Friday, 16 January 2009 11:18
THE cash-strapped government this week failed to pay soldiers their
January salaries on time amid reports that it has also ruled out paying them
in foreign currency in the near future - a move that has resulted in morale
in the army hitting rock bottom.
Reliable sources told the Zimbabwe Independent that soldiers were due
to be paid yesterday, but were advised by officers at army barracks
throughout the country that government was unable to pay them this week.
The sources said a senior army officer, Colonel Mbonisi Gatsheni,
former defence forces spokesperson, on Wednesday told soldiers at KGVI
barracks that they would not receive their salaries on time, but did not
disclose the reasons for the delay.
"We were initially supposed to get our salaries on Tuesday, but the
payday was moved to Thursday. During the course of this week we were
informed that the salaries were not deposited in our accounts," a source
said. "Gatsheni told us that our salaries will be in local currency and this
The soldiers, the sources said, were now expected to get their
salaries in local currency next week. The sources said during a commander's
parade on Monday, Brigadier-General Douglas Nyikayaramba told soldiers not
to expect salaries in foreign currency because the government did not have
adequate hard cash.
Nyikayaramba, the sources added, said the government was working on
paying allowances in hard currency in the interim.
"He said the government didn't have enough foreign currency to pay
soldiers, but was considering paying our allowances in hard currency," one
soldier said. "Nyikayaramba didn't specify when we will start receiving the
allowances in foreign currency."
The sources said junior soldiers were bitter that the government had
refused to pay them in hard currency when senior army officers from the rank
of colonel had for months been partly paid in foreign currency.
"We are angry. The economy has been dollarised and how are we going to
buy goods and services with the Zimbabwe dollar?" a soldier from Llewellyn
Barracks in Bulawayo asked yesterday. "What makes us more bitter is that
some of our chefs (high ranking army personnel) have for months been paid in
Efforts to get a comment from Defence minister Sydney Sekeremayi and
defence forces spokesperson Ben Ncube were in vain yesterday.
Sekeremayi was unreachable on his mobile phone, while Ncube's office
telephone was not being answered.
Zimbabwe's army has since last year been saddled by many problems
after exhausting its budgetary allocation, among them shortages of food to
feed soldiers in barracks.
Last week, the Independent reported that the government had resorted
to slaughtering elephants to feed soldiers.
The army has, in addition to shortages of food, also struggled for
basics such as boots and uniforms for troops while the bulk of military
equipment and hardware is said to be old and in need of replacement.
Secretary for Defence Trust Maphosa last year told the Parliamentary
Portfolio Committee on Defence and Home Affairs that the government was
fortunate that it was not being sued by soldiers for failing to provide
adequate and nutritious food to the army as is required by law.
In an unprecedented show of discontent, some soldiers last year rioted
in Harare, assaulting civilians, stealing cash from street currency traders
and looting shops.
BY CONSTANTINE CHIMAKURE
Friday, 16 January 2009 11:00
A GROUP of suspected war veterans has turned a primary school in
Bulawayo's Entumbane suburb into farming plots after the opening of schools
was postponed to January 27.
The war veterans have transformed Zulukandaba Primary School into
Information to hand shows that the ex-combatants last month brought
down the school's security fence and turned sports fields into agricultural
Residents in the suburb told the Zimbabwe Independent that the war
veterans had planted maize, which is now at knee level thanks to the rains
that have been pounding Bulawayo and surrounding areas.
In an interview, the councillor for the area, Prince Dube, said the
school's authorities informed him that it had been turned into a farming
"I was informed by the school authorities that some people had turned
the school's grounds into a farm where they have subdivided the playing and
training grounds into small farming plots," Dube said. "These are known Zanu
PF activists who are claiming to be war veterans and it boggles the mind why
they can turn a school yard into farming land."
He said residents wanted the Bulawayo City Council to intervene and
slash the maize.
Dube said: "The issue was brought to my attention last week by angry
residents and they have said that if the war veterans do not slash the maize
seed by themselves, then we will have to call for council assistance in
having it removed."
The war veterans also stand accused of looting school furniture and
removing the security fence. The city council yesterday said it would look
into the issue.
Schools were supposed to open this Tuesday, but were delayed by
government citing the non-completion in the marking of Grade 7, 'O' and 'A'
However, the Zimbabwe Teachers Association said government made the
decision after teachers threatened to continue the strike they started last
year unless they were paid in foreign currency.
Teachers are demanding a basic salary of US$2 200.
BY HENRY MHAKA
Friday, 16 January 2009 11:10
BANKS this week failed to implement a Reserve Bank directive to allow
formally employed workers to withdraw their full monthly salaries, amid
reports of bank notes shortages.
The Zimbabwe Independent observed that most banks set varying
withdrawal limits following Monday's decision by the central bank allowing
workers to access their full January salaries upon presentation of a
Standard Chartered bank yesterday set $2 trillion and $1 trillion
withdrawal limits for its branches in the city centres and those outside
FBC Commercial Bank's limit was $10 trillion, NMB $5 trillion while
Beverley and Barclays allowed individuals to withdraw only $500 billion.
Banks lodge treasury bills as security when they need cash from the
Reserve Bank, but the current-liquid state of the money market stops them
from lodging the instruments.
Pressured by the breakneck speed towards full dollarisation of the
comatose economy, most companies responded to the worsening economic crisis
by hiking salaries in an effort to cushion workers from the harsh
The lifting of the cash withdrawal limits has resultantly weakened the
local currency against major ones as workers hurriedly offload the
depreciating local currency for foreign exchange.
Yesterday, the local unit crashed to an all-time low of $250 billion
against the United States dollar, a development analysts have attributed to
the pricing of virtually all goods and services in foreign currency.
The Bankers Association of Zimbabwe (BAZ) has, however, warned that
money supply problems would continue to be "intermittent" unless the country
resuscitates depressed capacity utilisation for industry.
"It is very difficult to project customers' demands because of
hyperinflation," said BAZ president John Mangudya. "Salaries are often
processed on the same days when customers come to withdraw cash.
This means that projections are based on the historical trend rather
than the future, which makes it difficult to forecast. Currently consumption
is higher than production meanings that there is bound to be a shortfall. An
increase in production can only address these intermittent challenges."
