|The ZIMBABWE Situation||Our
thoughts and prayers are with Zimbabwe |
- may peace, truth and justice prevail.
MERCHANT BANK OF CENTRAL AFRICA LTD
International Banking Division
30 December 2003
In pursuance of the Monetary Policy Statement that was announced by the Governor of the Reserve Bank, Dr. G. Gono on 18 December 2003, The Reserve Bank of Zimbabwe has issued instructions through a directive to Authorised Dealers, which is designed to operationalise the Monetary Policy Statement.
2. Essentials of the Guidelines
The essential areas of the Foreign Exchange Auction system, which will be introduced from 12 January 2004, are as follows:
The process covers the auction of foreign exchange through the Currency Exchange on a daily basis or any other frequency as determined by the Reserve Bank of Zimbabwe.
3.1 Tender Invitation
3.3 Tender Results
3.4 Penalty Clause
4. Other Exchange Control Matters
With effect from 1 January 2004, exporters will be required to acquit their CD1 forms on the basis of gross export proceeds. The retention period for the 50% currently being retained by exporters in their FCAs shall be reduced to 21 days.
Exporters who will repatriate their export proceeds timeously will be rewarded while those who exceed the stipulated period of 90 days without Exchange Control approval will be penalized. In this regard, with effect 12 January 2004, gross export proceeds will be treated as follows:
CD1 Acquittal Period (days)
Export Proceeds Retention Levels
For Immediate Sale to the Auction at the Ruling Auction Rate
For critical imports & Gvt requirements (@Z$824 per USD)
Exchange Control Approved Extensions
121 and above
CD1 forms with amounts that are overdue (i.e. beyond 90 days without Exchange Control approval) will not be credited into an FCA but will be sold immediately with the 75% going through the auction at the auction rate and 25% being sold at Z$824 per USD.
The External Loans Coordinating Committee (ELCC) is now approving all offshore loans. External loan repayments will be met from the exporter’s FCA retention and other purchases from the auction, rather than from gross export earnings.
The 10% FOB EIS has been increased to 15% with effect from 1 January 2004. Other export incentives currently in place remain at their current levels.
The maximum amount of local currency that can be exported by travellers has been increased from Z$50 000 in travellers cheques to Z$100 000 of which at most Z$50 000 may be in cash (notes) and Z$50 000 in bearer cheques. No limit will apply to the amount of local currency that is imported into the country.
With effect from 1 January 2004, the minimum foreign currency account balances for individuals and corporates have been set at US$200 and US$500 respectively.
All locally registered and owned Export Processing Zones companies are now subject to the surrender of foreign currency received from export of goods and services. Locally registered but foreign owned companies are exempted from this requirement but will now be required to pay for their fuel bills in foreign currency. This item should be read in conjunction with Statutory Instrument 360 of 2001: Exchange Control (Export Processing Zones) Order, 2001.
As Authorised Dealers will now be required to surrender 25% of foreign exchange receipts from the export of goods and services to the Reserve Bank to cover critical imports, all Exchange Control dispensations and exemptions on the 50% portion purchased on behalf of Government are cancelled with immediate effect.
All applications submitted to Exchange Control for approval as from the 8th of January 2004 will now be subjected to the new auction system.
Gold producers will continue to retain 50% of their foreign currency earnings from deliveries made to Fidelity Printers and Refiners. The applicable retention period will also be 21 days. The other 50% will be surrendered to the Reserve Bank and 25% will be bought at the auction rate while the balance of 25% will be bought at the current exchange rate of Z$824 per US dollar.
The Reserve Bank will buy 75% of all the foreign exchange drawn down from offshore lines of credit at the ruling auction rate. The remaining 25% will be bought at an exchange rate of Z$824 per US dollar to cover critical imports and other Government requirements. With respect to tobacco purchased through the Memorandum of Deposit Facilities, the Reserve Bank will buy 75% of the foreign currency at the ruling foreign exchange auction rate and 25% at the official exchange rate of Z$824 per US$ dollar.
The 20% special allocation to the Tobacco Growers’ Trust (TGT), thus, falls away since tobacco growers will be sufficiently rewarded and can also source foreign exchange from the auction. The Exchange Control (Tobacco Finance) Order, 2002 will be amended accordingly. The Tobacco Trading and Financing arrangements stated in the Exchange Control Directive RE: 121 dated 22 April 2003 will also be amended accordingly to accommodate tobacco purchased through the Contract system.
