the talks as
a threat to the
process. There were attempts to gag the paper through crude
diplomacy, that
almost amounted to threats to staffers. Civic groups that
attempted to
impose themselves on to the processes were shut out. This was a
deal between
the MDC and Zanu PF. The parties believed they were
representing the
national interest.
Despite attempts to put a
lid on proceedings, information still came
out in large torrents. We knew
what the two parties were up to and last
September we pointed out the
direction the talks were likely to take — that
Zanu PF would not agree to a
new constitution, that President Mugabe wanted
to die in office and that he
wanted an election in March.
We revealed details on the 18th
amendment, Posa and Aippa. There was
too much information around to keep
under wraps. Put simply, details of a
proper deal to settle a national
crisis cannot be kept away from
stakeholders. It has never worked. United
States jurist Justice Potter
Stewart in a legal opinion in the Pentagon
Papers case opined: "when
everything is secret, nothing is
secret".
Details of the dialogue became a public secret but because
the
negotiators, especially in the MDC, refused to share what they were
agreeing
to even with those of their own kind, Mbeki’s negotiated processes
lacked
national ownership. The evidence of this came out when Mugabe thumbed
his
nose at MDC’s calls for a transitional constitution before the
elections.
There was no popular outcry because the public had not really
called for
that.
The MDC, which believed it had Mugabe on
tenterhooks through the
dialogue, misread the usefulness of secrecy in
dialogue. They naively
believed everything said to them across the
negotiating table but did not
appear to know the grand Zanu PF plan of using
the dialogue to seek
legitimacy for Mugabe. We last year repeatedly warned
the MDC that President
Mugabe was not going to legislate himself out of
office and that it was
important for the opposition to have a plan B in the
event of the talks
collapsing.
To Zanu PF, the talks have been
a huge success. The ruling party has
achieved all it wanted and, more
importantly, the achievements have the MDC’s
seal of approval.
The MDC on the other hand is still dazzled by Mugabe’s call for an
election
next month and his rejection of a new constitution. They are now
seeking
popular support to fight for these from a populace that was shunted
out of
the process at the onset of the dialogue. We question what the quest
for
secrecy achieved other than putting a veil over Zanu PF’s sinister plan?
Zim Independent
Candid Comment
By Joram Nyathi
"BEING prepared
for the worst is the only way to be prepared for the
best," said Cuban
leader Fidel Castro recently. This is hardly what one can
say of Zimbabwe’s
main opposition, the MDC, and it is proving a costly
lapse.
The
die is cast as it were. Zimbabwe’s first harmonised presidential,
parliamentary and local government elections will be held on March 29.
Zimbabweans from all sections of society would be expected to freely choose
their leaders and representatives in parliament and in the senate. The
question is whether the elections will be free and fair. Will all those who
are eligible be able to cast their ballot? In just one day?
The
experiences of the recent past have not prepared us for any of
this, and
already we are being primed for a disputed electoral outcome. It’s
a bad
omen.
While Zanu PF says it is ready for the elections, there is
the usual
confusion in the MDC. There are even calls for a boycott so as not
to
"legitimise" a flawed electoral process and the inevitable
result.
It is not difficult to understand the MDC’s dilemma. Even
without
posturing about a new constitution, the party is sorely divided (as
is Zanu
PF), lacks focus and in desperate need of a decent excuse to pull
out. It
put all its eggs in one basket at the Sadc-initiated talks with Zanu
PF,
which talks were magically expected to even the electoral playing field
and
end politically-motivated violence. Then it sat back.
Now
the MDC is preoccupied with condemning every electoral institution
over
which it has no control, from the voters’ roll to the Zimbabwe
Electoral
Commission, but doing precious little to galvanise its supporters
to vote.
Soon they will be condemning their own brainchild: voting in one
day. The
number of polling stations and officers needed to do this is
mamoth.