The Zimbabwe Congress of Trade Unions (ZCTU) yesterday accused the
central bank of "denying workers the right to withdraw their salaries".
Acting ZCTU secretary-general Gideon Shoko blamed the central bank for
failing workers who are currently getting wages in local currency despite
lifting withdrawal limits on formally employed workers from weekly amounts
of $5 billion.
"It has come to our attention that workers have been denied their
right to withdraw their salaries from banks," said Shoko in a statement.
"The reason was/is that they must produce their January 2009 pay slips. The
banks have gone further and produced a circular to that effect dated 9
January 2009, and signed by your (Reserve Bank) director of financial
Banking sources said the central bank ordered banks and building
societies to relax the monthly limits to workers who produced pay slips for
This means that workers could not withdraw outstanding balances for
their December salaries despite earlier promises by the central bank.
The ZCTU demanded that the central bank withdraw the circular because
it was contrary to last month's concessions made between the central bank
and the labour union.
The Independent this week witnessed incensed customers at several
banking halls expressing disgust over the central bank's "betrayal".
University of Zimbabwe graduate school of business professor Tony
Hawkins described the new monetary measures authorising workers to withdraw
their full salaries as unsustainable.
"This whole thing is a farce in some sense," Hawkins said. "Almost 90%
of all transactions are now being carried out in hard currency. Nobody now
wants the Zimbabwe dollar. Dollarisation has taken over and the local
currency is becoming less and less meaningful. I don't think the central
bank can manage the situation."
BY BERNARD MPOFU
Friday, 16 January 2009 10:54
LAWYERS representing three white commercial farmers facing allegations
of training bandits have told the High Court that weapons seized by state
security agents from the accused were sporting firearms.
John Vigo Naested, Bryan Michael Baxter and Angus John Thompson were
arrested on June 6, three days after about 370 police, Central Intelligence
Organisation (CIO) officers and army personnel, which included two
helicopters and civilian vehicles, raided their plots in Acturus on
allegations that they were recruiting and training bandits.
The plots are used as an outdoor adventure camp known as Kudu Creek.
The security agents recovered firearms from the accused and the
farmers appeared in the magistrates' court in Harare on January 9 and were
The state alleges that between February 2003 and January 2009, "the
accused recruited and assisted or encouraged some MDC-T youths to undergo
training with the intention of committing acts of insurgency banditry,
sabotage or terrorism in Zimbabwe".
In an application for bail at the High Court, the farmers' lawyers -
Mavhunga & Sigauke and Coghlan, Welsh & Guest - said the recovered firearms
were not for military training as alleged by the state.
"The firearms that were recovered in the possession of the first
applicant (Naested) are not military firearms but are sporting firearms,"
reads the application. "There is no evidence that links the use of these
sporting firearms to the alleged military training."
Most of the firearms, the lawyers said, were "fully licenced".
"The state also alleges that they recovered five firearms from the
second applicant (Baxter). It is important to note that all these rifles are
purely sporting ones and cannot be used for military training. It boggles
the mind why sporting rifles would be used in alleged military training when
there are suitable military guns," the bail application reads.
Baxter told the lawyers that a former Reserve Bank employee - Joseph
Banda - instigated the raid at the farmers' plots in an attempt to take over
Baxter said the raid was the fifth in four years.
"It is incisive to note that all the five raids were at the
instigation of Joseph Banda, a former employee of the Reserve Bank who
intends to take over the second applicant's (Baxter's) plot," the lawyers
The lawyers said Banda last year approached Baxter with a copy of the
Government Gazette and an offer letter and asked the farmer to vacate his
plot because it had jointly been allocated to him and the CIO who wanted to
turn the farmhouse into their headquarters.
"The second applicant (Baxter) had to look for assistance from
Honourable Governor (Aeneas) Chigwedere who advised him that the offer
letter was false. Since then he (Banda) has employed violent means in his
bid to take over the plot, but all have failed," the lawyers said in the
Banda was accused of making several death threats against Baxter and
his family and on December 27 2008 it was alleged that he handcuffed and
assaulted with an iron bar the farmer's employee identified only as Alois.
The lawyers said their client was reliably informed that Banda would
be the key state witness.
The lawyers argued that the accused should be granted bail on the
basis that they were of advanced age, have no previous convictions and have
no pending cases in the jurisdiction or outside and that allegations against
them are weak.
"The three applicants are owners of the properties on which they live
and they are all family men. They are patriotic and law-abiding citizens who
have never considered to migrate despite the obvious current hardships
facing the nation today," the application read.
The state is opposing bail on the grounds that Naested, Baxter and
Thompson were facing serious charges of which if convicted would face two
life imprisonment terms that would induce them to abscond and also they
might interfere with investigations or witnesses.
The lawyers narrated how the farmers' properties were raided.
Naested, Baxter and Thompson were raided at around 2am on January 3 in
a "predawn swoop by roughly 370 policemen, CIO and army personnel which
included two helicopters and civilian vehicles".
The applicants said the raid lasted from 2am to 3pm on Sunday and
Naested and Baxter were asked to accompany the police to Harare Central
police station for questioning and were later released the same day.
On January 6, the farmers were arrested between 1am and 3am and
detained at Braeside, Highlands and Borrowdale police stations in the
"The applicants were then later held incommunicado from their lawyers
until they appeared at the courts at 1730 hours on January 9," the lawyers
The farmers, the lawyers said, handed over to the police videos of
activities that took place at the Naested plot as well as indemnity forms
signed by parents of children from St Johns High, Sharon School, Bishopslea,
Ariel in Ruwa, Lilford in Nyabira, Lomagundi college, Chisipite and Convent
Some of the courses taken included leadership for eight to 10 year
olds, rope courses, rock and mountain climbing, building courses, canoeing
and tree identification. The High Court is set to hear the application
BY WONGAI ZHANGAZHA
Friday, 16 January 2009 11:14
POLITICAL analysts yesterday said President Robert Mugabe cannot
afford to dissolve parliament if Constitutional Amendment No19 fails to pass
Mugabe, analysts added, will face defeat in fresh polls against the
Morgan Tsvangirai-led MDC if he dissolves parliament.