All tobacco Memorandum of Deposit twinning arrangements to finance fuel, electricity and all other special deals will fall away. The auction system, therefore, supercedes any bilateral arrangements, as Government fuel requirements through NOCZIM will continue to be met from the 25% surrendered to the Reserve Bank, while ZESA’s requirements have also been ring-fenced and will, therefore, not come to the market.
Tourists, Non-Governmental Organisations (NGOs), Embassies, International Organisations, and individuals can offer to sell their foreign exchange through Authorised Dealers at the ruling auction rate. Clients with Reserve Bank approval to operate Money Transfer Agencies should advise recipients of diaspora funds that, they could sell such receipts at the ruling auction rate through Authorised Dealers.
Foreign exchange receipts from trade finance facilities and other capital inflows would also be sold to the Reserve Bank at the obtaining auction rate. Please note that this l only applies in cases where clients liquidate their loan proceeds to finance their local operating expenses.
Any clarifications to matters covered herein should be directed to the Merchant Bank of Central Africa (MBCA), International Banking.
Meltdown of Zimbabwe's
economy passed a milestone yesterday when shops began
refusing cheques from six commercial banks teetering on the brink of
Supermarkets in the capital, Harare, displayed notices warning customers
that no cheques would be accepted from some of the country's best known
One third of Zimbabwe's commercial banks have been blacklisted, heralding
the collapse of Harare's once sophisticated financial sector.
"We have an avalanche in progress, and there is a known list of banks which
have little stamina and so, for them, it will be very destructive," said
John Robertson, an independent economist.
The banks have fallen victim to hyperinflation and flagrantly corrupt
lending policies. Zimbabwe's real inflation rate exceeds 1,000 per cent yet
the government has set interest rates at only 800 per cent, forcing most
banks to lend at a loss.
To make matters worse, many have chosen to favour President Robert Mugabe's
wealthy followers with unsecured loans at preferential rates of interest.
The combination of negative real interest rates and bad debts from
supporters of the ruling Zanu-PF party has driven six of the 15 black-owned
banks to the verge of insolvency.
Some are so short of cash that they have started offering interest of 650
per cent for 10 day deposits. Few of these banks will have the means to
honour their promises.
Only foreign-owned institutions offer complete security. Confidence remains
high in Standard Chartered, which is British, and South Africa's Stanbic
bank. The names of the threatened banks cannot be disclosed for fear of
precipitating their collapse.
Zimbabwe's economic collapse has created countless money-spinning
opportunities for unscrupulous bankers with links to Mr Mugabe's regime.
At the official exchange rate, £1 is worth Zimbabwe $815. On the black
market, £1 buys Zimbabwe $7,000. Some banks have bought hard currency from
the Reserve Bank at the official rate and pocketed huge profits by selling
it on the black market.
Zimbabwe's economy is among the fastest-shrinking in the world. Its collapse
has assumed such proportions that unemployment has risen to more than 70 per
cent and half the population survives on international food aid.
Zimbabwe press fights for its freedom
January 6, 2004
By Basildon Peta
Zimbabwe's Daily News has resumed its battle to reopen after President
Robert Mugabe's regime defied two court decisions allowing the newspaper to
The government has stationed police to ensure that staff at the
country's biggest newspaper cannot work.
On December 19, the Administrative Court issued a second judgment
ordering the police not to interfere with the newspaper's production.
Mugabe's spokesperson, Information Minister Jonathan Moyo, has vowed
to keep the newspaper shut.
Moyo, who caused a storm last year when he described South Africans as
filthy and uncouth, has dismissed the two court judgments.
The publishers of the Daily News have been losing an average of about
R400 000 daily.
Daily News lawyer Gugulethu Moyo has been working on two new
applications to get the newspaper reopened. She was due to file them in the
High Court today.
"We have the right to publish but we are being prevented," she said.
"It is a very frustrating experience because the custodians of the law
should be the police, who are themselves doing all they can to flout the
law. The law is only as good as it can be enforced."
The Daily News was closed down in September after it
register with the government-appointed Media and Information Commission, set
up as part of Mugabe's draconian media clampdown laws.