What I find sad about calls for a boycott is that apart
from
exacerbating political tensions in the country, there is no national
benefit
in the proposition. Those pushing this hard line are said to be in
the NGO
sector where Zimbabwe’s crisis has become a major source of personal
enrichment. Boycotting the elections by the MDC is their survival kit — it
means the crisis will persist and there will be a lot of crocodile tears
shed among the donor community on behalf of the victims of Robert Mugabe’s
dictatorship.
Pitted against this crisis syndrome gang are
aspiring MPs who know
that a boycott would cost them the good life on the
gravy train. Most of
them are ruing the day they boycotted the senate
elections in 2005. A
boycott is unimaginable.
But boycotting
elections so soon after endorsing an amendment adopting
those elections is
as disingenuous as boycotting senate elections in 2005
because it (senate)
was deemed a costly waste and then endorsing a larger
one soon after. It is
a woolly-mindedness that verges on the vexatious.
However, it is
not as if the MDC doesn’t have valid issues to complain
about. From violence
to arrests and denial of access to the state media, the
electoral system is
skewed in Zanu PF’s favour and susceptible to
manipulation.
The
problem with the MDC is that after the events of March 2007, after
condemning every local initiative as an attempt to buy time for Zanu PF,
once the talks began under Thabo Mbeki’s mediation, it started behaving as
if it had a lot of leverage in the dialogue. Instead of engaging in serious
preparations for the elections, it expected Mbeki to be its saviour from
Zanu PF when he has neither the magic wand nor the obligation to do so. He
is merely a facilitator. More than that, it believed Zanu PF’s duplicity
that only it (MDC) mattered in the talks against the advice of its civil
society partners under the Save Zimbabwe Campaign.
But since
its "treacherous" endorsement of Constitutional Amendment 18
Act the MDC
leadership has been under immense pressure to demonstrate that
it has not
given Mugabe and Zanu PF a new lease of life and conferred
legitimacy on
more piecemeal amendments to the constitution. This is evident
in its latest
complaints about Zanu PF backtracking on a "transitional
document" before
the March 29 elections which Mbeki is supposed to be
hiding.
Mugabe never minced his words on a new constitution.You needed to be
MDC to
believe outsiders or the threat of an MDC election boycott would
force him
change his mind. Whether he is right or wrong is not an issue.
What
is an issue is the MDC’s strange demand for a hurried,
election-specific
constitution without a popular referendum. I don’t know
whether this is a
genuine demand or electioneering. This is raised together
with the
outlandish demand for a "transitional document".
The only instance
when such a mechanism is often used is when you move
from one system of
government to another such as from apartheid to majority
rule in South
Africa or from Rhodesia to Zimbabwe. The logic in both cases
was that a
section of the population was wrongly but legally proscribed from
participating on an equal basis in the affairs of their country of birth.
Now we want a transition from what to what?
Now that the
election date has been set, a new constitution is
rendered a non-issue for
all practical purposes. Even if the date was moved
by three months, which is
what the current constitution allows Mugabe to do,
there would still be no
time to hold a referendum for a new constitution.
The MDC rejected proposals
by Mugabe to push back the elections to 2010
because "he was afraid of
losing" the elections this year. Now they face the
prospect of losing and
the only figleaf they can find is a new constitution
and a postponement of
the polls.
Our leaders should prepare the electorate more for the
elections and
less for a disputed result. The simplistic conclusion one
draws from this
political stand off is that while Zanu PF has been cunning
and selfish in
dealing with the opposition, the MDC is itself guilty of
amateurism and a
failure to articulate its cause. It is equally guilty of
overrating its
bargaining power.
Zim Independent
Editor's Memo
By Vincent Kahiya
'KINDLY note the RTGS system
has been down since Friday. The RBZ
advises that the vendors are working to
rectify the problem. As a result of
that down time, payments could not be
processed. I will advise as soon as
the system is up. Kindly bear with
us."
Those privileged to have access to the Internet started to
receive
messages such as the one above from banks on Monday and
Tuesday.
The messages sought to shed light on why salaries had
failed to
reflect in people’s accounts and why accounts remained unfunded
despite
monies having been transferred through the now misnamed Real Time
Gross
Settlement (RTGS) system.