The Bill, which gives legal effect to the all-inclusive government
deal signed last September between Mugabe, Tsvangirai and Arthur Mutambara
of the smaller formation of the MDC, is expected to be tabled in parliament
when it resumes sitting on Tuesday.
If parliament rejects the amendment, the deal would collapse.
Tsvangirai's party has since said it would not support the Bill in
parliament until "outstanding issues" of the unity government pact are
The sticking issues, according to the party, include allocation of
ministerial portfolios; appointment of governors; ambassadors and permanent
secretaries, and the constitutive nature of the National Security Council.
Speculation is rife that Mugabe will dissolve parliament if the Bill
fails to pass, but political analysts said the move would spell doom for
"The most illogical thing Mugabe could do if parliament rejects
Constitutional Amendment No19 would be to dissolve parliament," Bulawayo
Agenda executive director Gorden Moyo said this week. "Mugabe may dissolve
parliament and this will spell doom for him."
He said if Mugabe dissolves parliament without revisiting contentious
issues raised by the MDC-T, it would render former South African President
Thabo Mbeki's mediation process futile and Zimbabwe would be back to where
it was before the signing of the agreement on September 15 last year.
"Zimbabwe will be back to where it was before the signing of the
agreement, Mbeki's efforts would have come to nought and Mugabe's
illegitimacy will still be an issue if the deal fails," Moyo added.
The analysts said if parliament rejects the Bill, Mugabe would have
three options - dissolve parliament and call for fresh elections, form a
government without either MDC formation, or forge an alliance with Mutambara's
Lovemore Madhuku, the chairperson of the National Constitutional
Assembly (NCA), said it was highly unlikely that Mugabe would dissolve
parliament, try to constitute a Zanu PF government and attempt to run the
country with a hostile parliament.
"Mugabe will not dissolve parliament because that would spell disaster
for him," Madhuku said. "He will form a government and bring issues before
parliament and if parliament continuously rejects everything then he would
have proved that it is hostile and at that point he would dissolve it."
He said Zanu PF might dissolve parliament after the party's congress
Zimbabwe is in a deepening crisis that has been characterised by high
inflation, a foreign currency-denominated economy, and uncertainty
precipitated by the lack of a substantive government for almost a year after
harmonised elections were held last March.
BY LOUGHTY DUBE
Friday, 16 January 2009 10:26
THE Zanu PF-controlled Herald newspaper has climbed laughable heights
in alleging non-existent divisions within the leadership of the MDC.
Since Saturday, the Herald has engaged in cheap propaganda about the
so-called divisions within the top ranks of the ruling party.
Zimbabweans will not be hoodwinked by shrill propaganda from a
discredited newspaper. Since Saturday, the allegations have ranged from
false stories that the MDC secretary-general, Tendai Biti, is plotting to
oust resident Morgan Tsvangirai to laughable claims that the MDC president
has summoned the top leadership of the party to South Africa to mend
non-existent rifts within the top hierarchy of the party.
Zimbabweans know that the only political divisions that exist are in
Zanu PF where succession disputes and factionalism are a reality and not
For the record, the MDC president and all members of the party's
standing committee, including Biti, were elected for five-year terms at the
MDC Congress on Sunday, March 19, 2006 and their terms expire in 2011.
There is no reason why the MDC secretary-general, himself a lawyer of
unquestioned repute and a key figure in the drafting of the MDC
Constitution, would wish for an illegal congress in February 2009.
Anyone with a cursory knowledge of the MDC would know that Eddie Cross
is the Policy Co-ordinator-General and not the party's financial advisor as
peddled by the Herald.
The lies are too threadbare, indeed too naked to be taken seriously by
the discerning people of Zimbabwe who overwhelmingly voted for the MDC on
March 29, 2008.
It is common cause that several resolutions by the MDC national
council have reiterated the fact that all outstanding issues have to be
resolved before the party can become part of the inclusive government.
These resolutions, including those of the last National Council held
in Kadoma on Friday, December 12 2008, have been unanimous.
This means there are no divisions within the party; the party has one
position regarding the issue of the inclusivegovernment.
No amount of propaganda against the MDC and its leadership will
improve the waning political fortunes of Zanu PF.
No prophets of doom will be able to bring ill-luck to the people's
project. The people are sovereign. The people's will shall prevail.
MDC Information and Publicity Department
|Friday, 16 January 2009 10:46|
ON Monday Judge President Rita Makarau opened the High Court legal year in Harare and made a number of accusations against lawyers. Our News Editor Constantine Chimakure on Tuesday interviewed Law Society of Zimbabwe president Beatrice Mtetwa on Makarau’s utterances and other issues on the rule of law. Below are the excerpts from the interview.
In other jurisdictions, for instance, you will find out that the law society or representatives of the legal profession are given a chance to also speak so that they give their view of how they perceive the justice delivery system in the country and I always find it extremely unfortunate that the profession is represented by what judges perceive to be the position.
In addition, the court has the power to deal with any lawyer who will have brought a case for political reasons, not legal reasons, before it either through contempt, through costs or by referring the matter through the registrar to the Law Society to investigate whether or not that member is guilty of one form of misconduct or another.
Zimbabweans are, therefore, entitled to have the freedom of speech that the constitution allows them and this includes lawyers.
Lawyers are entitled to look at, for instance, the current cases where we have persons who were admittedly unlawfully kidnapped, kept incommunicado for long periods of time, allegedly tortured and medical evidence has confirmed torture on most of those who complained of torture and as a legal profession we are entitled to be extremely concerned that the judiciary does not appear concerned with the violation of one of the most cherished rights in our constitution — the right to liberty.
It is difficult to understand how it is okay for judges in Zimbabwe to criticise decisions of other Tribunals whilst Zimbabwean lawyers are expected to keep mum on decisions they perceive not to accord with their understanding of the law.
It is also extremely unfortunate that the Judge President believes that she can castigate lawyers at a forum where they have no right of reply but seeks to deny lawyers the same right.
This is what was done when Patrick Chinamasa was perceived to have criticised a judge and his judgement in terms that were outside the usual acceptable terms.