Administrative Court judge Michael Majuru later ordered the newspaper
to be reopened and declared the censors an illegal body. The government
defied the order.
n Human rights campaigner Peter Tatchell has been granted a British
court hearing to consider a warrant for the arrest and extradition of Mugabe
on torture charges.
Britain's attorney-general must agree to any prosecution, and heads of
state are usually immune from prosecution. - Independent Foreign Service
New York Times
Africa Puzzle: Landless Blacks and White Farms
By SHARON LaFRANIERE and MICHAEL WINES
Published: January 6, 2004
GABON, South Africa — At first blush, the jumble of
sprouting from 123 acres of flat countryside is a mirror of thriving towns
all over the nation. Thousands of barren yards, marked by chicken-wire
fences and festooned with clotheslines, face dirt lanes dignified by
hand-lettered wooden street signs. There are also a taxi stand, a
shoe-repair shop, a soccer field.
About 15,000 black South Africans call Gabon home. It is their home — but
For this city of squatters is built on part of the 13 square miles of
farmland where Abraham Duvenage, its white owner, has grown corn, sorghum
and soybeans for half his 73 years. Indeed, Gabon was a hayfield until about
three years ago, when families from a nearby township decided that the land
was free for the taking — and took it.
"I've been farming there more than 35 years, and now it is going downhill,"
he fumed as his 18 employees tilled the remaining open pasture. "I, an
individual farmer, have to take the brunt of all these lawless people."
Eunice Rosila, 30, a resident in one of those chicken-wire enclosures,
begged to differ. "The main point is, we don't have a place to stay," she
said, sitting beneath an umbrella to escape a blazing sun. "We've got a
right to be here, because the owner was not using this land."
The tug of war is part of an intense conflict over land in southern Africa.
It pits tens of thousands of white landowners, beneficiaries of a system
that denied blacks property rights, against millions of nonwhites left
landless by colonialism.
For close to a decade, many landless have waited fruitlessly for democracy
to end that disparity. Experts worry that their growing impatience threatens
the black-white compact that has been the linchpin of South Africa's
The government has promised its 40 million nonwhites a radical
redistribution of land, but such hopes have been largely dashed. Upon ending
apartheid in 1994, government leaders pledged to use the treasury and the
law to transfer 30 percent of white-owned farmland to nonwhites in five
years. Nearly 10 years later, they have transferred 2 percent. A minuscule
sliver has been sold privately to nonwhites.
More than 9 of every 10 acres of commercial farmland remain in the hands of
50,000 white farmers.
How far land reform can alleviate injustice is a matter of debate. In a
nation where more than half the population is urban and one in three workers
is unemployed, jobs and building a developed economy are more pressing to
many people, including leaders in the governing African National Congress.
"People know perfectly well that if they are going to improve their
livelihood, they aren't going to do it on the land," said Steven Friedman, a
senior scholar at the Center for Policy Studies in Johannesburg.
Other experts say that argument overlooks the value of a plot of land for a
vegetable garden to countless families with no income, particularly in a
nation where rural poverty is crushing. In addition, they say, it
underestimates the wealth that could be spread by breaking up the vast
white-owned farms that dominate commercial agriculture.
What is indisputable is the tension. White farmers say they bear the full
brunt of growing black resentment: since 1991, more than 1,500 have been
killed. Government reports attribute most of the murders to robbery, not
race or class resentment. Many farmers say that glosses over the problem.
In parts of KwaZulu-Natal Province, a fertile expanse bordering the Indian
Ocean, the jockeying approaches low-level guerrilla warfare. Farmers employ
security men and ring pastures with trenches to fend off attacks by
A fast-growing political faction called the Landless People's Movement has
threatened to start taking over white farms in early 2005, at the climax of
the presidential election season. "We are going to shake them," Magaliso
Kubheka, who organized the group in 2001, said in an interview.
Societies accused of abusing patients’ subscriptions
SOME doctors yesterday accused some medical aid societies of holding on to,
speculating and converting to their own use, clients’ subscriptions at the
expense of both doctors and the patients.
They also accused the societies of favouritism in disbursing medical fees
with only those closely connected doctors getting preferential treatment.
"It is the main reason why you find we are demanding cash up-front, we are
doing this to keep afloat and be able to serve the next patient. We are
doing this for our patients," said one doctor.