Monies transferred as far back
as Monday last week were still not
showing in accounts of recipients despite
remitters having been debited.
The e-messages from banks were a
tacit admission by the banking sector
that there was a problem.
Meanwhile those without Internet access thronged banking halls only to
be
told that monies had not been transferred into their accounts.
They
were told of a gridlock in the RTGS system. They were told that
it was the
RBZ which had suspended the RTGS system "because it had no
money".
The other well-recited excuse was that the power outage
on Tuesday had
thrown the RTGS system into a tailspin.
One
question banking staff at enquiries desk failed to answer though
was when
this would be fixed and when accounts would be funded.
The
desperate depositors included those afflicted with chronic
illnesses having
to endure extended periods of pain because they could not
access money sent
through the RTGS system by relatives to purchase
life-sustaining
drugs.
At one bank branch I visited in the city centre a frail man
left the
bank in tears after he was told there was no money in his account.
He had in
hand a Barclays Bank RTGS form as proof that money had been
transferred into
his account. To illustrate his desperation, he pulled out a
bottle of
Stalanev tablets and placed it in front of the bewildered clerk
who scarcely
got the message that the man was on ARVs.
He was
not the only victim. The list included thousands of workers who
failed to
access their salaries on time this week and pensioners who failed
to access
their miserly incomes.
Individuals and companies had unpaid
invoices to hand as their
accounts remained empty despite monies having been
transferred into them
this week.
Many failed to purchase goods
and services whose prices went up
exponentially in sync with the weakening
local currency. Fuel for example
has gone up more than four times in the
last 10 days.
Deals worth trillions of dollars were not sealed as
punters failed to
move funds to stockbrokers to pay/buy shares on the
bourse. Activity on the
money market was also badly affected.
Money locked in the system has been losing value daily and there is no
recourse to the depositor who is still expected to pay bank charges, taxes
and at the end of the day earns nothing in interest from the money deposited
with banks.
Wholesalers and manufacturers registered reduced
business this week as
retailers — who pay for orders through the RTGS system
— failed to pay for
purchases.
The quantum of business lost
countrywide would be difficult to fathom
but evidence of its extent was
abounding in dejected faces of depositors at
banks and desperate parallel
market dealers working feverishly on their
cellular phones to calculate lost
opportunities and positions.
In this desperate situation, there was
no coherent statement from
banks and the central bank, which bred
speculation and disinformation.
But this paper’s investigations
revealed that the major reason there
was no movement of funds between banks
since the latter half of last week
was that banks’ accounts at the central
bank were not adequately funded.
The banking public was never told
this line. By last Wednesday, 999
transactions between banks, valued at $34
trillion, had been dishonoured.
The dishonoured transactions were
concentrated at Standard Chartered
Bank with $14,6 trillion, ZB Bank with
$5,8 trillion and Beverly Building
Society at $4 trillion, according to RBZ
figures.
We revealed the banks’ short positions last week in a
series of
stories and in our Comment.
We stirred a hornets’
nest. The news editor Dumisani Muleya and myself
were bombarded with angry
phone calls and text messages from bankers.
Banks were very quick
off the blocks, accusing us of lying,
misrepresentation and ignorance of the
functioning of banks.
I dared the banks to write to us or grant us
interviews concerning
their liquidity positions.
I also
challenged them to come up with statements to inform their
clients that our
story was way off the mark and that the financial
institutions were healthy
and operating normally. Their universal response
to this was "Gono
munomuziva — he is vindictive. He will close us down
tomorrow."
"So you won’t defend your position even if it is correct because you
are
afraid of Gono?" I asked one of them. "Perfectly so if that will save
the
bank," he responded.
But this silence on key policy issues and
fundamental aspects for mere
survival will not endear banks to their
clients.
Depositors are the least interested in this gobbledygook
about
scary-Gideon. It is incumbent on banks to tell depositors exactly what
is
happening.
