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Budget to Confirm Full Dollarisation

Thursday, 22 January 2009 21:27

ACTING Finance minister Patrick Chinamasa will on Thursday announce a
budget in which government is making provision for the holding of elections,
official sources have said.

The sources yesterday said the budget, which is being formulated with
"active input" from the Reserve Bank and the Joint Operations Command, would
effectively dollarise the economy.
It will, among other far-reaching measures, make all taxes for
individuals and corporates, and all duties, payable in foreign currency. It
is also expected to set out modalities for school fees payments in foreign
currency  in addition to spelling out new policy directives to operate a
dollarised economy.

Government, the sources said, should in the budget introduce special
coupons to be used to pay civil servants. The coupons will have US dollar
equivalent face values. This is being proposed to mitigate the absence of
forex to pay government workers.

The coupons would be redeemable at designated shops.

Information to hand shows that a committee dominated by security
personnel, the RBZ, officials from the Ministry of Finance and the Zimbabwe
Revenue Authority has since November been working on the budget in which
allocations will be set aside for the staging of an election later this

Last month at the Zanu PF people's conference in Bindura, President
Mugabe told his supporters to prepare for elections. The opposition has
lately also been warming up to the idea of facing Zanu PF in fresh

Details on the amount being reserved for the election could not
however be obtained at the time of going to press.

Zimbabwe Electoral Commission spokesman Utoile Silaigwana said the
commission was prepared to hold elections at any time that President Mugabe
made a proclamation.

"I am sure that you are aware that we have never failed to hold
elections. Once a proclamation is made, we know we will get the funding," he

Silaigwana said they would not incur too many expenses as the
commission had adequate stationery and manpower to conduct elections.

He however could not give the cost of the elections held in March last
year saying he needed to check with the finance department to get the

The sources said to raise revenue, government would in the budget
propose the payment of taxes in foreign currency. This, they said, would
effectively dollarise the economy.

A formal agreement is required with the US authorities before a
country can formally adopt the greenback as its currency. Zimbabwe however
intends to use multiple currencies to transact business.

Officials from the central bank and government have lately been on a
foray to Russia and North Africa to raise funding to finance state
activities. There is market talk that government has mortgaged mineral
reserves to Russian investors for hard currency.

On school fees, government could allow trust schools to collect up to
90% of fees in foreign currency while government urban schools could be
given the green light to collect up to half in foreign currency. Rural
schools would continue to offer tuition in Zimbabwe dollars.

The drafters of the budget have taken on board proposals from the
Confederation of Zimbabwe Industries (CZI) for government to introduce
foreign currency-indexed tax bands and a fuel levy in a drive to raise
revenue for the cash-strapped government.

The CZI in its contribution to the budget formulation said government
should introduce the new measures in order to boost its shrinking revenue
base and promote employee retention.

The CZI also recommended the slashing of customs duties levied on
luxury goods.

These proposals, the organisation argued, follow an inevitable drive
towards the full dollarisation of the country's battered economy.

However, with independent estimates suggesting that 80% of the economy
is now informalised on the back of heightened corruption in government, this
proposal could fail to boost the state's declining revenues.

"Government should set tax bands in US dollars with the threshold at
poverty datum line levels and maximum tax rate of 20% for those earning over
US$1 000 per month," read the proposal. "This will enable business to be
more competitive on tax payments and help skills retention."

This has been taken on board by government, a source said.

The confederation said the introduction of a foreign currency-indexed
fuel levy would assist in balancing government finances.

"This tax must be set in line with regional practice to ensure that we
remain competitive as a nation," the CZI suggested.

Apart from the proposed tax reforms, the industrial body recommended
that the Reserve Bank cease money printing.

The central bank has, however, continued introducing new notes with
the latest being last Friday's issuance of the historic $100 trillion bill.

"The primary mechanism that we are recommending is an interim
dollarisation of the economy," read the CZI proposal. "This is not a
straightforward process and needs to be carefully managed. In particular we
believe that there are not enough United States dollars in circulation to
sustain meaningful economic activity. To that end the Zimbabwe dollar will
need to be maintained as a parallel currency.

For the Zimbabwe dollar to fulfil its role as an effective medium of
exchange, it is vital that the monetary base is frozen. If this is done then
the Zimbabwe dollar will quickly find a level against international
currencies and then keep this level."

The CZI said the country needed to engage "international expertise" in
dollarising the economy - a decision the organisation argued would prevent
government utilities and private companies from charging "unrealistic"

Last year, leading American monetary reformist Professor Steve Hanke
advised Zimbabwe to use the South African rand in what he termed the
"Randisation" of the economy and the establishment of a currency board to
replace the Reserve Bank.

The Reserve Bank, the CZI proposed, should also reduce statutory
reserves before freezing the monetary base to reduce the gap between
borrowing and lending rates.

In an interview on Wednesday, CZI president Kumbirai Katsande doubted
government's sincerity in implementing fiscal policies that promote
manufacturing despite numerous policy submissions by various stakeholders.

The current policy environment, according to the CZI, was "highly
penal" to formal businesses and has led to a collapse of formal business
activity and a mass informalisation of the economy.

"There is a misunderstanding here over government's role," Katsande
said. "We are faced with a fluid situation that requires speed.
Unfortunately this has not been the case with past policies. Its role should
facilitate orderly trading and business growth."

Turning to the monetary policy, the CZI wants an immediate review of
the Reserve Bank of Zimbabwe Act with the view of creating an "orthodox
independent central bank" guided by international practice.

Currently some critics blame the central bank for formulating
"populist policies" skewed in favour of the ruling Zanu PF party.


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Mugabe Seeks Sadc Mandate to Form Government

Thursday, 22 January 2009 21:12

PRESIDENT Robert Mugabe will seek the mandate of the Sadc Summit in
South Africa on Monday to form a government excluding MDC leader Morgan
Tsvangirai with a promise to hold fresh elections within two years, the
Zimbabwe Independent has learnt.

The summit was called after Sadc chairman, South African President
Kgalema Motlanthe, Mozambican leader Amando Guebuza and Zimbabwe unity
government deal-broker Thabo Mbeki failed on Monday in Harare to resolve the
political stalemate in Zimbabwe.
The deal signed last September between Zanu PF and the two MDC
formations has been stalled because of haggling over posts between Mugabe
and Tsvangirai.

Sources in both Zanu PF and the MDC-T told the Independent that the
deal had "already collapsed" and the two protagonists were already plotting
the way forward.

Mugabe, the sources said, was confident that Sadc would not overrule
its decision of November 9 last year that a new government be formed
"forthwith", with Zanu PF and the MDC-T co-managing the Ministry of Home

The 84-year-old Mugabe, the sources said, had during his annual leave
been consulting Zanu PF bigwigs on the formation of a government after he
concluded that the deal would not be consummated because
they were poles apart from Tsvangirai.

"To Mugabe, Monday's Sadc summit is a mere formality," one of the
sources in Zanu PF said. "He does not expect Sadc to overrule its position
of November 9 and at the same time he is not expecting Tsvangirai to move
from his stance. No more concessions will come from Zanu PF. Mugabe will ask
Sadc to give him the mandate to form a new government."

The sources said Mugabe, if granted the mandate, would initially leave
cabinet posts vacant for both MDCs before filling them after a while and
then preparing for fresh elections.

Mugabe and Justice minister Patrick Chinamasa last year said if the
unity government deal collapsed, new harmonised elections would be held.

Sources in the MDC-T said Tsvangirai was pessimistic that the Sadc
summit would break the deadlock and lead to the formation of an inclusive

The sources said Tsvangirai had no credible "Plan B" and intended to
launch a diplomatic campaign in the region and abroad against Mugabe if he
goes ahead and forms a government that excludes the MDC-T.

"It is clear in our party that Sadc will not move. The deal is set to
collapse on our watch," a member of the MDC-T national executive said.
"However, Mugabe will have legitimacy problems if he goes it alone.

Tsvangirai will use the lack of legitimacy to discredit the government
in the region and internationally."
Mugabe's government failed to get recognition in Sadc, the African
Union and internationally after last year's presidential election resulting
in Sadc-mediated talks between Zanu PF and the two MDC formations, which
culminated in the signing of the inclusive government pact on September 15

Chinamasa yesterday declined to take questions on the unity deal
saying he would address a press conference today.

"All the issues you are raising will be clarified at the press
conference," he said. "You will get the answers then."

In a statement after visiting cholera patients in Budiriro yesterday,
Tsvangirai said Zanu PF was standing in the way of a political settlement.

"MDC was not being obstructionist in the dialogue process, but it was
Zanu PF which had to accept the logic and justness of the MDC's compelling
case for equity," the statement read.

During Monday's meeting, Mugabe rejected Tsvangirai's conditions for
joining his government, saying his demands were "unacceptable".

Tsvangirai had demanded control of the "key" Home Affairs, Finance,
Information, Agriculture and Local Government ministries. He had proposed
that Mugabe take Defence, National Security, Justice, Foreign Affairs and
Land. He also demanded the release of political prisoners.

Mugabe rejected Tsvangirai's proposals insisting the issue of
portfolios had been resolved and there was no need to "reopen" it.

Motlanthe, Mbeki and and Guebuza reportedly pushed hard for a
compromise, reminding Mugabe and Tsvangirai of Zimbabwe's deepening
humanitarian crisis and its collateral damage on the region, but failed to
move the bitter rivals.

Mugabe insisted that he had complied with Sadc recommendations to put
measures in place to form an inclusive government, but Tsvangirai had


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Farm Workers Dwindle

Thursday, 22 January 2009 21:04
FARM workers, bearing the brunt of a poor preparation for the 2008/9
agricultural season, have dwindled by more than 25%.

This is farmers after farmers have abandoned fields to engage in other
economic activities to sustain themselves.

Shortages of inputs and poor planning have impacted negatively on the
agricultural sector, amid predictions that the season would be a complete
write off.

This has worsened the plight of farm workers countrywide as hunger and
low wages take their toll.

General Agriculture and Plantation Workers Union of Zimbabwe
secretary-general Gertrude Hambira told the Zimbabwe Independent this week
that more than 40 000 farm workers had abandoned their jobs because of poor
wages and working conditions.

"We are alarmed at the rate we are losing our membership. Many farm
workers have turned to other means of survival such as gold panning and
cross border trading," Hambira said. "Our numbers have dwindled from more
than 120 000 to less than 80 000 within a period of one year and we fear
that this could worsen."

She said employers, particularly the resettled farmers, were paying
only the stipulated $5 billion a month and were failing to provide workers
with food.

Hambira said her union was inundated by pleas for humanitarian
assistance from the workers, some of whom she claimed were now surviving on
mangoes and wild fruits.

She said the situation was worsened by the current deadlock between
the union and farmers on the need to pay the labourers in foreign currency.

Hambira said the majority of employers were refusing to pay in hard
currency arguing that as newly resettled farmers they could not afford to do

"There are some (farmers) refusing to pay saying that they are new
farmers. How can one continue to be a new farmer from the year 2000? It is
just an excuse not to pay workers," she said.

The workers are demanding to be paid US$15 monthly plus basic
commodities, which include 20kg of maize, four litres of cooking oil, three
bars of washing soap, 4kg sugar and 4kg salt.

The employers, Hambira claimed, were prepared to pay US$2 and provide
a bucket of maize, two litres of cooking oil and a packet of salt.

 "We are far apart in terms of what we are putting on the table as a
suitable wage for our members. For one to offer to pay US$2 as payment shows
either that person has lost their sanity or that they are just greedy and
insensitive," she fumed.

Hambira warned that the failure by employers to pay reasonable wages
would further destabilise the agricultural sector, which is already going
through a very difficult period.

She said the union had received reports of unrest in some parts of the
country such as Mashonaland West and Mashonaland Central where farm workers
were refusing to accept local currency as wages.

The Zimbabwe Farmers Union has weighed in to support farm workers
getting paid in hard currency and urged the central bank to allow everyone
to carry out transactions in hard currency without having to go through the
tedious process of applying for a licence.

ZFU vice-president Edward Raradza told the Independent that farmers
could only pay their workers in hard currency if they were allowed to trade
their produce in foreign currency.

He said it did not make sense to apply for a licence to trade in
foreign currency when "mangoes and vegetables" were being sold in hard
currency by street vendors.

"The Reserve Bank should allow farmers to sell their produce in
foreign currency so that we can pay our workers in the same currency,"
Raradza said. "The situation on the ground is that everything has been

The union and employers are set to meet today in an attempt to break
the deadlock.