He said they increased consultation fees and were now demanding cash
up-front to keep afloat because some medical aid societies took long to
process payments and by the time they did inflation would have eroded them.
Private doctors increased their consultation fees from $20 000 to $46 000
and are demanding cash.
One doctor said it took him up to five months to receive money from medical
aid societies after treating patients.
"It is useless for us to keep on banking on medical aid societies for
payments because they are taking too long to pay us.
"The situation is just chaotic and we have to demand cash for us to keep on
going," said the medical doctor who preferred anonymity.
He said although most doctors understood the plight of the patients, the
only way they could do business was to ask for cash payments.
Dr Ishmael Moyo, a child specialist, said most of the money that was paid to
doctors by medical aid societies had been eroded by inflation.
"It is unfortunately a dog eat dog kind of situation because, yes the
patient wants treatment but we must also remember that the doctor like
anybody else need to eat and money to keep the practice going on," said Dr
Zimbabwe Medical Association (Zima) secretary-general Dr Paul Chimedza said
it appeared some medical aid societies wanted to cripple the private sector
for them to remain dominant.
"Medical aid societies do not have money to pay and they owe our members
millions of dollars.
"Some of the executives are driving the latest Mercedes Benz vehicles and
getting salaries of up to $25 million and yet they cannot pay doctors for
services rendered, that is obscene," said Dr Chimedza.
He said it was unfortunate to the ordinary man that the medical aid card has
become invalid despite paying thousands of dollars in monthly contributions
to medical aid societies.
"Zima had to ask for cash because we are now taking our members from the
gravy train before it crashes," he said.
Most doctors said medical aid societies were not paying them a fair
proportion of the patients’ contributions and some societies pay so late
that the payments have been seriously eroded by inflation.
The doctors urged the police to institute investigations into the medical
aid societies most of which were known to be big time spenders.
Directors of some medical aid societies have been accused of departing from
their core-business and diverting patients’ contributions to private
investments on the money market where they were reaping huge profits and
Such directors of medical aid societies now compete with other businessmen
in driving latest models of vehicles.
"Most of these directors live lavishly, they are among the country’s biggest
spenders at home and abroad," said another doctor.
Some of the directors were known to own several properties while the
subscribers were turned away from doctors daily.
"The issue of doctors receiving their payments late has been going on for
sometime but medical aid societies are generating enough money, it’s
puzzling," said one senior employee of a medical aid society in Harare.
The founder of a newly formed medical aid society company is being
investigated in seven cases of fraud involving over $50 million.
Police confirmed that they were investigating the business executive who is
alleged to have faked seven bank drafts believed to have been manufactured
by some bank employees he connived with between 2 000 and 2002.
The Government had asked doctors to consider the plight of patients facing
economic hardships and wanted those on medical aid to be able to continue
seeing a doctor after filling in the claim form.
Zimbabwe Medical Association president Dr Billy Rigava said private doctors
had resolved to increase consultation fees owing to economic hardships.
The Zimbabwe Congress of Trade Unions yesterday condemned the decision by
"This action is not only a big blow to patients who pay in cash but also
renders medical aid irrelevant at a time when it is needed most.
"It seems private doctors are passing the buck to the wrong people. Instead
of hiking consultation fees to unaffordable levels, private doctors were
supposed to find ways of making medical aid societies make timeous payments
to the doctors," the ZCTU secretary general Mr Wellington Chibebe said in a
He said the development meant workers on medical aid would be making double
payments to their medical aid and to the doctors.
"The ZCTU therefore calls on the Zimbabwe Medical Aid Association and the
National Association of Medical Aid Societies to come up with an agreement
which will benefit all stakeholders, especially the patients who are now
caught in between a ‘rock and a hard surface."
Yesterday some ordinary Zimbabweans urged the police to intensify probes
into corporate crimes that affected them yet lining the pockets of the rich.
"Police concentrate on petty crime by the ordinary man in the street but big
crimes are happening in the corporate world and these do not affect
individuals but the whole nation," said one Harare woman.
Globe and Mail, Canada
By STEPHANIE NOLEN
From Tuesday's Globe and Mail
Harare - On health-clinic walls across
Africa, the posters have shouted the
same cheery message for years now: "Breast is best!"