Some of the troubled banks are quoted on the
stock exchange. In this
circumstance, were the banks not expected to issue
cautionary statements to
explain their liquidity positions? Perhaps that is
not as important as the
need to build confidence in the banking sector. At
the moment it has plumbed
to embarrassing lows and does not appear to have
hit the bottom yet.
Zim Independent
MuckRaker
SO we are well and truly in election mode as March 29
looms on the
horizon. The president and ministers have been making "no going
back" noises
as if the date is cast in stone.
But it might be
worthwhile to reflect on the context here. The whole
point of the Sadc
mediation initiative was to spare Zimbabwe another
damaging disputed
election outcome. President Thabo Mbeki right from the
get-go saw the danger
after the March crackdown of a nation divided against
itself. Already the
country’s economy was spiralling out of control and a
disputed result would
have been disastrous for Zimbabwe and the region.
Everywhere else
Sadc states were prospering. Botswana, Mozambiqe and
Namibia were
flourishing. Zimbabwe under Zanu PF was heading in the opposite
direction.
And it had nothing to do with sanctions.
Mbeki, who had been
struggling with the problem since 2000, was the
logical Sadc choice of
mediator. And within 24 hours of the Dar es Salaam
summit he had outlined
his agenda. It was essential that all parties to the
election agree on the
instruments conducting it, he said. While he made
clear this was the
position the opposition was likely to adopt, there could
be little doubt it
was his own view as well. The ruling party and the main
opposition groups
would have to agree on the constitution and role of the
electoral body
running the election.
In the event the government and the MDC
agreed that the ZEC should
manage the election from beginning to
end.
That did not happen. The Registrar-General’s office continued
to
control the voters’ roll, which as a result remained a mess, and the ZEC
very quickly proved itself a vehicle of government’s needs. For instance,
despite its claims to independence, it allowed the government to invite
observers when it should have been responsible for that aspect of the
process.
Last week South Africa’s chief elections officer Pansy
Tlakula was in
the country to attend a conference on electoral preparations.
She paid a
courtesy call on ZEC chair George Chiweshe and reportedly asked
him why he
wasn’t attending such an important conference. "I’m too busy,"
was the
reply.
This tells us all we need to know about the
seriousness of this
outfit!
Mbeki was here recently to follow
up talks in Pretoria between the two
parties the previous weekend. But he
made little or no impression upon
Zimbabwe’s obdurate ruler on the need for
flexibility around the election
date and transitional
modalities.
If Mugabe believes he has caught the opposition on the
back foot he
will soon find himself at a disadvantage. Mbeki will have to
explain to Sadc
leaders why Zimbabwe is refusing to comply with the
Mauritius protocol that
underlines the need for all parties to agree on
electoral bodies and
procedures.
Kenya has provided a wake-up
call to those who believe an incumbent
can manipulate an electoral
supervisory body and get away with it. But as in
all things the MDC has been
supine in spelling all this out. Instead we had
Nelson Chamisa’s maladroit
remarks.
When is the MDC going to wake up and give the country a
lead? They
could start by exposing the manipulation already taking
place.
The Chronicle last week carried a picture of Senator
Chief Vezi Maduna
addressing delegates to a Zanu PF district workshop in
Filabusi. Listening
was Andrew Langa.
This illustrates the
partisan manipulation of chiefs which we reported
two weeks ago with the
allocation of vehicles, even to those who can’t
drive!
Why
don’t chiefs, the president, ministers and officials all set a
good example
of electoral behaviour by eschewing state resources, telling
voters what
rights they have, and generally raising the tone of the campaign
in line
with the reforms recently introduced?
Chief Maduna to his credit
spoke out against the imposition of
candidates, but Langa made a fool of
himself by claiming the West was out to
repossess the land.
If
brains were taxed he would get a rebate. Only the dumbest of party
followers
will swallow this nonsense but it is indicative of how the
bankrupt party of
power intends to conduct the campaign in the absence of
any clues as to how
it intends to rescue the country from the pothole it has
been plunged
into.