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Zinwa Workers go on Strike

Thursday, 22 January 2009 21:02
MAINTENANCE workers at the Zimbabwe National Water Authority (Zinwa)
this week downed tools to protest poor working conditions, worsening the
plight of residents in the western parts of the capital who have gone for
two weeks without water.

Zinwa workers told the Zimbabwe Independent that they went on strike
on Monday after their employer refused to supply them with protective
clothing when repairing burst water and blocked sewer pipes.

 "We have repeatedly told management to supply us with protective
clothing but it seems our calls are falling on deaf ears," said one of the
employees who requested anonymity.

The workers said apart from failing to provide protective clothing,
they also did not have proper
tools to carry out maintenance work.

Zinwa's water supplies director Douglas Kagoro yesterday declined to
comment on the strike and water supply situation in the capital saying he
was attending consultative meetings and that a press statement would soon be
issued on the matter.

Residential areas which include Glen Norah, Glen View, Budiriro,
Belvedere and some parts of the central business district, have gone for two
weeks without water after a main pipe burst.

The water crisis has also affected operations at the Budiriro
Polyclinic, which is a main referral centre for the cholera outbreak.

The United Nations Children's Fund (Unicef) has intervened in the
affected areas by suppling water to residents in Budiriro, Glen View and
Glen Norah.

However, the supplies were not enough to cater for all residents and
this has resulted in some residents digging open wells.

Meanwhile, cholera figures released yesterday by the World Health
Organisation (WHO) revealed that the epicentre of the outbreak seems to be
moving away from Harare to other districts of the country.

Cumulative infections by Monday had reached 46 606 patients while at
least 2 484 deaths had been recorded as a result of the water-borne disease.

The cholera outbreak, which started in August last year, has spilled
across the borders of neighbouring countries such as South Africa,
Mozambique and Malawi where several deaths have been reported.


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Election Challenge Postponed to Next Month

Thursday, 22 January 2009 20:59
MINORITY opposition leader Justin Chiota's case seeking the
nullification of last year's presidential election and the ongoing talks on
the formation of an inclusive government was yesterday postponed by the
Supreme Court to next month.

The court moved the case to February 19.

Chiota, the president of the Zimbabwe People's Party, and Daniel
Shumba, leader of the United People's Party, were last year barred by the
Zimbabwe Electoral Commission (ZEC) from participating in the March 29 poll.

The duo approached the Supreme Court seeking the reversal of the

The court ruled on August 1 2008 that their disqualification by ZEC
was illegal.

On the strength of that ruling, Chiota lodged his latest application.

Chiota, an advocate and businessman, wants the court to declare null
and void the March election and order a fresh poll within 90 days and also
to bar and interdict President Robert Mugabe and the leaders of the two MDC
formations, Morgan Tsvangirai and Arthur Mutambara, from proceeding with
talks to constitute an inclusive government.

A conclusion in this constitutional case would determine the fate of
the power sharing talks brokered by Sadc and the African Union.

Tsvangirai won the first round of elections but without an outright
win required by electoral law. This outcome led to Mugabe's re-election
after the opposition leader pulled out of the election race citing an orgy
of violence unleashed on his supporters.

ZEC chairman George Chiweshe, Mugabe, Tsvangirai and independent
presidential candidates in the March poll, Simba Makoni and Langton
Towungana, are cited as respondents in Chiota's application.


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Zanu PF, MDC Playing Power Games - Makoni

Thursday, 22 January 2009 20:53
LOSING presidential candidate in last year's election and leader of
the Mavambo/Kusile/Dawn movement, Dr Simba Makoni, says Zimbabwe's current
political impasse can be resolved by forming a Transitional National

Our news editor Constantine Chimakure put questions to Makoni this
week on his movement and the political crisis in the country. Below are

Chimakure: Dr Makoni, can you give us an update on the transformation
of Mavambo into a political party?

Makoni: At the beginning of August 2008 we set up a steering committee
tasked specifically to guide the transformation of Mavambo/Kusile/Dawn from
a movement of volunteers into a political party. By the end of 2008 a draft
constitution had been produced and distributed for examination and critique
among activists of the movement countrywide. Currently, our main focus is on
setting up interim structures at the provincial, district, ward and local
levels, to manage the consultations leading to party formation and initiate
membership mobilisation.

Chimakure: When is the party going to be launched and how formidable
do you think it will be given the dominance of both Zanu PF and MDC?

Makoni: We plan to launch the party before the end of the first
quarter of 2009.
As to how formidable the party will be, I believe that given a normal
political environment, we will quickly grow to be the biggest party in the
country and form the next government. People are sick and tired of the
politics of power that both Zanu PF and the MDC are engaged in. They feel
abandoned and betrayed by those who are fighting for power and positions for
themselves while the country burns.
Feedback from across the country suggests that the people have lost
faith in the de facto two-party system we have in Zimbabwe now. They believe
that our movement offers a credible and viable basis for an alternative; the
third way to a government committed to serving the people.
We do not believe that the MDC-Tsvangirai and Zanu PF are still
dominant in terms of popular appeal; they were dominant up to March 29 2008.
Zanu PF's behaviour during the run-off campaign inflicted immense pain on
the people; and the MDC-Tsvangirai and Zanu PF's conduct after September 15
has not only led people into despair and disdain, but also resentment and

Chimakure: It is common cause that the votes you obtained in the
presidential election if they had gone to either President Robert Mugabe or
Morgan Tsvangirai, an outright winner would have emerged. Don't you think
that you should have been part to the power-sharing talks?

Makoni: Yes, as a purely arithmetic exercise, if the votes cast for me
were added to either Mugabe or Tsvangirai, then the one receiving them would
have achieved an outright majority. But conversely, also as a purely
arithmetic exercise, if the votes cast for either Mugabe or Tsvangirai were
added to mine, I would have won an outright majority. So, a theoretical
arithmetic exercise serves no useful purpose in the current state of our
However, let us place on record that the majority of people who voted
for me were not going to vote for either Mugabe or Tsvangirai, even if I
hadn't joined the presidential race. Remember, there was a surge of people
who registered as voters soon after I announced my candidacy. Therefore,
both Mugabe and Tsvangirai should appreciate that I energised the election
and opened space for keener competition than would have been between just
the two of them.
Regarding participation in the power-sharing talks, allow me to
re-state that our proposition soon after the outcome of the March 29 2008
poll was announced, was that the proposed presidential run-off be cancelled,
and national leaders from all key constituencies, not just political
formations, engage each other towards the formation of Transitional National
Authority. This was not accepted.
When the tripartite negotiations commenced and the framework and focus
of the discussion were defined as "sharing power", we had no appetite for
it. We are not in the politics of power and control, but are motivated by a
commitment to participate in, and contribute to, national affairs and
serving the people.
As we are all now painfully aware, the two protagonists are fully
committed to wresting maximum power for themselves and their allies while
the people die.  Zimbabwe cannot afford a bloated administration of five
people in the presidency and premiership, 31 cabinet ministers and 15
deputies - this is rank madness and cruelty. No sir, we hanker for no place
at such a table.

Chimakure: What do you think is the best way to deal with the current
political crisis?

Makoni: First, let me say that we joined other Zimbabweans in
welcoming both the Memorandum of Understanding and the Global Political
Agreement. We also join other citizens in lamenting the delay in the
formation of the so-called inclusive government. We are saddened that the
reasons for the delay have to do with power for individuals rather than
principles and priorities of national interest.
Therefore, we see no real prospect that the current impasse will be
readily resolved. Consequently, we consider that the following is a more
feasible and realistic approach:
That the leaders of the two MDCs and Zanu PF re-dedicate themselves to
work for the people; to subject their personal and respective organisational
ambitions to the interests of the people and country. I urge them to agree
to a fresh approach to cooperation in a broad-based Transitional National
Authority, whose principal objectives are:
=solving the humanitarian crises of food shortages and disease
=restoring  law and order and the security of all citizens;
=stabilisation of the economy, especially restoring normal supply of
goods and services;
=reviving normal banking and other financial services;
=restoring health, education, water and sanitation services to all
=restoring the country to normal cooperative relationships with
regional neighbours and the international community as a whole;
=guiding an inclusive constitution-making process towards a democratic
national constitution; and,
=preparing the country for fresh, free and fair elections, under a new
democratic constitution.
=That such a broad-based Transitional National Authority be produced
by a new inclusive forum of all national leaders, from politics, civil
society, traditional leadership, faith organisations, business and
professional sectors.

Chimakure: Some of the people in the movement accuse you of developing
a "Mugabeism". They claim that you have allocated yourself six vehicles and
you are promoting tribalism in the movement by recruiting people from
Manicaland into the movement's national management committee. What do you
say to the allegations?

Makoni: I doubt that such allegations are coming from genuine
activists of our movement. If they are authentic, why are they not making
these allegations in the fora of our movement, rather than outside?
I use only one vehicle, allocated to me openly by the relevant
authority in the movement.
The allegation that I "recruited" people from Manicaland shows the
ignorance of those making it. From the time that I announced my candidacy,
people came forward from all over the country, and from all walks of life,
and volunteered to support my campaign in various ways. When other
candidates joined to contest in parliamentary and local authority elections,
more volunteers came forward to support both the other candidates and
myself. Currently, we are a movement of volunteers.
Our leadership team is national in character. At the provincial level,
our leadership teams have members from most districts in each province. So,
this tribalism allegation is a mischievous falsehood.

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Pay us in Hard Currency or we Strike, Workers Warn

Thursday, 22 January 2009 20:49
AS the Zimbabwe dollar continues to lose value due to hyperinflation
and the near dollarisation of the economy, labour unions are pushing for
employees to be paid in hard currency.

Paying workers in hard currency, unions and labour analysts say, will
cushion them from spiralling prices of goods and services because foreign
currency is not susceptible to high inflation like the local dollar.

Over the past four months services such as education, health, rentals
and transport, among other things, have been dollarised yet the majority of
employees are paid in local currency.

Last year, teachers and health workers downed tools demanding to be
paid in foreign currency and fears abound that employees in other economic
sectors could follow suit this year - further crippling the already
struggling industry and commerce sectors.

The president of the Zimbabwe Congress of Trade Unions (ZCTU),
Lovemore Matombo, said wage negotiations this year should be in hard

He said the umbrella labour body's general council had resolved that
ZCTU "affiliates and the generality of the workforce" should negotiate wages
in terms of the US dollar, "failure of which the sector will withdraw its

The move to pay workers in foreign currency, Matombo said, was
precipitated by the near dollarisation of the economy.

Government last September licensed selected manufacturers, wholesalers
and retailers to sell goods and services in foreign currency, but almost
everyone in the country is now trading in hard currency.

Foreign currency is even demanded on commuter omnibuses.

While goods and services are now being paid for in foreign currency,
the majority of workers in both the formal and informal market are still
getting their wages in local currency.

Government, the largest employer in the country, has since paid
soldiers and teachers their January salaries in local currency amid reports
that it has insufficient hard currency to pay the workers.

Morale is low in the army, while teachers have vowed not to return to
work when schools open on Tuesday unless they are paid in hard currency.

The move to pay civil servants in local currency was met with heavy
criticism by the ZCTU.

"Awarding salary increments in local currency is no longer an option
given the dollarisation of the Zimbabwean economy," the ZCTU said. "Workers
from all industries will soon join teachers, nurses and doctors in national
action as the situation has become unbearable. The ZCTU demands that all
wages be paid in foreign currency or the foreign currency shops are done
away with, forthwith."

Progressive Teacher's Union of Zimbabwe secretary-general Raymond
Majongwe said the near dollarisation of the economy has rendered salaries in
local currency unsustainable.

He said: "We are not going to apologise for asking for salaries in
foreign currency. Civil servants, especially teachers, have been denied
meaningful salaries for a long time."

Majongwe said the US$2 300 teachers are demanding is justified
considering how foreign currencies have been devalued in the country.

"Zimbabwe is the only country in the world where US$100 buys nothing,"
he added.

Zimbabwe Teachers Association spokesperson Sifiso Ndlovu said workers
could no longer survive on salaries paid in local currency.

"We are asking for salaries in foreign currency because we are
operating in an economically abnormal situation where you can no longer use
the local currency to buy goods or access essential services," Ndlovu said.

When asked why teachers in Zimbabwe were asking for salaries much
higher than what their counterparts were getting in the region, Ndlovu said
they were simply responding to market price distortions where one requires
more than US$500 to buy groceries for a family of six.

In South Africa and Namibia teachers are paid between US$500 and US$1
300, while in Zambia they get US$300.