Breastfeeding passes on crucial antibodies to babies, protects them against
allergies, promotes their cognitive development and is much safer than
formula that must be mixed with possibly contaminated water.
But then came AIDS. Ninety per cent of people with HIV in Africa don't know
they have it and many women first learn they carry the virus when they're
already pregnant and are tested at a prenatal clinic.
Half of the children with HIV in sub-Saharan Africa today were infected with
the disease through breast milk from their HIV-positive mothers.
Doctors in North America first discovered that a woman with the virus could
pass it on in breast milk in 1985. Soon, Western women with HIV were being
strongly advised not to breastfeed.
But in Africa, it's the poorest women - those least able to afford formula
or have access to clean water with which to mix it - that are statistically
the most likely to be infected with HIV.
"You can't just say, 'Don't breastfeed.' That's a death sentence for many
babies. Fine, they won't get HIV, but they will die of diarrhea," said Jean
Humphrey, who heads Zvitambo, a research project funded in part by Canada
that examines HIV and breastfeeding in Zimbabwe.
The issue soon pitted Western scientists against doctors in sub-Saharan
Africa. From the West came pressure on the World Health Organization to
adopt the policy that HIV-positive women should not breastfeed; from doctors
in Africa and elsewhere in the Third World came the reply: So then what?
"It's a real dilemma, and I'm not pretending it's easy to solve, but what I
resent is the old colonial attitude, 'Look, the U.S. does it and Canada does
it, so why don't we do it?'-" said Hoosen Coovadia, professor of HIV/AIDS
research at the Nelson Mandela School of Medicine at the University of
KwaZulu-Natal. "This is a huge cultural question."
African researchers, including Prof. Coovadia, assessed the relative risks
of transmitting HIV versus diarrhea, and decided the way forward might be
The early results are surprising. They suggest the best thing a mother with
HIV can do for her baby is to breastfeed, all the time. "Unicef didn't
believe us when we told them the results [of the first studies]," Dr.
Coovadia said. "Now, they've stopped subsidizing formula."
While the researchers are still puzzling over exactly why this is, they have
found that breast milk really is best. Anything else given to an infant -
water, bits of porridge or cooking oil (given in this region to combat
constipation) irritate the lining of the gut, increasing the possibility
that the baby's body will absorb the HIV virus. So researchers are now
proposing that women practise "exclusive breastfeeding and abrupt weaning."
That is, nothing at all except breast milk for six months, and then an
Six months is the current best guess at an optimal length of time that
allows babies to get the most important benefits of breast milk while trying
to minimize the length of exposure to the virus.
But safer breastfeeding is not as easy as a quick conversation at the
clinic. If women are being encouraged to wean abruptly at six months, they
must receive intense support from counsellors and their community as it can
be deeply traumatic for both mothers and their infants, explained Katherine
Semrau, project co-ordinator for the Zambia Exclusive Breastfeeding Study
run at a Lusaka clinic. Mothers can end up with breast diseases such as
mastitis, and anguished babies can become malnourished.
Mothers also need to be taught the safest possible techniques for
breastfeeding to reduce the risk of problems such as cracked nipples, which
will increase the possibility of blood being passed to the baby along with
Dr. Humphrey said her team has also realized the importance of looking at
issues of consent since many rural Zimbabwean women don't make the decisions
about child-rearing. Rather, they must follow instructions from their
partners or mothers-in-law.
Dr. Coovadia believes that if women with HIV choose to breastfeed and are
shown the safest way to do it, and follow the guidelines, their risk of
transmission to their babies may be as low as 6 per cent. "Safer
breastfeeding is now the only real choice," Dr. Humphrey said.