We were pleased to note that David Moore of the
University of
KwaZulu-Natal has reminded readers of the South African Sunday
Independent
(following publication in the Zimbabwe Independent two months
ago) that
Mugabe’s claims to have been locked in lasting conflict with all
things
British represents a selective recall of history. Mugabe claimed at
the
meeting of the UN General Assembly in September that he had fought a
protracted war against British imperialism "which denied us human rights and
democracy".
But Moore has published a telegram sent by Mugabe
from Salisbury
Prison to British prime minister Harold Wilson in 1970
appealing for a
residence permit for his wife, Sally.
"Disturbed my wife Sally Mugabe at 20 Madeley Rd London W5 asked (to)
leave
Britain. (I) contend Sally (is a) Rhodesian citizen by marriage,
therefore
British subject. (Her) return to Rhodesia impossible (in) present
circumstances. (I) appeal (to) you (to) recognise her status and grant
residence permit till my release from political detention."
With a bit of lobbying from liberal supporters and a petition signed
by MPs
Sally was allowed to stay. Human rights, it would seem, had triumphed
over
hard-hearted bureaucrats.
But please can we hear a little less of
the "sinister forces" Mugabe
fought against. He was only too happy to
cooperate with them when the
occasion required it. He depends upon us all
having short memories.
Perhaps this is a good time to remind
ourselves of all those degrees
Mugabe was able to accumulate while locked up
in detention. Would any
prisoner now be able to take a correspondence course
of this sort? Would the
writing facilities be available to them, the postage
stamps etc?
Does anybody remember post offices, those places we
used to go for
stamps? Does anybody remember when Zimbabweans used to write
to each other
and to relatives in neighbouring states? We have now been
reduced to
medieval conditions where we write by candlelight and send the
letter by
messenger. This is the revolution Zanu PF is seeking to
defend.
M-Net’s Carte Blanche on Sunday night took us inside the
control
centre for South Africa’s power stations. It showed that while South
Africa
was in the midst of its recent blackout power was being exported to
the
country’s neighbours including Zimbabwe.
At the same time
Zesa was saying no South African power had been
received in
Zimbabwe.
An asylum seeker with no right to work in Britain was
employed for a
year — handling asylum appeals, the Daily Express
reports.
Eugene Tawanda Madzima helped process appeals in Leicester
after
landing a job with a fake Home Office letter and National Insurance
number.
He even helped in staff training and was only found out
when he tried
to open a bank account with a fake passport which he said he
bought from a
London solicitor for £1 000.
In an added farce,
the Express says, it emerged his asylum claim has
not been dealt with in
four years because he is one of the 450 000 backlog
cases.
A
judge said the blunder "beggars belief".
Sunday Times columnist
David Bullard quotes Barry Ronge as saying on
Talk Radio 702 that he has
noticed a shift in emphasis in the foreign media’s
coverage of South
Africa.
"We are no longer the miracle nation of 1994," Ronge had
pointed out.
"Instead we are rapidly becoming a global freak
show."
Ronge did concede that some of the foreign reporting was
intentionally
sensationalist, Bullard says. But "how for example do you
explain to an
interested foreigner that the best the ANC could come up with
as its
presidential hopeful was a man who everybody knew would eventually be
charged with money-laundering, racketeering, fraud and
corruption"?
Harare reader phoned in on Tuesday to say
deputy-Technology minister
Patrick Zhuwawo was screaming on ZTV news on
Monday evening that there was
no power because Tsvangirai asked for
sanctions, hence everyone is suffering
from the power cuts. On the same day,
Zesa had advertised apologising for
loss of power due to a serious technical
fault.
Our advice to Zhuwawo: Don’t make a fool of yourself. Get
hold of Zesa
before claiming to be speaking on its behalf.
Just to add to our miseries phone lines appear to be going down all
over the
city. Many people have not had a working line since November. The
phones
come back on sporadically but mostly people have come to depend on
their
mobiles. As a result readers are suggesting we rename TelOne "Tell No
One".