The education sector has been severely affected by a skills flight as
a result of low remuneration. Pupils at all government, mission and private
schools have not been going to school since last year.

Last week the Zimbabwe Independent revealed that the country's sole
examinations body, Zimbabwe Schools Examinations Council (Zimsec), was yet
to recruit teachers to mark the 2008 public examinations.

Zimsec advertised that it urgently requires teachers to mark the 2008
Grade 7, Ordinary and Advanced level examinations.

President of the Hospital Doctors Association, Kudzai Chimedza, said
junior doctors would also not be going to work until government starts
paying healthcare workers in foreign currency.

"Government had proposed that the least paid worker be paid US$50
while the highest paid gets US$850, but the money is too little considering
that everything, including rentals, are now being paid in foreign
currency, "Chimedza said.

Chimedza said it was appalling that government had allowed hospitals
to offer their services in foreign currency, which is way beyond what health
workers earn.

"We don't enjoy watching people suffering but the government has to
understand our situation: US$50 is not even enough to pay rentals for a room
in the high density areas."

Major hospitals including the largest referral centre, Parirenyatwa,
were last year forced to close down after healthcare staff downed tools in
protest at poor salaries and working conditions.

The workers demanded salaries in foreign currency in tandem with their
counterparts in the region.
The strike coincided with a cholera outbreak which has claimed more
than 1 600 lives.

However, normality is expected to return to hospitals after the United
Nations Children's Fund last week intervened and unveiled a US$5 million
fund to pay health workers.

Journalists have also said they should be paid in hard currency with
effect from January or they would go on strike.

In a statement to media houses this week, Zimbabwe Union of
Journalists president Mathew Takaona said: "The ZCTU general council at its
special meeting of January 17, 2009 made a resolution that all salaries and
wages be paid in foreign currency. For the compelling reasons cited by the
general council, it is instructive that all works councils comply and all
workers be now paid in foreign currency."

The demand for salaries and wages to be paid in hard currency was
prompted by the refusal by manufacturers, wholesalers and retailers to
accept the local currency as payment.

Even landlords in towns and residential suburbs are demanding rentals
in foreign currency.

A room in the high-density areas is being charged at US$30 while urban
transport operators are charging R5 for a single trip into town.

A snap survey by the Independent in the central business district of
Harare revealed that most supermarkets were no longer accepting local

A 20kg bag of mealie meal is being sold at US$15, beef US$5 per kg, a
bar of soap US$1,50, a loaf of bread US$1 and a 2kg packet of rice US$3.

Schools have set their fees from US$100 to US$2 500 a term although
government is yet to approve payment in hard currency.


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Patients Dump Urban Healthcare for Rural, Mission Hospitals

Thursday, 22 January 2009 20:45
WHEN Tobias Nzira recently tested HIV-positive after visiting a New
Start Centre he never thought he would encounter difficulties in seeking
treatment for opportunistic infections in the capital.

After receiving counselling at the centre, he had vowed to live
positively and pursue his dreams.

Nzira was told at the centre to undergo a CD4 count to determine
whether or not he should be put on the life-prolonging antiretroviral (ARV)

With most opportunistic infections clinics having shut down last year
after health workers embarked on an indefinite strike, Nzira's only hope was
Howard Mission Hospital in Chiweshe, Mashonaland Central.

The clinics at Parirenyatwa, Harare and Chitungwiza hospitals provided
services to people living with HIV and Aids.

Colleagues told Nzira that if he visited the hospital he would be
immediately put on the ARVs programme at affordable cost if his CD4 count is
below normal.

Nzira is not the only one who has joined the great trek to rural
mission-funded hospitals, but hundreds of urbanites across the country have
also joined them as health delivery at public hospitals is almost
non-existent, while fees at private institutions are beyond the reach of

With medical aid no longer accepted by private hospitals, patients
like Nzira now rely on rural mission hospitals that are donor-funded like
Howard, All Souls in Mutoko, Mutambara in Manicaland, Father O'Hea in
Zvimba, Karanda in Mashonaland Central and Silveira in Masvingo.

Public and private hospital fees are now paid in foreign currency and
most people living with HIV and Aids cannot afford to pay.

According to UNAids, Zimbabwe has a severe generalised epidemic of HIV
and Aids with an overall adult (15-49 years) HIV prevalence rate of 15,3%.

An estimated 1,3 million adults and children were living with the HIV
infection in 2008 and of those 680 000 were women of childbearing age.

The organisation said access to HIV and Aids care and treatment is
threatened by the political and economic situation, which has caused a
number of difficulties in HIV programmes.

A spokesperson for an HIV and Aids organisation said most of these
mission hospitals are funded by the Global Fund and are better equipped than
urban institutions.

"For example, Mt Darwin Hospital has three doctors, two lab
technicians, two nurses and two pharmacists who are paid by the global
 fund," the spokesperson said.

"The doctors are paid well and you would find that many of these
hospitals are well stocked in terms of medicine. That is why many people are
flocking there."

That is the reason why Nzira preferred Howard Mission Hospital. His
medical aid, like those of many Zimbabweans, had become invalid and further
constrained the health delivery system.

Recently, medical aid companies have attempted without success to
persuade their clients to subscribe in foreign currency.

Doctors' consultation fees now range between US$30 and US$50 and
almost all of them have since stopped accepting medical aid and are
demanding up-front payment in foreign currency.

This move has effectively blocked access to health care for most

Doctors and medical aid societies have been squabbling over fees for
years, while subscribers accused both of unilaterally imposing
self-determined fees and subscription structures on them.

The doctors have lost trust in health insurance companies as some of
them have over the years failed to pay them on time.

Paul Chimedza, former president of the Zimbabwe Medical Aid
Association (Zima), said in this day of hyperinflation it was irrelevant to
have medical aid.

"Zimbabwe is surviving under abnormal conditions and people are not
talking about medical aid anymore," Chimedza said. "Most doctors and service
providers are now dealing with the patients directly. Doctors want money
up-front just like a supermarket where you have to buy the product first
before making use of it."

He said medical aid societies were still on the road to creating
foreign denominated models for subscribers, and were still to gain
acceptance in the health sector.

Chimedza added: "Doctors are still hesitant to take medical aid. Even
when things were normal doctors had always had serious problems with medical
aid societies. They would fail to pay a third of the medical bills.

"If one has US$100 it would be prudent to just save the money
somewhere and make use of it if one wants to go to the doctor. The problem
is that people might subscribe and when they visit their doctors they would
be told that we do not accept medical aid and in the end they lose both

He said the other option was for companies to form partnerships with
doctors and pay them monthly subscriptions for their workers' healthcare.

"This is a much more guaranteed procedure to get a service," he said.

A staffer at Premier Service Medical Aid Society who preferred
anonymity said their organisation was still negotiating with doctors over
charging in foreign currency.

"There hasn't been a proper plan put in place to strategise the
payment in foreign currency with the doctors. For Excel Plan, the
subscription at the moment for 20 units per one person per month is set at
US$2 while for the Pinnacle plan, which is the highest scheme, a person has
to pay US$4 monthly," he said.

He, however, said these payments were not viable.

"What might be encouraged is for people to keep their accounts and in
the long run when things are okay things might work out. Otherwise it is
disaster," he added.

A snap survey conducted by the Zimbabwe Independent this week found
that most hospitals and private clinics no longer accept payments through
medical aid.

Avenues Hospital said they would not accept medical aid if it were
paid in local currency. "We no longer accept medical aid, especially if paid
in Zimbabwe dollars. It has to be in foreign currency. Payment (in foreign
currency) depends on

how much you pay monthly at the aid society," said a lady at the

A dental surgeon in Eastlea said he no longer accepted medical aid and
was accepting payments in US dollars only.


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Collapsing Gold Producers Seek Retention Scheme

Thursday, 22 January 2009 20:20
GOLD producers owed over US$30 million by the Reserve Bank have
proposed to government that it grant a full retention package for bullion
export earnings.

Documents in possession of the businessdigest disclosed that gold
miners last Friday submitted several proposals to  interim Mines minister,
Sydney Sekeramayi, seeking his intervention to save the erstwhile leading
foreign exchange earner from collapse.

Virtually all gold mines across the country have suspended operations
owing to cash flow problems.

The miners' proposals follow a series of attempts by the cash-strapped
industry to engage authorities over the arrears by the central bank.

"It is proposed that gold producers be allowed to retain 100% of their
export earnings to ensure a quick recovery of production to peak levels,"
read the proposals.

Under the current payment arrangement, the central bank through its
subsidiary Fidelity Printers and Refiners (FPR) pays 75% of the deliveries
in hard currency with the remainder being paid in the local unit at the
interbank rate.

"The gold sector has consumed capital over the years. There is need
for the sector to reinvest in restoration of the production base that has
been eroded," the proposal read. "If 100% retention is not given, the gold
industry will take longer to recover, as resources will be split between
restoration work and growth issues.

It can be argued that with 75% retention the road to recovery will
take twice as long as with 100% retention."

Payment delays for gold delivered to Fidelity Printers and Refiners
have, according to the Chamber of Mines of Zimbabwe (CMZ), led to an
estimated annual production of 3,4 tonnes compared to 27 tonnes at peak in

This historic downward trend resulted in last year's suspension of FPR
from the London Bullion Market Association (LBMA).

The miners argued that gold production from the country's top
producers - Metallon, RioZim, Forbes & Thompson, Falcon, Caledonia, ZMDC,
Bilboes, Freda Rebecca and John Mack, together with small-scale producers,
could meet accreditation requirements to the LBMA next year if government
provisionally allows the Chamber of Mines to market the precious mineral to
South Africa's Rand Refinery.

The prestigious LBMA requires producers to extract a minimum of 10
tonnes annually.

Unlike the current payment arrangements, the miners also proposed the
Rand Refinery to channel payment of proceeds of the sales of gold into the
offshore bank account of the Chamber of Mines, which will in turn provide a
payment schedule to the bank for payment to individual gold producers.

"The agreement is to be backed by RBZ guarantees that are acceptable
to potential lenders to the gold sector. The RBZ and the Chamber of Mines
will set up a committee to monitor progress in the implementation of the new
arrangements and to recommend further changes which will enhance gold
production," read the proposal.

The proposed arrangement, the miners argued, would also allow them to
re-start capital work and exploration that has been stopped due to viability

The lodgment of gold, the miners proposed, would continue to be
through FPR who would act as an approved laboratory for assay and
consolidation of bullion for export.

This means that the Chamber of Mines would contract FPR to assay and
consolidate or refine before export to the Rand Refinery.

Sources said the "commendable professionalism" shown by Sekeramayi
since assuming the mines portfolio ignited hope among the gold producers
although he did not immediately resolve the matter.

Efforts to get comment from Sekeramayi were in vain as his mobile
phone was not reachable.

Last year the beleaguered gold producers demanded that the Ministry of
Finance should revoke the Reserve Bank bullion-trading licence and re-issue
the permit to the CMZ after blaming the central bank for paralysing the


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CFX Bank Under Police Probe

Thursday, 22 January 2009 20:15
CFX Bank and senior managers are under police probe for allegedly
diverting $900 billion (then US$450 000) in new notes from the central bank
last December, meant for depositors, and buying assets and foreign currency
on the black market.

Documents in possession of businessdigest show that of the $900
billion which the bank received from the Reserve Bank on December 3 at
9.30pm, $255 billion was allegedly used to buy assets while the remainder
was diverted to the parallel market to buy foreign currency when it was
recovered by the Reserve Bank.

The rate of the local currency to the US dollar was US$1: $2 million
then, before it rose to $5 million the following day.

According to the documents, Sydney Makonese, a chief dealer with the
bank was on December 5 given US$19 870 and 24 800 South African rand worth
$39,7 billion and $4,9 billion respectively using the then exchange rate by
the director of treasury.

"Thabeth Muzarakura, an administration manager, was handed over diesel
and fuel coupons by the head of finance on Monday December 8 2008.

In the afternoon she received additional coupons from Sarah Makombe
(an accountant at the bank), who advised that an unidentified man had
delivered them to her," the documents said.

The breakdown of the coupons on hand was 10 000 litres of petrol
valued at $18 billion and 4 720 litres off diesel valued at $8,4 billion.

"On Sunday December 7 2008 around 1630 hours Mrs B Kadira - retail
director - requested keys to ATM room at London Derry from CCD Officers.
Grocery items were delivered by a man called Brain in three trips using two
different vehicles with the following number plates - ABD 2906 and DND 611
NW (South African)," reads one of the documents.