Blanket threats on unnamed legal practitioners on perceived unparticularised attacks in my view will not help solve the problem as the concerned legal practitioners do not know that they are the subject of the attacks, they do not know what, precisely, it is that got the Judge President to issue threats in the terms that she did.
This would be extremely unfortunate as our law is rooted in making decisions after hearing both sides of the story.
The legal practitioners concerned have not been heard, the Law Society is in the dark on the precise nature of the complaints and it is the litigating public that will ultimately suffer from this kind of attack, as lawyers will be frightened to appear before a judiciary that has threatened them.
We have seen that office even abusing powers, for instance the court ordered on December 24 that the abductees be taken for medical treatment at the Avenues Clinic and the Attorney-General’s office appealed against that decision.
The mind boggles how one can deny a suspect the right to medical treatment, when a convicted person who would have committed the most heinous crime is entitled to medical treatment.
The Attorney-General’s office is supposed to execute its prosecutorial duties in an even-handed manner where there is equality before the law.
With recent events, it is clear that crimes committed by state agents will not be investigated with the tenacity and vigour seen where opposition politicians and civic society activists are concerned.
Some of the perceived failures on the part of lawyers might be due to sheer ignorance of the expected professional etiquette.
When I became president I invited all stakeholders to work with the profession and there are those who did not respond, among them the judiciary. We have had collaborative meetings with those who showed willingness to work with the Law Society and have had workshops with magistrates and prisons.
We have invited members of the judiciary to our functions and regrettably, very few turn up.
On current affairs, we do not have the local media enquiring on developments
and invariably it is the
If Zimbabwe had a diverse and vibrant media, I am certain that our members would want any critique of court decisions done locally for the domestic audience which consumes what our judiciary dishes out.
You are all aware that the state media only has a few lawyers who are allowed to comment on issues pertaining to the judiciary and this is precisely because the views of those lawyers are predictable and are in sync with views of the executive.
I also dream of the day when resources will be channelled towards the improvement of justice delivery where every province of Zimbabwe will have a High Court, where litigants will access justice easily and affordably, where court infrastructure will be maintained impeccably to enhance justice delivery, where the legal profession will in its entirety work towards the attainment of the rule of law, good governance, a socio-economic environment geared to benefit all regardless of their party political affiliations.
I dream of the day when our judges will be given the respect they deserve by ensuring that they are adequately remunerated through proper legal and constitutionally sanctioned channels that will not raise perceptions of being bought. I dream of a legal system that will restore to the people of Zimbabwe the dignity they deserve.
Friday, 16 January 2009 09:54
"GONE are the days when we used to shortchange people selling foreign
currency in order to get more Zimbabwe dollars," recalls Clive Sibanda a
seasoned foreign currency dealer based at Fourth Street, Harare.
With the foreign currency market now having more buyers than sellers
because of the recent "dollarisation" it appears the parallel market now has
more competition as dealers outdo each other in search of the scarce foreign
Sibanda's statement might sound pessimistic but it reflects the
attitude among those that trade foreign currency on the black market on the
streets of Harare in a dollarised economy that is not backed by production.
University of Zimbabwe business lecturer, Professor Anthony Hawkins,
said Reserve Bank governor Gideon Gono has failed to respond to the crisis
in time. "He took too long to address the crisis when figures were showing
that major sectors of the economy were not performing," Hawkins said.
"The crisis has reached unmanageable levels now, his decision needs to
be backed by production," he said.
These traders have every reason to believe that their "industry" was
Another Harare economist, John Robertson said the crisis was now
frightening and that at the present rate of devaluation the Zimbabwean
dollar would trade with the US dollar at any rate the following day.
Robertson said all this, coupled with the huge increases in money
supply growth, would never result in a stabilisation of the Zimbabwean
"Unless he (Gono) stops printing money, we will not get anywhere,"
All traders and retailers are refusing the local currency despite not
having a licence to trade in US dollars.
This has resulted in the value of the local currency almost doubling
when buying foreign currency from the dealers.
Yesterday the dollar was trading above $250 billion to the US dollar,
while the rand was being exchanged for anything above $25 billion.
As the rate continues to gallop there is now a belief in the market
that dollarisation would not turn around the economy and was bound to fail
as there was no production to support the policy.
An analysis of the operations of the Reserve Bank since 2003 lends
credence to this belief that the market was far from stabilising.
So many foreign exchange policies have been tried but all of them have
failed. Some have been withdrawn before they could be implemented. To track
these policy changes one has to look at Gideon Gono's tenure in office since
His tenure at the Reserve Bank has been characterised by uncertainty
on the foreign currency market.
With each monetary policy, the market has come to expect a raft of new
foreign currency policies.
Gono set up semi-weekly Reserve Bank-controlled auctions soon after
These auctions, he said, would determine the official exchange rate
which had been pegged at $824 to the US dollar in February 2003.
The rate quickly moved to $4 196 to the greenback on January 12 to end
the year at $5 730 to the US dollar through the auctions, slightly trailing
the parallel market which ended the year at $6 000 for the US dollar.
The year 2005 was to be an entirely different year as the Zimbabwe
dollar would tumble heavily against major currencies. The rate moved to $6
200 in March and then $9 000 for the US dollar in May.
The parallel market surged to $14 000 and then to $20 000 against the
US dollar in respective periods. In the same year, Gono devalued the dollar
to $10 800 to the greenback on July 18.
He then changed it to $17 600 on July 25, before pushing it down to
$24 500 on August 25.
The dollar was to be devalued three more times in 2005, starting in
September when it moved to $26 003, to $60 000 in November and finally to
$84 588 in December.
That did not seem to work as the parallel market continued to race
ahead. On July 18 it was $25 000, then $45 000 on August 25, $75 000 in
September, $90 000 in November and closing the year at $96 000 in December.
Gono then discontinued the Reserve Bank currency auctions in November
2005 and announced that market factors would determine the exchange rate.
Gono at that time said there were some players who were abusing the
auction floor systems.
But even he had to accept that the auctions had been quite successful,
despite removing them.
The foreign currency generated in the first quarter of 2004 using the
auction system surpassed the total inflows registered in 2003. Over US$192,9
million was raised through the first quarter auctions.