Zim Independent
By Eric Bloch
THE Minister of Finance,
Samuel Mumbengegwi, has a remarkable tendency
to tackle anything and
everything back to front.
He favours putting the cart before the
horse, and then blames the
horse for its inability to pull the
cart.
He is so prone to do things in reverse that, perhaps, it is
time for
him to return to his mother’s womb, for he must surely believe that
birth
comes before conception.
The latest demonstration of this
ministerial philosophy occurred when
he addressed chief executives of banks
last week.
He dogmatically informed the bankers that the exchange
rate will only
be reviewed when there is increased productivity in the
economy. He stated
that "the exchange rate is a function of productivity",
and that "the
exchange rate cannot be addressed until we do what we can to
increase
production".
Zimbabwean productivity has fallen
cataclysmically in recent years,
and especially so in the last six to nine
months.
The causes of the decline are many. Although they do not
include the
oft-repeated, totally false, governmental contentions that a
major cause
thereof are diabolical, evil machinations of Western countries,
in
conspiracy with Zimbabwean businessmen, in order to destroy the economy
and
thereby ensure a political regime change.
The causes of
shrinking productivity are also not so-called "illegal,
international
sanctions", for such sanctions only exist in the convoluted,
distorted
thought processes of the minister and his colleagues, but not in
reality.
However, one of the most pronounced causes of the
tumultuous fall in
productivity is government’s gross mishandling of the
exchange rate.
The exchange rate policy impacts both directly and
indirectly upon
productivity, and if government obdurately adheres to its
current stance,
then yet further collapses in productivity are inevitable.
The productivity
of agriculture, mining, tourism and manufacturing
operations in Zimbabwe is
greatly dependent upon exports.
Save
for certain agricultural commodities, the capacity of the
Zimbabwean market
to absorb the volumes of the production necessary for
viable productivity of
those sectors does not exist.
Not only is the total population only
about eleven million, but much
of the population is poverty-stricken and
vested with minimal consumer
spending power.
Therefore, such
volumes as can be produced and sold to Zimbabweans
must be greatly
complemented by production for, and sale to, export markets.
However, one cannot sell in export markets unless one’s products are
both
quality and price-competitive.
Zimbabwe has long proven its ability
to meet the highest of
internationally sought quality standards, be it
Zimbabwean tobacco, cotton,
beef, precious and semi-precious minerals,
tourism amenities and services,
or be it manufactured textiles, clothing,
footwear, furniture,
pharmaceuticals, toiletries and cosmetics, engineering
products, or a vastly
diverse array of other goods.
But its
ability to be price-competitive is wholly frustrated by a
governmental
bigoted policy on exchange rates, which policy fails to
recognise the
consequence of Zimbabwe’s world-record levels of
hyperinflation.
When costs of production soar upwards by more
that 25 000% in one
year, which was the case in 2007, and when those costs
more than double each
month, as is currently the case, any aspirations to
export are totally
destroyed, unless there is commensurate exchange rate
movement.
The producer cannot increase prices to cover the rising
costs, for his
competitors in other countries are not faced with similar
cost escalations,
and therefore do not have to increase their prices other
than very
marginally to address the low levels of cost inflation sustained
by them.
Therefore, if the Zimbabwean producer is to be able to
compete, the
exchange rate must adjust in alignment to the real inflation
borne by the
producer.
The destruction of export viability, by
government’s rigid adherence
to tunnel-vision exchange rate policy
determination is a major contributant
to inflation, for in the absence of
exports, the production for the domestic
market has to absorb the entirety
of the producer’s fixed costs, whereas if
higher volumes were produced, in
order to service export markets as well as
the domestic market, then the
proportion of fixed costs attributable to
domestic production would
diminish.
A further very major hindrance to productivity is the
insufficient
availability of foreign exchange to fund importation of
operational inputs,
consumables, spares, and state-of-the-art machinery and
equipment.
Agricultural production has been curtailed, year after
year, by
insufficient availability of fertilizers, insecticides, fuel,
equipment, and
much more.