The list of groceries include mealie-meal 12,5kg x 100 bags valued at
US$1 000; cooking oil 2 litres x144 - US$576;  salt 20kgsx10 - US$120;
washing soap 48 bars x22 boxes - US$792; beans 50kgs x10 - US$500 and sugar
5kgs x58 --US$406. The total was US$3 394.

According to the document, the purchase of the assets was unprocedural
because requisition and authority to incur the expenditure was not done by
the relevant department.

"A requisition for Redan fuel was done but BP coupons have been
delivered and they are not in batches. Kadira (retail director)'s
involvement in the purchase of human resources related items is questionable
as the department was still in the process of consulting MANCO (management
committee) on staff benefits," the document said.

The documents said there was no audit in the purchase of the items -
that is  requisitions or invoices.
 On December 3 last year banking institutions were issued with a total
of $80 trillion to prepare their system for the increased cash withdrawal
limits, which went into effect the following day.

CFX Bank and senior managers are under police probe for allegedly
diverting $900 billion (then US$450 000) in new notes from the central bank
last December, meant for depositors, and buying assets and foreign currency
on the black market.

Documents in possession of businessdigest show that of the $900
billion which the bank received from the Reserve Bank on December 3 at
9.30pm, $255 billion was allegedly used to buy assets while the remainder
was diverted to the parallel market to buy foreign currency when it was
recovered by the Reserve Bank.

The rate of the local currency to the US dollar was US$1: $2 million
then, before it rose to $5 million the following day.

According to the documents, Sydney Makonese, a chief dealer with the
bank was on December 5 given US$19 870 and 24 800 South African rand worth
$39,7 billion and $4,9 billion respectively using the then exchange rate by
the director of treasury.

"Thabeth Muzarakura, an administration manager, was handed over diesel
and fuel coupons by the head of finance on Monday December 8 2008. In the
afternoon she received additional coupons from Sarah Makombe (an accountant
at the bank), who advised that an unidentified man had delivered them to
her," the documents said.

The breakdown of the coupons on hand was 10 000 litres of petrol
valued at $18 billion and 4 720 litres off diesel valued at $8,4 billion.

"On Sunday December 7 2008 around 1630 hours Mrs B Kadira - retail
director - requested keys to ATM room at London Derry from CCD Officers.

Grocery items were delivered by a man called Brain in three trips
using two different vehicles with the following number plates - ABD 2906 and
DND 611 NW (South African)," reads one of the documents.

The list of groceries include mealie-meal 12,5kg x 100 bags valued at
US$1 000; cooking oil 2 litres x144 - US$576;  salt 20kgsx10 - US$120;
washing soap 48 bars x22 boxes - US$792; beans 50kgs x10 - US$500 and sugar
5kgs x58 --US$406. The total was US$3 394.

According to the document, the purchase of the assets was unprocedural
because requisition and authority to incur the expenditure was not done by
the relevant department.

"A requisition for Redan fuel was done but BP coupons have been
delivered and they are not in batches. Kadira (retail director)'s
involvement in the purchase of human resources related items is questionable
as the department was still in the process of consulting MANCO (management
committee) on staff benefits," the document said.

The documents said there was no audit in the purchase of the items -
that is  requisitions or invoices.

 On December 3 last year banking institutions were issued with a total
of $80 trillion to prepare their system for the increased cash withdrawal
limits, which went into effect the following day.

CFX got a total of $900 billion on the same day for issuance to their

Reserve Bank governor Gideon Gono said: "At exactly 9.30 pm on
December 3 2008, the Reserve Bank's tracking system picked up that the
serialised notes issued to CFX had mysteriously found their way into the

CFX got notes in the following series: $10 million notes with serials
AA0207001 to AA0217000 amounting to $100 billion; $50 million notes with
serials AA7363001 to AA7377000 amounting to $700 billion and $100 million
notes serials AA0079001 to AA008000 amounting to $100 billion.

The $900 billion signed off by CFX on collection was done under
voucher number 01408 at 1220 hours on Wednesday.

At 9.30 pm on Wednesday serialised new notes off CFX's withdrawal from
the Reserve Bank were already on the market.

A protected informant who worked with the Reserve Bank throughout the
night reported that a total of $260 billion was offloaded by CFX at night on
Wednesday, buying foreign currency.

The Reserve Bank then dissolved CFX Bank's board of directors and
removed the financial institution's senior management.

The bank's nine directors, identified as P Chitando, the chairman, JS
Brown, E Shadaya, JN Dhliwayo, M Chingwena, BC Hofman, I Chagonda, P
Alichindama and A Kandlela, have all been purged.

Gono also declared the bank's management "unfit and improper" to work
in any banking institution in Zimbabwe or sit on any banking institution's
board for the next five years.

The top management were identified as O Mukumba -- Managing Director;
PT Ndoro -- Company Secretary; B Kadira -- Head of Retail; W Chidziwa --
Head of Treasury and International Banking; P Mureya -- Head of Finance and
Administration, C Dangarembga --- Head, Risk Management and C Saungweme --
Head of Audit.

Formerly Century Bank, the institution was renamed CFX Bank (CFXB)
following a merger between CFX Financial Services (CFX) and Century Holdings
Ltd in 2004. The bank was placed under the management of a curator on
December 17 2004.

CFX applied to merge the operations of CFXB with CFXMB on the grounds
that it was not viable to continue the business of the merchant bank
separately as all trading was taking place in the name of CFX Bank Ltd.

The merger was approved by the Minister of Finance in 2006. Following
the determination that CFX Bank Ltd had been resuscitated, curatorship of
the bank was uplifted on February 28 2006.

The bank's majority shareholders are Allied Financial Services (17%),
the People's Own Bank (13%), Premier Asset Management Nominees (6%) and
Premier Asset Management 6%. -- Staff Reporter.

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The (Im)possibility of an Island

Thursday, 22 January 2009 20:11
ONE could almost be forgiven for forgetting the days when a daily
allowance of a dollar to take to school could afford a "freeze-it", a packet
of maputi and perhaps an after-school chocolate ice cream cone from the
Dairiboard vendors, strategically positioned just outside the school gate to
capture whatever loose change was left from the break time 'bingeing'.

Back then, a $10 gift from a relative after eagerly showing them your
latest report card was soon followed by dearest mommy seizing it for
safekeeping, and only given back to you through some form of an instalment
scheme. Back then that dollar counted for a lot and it was not even

Fast forward to today and the latest craze is on dollarisation,
dollarisation and still more dollarisation.

Zimbabweans find themselves paying for everything from hospital fees,
education and groceries in some form of foreign currency. Even some areas
that people thought were safe such as cellphone airtime and watching soccer
matches have not been spared.

However, perhaps owing to the gross market inefficiencies in our
economy the pricing of some of these goods and services do not make much
sense. Everything is just plainly overpriced to say the least.

There is a general feeling however that prices are beginning to come
down quite significantly in recent weeks. A major reason for this perhaps is
that using US dollar pricing means that local players will now have to face
direct competition from companies beyond our borders.

In the long run local suppliers can only charge at a level where it
would not be worthwhile for consumers to drive to border towns in South
Africa, Botswana or Zambia for most of their shopping.

One can think of the example of alcoholic beverages. This particular
market was perhaps the first to experience market forces driving down

The market for beverages should be about maximising profits through
volume rather than excessive mark-ups. When foreign beers first appeared,
they were priced at five to 10 times what they are currently selling for.
Now local beers are at times even more expensive than some of the imports.

This should serve as a sign for future trends across most products and
for the rest of the economy. Local manufacturers need to start realizing
they can easily lose the competitive advantage arising
from being closer to their market and a sense of supporting local
companies just because they are Zimbabwean.

An encounter with a cellphone subscriber presented another such
anomaly. The lengths to which consumers are willing to go to ensure they are
not short-changed can be amazing.

On a trip down south, this particular subscriber was interested to
know if it was cheaper to use a South African issued prepaid cellphone line.

On checking the various operators' websites it turns out that that can
actually be cheaper in some instances where international SMSs from a South
African based operator can be as low as R2.50 while roaming in Zimbabwe!

So looking at set up costs alone foreign operators seem to have an
advantage. Using Vodacom (SA) as an example, it costs you less than a South
African rand to buy the line and there are no activation costs for the
SMS-only roaming option.

Compare this with a local offering at US$20 for the line and SMS
charges ranging from US$0.14 to just under US$0.40 for local and
international messages respectively.

Assuming one wants the SMS-only option; only after sending about 200
messages would local operators actually start becoming cheaper. But by then
trying to regain lost customers could be a lot more difficult.

Unconfirmed reports suggest a British based operator can offer calls
(again while roaming in Zimbabwe) at less than the cost of making
local-to-local calls and it is probably on per second billing at that! With
the age of borderless technology, internet banking will enable consumers to
easily service the alternatives without much of a hassle.

While this particular example highlights the skewed pricing of
Zimbabwean mobile operators, the same would apply to any other sector. And
the super-profits will only last as long as the market is not informed and
aware of the various alternatives available to them.

The world we live is fast changing and the days of operating as some
form of island with protected local industries could soon be over.

Zimbabwe is in the process of making some commitments with regional
blocs to create free trade areas with the eventual hope of creating a
fully-fledged customs and monetary union. Should the status quo remain local
companies will surely be no match for external players.

Local companies should either look at more cost effective business
models or just stop being greedy. To prove this you could try offering a
local consumer an imported Hansa beer at the price of a local pilsner and
guess what they will choose.

To be fair such pricing mismatches perhaps result from the haphazard
manner in which the "dollarisation" is occurring. Perhaps now would be the
time to set up proper official and blanket treatment for all suppliers.

Offering foreign currency licences to part of the economy creates
unfair advantages for some while continuously stifling healthy competition
between players to bring prices down.

Dollarising the stock market, for example should soon be followed by
that of the whole economy. In the long run, perhaps the consumer will
benefit (as wages and all else is converted into foreign currency) but then
again, this is pretty unlikely to happen as we all know who the biggest
loser will be!


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Chinamasa Faces Daunting Task in Presenting Budget

Thursday, 22 January 2009 20:06
LAST year former Finance minister Samuel Mumbengegwi made a record
devaluation of the Zimbabwean dollar when he presented his budget.

He devalued the dollar by 11 900% to 30 000 from 250 which had
prevailed since July 31 2006 in a bid to attract foreign currency on the
official market.
He concluded his budget by admitting that it would not set the pulses
of suffering Zimbabweans racing.

He was left  with little to do but waffle about stability - while
avoiding to mention where the money was going to come from - and explaining
the effect spending would have on the economy.

It made depressing listening Herbert Murerwa concluded his last four
budgets by seeking divine intervention.

In 2006, he concluded his budget speech by quoting the Biblical
prophet Jeremiah.

Chapter 29 verse 11 of his book states: "For I know the thoughts that
I think toward you, thoughts of peace not of evil but to give a future and a

During his last budget in 2007, Murerwa closed his speech with another
quote from 2 Corinthians Chapter 4 verses 16 and 17. But whatever he might
have wanted to infer basing on the good word, he lost it.

Simba Makoni's budget statements were presented amid expectation that
they would breathe life into the failing economy by introducing measures
that would help resuscitate the ailing manufacturing and mining sectors.

Instead, he always concluded by  pinning hopes of recovery on the
collapsed agricultural sector.

Bernard Chidzero and Ariston Chambati and once acting Finance minister
Emerson Mnangagwa presented their budgets when the economy was still sound
and as such did not have a lot of headache during their presentations.

Acting Finance Minister Patrick Chinamasa unlike his predecessors will
have a daunting task of presenting a budget when the economy has virtually

Economist Brains Muchemwa said presenting a budget in local currency
would not make sense since the currency was losing value at an alarming

 "The only way the budget will make sense was if it is announced with
figures being translated to foreign currency. This is the time to learn
about the country's health. Where the money will come from will paint a
clear picture about the future. Will it be taxes and tariffs, domestic or
external borrowing or will they print money?" said Muchemwa.

Economic analyst John Robertson said Chinamasa's task was not an easy
one as demands for supplementary budgets by ministries reflected the
seriousness of Zimbabwe's economic rot and raised serious questions over the
government's official inflation data.

"The demands were frightening when you compare to the original budget.
This shows the magnitude of deep-seated inflation and is testimony that the
government has failed to bring inflation under control," Robertson said.

Robertson said government spending was too high and that there was
inadequate cash being channelled towards infrastructure development.

Next Thursday  Chinamasa will present the 2009 national budget to
parliament following a two-month delay caused by a deadlock over the
formation of a coalition government.