On January 3, 2006, the dollar was again devalued to $85 158: US$1. It
moved to $99 201,58 on January 24 and then to $101 195,54 on April 28 where
it was to stay until July 31.
The parallel market continued to gallop to reach $550 000 on July 27.
After the revaluation exercise on August 1, 2006, in which three zeros were
lopped off the dollar, the exchange rate was moved to $250 to the US dollar
where it was to stay until August 2007.
However, a special rate of $15 000 was applied for miners, farmers,
non governmental organisations, embassies and Zimbabweans living abroad.
Meanwhile the parallel market continued to race further ahead of the
It rose from $550 to the US dollar on August 1, 2006 to $1 500 on
October 12. It then shot up to $3 200 on January 11, 2007 and on April 1, it
stood at $30 000.
But it was not until June 2007 that the real madness began on the
parallel market, coinciding with government's price blitz. On June 3 US$1
was worth $55 000. Twenty days later, it took $400 000 to buy the greenback.
The dollar was devalued again in September 2007 to $30 000 against the
US dollar. On April 30 Gono decided to do what the market had been advising
him for four years and let the dollar float. Thrilled at the prospect of
eliminating the parallel market, Gono's optimism was unfettered.
"Given the centrality of foreign exchange in the economy," Gono said,
"its pricing has to take into account the need to incentivise all its
generators to remain viable, whilst at the same time minimising the intended
adverse consequences on the vulnerable segments of society."
He introduced the Priority Focused Foreign Currency Twinning
Arrangement, which allowed the exchange rate to float at market rates.
The interbank rate started on a high, eclipsing the parallel market in
the first week as it paid between $165 million and $185 million against
parallel market dealer rates of $120 million for the US dollar.
In August Gono removed 10 zeros from the currency in a bid to support
his policy to liberalise the foreign exchange market.
BY PAUL NYAKAZEYA
Friday, 16 January 2009 09:49
AS noted in last week's article, the Zimbabwean monetary system has
transformed considerably over the past year with a quick shift towards
The fact that the local unit has lost its appeal even among the most
patriotic people is no longer a secret. No one wants to keep it for longer
than a day. In fact whoever holds it is always under pressure to spend it
either on buying commodities or switching to a stable currency.
The economy has clearly shifted towards foreign currency with many
voices calling for a full dollarisation. Panama, Ecuador and El Salvador
are countries from Latin America that have taken this route successfully.
Closer to home Namibia, Lesotho and Swaziland are members to the
Southern African Customs Union (Sacu) which allows them to use the South
African rand as legal tender. Will this work for Zimbabwe as well?
A country is said to have dollarised if the citizens are using a
foreign currency instead or alongside the local unit. This can be
unofficially, semi-officially or officially.
The current scenario where individuals privately conduct their
transactions in a foreign currency because they deem the Zim dollar unstable
is termed unofficial dollarisation.
Official dollarisation which at times is referred to as full
dollarisation comes about when a country ceases to issue the domestic
currency in preference to a foreign one.
At times, a country may allow a foreign currency to act as a secondary
legal tender. In such situations the country is said to have partially
Presently, Zimbabwe is partially dollarised as evidenced by the
licensing of some sectors of the economy to charge products in forex.
However, the unofficial use of foreign currency has spread across many
sectors of the economy. Small businesses which cannot raise the required
deposit amount needed to be granted a forex licence have resorted to
transacting in hard currency illegally.
For Zimbabwe, full dollarisation will entail ceasing the printing of
Zim dollars and instead adopting another country's currency. Possible
options include the South African rand and the US dollar or both.
Adoption of the rand can be through Sacu which links South Africa,
Lesotho, Namibia and Swaziland into a monetary union. This implies that as a
country we adopt fully the South African monetary policy framework.
This will act as a first step towards restoring the country's
credibility in the eyes of foreign investors as central bank authorities
will cede control over the management of interest rates and the exchange
Joining of such a monetary union will help cool off the current market
volatility emanating from the prevailing hyperinflation. The new currency
will usher in low inflation figures existing in the source country.
Low inflation figures will result in real interest rates which will
encourage savings by the public hence solving our perennial cash problems.
Banks will on the other hand be able to resume lending operations thereby
availing the much needed capital to industry.
A market-based exchange rate management framework can also flourish. A
liberal exchange rate framework is vital in boosting productivity within
industry as firms will be motivated to produce knowing they will receive
fair value on their products.
Equally motivated will be tobacco farmers and those from the mining
community who have been scaling down their operations of late owing to the
unfavourable exchange rate management policy.
Such a move will also boost the government tax revenue. The present
unofficial dollarisation is prejudicing the government of a lot of income.
Most of the employees earning salaries in hard currency are not paying
their income taxes. Equally evading are companies illegally levying services
in foreign currency. Another potential source of income is the stock market
given the foreign investors' appetite to secure shareholding in local firms.
Laws on indigenisation will however need to be relaxed to lure more
investors. The harnessed income can be channeled towards paying civil
servants living wages.
Serious considerations however need to be made before fully
dollarising the economy. Full dollarisation results in Zimbabwean
authorities losing autonomy on monetary policy formulation as it adopts the
monetary framework of the issuing country.
Officials from the central bank will no longer have authority over
exchange rate management and interest rates. In other words, they will no
longer be able to stimulate economic growth locally. Thus the country will
have to rely on fiscal policy framework for this function.
Seigniorage costs also need to be taken into account before taking
such a step. Two angles need to be looked at. Firstly, the government will
be forced to forgo the benefits it derives from printing fiat money.
For some time now, the Zimbabwean government has been funding most of
its operations through printing money. The government will continue to earn
such revenue though on a smaller scale.
Presently, the countries in the rand monetary area earn seigniorage
income as a percentage of the income they would earn if the amount money
circulating in their economies was invested in South African government
The stock cost of seigniorage also needs to be considered. If we adopt
another currency, the central bank will need to buyback the stock of notes
and coins currently in circulation together with the bank deposits.
The central bank will need reserves of the requisite currency to do so
which it does not have at the moment.
Essentially the country needs an injection of foreign currency to
kick-start the dollarisation process.