So too has been mining production.
For much of the manufacturing
sector, production volumes are heavily reduced
by frequent stoppages
necessitated by non-availability of inputs, or by the
scope of operations
being severely constricted by insufficiencies of such
inputs.
However, were producers to have real export viability,
accorded to
them by credible exchange rates, they would be generating the
foreign
exchange required by them for both their export and domestic market
production. In addition, most of them (if not all), would also be generating
foreign exchange required by those producers servicing only domestic needs,
not being engaged in exports, and as required by government and other
sectors of society.
In particular, substantially increased
exports, made possible by
meaningful exchange rates, would result in a very
significant reduction in
the unlawful foreign currency "parallel" and
"black" markets, bringing about
a stabilisation of rates therein, and
ultimately a reduction of such rates.
As those markets are amongst
the biggest triggers of Zimbabwe’s
ongoing hyperinflation, those increased
exports would markedly reduce the
inflation attributable to the operations
of those markets. This would, in
time, contribute to stabilisation of
official exchange rates, due to the
then falling levels of inflation,
although in part contingent upon
government also taking other overdue,
constructive steps to contain
inflation.
Whilst back in the
womb, minister Mubengegwi should seek to develop a
more substantive economic
backbone, so that after his rebirth he can put
first things
first.
One of those first things must be to move rapidly to
market-force
driven exchange rates. Minister, put the horse before the cart
and you’ll be
amazed how both it and the cart can then go forwards!
Respect for property rights can save economy
I BELIEVE that we were
on the eve of another dramatic move in the
legal revolution that continues
to destroy commercial agriculture and
Zimbabwe.
In September
2005 Zanu PF MPs put in place amendment number 17 which
acquired all white
owned land for the state and gave no right to challenge
this in court. No
Zanu PF parliamentarian voted against this act.
At the end of 2006
Zanu PF MPs put in place the Consequential
Provisions Act which said that
all those farmers still in their homes and
farming without permission from
the Minister of State Security would be
committing a crime and would face
jail. No Zanu PF MPs voted against this
Act either. And neither have any of
them got the the neccesary "permission"
for white farmers to
continue.
In October 2007 the Zimbabwe Republic Police initiated
prosecutions
under this Consequential Provisions Act; and to date
approximately 150
farmers are in the process of being prosecuted for still
being on their
farms. Any farmer without an offer letter, lease or permit is
on the wrong
side of the law. The 150 farmers currently being prosecuted
will, we can be
sure, be expanded.
In January 2008 our Supreme
Court upheld the law that the Zanu PF MPs
put in place expressly saying that
the Bill of Rights and right to
protection of the law no longer exists in
Zimbabwe for farmers or anyone
else that the parliamentarians care to make
unjust laws against.
Sometime between now and March 29 I believe
white farmers are going to
be thrown into jail again for continuing to
commit the crime of being in
their homes and farming.
Are our
agricultural leaders going to make the same mistake as they
did in 2002 and
take no legal steps to ensure their members are protected
from the effects
of being on the wrong side of the law: jail and
dispossession?
In 2002, Colin Cloete and his CFU council made a concious decision not
to
protect their members. They were apparently assured, like Piet Retief,
that
they would not be harmed.
As a direct result of that unfortunate
decision the vast majority of
farmers were dispossessed of everything that
they had ever worked for. Many
were incarcerated. Their workers lost their
jobs and their homes and the
country went hungry. The economy collapsed.
Roads, schools, hospitals,
electricity supplies, water delivery systems
collapsed and continue to
collapse today.
The effect of
destroying title has been felt by all. The engine of the
bus called Zimbabwe
has been stripped, sold off or vandalised by the driver;
and the people of
Zimbabwe have had to get out and walk. Without property
rights, the engine
that drove the economy can not function.
Ben
Freeth,
By e-mail.
------------
What shall we
be in five years?
WE shall wake up one day and discover that we no
longer have all that
we used to have.
What shall become of our
roads, if we add five more years to your
existence in power, Mr Transport
minister?