From ZWNEWS, 6 January
Petrol bombing, assault
The home of
the deputy chair of Zvishavane Town Council was petrol-bombed
early on Sunday morning. Simon Dick, who is a ward councillor in the Town,
and also youth chair for Midlands South for the opposition MDC, fled unhurt
from the house in Zvishavane with his sister-in-law Esther Wilson. The
house, however, was devastated, and all their belongings except the clothes
they were wearing were destroyed. Zvishavane is in Mberengwa East
constituency, in which there was more violence than in any other
constituency in the 2000 parliamentary elections. In Nkulumane suburb near
Bulawayo last Friday, Fr Nigel Johnson, a Jesuit priest, was assaulted by
CID officers, He had been filming local musicians when he was set upon by
the police officers, kicked onto the ground, and threatened with the
confiscation of his car, camera and ID card. Local residents protested at
his treatment, and the police officers then took Johnson to the local police
station, from where he was transferred to Bulawayo Central. He was released
the next morning after a night in the cells. No charges were brought against
Comment from The Mail & Guardian (SA), 5 January
Mbeki's smoke and mirrors
South Africa’s President Thabo
Mbeki is a man on a mission. He believes he
can secure what he calls leadership renewal in Zimbabwe by June. That is the
deadline he has set himself. And following his recent humiliating rebuff in
Abuja, Nigeria, where Commonwealth leaders rejected his bid to re-admit
President Robert Mugabe to the fold, he is under intense international
pressure to show that his quiet diplomacy is capable of delivering change.
But how effective will he be when, according to some soul-baring on the ANC
Today website, he sees Mugabe as more sinned against than sinning - a victim
of the very forces Mbeki blames for having thwarted his own diplomacy at
Abuja? Mbeki’s apologists have been busy arguing that his public
declarations on Zimbabwe shouldn’t be taken too literally. There was a need
to propitiate that country’s notoriously prickly ruler, they suggest. But
the president’s Internet intervention reflects all too obviously his own
deeply held convictions to be dismissed as diplomatic footwork.
He slams Australian Prime Minister John Howard, chair of
the troika of
leaders tasked at the previous Commonwealth Heads of Government Meeting
(Chogm) in Coolum, Australia, with deciding what steps to take on the
Zimbabwe issue, for calling an "unscheduled" meeting in September 2002 to
impose new sanctions on Harare halfway through its one-year suspension. The
troika, comprising Howard, Mbeki and Nigeria’s Olusegun Obasanjo, had
imposed the suspension in March 2002 following the verdict of a Commonwealth
observer team that Mugabe’s re-election had been seriously flawed. Howard
had no mandate to call such a meeting, Mbeki indignantly declares. He also
castigates Commonwealth Secretary General Don McKinnon for misleading member
states when he said it was the "broadly held view" of government heads that
Zimbabwe’s suspension should be extended beyond March 2003 until the Abuja
Chogm in December. Some were not consulted, he said. Mbeki claims the
Zimbabwe government was not given a chance to respond to the report of the
observer team. He expresses a clear preference for the views of South Africa
’s own observer mission, which declared that the poll outcome represented
"the legitimate voice of the people of Zimbabwe".
Mbeki is disingenuous on all these points. The troika was
mandated at Coolum
to adopt whatever measures it saw fit based on the report of the
Commonwealth observer group. It was entirely within the remit of Howard as
both Commonwealth and troika chair to schedule meetings and propose fresh
measures if it was felt Zimbabwe was refusing to comply with the Marlborough
House terms set out by the three leaders in March 2002. These included
electoral reform, repeal of repressive laws, inter-party dialogue and
engagement with the United Nations Development Programme (UNDP) on land
reform. McKinnon was authorised to liaise with the Zimbabwean government in
ensuring the terms were met. After a year of frustration, McKinnon spent
most of February 2003 discussing Zimbabwe’s suspension with Commonwealth
leaders. He saw most in person. That is how he arrived at the "broadly held
view" that Zimbabwe’s suspension be continued until the Abuja Chogm. This
was hardly surprising. In the 12 months since Zimbabwe’s suspension there
had been no repeal of repressive laws and no attempt to set up an
independent electoral commission or to disband ruling party militias. Army
officers continued to supervise polls.
Howard and McKinnon’s
stance in maintaining Zimbabwe’s suspension was
vindicated by the decision of the committee of six, appointed at Abuja, and
subsequently endorsed by all government heads in their final communique that
Zimbabwe’s suspension should be maintained until Mugabe met the terms laid
down in 2002. In other words, the "broadly held view" that Mbeki questions
is the majority view that prevailed. McKinnon had misled nobody and Mbeki,
lashing out at procedures that "undermined democratic principles", ended up
in a minority of one. Reference to Pretoria’s own observer mission does
little to bolster Mbeki’s case as it was widely seen as susceptible to
manipulation by South African ministers who made their views known ahead of
its findings. When the team’s chair Sam Motsuenyane was asked why there had
been insufficient polling stations in Harare, an opposition stronghold, he
replied that it was an "administrative oversight". Mbeki ignores the report
of the regional parliamentary observer group, which concurred with the
Commonwealth mission’s conclusions.