The budget is traditionally presented in November but this had been
put on hold in anticipation of the formation of a unity government involving
Zanu PF and the two formations of the opposition Movement for Democratic
Change (MDC).

Prospects of the unity government have dimmed after Monday's
deadlocked meeting between President Robert Mugabe and the leader of the
main MDC formation, Morgan Tsvangirai. Chinamasa  looks to break with
tradition and come up with a short-term budget, possibly covering three or
six months.

Government officials this week hinted that the budget could be
denominated in foreign currency in line with developments in all economic
sectors where the more stable US dollar and South African rand are the
preferred medium for business transactions.


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ZSE Considering Switch to US Dollars

Thursday, 22 January 2009 20:03
THE Zimbabwe Stock Exchange (ZSE) is considering proposals submitted
by listed companies to report their accounts in United States dollar terms.

The local bourse this week said it had received a number of proposals
from quoted companies to report their financial result in US dollars. The
companies also cited failure by Central Statistical Office (CSO) to publish
inflation results for the greater part of last year.

ZSE chief executive Emmanuel Munyukwi said the proposals were
submitted and the local bourse would look at the merits of the proposals.

Zimbabwe's economy is now virtually dollarised whilst the CSO has
failed to publish year-on-year inflation figures on time for the past 13

Companies had argued in their proposals that the delay in the release
of inflation figures was affecting the release of their inflation-adjusted

They also argued that most of their costs were United States

"There is a drive at the moment by some of these (listed) companies to
publish their (financial) statements with figures denominated in US
 dollars," Munyukwi said.

"We are not too sure if that is legal but we are looking into it," he

Mining counter, Falgold, last year published its financial statements
in US dollars.

However, this move was met with stiff resistance from the Stock
Exchange forcing Falgold to eventually publish its statements using the
local currency.

Listed companies are required by both the ZSE and the Companies Act to
publish their audited financial statements at least 90 days after the
financial year end. The 90-day requirement is also observed internationally.

The delay in the release of the inflation figures has made it
difficult for most listed companies to release their accounts within the
required 90-day period.

The rate at which the dollar was losing value was also making
financial results to fail to make sense.
The stock market said there were fears that some local companies could
fail to submit their audited statements on time because of the delays in the
inflation figures.

ICAZ last year said annual reporting by both quoted and unquoted
companies had become a nightmare because of the delay of inflation figures.

Foreign owned companies were said to be the worst affected as they
have stricter reporting requirements as holding companies will have to
consolidate and report within 90 days.

Confederation of Zimbabwe Industries (CZI) president Callisto Jokonya
said: "Inflation figures are always of importance as they help us plan. We
are talking to the Minister of Finance who is the first port of call.

If we quote in other currencies, it would look like we are not working
with government. But government has to make the environment favourable by
providing these figures."


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Barman Calls Last Round

Thursday, 22 January 2009 19:57
THIS year is a difficult year for everyone around the world and of
course much more difficult for Zimbabweans.

The shocking confessions from Bernard Madoff and Ramalinga Raju that
preceded 2009 were ominous signs of the great belt tightening to come, and
here we are, tightening belts that in fact need loosening as further
tightening will snap the same belt that needs to keep the trousers in
We have entered a phase where for many developed economies, monetary
policy is less likely to be effective going forward as interest rates near
zero, and the craze of fiscal policy is visibly taking over.

This is a pleasant year for central bank governors to take an early
holiday at the beginning of the year, one that is likely to be much longer
than they desire especially for the US Fed's Ben Bernanke who has not been
long in the office.

But since this is one man who believes so much in fiscal stimulus in
fighting a deflation, hopefully he will find more consultancy work from the
treasury than from the Fed.

And of course our own central bank governor can equally join the
central banker governors around the world.

With a Zimbabwean economy that has picked an unstoppable dollarisation
wave, how do we leverage on monetary policy when that same monetary policy
is now hardly effective in the US where the dollar originates?

No one should query if the RBZ governor decides to go on an open-ended
leave between now and 2010.

Mervyn King, the governor of the Bank of England, should be more
remorseful, having sent interest rates to their lowest since 1694, more than
four centuries ago. And for the first time he should be feeling less
powerful and idle. At least the Japanese have been there before and
appreciate how the central bank governor can go AWOL for over one-and-a-half
years with interest rates at zero.

The monetary policy levers are just no longer useful, and despite the
massive cuts in interest rates around the big economies, credit can't just
flow into the deficit areas and the major global buzzword now is 'bailout'.

The world has come to self-correction. After taking cheap beer the
whole night, the global economy could not afford to avoid the toilet for too
long. And today many countries still queue to relieve the excesses in their

The binge, emanating from cheap credit that drove household debt to
disposable income to dizzying heights of as much as 158% in December 2006
for Australia, has eroded the business confidence and no barman wants to
sell beer to anyone now, at least on credit.

And that is the big challenge facing the addicts, the bankrupt
consumer and cashless corporate notwithstanding huge injections being pumped
into the financial system around the world.

From the negativity flowing around the world on lay-offs and more
bailouts needed, the barmen are less likely to be selling beer to anyone,
even though the manufacturers have delivered it free to their warehouses.

Zimbabwe had its own cheap beer for years, and when the morning of
relieving the system came, it came with pain. At a time the global economy
ran on cheap credit, Zimbabwe ran on its own free flow of not only cheap
credit, but also free handouts.

There is a big factor of consumer and social protectionism that the
government ran with for a long time through price controls that has come to
haunt the very same people that were meant to benefit from it.

Who does not remember the cheap fuel of 2003-2004? I remember one
Friday afternoon driving to Botswana, some 700km away just because I had
nothing interesting to do in Harare!

Who cannot remember speaking on the phone for three-five hours on a
daily basis (peak period) until just before January 2009 only because they
had nothing to do and could afford a US$ to pay the bill at the end of the
month?  Does anyone care to switch off lights or geysers as they retire to

The cheapest rates for electricity and water are arguably found in
Zimbabwe, so is vehicle licensing and road usage.

Government policy, at a time the budget deficit has been soaring to
over 100% of GDP (after including quasi-fiscal activities of the RBZ), made
disastrous policies in consumer protectionism without sufficient funding,
the consequence of what we see today in failed physical capital

The correction is coming slowly through dollarisation, although there
is massive resistance now because the same people the government sought to
protect are now so vulnerable that they cannot be left alone to meet the
market price for goods and services.

And an intervention is desperately needed in the form of a stimulus
fiscal package, a package that unfortunately is beyond the reach of the
government alone without engaging the international community and donors.

The previous Z$-related stimulus packages have failed because of the
obvious reasons that the economy is highly incapacitated on the part of
physical capital and foreign currency, which basically is the lynchpin in
addressing the critical supply side of the economy.

Is it not sad that Zimbabwe is now a province of South Africa? Many
producers of goods in South Africa count Zimbabwe as their domestic market,
and the productive sector in Zimbabwe that used to provide the jobs and
contribute to government revenue has given in to years of price controls and
administrative distortions.

The many jobless and socially vulnerable Zimbabweans in the rural
areas are now defenceless in the face of the noble concept of basic
sustainable market discipline of paying the right prices for goods and
services via dollarisation.

They now need more temporary cushion than they ever did, and
unfortunately it's no longer tenable. The state cannot print US dollars for
subsidies as the Z$'s rejection hastens.

The options are very limited, but still they exist. The political
stalemate has created a lot of apprehension among potential guarantors to
the recovery process.

But the economy cannot stop because of the politics, and the
government has the right to unlock the gridlocks, only of course if it gets
the courage to shrug off the heavy tag of policy inconsistency and
unpredictability that has shredded its credibility.

It's clear the dollarising economy is creating huge suffering to the
majority because over 98% of the workforce earns in the local currency that
is not meaningfully acceptable even in the rural areas where everything one
intends to buy starts at US$1.

With 80% of people estimated to be living in the rural areas and their
traditional breadwinners in towns where there are now unemployed, the
situation is even more dire. But a government should not give up on its

The Americans are a proud people that are creating huge stimulus
packages to fend off a recession. You want to meet a proud nation, meet the

We have had a recession since 1999, and have tried everything and
failed to kick start economy, from the misleading price controls to the
productive sector bailouts. What we have not done, that which will raise the
economy, is giving the right market impetus on pricing and access to
international lines of credit.

The former is inevitable with dollarisation. The global market has
dried out, and money cannot flow anymore. The barmen are not as friendly.

If we are not careful, the pricing reform through dollarisation is
benefiting more South African producers who have already been benefiting
from a wider uncontested market in Zimbabwe, and of course as well from the
depressed wage rate emanating from the large pool of Zimbabwean migrants
that stream to South Africa every day.

That's probably the reason why the South African central bank is not
worried much about easing monetary policy - because there is a huge market
that is unresponsive to monetary policy in Zimbabwe, Zambia and Botswana.

Considering Zimbabwe has joined Botswana and Zambia as a "domestic
market" for South Africa produced goods, Tito Mboweni can still afford to
give strong support to the shaky rand through the interest rate lever
without worrying much about stimulating consumer demand which is taken as

The government has one last shot to kick-start the recovery. And that
is the disposal of assets to generate foreign currency and inject spending
power into the civil servants, who in turn, because of their numbers, will
turn the creaky wheels of the economic recovery process.  Mobile service
providers are now charging in foreign currency and Net*One can easily go
under the hammer. There is nothing strategic about it.

It's unlike Zesa, PTC or Air Zimbabwe. This is the best time to sell
the government stake in Hwange when the demand for power and coking coal is
highest due to the regional electricity shortages.

We have precious minerals under the state's claim in coal, uranium and
diamonds. There is no strategic value in these when they lie in the ground
and prices continue to plummet and a generation suffers under the worst ever
inflation in the world since 2000. After all, we are all Zimbabwean.

Brains Muchemwa is a local economist


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Eric Bloch: Govt Must Talk Less, Act More

Thursday, 22 January 2009 17:40
IT is incontrovertible that the Zimbabwean economy has been gravely
shattered, and reduced to such appallingly low levels that millions are
starving, cholera exists more widely than do basic food supplies.

Much of the infrastructure (including electricity generation, water
supply, telecommunications, health care services and education) verges on
the edge of total collapse, and hyperinflation is higher than in any country
throughout history.

Swiftly, and in deliberate and blatant disregard for realities,
government has sought to distance itself from any responsibility for the
economic collapse.

It has consistently ascribed the decimation of the economy, and the
consequential intense hardships and suffering sustained by the populace, to
causes wholly unrelated to government.

To a limited extent it sought, in some of the past 11 years, to
attribute the economic ills upon climatic conditions, albeit that on most
occasions such contentions were almost devoid of credibility.

However, the most predominant of government's allegations as to the
causes of the impoverished economy, endlessly repeated, is that the
Zimbabwean economy has been brought to its knees by "illegal international

Although almost wholly devoid of substance until 2008, government has
been vigorously adamant that the alleged sanctions were the cause, almost in
entirety, of the economic destruction suffered by Zimbabwe.

As nauseatingly frequent as government has striven to convince all
that this was the cause of the morass that constitutes Zimbabwe's "economy",
so this column has sought to refute those contentions.

At the risk of even greater nauseating repetition, it must be stated
once again that government's claims were almost without foundation until
recently, and even now are only partially sound.

Save and except for the provisions of the Zimbabwe Democracy and
Recovery Act in the US, which prescribes that that country shall veto any
funding support for Zimbabwe by the Bretton Woods' institutions (the World
Bank and the International Monetary Fund), and that the US has not extended
to Zimbabwe participation in the benefits of the Africa Growth and
Opportunities Act (Agoa), absolutely no economic sanctions applied against
Zimbabwe until February 2008, and yet the Zimbabwean economy was in
continuous decline since 1998!

Government counters the arguments that economic sanctions did not
exist by continuously focusing upon the diminishing provision of aid and of
loan funds and lines of credit by donor nations, international financial
institutions and private sector enterprises.

But the hard fact is that none will lend to poor credit risks, and
Zimbabwe had indisputably become such a risk.  It had recurrently defaulted
in timeous debt settlement, had an increasing balance of payments deficit,
and an ever-contracting economy.

No bankers, lenders or other suppliers make advances if there is
little reasonable expectation of settlement being forthcoming. That is not
sanctions, but good and sound business practice.

Moreover, an unwillingness to provide loans, lines of credit or aid
can in no manner be credibly contended to be "illegal", although Zimbabwe's
government never makes reference to sanctions without that adjoining

It is for each country to decide whom it is willing to assist and
support, and for each bank, financier and business to decide whom it will
trade with.