Our roads have become a jungle over night, infested with
potholes all
over. This has reduced the lifespan of our motor vehicles,
escalating the
cost of maintenance and increasing the frequency of servicing
the vehicle.
What then shall become of our electricity, if Mr
Energy minister you
are given another five more years in office? Load
shedding and unresolved
ever recurring faults, this is the order of the day.
It will be a shocking
thing to have electricity 24 hours a day.
Where is the spirit of ubuntu? Now that you have managed to buy a
generator
with our taxes, you don’t see the need of those who have put you
there. Why
not have pro-active approaches to managing our power?
What then
shall become of our drinking water, Mr Water Resources
minister, if we throw
another five years to your tenure? Our water has been
getting dirtier
everyday; no remedies have been taken to rectify this.
People are
getting sick everyday due to this dirty water you pump into
our homes and
offices. If you have failed us like this in your stint, what
then shall we
be in five years time?
What shall become of our money, Mr Governor
sir, if we are to continue
in this vein in the next five years? Will our
money have any significance?
Will we be able to trade with other
nations?
Can you tell where our health sector will be, if we allow
the current
Health minister to steer the boat for the next five years?
Already we have
seen our dear doctors, nurses and health workers taking
industrial action,
leaving for the diaspora in droves and risking lives of
many who are lying
on hospital beds. If we can’t do it, let us leave it
because we are holding
a lot of lives and their blood is upon
us.
Our industries are now a pale shadow of what they should be, or
should
we say what they used to be a few years ago. Who should we pin it on
Mr
Trade minister?
I have often been told that the first point
of failure is when you
look for someone to blame in a situation. I am not
going to blame anyone. As
a voter, I have but myself to blame. I am the
culprit.
It is in our hands to make or break this March, who shall
we trust
with our future?
Anonymous,
By
e-mail.
---------------
Home truths for Sasa
AFTER reading Mabasa Sasa’s piece entitled, "MDC must march against
sanctions" (Herald, 25 January), I must admit that Zanu PF has more than its
fair share of bootlickers, ranging from Manheru to Ceaser Zvayi to Goodwills
Masimirembwa.
What started as an intelligent and verbally
colourful article
degenerated into an incoherent babble when he tried to
make a case for the
MDC to denounce "illegal sanctions". His piece lacked
originality as we have
been bombarded with the same rhetoric from just about
everyone within Zanu
PF circles.
When it suits them, these
sanctions are often described as
"non-events" then they suddenly become
"illegal sanctions".
A few home truths for Mabasa to
digest:
*Mabasa has no authority to prescribe or dictate what the
MDC should
or should not march for.
*People are suffering
because of the bankruptcy of sound economic,
social and justice policies in
Zanu PF.
*Zanu PF instigated the fast track land reform programme
purely for
political survival. Is it a coincidence that this reform was
launched in
2000? After a resounding no vote for the new constitution in
1999?
*Pro-people statements do not put bread on tables. It would
be also
wrong for the MDC to support a land reform that has not benefited
the
ordinary citizens. In any case, this so-called land reform has brought
about
massive unemployment and hunger.
*The MDC Freedom March
was just but one way of registering concern at
the ever deteriorating
standards in all spheres of life in Zimbabwe.
Joseph
Mhlanga,
Dublin, Ireland.
--------------
Mixed-up priorities
I LISTENED to the radio this week and heard that
the African Cup of
Nations soccer showcase currently being played in Ghana
will now be beamed
live by ZBH after a massive US$1 000 000 was paid to
secure braosdcasting
rights.
Last week there was an article in
the Herald that the Ministry of
Water was failing to raise R15 000 000 for
pipes required to sink boreholes
in suburbs worst hit by the shortage of
water.
A quick calculation will show you that US$1 000 000 is
equivalent to
R7 000 000, half the amount needed for pipes to sink the
boreholes.
What sort of prioritisation is this where a game of
soccer takes
precedence over human lives?
Masawi
Munyanyi,
Greendale.