The central bank function as the lender of last resort ceases to exist
unless a reserve buffer is created. A reserve buffer will be necessary to
help instill a sense of security in the financial system.
As it stands, the current partial dollarisation has brought more harm
than good to some sectors of the economy. If the country is to dollarise
fully, control systems have to be put in place to ensure the country enjoys
the full benefits of the process at the same time controlling its adverse
BY KUMBIRAI MAKWEMBERE
Friday, 16 January 2009 09:41
A FUEL shortage is looming in the country amid revelations that
government departments have run out of fuel.
Officials at National Oil Company of Zimbabwe (Noczim) on Tuesday told
businessdigest that most government departments had not received consistent
fuel supplies since December because of foreign currency shortages.
Reserve Bank of Zimbabwe governor Gideon Gono however said shortages
of fuel were as a result of the proliferation of counterfeit coupons which
did not tally with the amount of fuel on the market.
Gono said preliminary investigations by the bank show alarming
discrepancies between the quantities of coupons held by the issuers in the
form of booklets, against the corresponding stocks of fuel on hand at the
respective fuel companies.
In addition, a growing number of fuel coupons are being dishonoured by
fuel dealers, as some of the issuers of these coupons are not authentic, an
indication that the whole system is prone to fraudsters apart from
government failure to import fuel.
The prices of fuel is ranging from US$0,70c to $1,20.
businessdigest understands that government, which is currently
cash-strapped, was planning to float bonds in US dollars to raise money
which among a host of "other needs" would be channelled toward fuel
Some companies have not received fuel for the past three weeks despite
having paid for the product to Noczim. Investigations by businessdigest
reveal that most government departments did not have fuel.
Officials at Noczim told businessdigest this week that the parastatal
also had a huge backlog on fuel deliveries to the companies.
"Every time we call Noczim there is a different explanation.
Government does not have the foreign currency to import its own fuel," said
The government has also been dithering on licensing more private fuel
companies. Fuel companies are licensed every month. So far only three
companies have been licensed by the Ministry of Energy and Power
The three companies are Ekaya, Redan Petroleum and Caltex. More than
20 companies are yet to be licensed. The delay in licensing companies has
created serious shortages on the market.
BY PAUL NYAKAZEYA
Friday, 16 January 2009 10:40
THE juxtaposition of Arthur Mutambara's Inconvenient Truths about the
West and Zimbabwe and Tendai Dumbutshena's Mutambara: Wake up, smell the
coffee in last week's edition of the Zimbabwe Independent helped in
highlighting the current debate on the political crisis in Zimbabwe,
particularly the apparent deadlock over the so-called Global Political
Agreement (GPA) which was signed on September 15, 2008.
(I am at a loss as to the origins of the term GPA - especially the
"global" part of it - when the process towards the agreement itself was for
the most part couched in secrecy, and the parties to it hardly reflective of
a global purview of the problems confronting Zimbabwe, let alone a national
The debate will reach its climax on January 20 when the Parliament of
Zimbabwe will consider Amendment 19 or the legal expression of the agreement
signed on September 15, 2008.
Already there are indications that the MDC-Tsvangirai, whose current
standing in the House of Assembly is almost unassailable, is likely to
jettison Amendment 19 and put paid to the proposed inclusive government
without which Mugabe and Zanu PF will sink deeper into the political and
Therefore, there is need to consider the balance of forces that have
accompanied and impinged upon these developments, as the basis for some
insight into the possible trajectory of events in the weeks and months
This contribution to the debate concludes with suggestions on the way
forward, not least because the MDC-Tsvangirai itself has so far not proposed
an alternative to Amendment 19, nor a political and economic roadmap on the
basis of which Zimbabwe can redeem itself from the current crisis.
Tendai Dumbutshena was correct in cautioning Arthur Mutambara, a
signatory to the so-called GPA, against an abiding faith in the agreement.
Likewise, Dumbutshena's insinuation that Mutambara has more than a
vested interest in an agreement without which he might, on the basis of the
outcome of the March 29 election last year, have become politically
irrelevant in Zimbabwe.
Well, it is true that Mutambara has been the main political proponent
of the so-called GPA ever since its signing as the (political and economic)
balance of forces have tilted against the goal of an inclusive government.
So much so that Mutambara has become blind to those changes in the
balance of forces that he now wants to apportion blame for the imminent and
impending demise of Amendment 19 directly to the West, indirectly to
Tsvangirai, but hardly to Mugabe.
But, then, what in Mutambara's view are the "inconvenient truths"
about the West over Zimbabwe? The fact that most of the West, and likewise
such African luminaries as Desmond Tutu and John Sentamu, want Mugabe to go?
But is that not a view shared by the majority of Zimbabweans,
including many if not most in Zanu PF itself? And how many among the
"Pan-Africanist" leaders of the African Union and Sadc do not share this
view that Mutambara associates with the "imperialist" design on Zimbabwe?
As part of the analysis of the balance of forces that characterise the
Zimbabwean situation, it is important to assert at the outset that Africa's
current position in the international division of labour is that which
seriously limits its leverage vis-à-vis those who govern our globe - the
This has not only proscribed Pan-Africanism in terms of its political
and economic objectives, but also explains why it remains so relevant as
long as Africa and peoples of African origin remain at the bottom of the
More significantly, this means that the post-colonial state itself is
simultaneously a creation of, and operates within the orbit and purview of,
that very world order to which Africa and Pan-Africanism is purportedly
In reality, however, "anti-imperialism" becomes largely rhetorical,
invariably a plea for inclusion into and sympathy from the West, than an
assertion of independence, disengagement and self-confidence on the part of
African leaders and their states.
This makes Mutambara's dream of an "African solution" to the Zimbabwe
crisis not only illusory but also a political function the import of which
is to distract and divert attention from such problems as confront Zimbabwe
For the Zimbabwe case itself is yet another classic illustration of
the impotence of both the African Union and Sadc.
The continental body failed so dismally to deal with the Zimbabwe
crisis last June when, confronted with Mugabe who had just emerged from the
sham election that was the "run-off" on June 27 2008, it was the first to
accord him the legitimacy he desperately needed as president, in the face of
opposition at home and the world over.