Decisions not to assist, support or trade do not have to be made by
the Untied Nations, or by any other body, and the absence of any such
decision neither constitutes the refusals of aid or trade to be sanctions,
or that those decisions are illegal.

But government persists in its contentions of illegal sanctions,
thereby misleading the populace and intensifying its alienation of the
international community in general, and of possible providers of assistance,
potential investors and others, thereby further worsening the state of the

However, even if sanctions had previously existed, and recognising
that some countries have now resorted to economic sanctions against Zimbabwe
(primarily being the US and the countries comprising the European Union),
government should desist from its constant endeavours to exonerate itself,
and instead should seek to minimise the consequences of those sanctions.

This it can do in several ways. First and foremost would be to seek
the termination of those sanctions.  Without in any manner surrendering
Zimbabwean  sovereignty, government should interact constructively with the
countries applying sanctions, pursuing reconciliation without subjugation.

In particular, government must intensively restore democracy, respect
for human and property rights and maintenance of law and order, with just
and humane operations of the police and armed forces.

Not only is it in any event incumbent upon government to do so in
fulfilment of its constitutional obligations, but it would significantly
restore Zimbabwe's international relationships.

However, pending the withdrawal of sanctions, government must
facilitate the survival of the economy.

As greatly as most people will justly condemn much that the Rhodesian
Front government of the UDI period espoused, nevertheless the economy very
substantially circumvented many of the hindrances and constraints of the
UN-imposed, very comprehensive international sanctions that prevailed
throughout 1966-1979.

So too did Israel for years under the yoke of sanctions of Arab states
and others supporting them, Iraq under Saddam Hussein, Libya for many years,
and others. But what has the Zimbabwean government done to assist the
economy's survival under sanctions? - Absolutely nothing!

In addition, government could energetically pursue the strengthening
of economic linkages with those countries that are not applying sanctions
against Zimbabwe, and who could be interested in intensified economic ties
with Zimbabwe.

To date government's efforts in this regard have been limited to its
"Look East Policy", with comparatively limited positive results.

It is time - nay, it is long overdue - for the Zimbabwean government
to recognise that it must resort to less talk (especially the fruitless,
false, perpetually vituperative castigation of other countries, and the
repudiation of self-blame), and instead must resort to meaningful action.

The Eric Bloch Column

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Candid Comment: MDC will not Fall Into Zanu PF Trap

Thursday, 22 January 2009 20:27
WHEN a struggle becomes long and the end becomes a mirage,
opportunism, hypocrisy and dishonesty creep in.  In all these situations,
principles are sacrificed on the altar of self-interest.

The struggle, already arrested by exhaustion, becomes bastardised.

History shows that those struggles that have survived have only done
so because a few have stayed the course and have refused to be seduced by
myopic soft landings.

It is this sort of mentality that has given rise to a new school of
thought that seeks to revise our recent history and has peddled myths about
the limited options available to the people of Zimbabwe, and have therefore
sought to compromise the one thing that can never be compromised.

This is the sacrosanct principle that it is only the people that have
an inalienable right to decide their course and their destiny.

The revisionist school of thought and its disciples constitute a bunch
of tireless, airport- lounge activists and a beehive of "people's
representatives" who are nothing but a cocoon of elitist mafia.

Frequently, their ideology is betrayed by pseudo-intellectual,
high-sounding but superfluous blur. It is a pure distillation of anger and
frustration masquerading as political strategy.

Let us begin with the contention that there was no winner in the March
29 election.

Indeed there was a winner! We contested this election without
resources, without access to the media, without access to vital electoral
information and data.

Contrary to the provisions of the Electoral Act, we were not availed
the voters' roll; neither did we know the number of polling stations.

The law kept being changed in the course of the game and it was more
like playing tennis with a continuously moving base line.

Furthermore, as we exposed at the time, all state agents manning the
polls were carefully handpicked to exclude anyone thought to be sympathetic
to us.

Indeed, over 5 000 teachers were excluded as a result of this. What a
monstrous fraud! To suggest that the MDC did not win the election on March
29 is intended to obfuscate the Zanu PF decline while stroking the
over-inflated egos of some who were severely defeated in that election.

Their self-proclaimed mantra as kingmakers is a by-product of this
myopic indulgence. More importantly, it underlies a deep and chronic
contempt and disrespect for the people. It is the people that decide their
fate and not some overfed Google-addict sitting on a table.

Politics is not a chess game of elaborate flip charts.

A second fraud is to try and equate Tsvangirai with Mugabe. This, with
all due respect, is sick populism intended not to defile Mugabe for he has
done that on his own, but to ridicule and demonise Tsvangirai and the MDC.

The attack is personal and is no different from the daily diatribe of
defamatory vituperations churned out by the Herald. In short, to Mugabe and
others, Tsvangirai is the red flag that has generated anger and hatred of
satanic proportions.

Is it an accident that a rocket scientist can be so ahistorical and so
revisionist as to equate the sins of this regime with any other person?  Can
the failure of this agreement be visited upon our shoulders?

One thing has to be emphasised for the benefit of those conducting the
symphony of hatred and discord at Herald House. Tsvangirai is the undisputed
and incontestable leader of the MDC. Not only that, he is the leader of this
struggle. Every struggle has a face and a leader.

For the record, it is Mugabe and his acolytes who have been
responsible for the castration of Zimbabwe's manhood. It is not so-called
sanctions that have created the phenomenal decline of this economy to levels
unheard of in modern economics. Now where does Tsvangirai fit into all this?
The answer is simple.

It is not Tsvangirai who is frustrating the consummation of the unity
deal but rather Mugabe himself. In this regard, let's put into perspective
the MDC position on the dying dialogue.

There must be a satisfactory legal framework to underpin the
agreement. Secondly, there must be an equitable distribution of ministerial
portfolios. In short, responsibility with authority.

Thirdly, the constitution and composition of the National Security
Council must be defined. This overseeing body is essential to ensure the
gradual weaning of state institutions from the breast of Zanu PF.

Fourthly there must be an equitable and fair distribution of key
public positions including governors, ambassadors and permanent secretaries.

Finally, there must be a reversal and cessation of all breaches of the
Memorandum of Understanding and the Global Political Agreement.

This includes the unconditional release of Jestina Mukoko, Gandi
Mudzingwa and all abductees and the reversal of all executive appointments
unilaterally made after July 21 2008.

Surely there is nothing extraterrestrial about these demands. In fact
the demands are a logical platform if not precondition for any viable
Government of National Unity.

Finally, a myth has been peddled that there is no other strategy or
option other than that of a GNU. This can only be a Freudian dislocation.
Dialogue and the GNU are the conscious by-product of a roadmap we crafted in
May 2006.

The substance is to achieve democratic change in Zimbabwe through
peaceful, democratic, constitutional and non-violent means. To then suggest
that this can only be achieved through a GNU chaired by Mugabe is somewhat

In short, we remain committed to the cause of change in Zimbabwe as we
remain committed to the GPA, subject to the resolution of our demands.
However, we are not so naïve as to allow Zanu PF to trap us in the
cul-de-sac of their sterile processes.

Biti is secretary-general of the MDC-T.


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Comment: 2009 budget mission impossible

Thursday, 22 January 2009 20:24
WHEN government this week set the maximum taxable income at $250
trillion a month, what sort of budget is it going to come up with next

It can only be in foreign currency if our bankrupt rulers can produce
the dollars to finance the budget.

Stand-in Finance Minister Patrick Chinamasa will definitely not want
to announce the appropriation in Zimbabwe dollars.

It is not just the embarrassment of stumbling over awkward figures
laden with zeros (remember Samuel Mumbengegwi struggling with trillions two
years ago) but the reality that the local currency has virtually ceased to
be local tender.

Lack of confidence in the currency is seen by the degree of unofficial
dollarisation prevailing in the economy. We have seen the level of
unofficial dollarisation progressively undermining the domestic currency as
a store of value.

Chinamasa is well aware that while announcing votes in foreign
currency will roll easier from the tongue, financing whatever budget will be
a big task for a government struggling to get foreign currency to buy basic
stationery like envelopes and carbon paper.

Chinamasa's budget next week is therefore a wish list of government
aspirations but also a realistic advertisement of the extent of the crisis
in this country.

Dominating his beggar's list should be the vast amounts required for
food imports to nourish 8,2 million, according to government's own

Vast amounts are required to put health and education on the path to
recovery. The civil service wage bill in foreign currency will be

The government will also need to spend billions in hard currency to
repair damaged public infrastructure, complete long-stalled capital projects
like the Tokwe Mukosi Dam and initiate new ones.

Just to fathom the scope of the resources required, US$40 million will
be required to pay 100 000 teachers at a conservative monthly pay rate of
US$400. Unicef last week provided US$5 million to pay health workers but
that is the amount required for just a month.

Industry has said it requires US$900 million to raise capacity
utilisation from the current low of 10% to 80%. In the absence of credit
from banks or balance of payments support, government is expected to step
into the void.

The huge task to hand for the government is financing whatever budget
it is going to announce.

Traditional sources of financing the budget - corporate and individual
taxes, tariffs and excise duty - have lost substance with the demonetisation
of the local currency. Printing of money to support the central bank's
quasi-fiscal activities is no longer a sensible option either.

Modalities of collecting corporate tax and Paye in foreign currency
are still being worked out.

Setting tax brackets for foreign currency salaries is another taxing
exercise due to the absence of proper benchmarks in the new form of
remuneration. Then there is the parlous state of the banking sector to
contend with.

The state of the sector is an important consideration for any economy
moving toward formal or informal dollarisation.

Successful dollarisation requires full financial integration, as banks
will now play a critical role in the maintenance of monetary and balance of
payments equilibrium.

Whenever there is excess demand for funds banks should be able to
source them from abroad and if there is excess supply banks should be able
to invest funds abroad. Our banks are not sufficiently integrated into the
international financial system to provide adequate support for

But even with international integration, there is the issue of country
risk in granting loans and providing financial support for the connected
banks in the dollarised domestic economy.

Country risk depends on the perception of fiscal viability and the
ability to service debt.  Zimbabwe has not fared well in this area.

Figures aside, Chinamasa's budget speech must clearly signal
government's intention to create a low-inflation environment and to make
even more far-reaching fiscal and broader public sector adjustments.

This is necessary to enhance investor confidence and promote the
restoration of long-term investment.

Essentially dollarisation will require utmost discipline and
responsibility in the conduct of the public affairs of the country.

The country needs to focus on programmes that offer the best returns.
Wasteful programmes that are designed to buy votes must be discarded. Focus
must be on invigorating economic activity to raise capacity utilisation in
industry and on the land in order to create employment.

Government finances would also need to be put on a sound footing, and
budgetary rules and practices as well as general accounting standards within
the public sector strengthened. The government must be in a position to
sustain revenue flows in line with expenditure.

All this however requires prudent economic blueprints underpinned by
political stability. Otherwise the budget will turn out to be another
academic exercise with no positive impact on our desperate situation.

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Muckraker: Pesky Lensmen Victims of Crazed Bling Attack

Thursday, 22 January 2009 17:33
TUCKED away inside the Herald in the final paragraphs of its story on
Monday's talks was a handy little disclosure by "an insider".

It said that Morgan Tsvangirai had a bilateral meeting with President
Mugabe where he demanded that all political prisoners be released and senior
appointments in the public service made since September be annulled.

Many will consider these to be entirely reasonable demands and indeed
the MDC-T leader would find it difficult to persuade his followers of the
need to join a unity government when innocent people are being detained on
spurious charges and torture routinely practised, according to doctors'

But what was of interest to us was the fact that the Herald, no doubt
prompted by its "insiders", had for weeks been telling us there was no
chance whatsoever that Mugabe would consent to a meeting with Tsvangirai
because everything had been decided last year in South Africa.

So didn't Monday's tête-à-tête amount to a meeting? And weren't the
concessions made on gubernatorial appointments of any significance?

Nelson Chamisa, by the way, should note when Mugabe's minions give
confidential briefings to the state press, and ensure the independent press
is fully counter-briefed so certain claims are effectively dealt with.

Anyway, it was useful to know the next time we hear there is "no going
back" that there will be!

Does anybody recall the conciliatory letter Mugabe wrote to Barack
Obama congratulating him on his election victory in November? Since then
Obama has been under sustained fire from Mugabe's publicists.

So what was the point of trying to open a diplomatic door only to have
your zealots making sure it remains firmly closed? Admittedly there wasn't
much prospect of success but it wouldn't have hurt to have tried.

Meanwhile, we noted the following paragraph in Obama's inaugural
address: "To those leaders around the world who seek to sow conflict, or
blame their society's ills on the West: know that your people will judge you
on what you can build, not what you destroy.

To those who cling to power through corruption and deceit and the
silencing of dissent, know that you are on the wrong side of history; but
that we will extend a hand if you are willing to unclench your fist."

How can Jonathan Moyo write a lengthy defence of new Attorney-General
Johannes Tomana without once declaring an interest? He must assume we all
have very short memories.

Was Tomana not Moyo's own lawyer who was imposed on the Media and
Information Commission by Moyo when he was Minister of Information?

Why did Moyo omit to mention that connection? And what was Tomana's
fate when Moyo lost his job?
A "false controversy" has erupted over Tomana's appointment, Moyo
claims, since Tomana declared himself to be a proud supporter of Zanu PF.

Tomana has every right to belong to Zanu PF, Moyo says. In today's
highly charged political climate there is no Zimbabwean who does not support
Zanu PF or the MDC.

This is largely true. Tomana has the same right of association that
the rest of us supposedly enjoy. But, as the government's chief law officer,
he is also expected to exercise a professional attachment to the rule of
law. He needs the respect of the profession if he is to work with it. Let's
hope he earns it.

Moyo claims Judge-President Rita Makarau's criticism of lawyers was
specifically directed at lawyers like Beatrice Mtetwa "who think they have
free licence to criticise anyone and everyone including harming the national
interest without being held accountable".

So Tomana has a constitutional right to belong to the party of his
choice while Mtetwa is accused of "harming the national interest" by
insisting that individuals kidnapped and tortured have the right to the
protection of the law?

This would appear to be a selective approach to the application of the
law. And in what way is Mtetwa "harming the national interest" by seeking
judicial protection for those arbitrarily seized and detained?

Why is she wrong to ask judges to uphold the law instead of swallowing
the dubious claims of the state which is waging a not-so-clandestine war
against the opposition?

Moyo suggests that President Mugabe has no obligation to consult
Morgan Tsvangirai on appointments to the government or any other matter.

No, indeed there is no obligation other than that of working together
for national recovery.

Why does Moyo think it is unreasonable for those who are party to the
September 15 pact to insist that Mugabe upholds the terms that were agreed
upon before they join the government? Why is it so irrational to insist upon
sincerity and conformity with the terms agreed?

That includes upholding the rule of law and discouraging your
followers from attacking their opponents.

Moyo accuses Mtetwa of "scandalous" behaviour by claiming there was a
breakdown in the rule of law.

But isn't it the duty of lawyers to point out where they think there
has been a breakdown in the rule of law?

And isn't that what much of the legal profession, and indeed the
country at large, believes given the apparent reluctance of magistrates and
judges to afford applicants the liberty to which they are entitled?

Is Moyo seeking to take from us the right to criticise court
judgements? And how low must he sink to attract the applause of his former

He claims it is easy for "lawyers like Mtetwa" to harm Zimbabwe's
national interest because she is a Swazi national.

Now that is a scandalous remark by any definition. Why doesn't Moyo
disclose a certain interest in dealing with Swazi nationals before he fires
off these cheap shots at others?

Moyo's whole Sunday Mail article last weekend, first carried in, was clearly designed to advertise his availability for
office. It will be interesting to see what he gains from it.

Meanwhile, we were interested to note Nathaniel Manheru giving Patrick
Chinamasa his marching orders on legislation to gag the Law Society.

"Where self-regulation doesn't work, then direct regulation must come
into play," he wrote last Saturday. It worked in the media profession, he
claims despite the collapse of nearly every state prosecution brought under

"Why not for the legal profession where cases of misconduct clearly
undermine public faith in the administration of justice?"

"The ministry clearly watched a very dangerous poacher turn herself
into a game keeper at the Law Society of Zimbabwe," Manheru remarked in
reference to Mtetwa.

"Instead of fearing, the poacher is actually expanding her role,
including creating and dishing out phoney awards named after legal
luminaries as happened just this week."

The Law Society recently inaugurated the Walter Kamba Rule of Law
Award which recognised Justice Wilson Sandura's courageous judgements on the
Supreme Court bench. Manheru clearly objected.

While we should expect such malevolent remarks from the likes of
Manheru, we certainly don't expect Chinamasa to defend the indefensible. He
called Tsvangirai's demand for the rescinding of the appointment of the RBZ
governor and Attorney-General "misplaced".

There was an urgent need to fill the two positions, he claimed.

The governor of the RBZ had been playing a leading role in fighting
sanctions, Chinamasa said, while in the case of the AG, there had been "an
increase in banditry and insurgency and there was no way the government
could operate without such an appointment".

"It is to everyone's knowledge," Chinamasa claimed, "that MDC-T was
recruiting former soldiers and police officers for military training in
Botswana with the intention of removing the government."

Is that so? Does the public in all seriousness believe these charges?
Does anybody? And what evidence can Chinamasa produce?

Don't we recall similar charges about militia training (in South
Africa) which collapsed in the past? Don't we recall even before that
episode the late Justice Sandra Mungwira in 2004 describing as a complete
fabrication state evidence in the case of MDC officials in Bulawayo, whom
Mugabe had labelled terrorists?

The best response to Chinamasa's claims about MDC-T training came from
the Botswana authorities themselves. Why should a party want to remove a
government by force that it had already defeated at the polls, they asked?

Chinamasa, it should be recalled, was a casualty of that rout. Which
may explain his need to lash out at the MDC-T from time to time. But what he
claims to be "everyone's knowledge" is certainly not what he thinks.

As for Gideon Gono leading the fight against sanctions, his role in
promoting inflation by printing money has been fully recognised.

He only joined the ruling party's dishonest campaign to blame all
their self-imposed troubles on "sanctions" when the Australian government
took steps against his children. That was unfortunate.

But we never could understand why he should have wanted, like Reason
Wafawarova, to practise his patriotism in Australia!

We were pleased to see our old friend Olley Maruma occupying the slot
in the Herald Letters column usually occupied by the chief spokesmen of the
regime masquerading as somebody else.

He was dutifully attacking Eddie Cross for suggesting there was a need
for a change of driver on the bus of state. Maruma, rather clumsily,
attempted to translate this as a class narrative.

If Maruma wants to adopt this approach, he should explain to us why he
took full advantage of the hospitality extended to him by the British
Council recently.

He was spotted guzzling the enemy's booze and wolfing down their
snacks at a Chatham House function. Let's hope that apart from this
conspicuous consumption he managed to give a good account of himself.

Somebody not giving such a good account of herself was Grace Mugabe in
Hong Kong last week. She reportedly lost her cool with some pesky

A London Sunday Times photographer claims he was beaten up and punched
by the First Lady. She flew into a rage when she was spotted last week
leaving the exclusive Shangri-La Hotel in Hong Kong, the newspaper said. She
had been staying there with her entourage.

"Holding a Jimmy Choo-style bag estimated to be worth at least £2 000,
and hiding behind Cavalli rhine-stone-framed glasses with a red cashmere
shawl over her head, she ordered her bodyguard to attack the photographer,
Richard Jones," the newspaper reported.

"While the bodyguard tried to wrestle away Jones' camera, she joined
in the assault.

"The man held him while she hit him again and again in the face with
her fists," the paper said. "She was screaming, completely crazy," said
Werner Zapletal, a tourist from Austria who witnessed the incident.

Jones (42) suffered nine cuts, abrasions and bruises to the face and
head caused by the heavy, diamond-encrusted rings Mugabe was wearing,
according to a medical report by Dr Raymond Ng, a general practitioner in
Hong Kong.

During the assault more burly bodyguards came running from the hotel
but were intercepted by security men from a nearby commercial building.

"Mugabe and her female companion fled around a corner seeking to hide
their faces, only to run straight into a second photographer, Tim O'Rourke.

He snapped a few pictures before she flew at him with her fists
flying, pulled his hair and tried to smash his camera. She then hurried back
to her five-star refuge."

The Hong Kong police, who were called to the scene, detained the
bodyguard. He was allowed to go after questioning. The police took a
statement from Jones.

The Sunday Times said officers at the Tsim Sha Tsui police station
will study CCTV footage of the incident which they are treating as "serious"
and "political". A decision on whether to press charges is pending but
Mugabe could claim immunity from prosecution.

Grace flew to Hong Kong on January 9 and installed herself in the
£600-a-night Harbour Suite on the 18th floor of the Shangri-La, according to
the Sunday Times.

There she played hostess to her daughter, Bona, who studies in the
city, and to a stream of relatives and friends. She rarely went out but
other members of the party were ferried around in black limousines costing
£60 an hour, the paper said. La Dolce Vita!

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Editor's Memo: Summit a Test of Sadc Leaders' Sincerity

Thursday, 22 January 2009 17:26
SADC chair Kgalema Motlanthe has a not-so-easy task on Monday to save
the faltering prospects of the formation of an all-inclusive government in

Events of this week, when mediation once again broke down, have
diminished prospects of Sadc's success in resolving the crisis here. The
regional bloc's options are ebbing as the problem has kept growing.

Sadc leaders have since March last year held three extraordinary
summits and three security summits in hopes of forging a unity government.
Monday's is the seventh.

The meeting in Pretoria requires a different approach to unlock the

It is important for the regional heads to confront fundamental issues
of governance and the country's fast-degenerating human rights record and
not just pushing for the swearing in of a new government.

The Sadc leaders have to realise that they are now dealing with
leaders who not only distrust each other but have also grown to hate each
other since September last year when agreement to form a unity government
was signed. It should not be business as usual for Sadc.

The South African leader and his delegation came to Zimbabwe this week
with a plan they hoped would unlock the political logjam and lead to the
formation of a government of national unity.

This to them appeared like a simple task in which they expected MDC-T
leader Morgan Tsvangirai to immediately join the government of national
unity and then work with Mugabe to sort out a myriad of outstanding issues
to do with appointments of security ministers, governors, diplomats and
other senior government officials.

The plan was rejected by the MDC. The proposals were always going to
be rejected because according to the MDC they failed to address issues which
prompted the deadlock at the end of last year.

The Sadc plan, according to the MDC, dovetails with the aspirations of
President Mugabe to continue holding onto power. This is the curse of the
Sadc intervention in Zimbabwe.

It has become a cumbersome process in which Mugabe has domesticated
the bloc to give an impression that his rule has the endorsement of his

Mugabe and his minions today believe they are running a legitimate
show in Harare backed by the region.

This is the connection that has encumbered the regional leaders from
achieving success in the mediation.

The leaders meeting in Pretoria this week are therefore not expected
to achieve much as long as they believe that the Zanu PF regime can be
rehabilitated when Tsvangirai's MDC agrees to join the GNU.

This is a hopeless position that has blinded the leaders to egregious
human rights abuses here. The silence is construed by our rulers as loud
messages of solidarity.

The Sadc summit is therefore a serious test of the region's resolve to
deal decisively with abductions and alleged torture of Mugabe's political
opponents by state security officers.

At the meeting this week, Tsvangirai added to a basket of unresolved
issues which Sadc has to deal with the abductions and alleged torture of his

The new demands for the release of the MDC activists have been viewed
in certain quarters as vexatious and a ploy by Tsvangirai to stall
proceedings. Why is he introducing these deal-breakers now?

The issues he is raising have nothing to do with the formation of an
all-inclusive government, the official line goes.

And this is how the Zanu PF regime gets away with acts of impunity
which have over the years resulted in the democratic deficit we face today.

There are imprudent Zimbabweans who have come to accept torture and
abductions as normal inconveniences in daily people's existence.

These excesses must be condemned. In Pretoria next week, Sadc heads
should address this issue as part of their mediation. How does the region
expect Tsvangirai to join a government in which he is branded as the face of
terrorism against the state?

They must muster the courage to speak out not because that is what
Tsvangirai wants to hear but because they have a moral obligation to
straighten the ways of their peer.

They have an obligation to set the standard of human rights in the
region. This is what will make the Sadc mediation relevant to the crisis to

There is no denying that issues to do with the democratic deficit have
been at the centre of the conflict in Zimbabwe and it cannot be addressed by
merely sharing positions in government. It takes more than that. This is the
major task to hand for Sadc heads.

To tackle this issue, the heads have limited options: to denounce
Mugabe and risk losing his attention altogether or to ignore Tsvangirai's
bidding, which will then be construed as an apt endorsement of Mugabe's

Not an easy call. But then nobody ever said doing the right thing was
a walk in the park.