And it has been the function of Sadc itself, as an inter-state
organisation and through the mediation of one of its heads of state, Thabo
Mbeki, that Mugabe has been able so far to weather the storm of opposition
at home and the world over.
But, most significantly for this discussion, it is this Sadc
initiative that many will regard as having redeemed Mugabe from defeat at
the polls in March 2008.
Of course, the so-called GPA signed on September 15 might have been
the best possible solution, reflecting as it did the balance of forces
between the MDC and Zanu PF at that critical time. And if the deal had been
consummated as expected in the days and weeks following September 15, even
the most rabid critics of Sadc might have celebrated such a breakthrough.
The point, however, is that the so-called GPA appears truly to be
"dead", to quote Tendai Dumbutshena. But it is not that the agreement itself
was bad in terms of its main elements. Besides, the MDC had, rightly or
wrongly, been party to the main import of that agreement and Tsvangirai
appeared ready to enter into it as soon as he had signed it.
As I pointed out in an earlier submission to this newspaper, the
agreement constituted essentially a transitional mechanism, of no more than
18 months (and not five years as Dumbutshena so strongly asserts), at the
end of which period Zimbabwe would have a new constitution, followed
thereafter by a general election.
In terms of that interim and transitional power structure, Mugabe
would be head of state, or virtually a ceremonial president as Canaan Banana
was in 1980; and Morgan Tsvangirai as head of government, an executive prime
minister as Mugabe was in 1980.
There are also important aspects of the agreement that seek to address
the problems and pitfalls that have been attendant to the Zimbabwean state
over the past decade or more, especially issues relating to civil liberties
and press freedom; and the need for a land audit as part and parcel of an
economic recovery programme for Zimbabwe.
As pointed out by Dumbutshena (but hardly mentioned by Mutambara), it
is Mugabe and Zanu PF that should be held responsible for converting what
might have been the beginning of a "solution" that the agreement offered,
into a problem.
In an address to his party's central committee soon after the signing
of the agreement in September last year, Mugabe described this development
as a "humiliation" which would have to be accepted as the cost of having
failed at the polls in March.
But the gist of his overall statement is one that should have informed
the likes of Mutambara about Zimbabwe's inherent vulnerability to Western
pressure, including the extent to which even the agreement itself will have
been an outcome of the threat of more and more sanctions against the
Zimbabwe state, and not excluding the possibility of external intervention
under the aegis of the limited Security Council.
Mugabe acknowledged as much as he pleaded with his party faithful to
accept the agreement.
But as Dumbutshena has outlined, almost everything Mugabe has done
since September has virtually rendered him and the Zimbabwean state even
more vulnerable to these external factors: by ignoring the central protocols
of the September agreement, treating his prime minister designate as an
enemy rather than as a partner, taking unilateral initiatives the effect of
which has been to pre-empt some of the key provisions of the agreement, and
continuing to pretend that it is business as usual in the face of an
Above all, Mugabe and Zanu PF have ignored the rapidly changing
balance of forces in which their political fortunes are fast receding and
that of the opposition rising correspondingly.
This means simply the following: any hope that Mugabe and Zanu PF
could ever reverse this trend and recover the political initiative in
Zimbabwe is entirely non-existent.
And if, as is expected to be the case next Tuesday, the MDC formally
rejects Amendment 19, it will be a development enough to cause Mugabe and
his stalwarts sleepless nights.
If so, Morgan Tsvangirai and his colleagues and allies at home and
abroad will have achieved the main objective for which the MDC was
established in 1999. However, there is the bigger picture that is Zimbabwe's
current economic and political crisis.
This will continue to face us all even as Amendment 19 is defeated. It
is this absence of an alternative national agenda - the glaring and growing
power vacuum - that should scare Zimbabweans.
So what is to be done?
First, parliament should itself seek to salvage some of the key
elements of the September agreement, at least as a framework for reinstating
and establishing some semblance of a transitional authority for the next 18
months, during which the constitutional reform exercise is undertaken and
the economic recovery plan effected.
Parliament itself should decide on the leadership and composition of
such a transitional authority, taking into account the respective strengths
and representations within the two houses, and in relation only to the main
tasks to be undertaken by a slim cabinet and the inclusion in the latter of
specialists in the financial and economic fields.
For example, there are several outstanding economists and financial
experts in the diaspora who could be almost indispensable to these talks.
Second, the broad framework that is the September Agreement should be
used as the basis for a national dialogue that will necessarily involve all
key factors in Zimbabwean society: all political parties, the churches,
civic bodies like the NCA and Woza, media organisations, intelligentsia and
other professional groups, the trade unions, traditional leaders and peasant
It is this national dialogue that should ensure the evolution of the
best possible Constitution for Zimbabwe whilst also informing and pervading
the national economic recovery programme.
Third, the United Nations should institute a programme through which
to mobilise regional, continental (African) and international support to
this national process in Zimbabwe, towards a successful transition and the
conduct of free and fair elections at the end of the 18 months' period.
Ibbo Mandaza is a Zimbabwean academic, author and publisher. He is one
of the founding members of the Mavambo-Kusile-Dawn Movement and its current
BY IBBO MANDAZA
Friday, 16 January 2009 10:21
THIS week High Court Judge-President Rita Makarau lambasted some legal
practitioners who she says criticised the judiciary in foreign media.
No particular story or legal practitioner was mentioned but those who
have been following the human rights abuse cases in Zimbabwe, and lawyers
who have braved state intimidation to stand with the victimised, can easily
put some faces to the legal practitioners concerned.
Zimbabwe is not living in normal times and the Judge-President and
others in the judiciary cannot pretend otherwise.
Zimbabweans from all walks of life have been victims of state thuggery
and the judiciary has been complicit in this by failing to invoke legal
protection when asked to do so.
Many in civic society, the opposition and indeed many voices critical
of the government of President Mugabe cannot say they have received justice
in Zimbabwe. Any criticism of the judiciary is thus on the basis of its
failure to dispense justice.
The judiciary has been willing tools in the circus of phantom treason
charges and dozens of conspiracy theories of Zanu PF in which individuals -
who are invariably found innocent at the end of the day - have been
subjected to the most inhuman treatment.
If not willingly consenting to the enforcement of the repressive
measures of Zanu PF, one can conjecture that the judiciary is itself a
victim of Zanu PF - fearful of what might happen to them.
One cannot but relate the composition and character of the current
judiciary to the events leading to the resignation of Chief Justice Anthony
Gubbay, followed by many other senior judges.
Earlier there was the desecration of the High Court by war veterans
who danced on top of court desks and chairs during the inquiry into the
looting of the war veterans fund.
When senior Zanu PF and government figures say they will defy the
courts should they not like their rulings, the judiciary has remained
The judiciary in Zimbabwe has undergone major changes in which one
finds it difficult to say the citizens are being served. In fact the ruling
elite has created its own judiciary to serve its interests.
It is therefore proper, Madam Judge-President, for those disaffected
to highlight their concerns. For laypersons like me, there is no way we can
know what is happening unless those who interact with the courts speak out
against the serious regression in the protection of citizens.
In this regard the judiciary is not being undermined when people
criticise it but is in fact being called upon to respect and adhere to its
constitutional duty, which is the upholding of the law, and more importantly
the protection of citizens from arbitrary arrest and detention.
That is all that the judiciary is being asked to do. Citizens of
Zimbabwe now realise that once Zanu PF decides you are going to suffer there
is nothing you can do, and more frighteningly there is little the judiciary
is prepared to do.
Many cases abound where the judiciary has failed in this regard. In
looking at the current crisis in Zimbabwe we also need to mention that the
judiciary is inherently compromised by its almost parasitic reliance on the
executive for handouts and survival.
How many judges double as farmers and other dealmakers? Who buys cars
for judges and under what legal provisions?
All these issues are not lost on citizens. The same questions I am
sure were asked by citizens who lived under the Smith regime and indeed in
apartheid South Africa, as to whether they received justice and under what
Criticism of the judiciary in Zimbabwe is therefore not something that
the judiciary can wish away. It is real and if the stories in the media are
inconveniencing judges it is well and good.
The lawyers referred to by the Judge-President are perhaps talking to
the foreign media because of laws such as Aippa that have decimated the
Zimbabwe media. The judiciary upholds the same laws as just and
constitutional despite the suffering they cause to the citizens of Zimbabwe.
All this is being played out right in front of our eyes. The call is
therefore for the judiciary to stand up and protect the rights of citizens,
or be judged harshly by posterity.
BY RASHWEAT MUKUNDU
Friday, 16 January 2009 10:17
THERE is no hiding the fact that the there is an unhealthy friction
between the judiciary and lawyers.
The nature of this friction is captured in Judge-President Rita
Makarau's speech to open the 2009 legal year, and the response by Law
Society of Zimbabwe president Beatrice Mtetwa which we carry in this
Justice Makarau referred to "unfair attacks" on the judiciary by
lawyers which she said showed "lack of respect and utter contempt" for the
She also pointed out that "a few of us judges and legal practitioners
had allowed transient politics of the day" to affect the relationship
between the legal profession and the bench.
She did not say which judges had been affected by the transient
politics on the bench, but did more to show how lawyers had become political
and were acting at variance with the tenets of the profession.
There is plenty of evidence that there is a problem in the execution
of justice in this country. This sad state of affairs does indeed stem
partly from the politicisation of the bench and the legal profession. But we
believe that the judiciary cannot blame lawyers before serious introspection
of its own output.
It is true that there are now Zanu PF lawyers and those deemed to be
pro-MDC. It is also true that there are honourable members of the bench
whose utterances, demeanour and decisions have placed them in the ranks of
The most competent jurors in the efficacy of the bench are the public
who approach the courts seeking justice. We do not believe that the bench
has of late demonstrated the requisite aptitude that builds confidence in
Indeed it is most unfortunate that we now have a situation where the
public approaching the courts for justice do so with trepidation.
They do not believe justice will be served. Today, if the truth is to
be told, no white farmer would approach a Zimbabwean court with confidence
to seek justice in a land ownership dispute. Experience has been their best
Justice Makarau in her speech on Tuesday spoke of what seemed like
"the hand of providence" in the almost equal distribution of electoral
petitions from political parties.
She said the lawyers were "abandoning their training and ethics and
were simply following the instructions of their clients even when they were
convinced that such instructions were wrong".
Can lawyers and dispossessed farmers also not turn around and allege
similar predictability that has been a factor in the conduct of the
judiciary when handling cases involving land reform?
Then there is also another disturbing trend which Makarau briefly
alluded to: the failure by the courts to clear their ever-increasing backlog
There are always excuses for the backlog ranging from staff shortages,
lack of stationery, and lately we have heard of the extra burden on the
judiciary brought about by the electoral petitions.
Meanwhile, many judges are busy with their farms and other businesses.
People's rights are being trampled on here. Prisons are teeming with
suspects on remand because courts have failed to deliver justice timeously.
The statistics presented by Justice Makarau show a huge accumulation
of criminal reviews which have not been dispensed with.
Decisions of the inferior courts are subject to review by the High
Court which can quash a sentence or reduce it if it deems the lower court to
The large number of cases awaiting review means there may be hundreds
of prisoners who should have been freed.
There are also prisoners who have been on death row for more than two
years as their cases cannot be taken to the Supreme Court on appeal because
the High Court is yet to transcribe court records, or the records have gone
The delays in delivering justice has resulted in the country's jails
teeming with prisoners on remand. As a newspaper, this is a subject we will
be pursuing vigorously soon with a view to exposing the blatant violation of
individuals' right to freedom.
There have also been inordinate delays in the completion of civil
cases with severe social and economic repercussions to the litigants.
In Bulawayo this week during the opening of the legal year, Deputy
Chief Justice Luke Malaba said dispossessed commercial farmers should not
have taken their case to the Sadc Tribunal before exhausting local remedies.
He revealed that the farmers had made an application to the Supreme
Court in March 2007 challenging compulsory acquisition of their properties.
"The applicants had not exhausted all remedies . as the Supreme Court
was still to make a determination of the matters raised by the application."
said Justice Malaba.
Has the Supreme Court handed down judgement on this case yet, we want