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Zim Independent Letters

Killing Zimbabwe's Industry
Thursday, 22 January 2009 20:40
THE Reserve Bank governor seems to be trying his utmost to kill
Zimbabwe industry and at the same time make life untenable for the average
Zimbabwean with his selective application of companies being able to trade
in single currencies.

The requirement to license can only be assumed to be a mechanism for
the Reserve Bank to collect revenue from any forex traded and not in the
overall interests of the people of Zimbabwe.

We now see shops selling South African goods and no local goods
because they no longer want to sell in local currency and Zimbabwean
manufacturers are not allowed to sell in forex.

Again this can only be so the Reserve Bank can keep tabs on how much
it is owed in forex irrespective of the hardship it causes the country and
ordinary people.

Many large and small companies have not traded for several months or
have been trading at sub-economic levels and are unable to raise any forex
let alone the US$20 000 needed to register, so they are in a Catch 22
situation -- cannot register to sell in forex so cannot get back on their
feet, again all because the Reserve Bank wants its pound of flesh.

The requirement to register first before trading in forex has meant a
lot of companies are in limbo as they wait for approval, or otherwise, and
are rapidly losing the market to South African suppliers or those that have
been registered.

Obviously those who are turned down or are unable to afford to
register would best be advised to close shop forthwith as continuing in
Zimbabwean dollars cannot be sustainable in the face of South African
competition and the unknown value of the Zimbabwean dollar.

 If the Reserve Bank governor really had the interests of the country
at heart he would allow everyone to trade in the currency of their choice
and try to tax them the best he can -- not that it is his job but the
Minister of Finance's anyway.

 Consumers are also not spared.  The lucky few who have forex are not
able to buy local products like milk and vegetables from some shops while
the unlucky ones cannot get most things, even mealie meal, as they do not
have any forex, although they may have loads of Zimbabwean dollars.

Again, if the Reserve Bank allowed all retailers to maximise sales
they would sell in both currencies, a realistic Zimbabwean dollar rate would
soon emerge and all levels of society would be able to buy the things they
need in the currency they have access to -- and fuel coupons being forced on
us as a currency is just plain madness.

A McCormick,


Media Registration Fees Assault on Press Freedom

Thursday, 22 January 2009 17:24
THE gazetting of exorbitant media application and registration
fees by the Zanu PF government represents a determined assault on press
freedom and the constitutional right of Zimbabweans to receive and impart

The Media and Information Commission (MIC) recently announced
increases of up to US$4 000 for foreign media journalists to operate in the
country and up to US$32 000 to establish offices in the country.

The increases are four times more than those of last year.

The MDC is strongly against these punitive regulations, which
are an attempt by a dying regime to silence the remaining small but vibrant
media in the country.

Since the enactment of the draconian Access to Information and
Protection of Privacy Act (Aippa) in 2002, the Zanu PF regime has made every
effort to make it difficult for journalists to operate in the country.

As a result hundreds of journalists have been forced to flee the
country while several independent media houses and broadcasting stations
have been closed.

The punitive registration and accreditation and registration
fees represent the lack of sincerity on the part of Zanu PF to the Global
Political Agreement (GPA) signed by the three major political parties on
September 15 2008.

All parties agreed, under Article 19 of the GPA, that freedom of
expression has to be guaranteed in the country.

The exorbitant fees being touted means that press freedom has
been dollarised, much to the detriment of ordinary Zimbabweans who are
starving for information.

Access to information under the Constitution of Zimbabwe and
international law is a basic human right.
The MDC believes that press freedom is a basic canon for any

Only rogue regimes have the reprehensible penchant to stifle
media freedom in order to prevent journalists from peeping into crevices
that would expose misgovernance and graft.

The MDC believes in a Voluntary Media Council where journalists
conduct their own affairs without government interference.

Press freedom is the people's freedom. Zimbabweans deserve heir
place in a true democracy.

MDC Information and Publicity Department.


We Expect Better Coverage
Thursday, 22 January 2009 17:06
I APPRECIATE your quest to provide us with news that is accurate
and up-to-date with regards to the Zimbabwean situation.

However, you are found wanting on the issue of your coverage of
the impasse between the MDC and Zanu PF. All we read are analysts predicting
doom to the MDC-T if it does not join the government regardless of the fact
that it is getting a raw deal.

We must not forget that the MDC is the party that won the
credible elections of March 29.

I visited the MDC website and found an opinion poll in which 52%
of the 21 599 respondents stated that Morgan Tsvangirai must not join the
GNU. 48% said he must.

I wonder why you do not factor in opinion polls in articles.
When the US presidential election race was in full swing your columnists
factored in results from opinion polls describing George Bush's

It is my belief that Bush is a true champion of democracy. He is
the one along with his father who did something to end the atrocities Saddam
Hussein was perpetrating when the rest of the world had a business as usual
approach to the catastrophe.

The conflict in Iraq is a result of those who were feeding from
Saddam's patronage. The fruit of US invasion can be witnessed in northern
Iraq where the Kurds welcomed the intervention.

The area has witnessed phenomenal growth after the removal of
Saddam while the militias in Tikrit blast each other senselessly.

Can we then say it was better to have a tyrant because of the
actions of a few?

Glen View.


The Role the Judiciary Must Play in Society
Thursday, 22 January 2009 16:59
BOTH the editorial comment and Candid Comment in last week's
edition (Zimbabwe Independent, January 16-22) were spot on.

As a contribution to a long overdue debate on the role of the
judiciary in Zimbabwe, especially in post 2000 Zimbabwe.

I can do no better than furnish you with the following pearls of
wisdom from Alfa Modibo Belgore, the former Chief justice of Nigeria, and
the late Michael Corbett, one of the greatest Chief Justices that South
Africa has had.

Chief Justice Alfa Modibo Belgore: "Since 1960 there has been
nothing wrong with the constitution. The operators, the elite, are making
terrible encroachments into the constitution. Our elite are very selfish
people. The constitution is a very sacred document but our people don't
respect it."

 "The executive might transgress, the legislature might become
unruly but it has always been the judiciary that has stood the test of time
by standing firm on the side of truth and justice."

Chief Justice Michael Corbett -- Ideal Qualities of a Judge:


A judge should have a sound knowledge of the law and the
practice of the courts. Under our system of very limited specialisation, a
judge may sit in criminal sessions, motion court and civil division where
the cases coming before him may involve any of the aspects of private law,
administrative law or complex commercial topics such as bills of exchange,
insolvency, company law and intellectual property.


In the ordinary running of a trial, the judge must have a vast
well of experience from which to draw. During the course of a single day, he
will inevitably be called upon to give many rulings on procedure, the
admissibility of evidence, the conduct by counsel of their respective cases
and so on.

In many such instances, the judge must know, almost
instinctively from his experience, what to do.

In addition, to some extent a trial judge must exercise a
guiding and restraining influence over the course and conduct of the whole
trial, at the same time maintaining a position of impartiality and


This quality relates both to fact-finding and to the application
of the law to the facts. He must have the knowledge and experience of the
world and its ways to make a good assessment of the probabilities and to
weigh them correctly.

He must be endowed with common sense. In applying the law to the
facts, in those many areas where a decision has to be made as to whether in
a particular situation, certain conduct is fair or reasonable, in other
words, where value judgements have to be passed, similar qualities of
judgement, common sense and understanding are demanded.


The judge must be beholden to no one. He must be not only
willing but also unflinching in his resolve to decide cases in whatever way
his professional skills and his conscience direct him, whatever the
consequences and however unpopular his decision may be in certain quarters
or indeed generally.

He must be objective, unbiased, unattached to any preconceived
notions or philosophy which would tend to make him take sides or take an
unduly severe or lenient view of certain types of conduct.

He must, in a sense, stand aloof from the society in which he
lives while, at the same time, being acutely aware of the realities of that
society as well as its moods, values and mores.


The judge must have the personality and temperament to maintain
order and dignity in court proceedings.

He must be patient. As the legal process is by its nature a slow
and somewhat ponderous one, the judge must be prepared, within reason, to
give the parties full rein.

He must approach every case with an open mind and , although he
will inevitably form certain views and impressions during the course of the
trial, he must keep that open mind until the end.

He must be a good listener. Interventions in the course of
hearing evidence should generally be restricted to the elucidation of
matters which are not clear.

During counsel's argument, the judge may, and indeed should, put
his difficulties to counsel and, in that way, test the validity of counsel's

However, he should not entre into a wrangle with counsel or try
to persuade him that his submission is incorrect or, except in extreme
cases, try to silence counsel on a particular line of argument.


Judges have an enormous workload. Current crime waves overload
the criminal rolls. The growth and development of the economy and commercial
activity, in general, have resulted in a steady increase in the volume and
complexity or civil litigation coming before the courts.

In the circumstances, all judges have to be extremely
industrious. They have not only to work for long hours, often in the
evenings and over weekends but they have to see to it that they produce,
with minimum delay, what the parties have come to court for; a judgment.

The importance of the truth of the old adage that justice
delayed is justice denied cannot be emphasised enough.

A judge must have the ability to suffer, with dignity and in
silence, the slings and arrows of the critics, some of whom, regrettably,
seem to find it unnecessary to read the court's judgment.

Indeed, misrepresentation of the decision of the courts, mainly
by the fourth estate such as the media, has in recent years posed a
significant problem n many countries.

It is not, for one moment, suggested that the decisions of the
courts should be immune from criticism, or that, in a general sense, judges
should not be accountable to the public.

However, criticisms should be based upon fair and accurate
reporting of the judgment and not upon slanted, distorted or incomplete
versions of what the case is all about.

By the same token, it is equally important that the dignity and
authority of the courts should not be undermined, especially by criticism
that has no factual foundation.

The question which the public who, as you elegantly described
them are the most competent jurors in the efficacy of the bench, must ask is
whether or not the members of our judiciary measure up to the ideal
qualities of a judge set out above.

MA Masunda,


Zimbabwe Independent SMS
Thursday, 22 January 2009 17:30
WHERE is African leadership when Zimbabweans are dying of
curable diseases, hunger and violence perpetrated by Zanu PF?

Zanu PF lost last March's elections and yet they are clinging to
power -- where are the African leaders then? Analysts talk about the effect
of sanctions on the economy but leave out the effects of a corrupt
government on the welfare of its citizens. Zimbabwe is in this state because
of misguided policies and corruption.


AFRICAN "brotherhood and solidarity" has been of no help to us
Zimbabweans. The likes of Thabo Mbeki along with Robert Mugabe are
responsible for the mess we find ourselves in. Were it not for pressure from
the West these power sharing talks would not be happening and all our
African "brothers" would be doing is shielding Mugabe from being chastised
at the UN and AU.

THE little foreign currency Zimbabweans had saved as a hedge
against inflation is being gobbled by these foreign currency shops whilst
they are unable to access their hard earned but now useless Zimbabwean

WHEN Gideon Gono came onto the scene he boldly stated that
failure was not an option. I wonder how he classifies his tenure at the RBZ
which is an unmitigated disaster. When he accepted reappointment for another
term we all knew it had nothing to do with his professional qualities and
abilities but his
pliability to Robert Mugabe's demands.

Please bring back Sudoku now? This is getting frustrating.
Diva Dollar.

I THINK that in the previous academic year students did not
learn anything. They should just repeat.

THE issue of the late release of last year's school examination
results is just an excuse for not opening schools because there are no
teachers to teach even those students that did not write any examinations.
Opening the schools without the teachers is just wasting money unless we
want to just send our kids away.
Concerned Parent.

I FAIL to understand why all schoolchildren have been stopped
from going to school, when it is only last year's Grade 7's, O'level and A'level
students who are need results to be able to go to the next level. Surely the
rest of the students can continue with school.

I BELIEVE that the MDC cannot allow being made a junior partner
in this power sharing arrangement. If Robert Mugabe does not want to let go
of some strategic posts - in which he has failed - then let him form his
government. Let him sort out the mess that he has caused himself.

INSTEAD of coming up with suggestions of strategies to kick out
Zanu PF by these analysts and commentators all we hear is condemnation of
MDC leader Morgan Tsvangirai. Did he vote for himself or was he not voted
for by the majority of Zimbabweans?

IT'S scary to imagine that Zimbabwe now wants to use the US
dollar and South African rand when production in farms and industry is
almost at zero percent! Our country needs fresh minds at the helm and also
people with humility. The current crop of leaders is too arrogant to make
any meaningful change for the people of Zimbabwe. We are drowning in sewage
and they refuse to acknowledge this.

We need change in Zimbabwe now!

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