Contrary to Mbeki’s claim, the Zimbabwe government was
opportunity to respond to the Commonwealth’s report and to engage with
McKinnon on matters of concern but, as Mbeki conspicuously omits to mention,
McKinnon and his envoys were refused visas to visit Harare. On the vexed
subject of land reform Mbeki claims the large sums of money promised by the
British government at the Lancaster House conference on Zimbabwe’s
independence never materialised. In fact, Britain provided more than
£47-million in the period 1980 to 1985 for land reform. But few of the farms
acquired found their way to the deserving poor. Most ended up in the hands
of Mugabe’s cronies. And when the UNDP decided after the 1998 Harare donors’
conference that land redistribution was chaotic, donors felt they could no
longer justify funding a programme that lacked transparency, failed to
address poverty alleviation, and undermined self-sufficiency in food
production. When Mbeki visited London in 2000 he was told Britain had set
aside a further £36-million for land reform if the UNDP was prepared to
approve a workable plan. He omits that detail from his account.
While Mbeki makes repeated reference to Britain’s "kith and
Zimbabwe, he seems studiously indifferent to the fate of trade unionists,
women’s groups, lawyers, and students. While lamenting Zanu PF’s treatment
by the international media, he has no words of compassion for the victims of
Mugabe’s unrelenting violence. If "those who fought for a democratic
Zimbabwe" have been "turned into repugnant enemies of democracy" by a
hostile media, as he claims, that could be because they have indeed become
repugnant enemies of democracy! Mbeki denies lobbying at Abuja for the
lifting of Zimbabwe’s suspension. In fact, his officials lobbied hard ahead
of Abuja, according to senior diplomats. That included support for former
Sri Lankan foreign minister Lakshman Kadirgamar’s candidacy for McKinnon’s
job and, according to one account, an attempt to get the Commonwealth
observer team’s report rewritten to bring it into line with South Africa’s.
But what is most revealing in Mbeki’s ANC Today
commentary is his resentment
of any foreign policy that is driven by concern for human rights. He appears
shocked that United States administrations should want to "foster the
infrastructure of democracy, the system of a free press, unions, political
parties, universities and allow people to choose their own way..." Nowhere
in his article does Mbeki say what happened to South Africa’s human
rights-based foreign policy unveiled with much fanfare seven years ago. Nor
does he say why he thinks it is "meaningless" for the Commonwealth to have
upheld its core principles in its policy towards Zimbabwe. He laments that
the land issue has "disappeared from the global discourse about Zimbabwe"
but fails to understand that most leaders have now seen through Mugabe’s
spurious nationalist smokescreen. In any case, Mugabe’s land grievance can
hardly continue to resonate as a global issue when nearly every white farmer
has been expropriated!
Mbeki was in Zimbabwe in
December to promote a government of national unity.
But any such plan - the one-size-fits-all being hawked from Burundi to the
Comores - that forces the Movement for Democratic Change into bed with Zanu
PF is bound to fail. Zimbabwe’s problems derive from repression and misrule,
not a lack of national unity. Zimbabweans are united in wanting free and
fair elections. If Mbeki sees his mission as indulging Mugabe by doctoring
the diplomatic record and forcing an accommodation with an increasingly
brutal regime, he had better get used to further setbacks of the sort he
experienced in Abuja.
Iden Wetherell is editor of the Zimbabwe Independent
Zimbabwe lays fraud charges amid financial turmoil
Tue 6 January, 2004 18:20
By Stella Mapenzauswa
HARARE (Reuters) - Two directors of a Zimbabwe company have appeared in
court on fraud charges, becoming the first legal casualties of a financial
sector crisis that has seen a run on deposits by panicked investors.
The country's central bank said on Monday it was reviewing the operations of
local banks, after new governor Gideon Gono last month criticised some firms
over their lending practices and said he would not bail out those in
trouble, triggering panic withdrawals by investors and depositors.
On Tuesday two directors of asset management firm ENG made an initial court
appearance on charges of fraudulently borrowing billions of dollars from
three firms, including Century Discount House, without issuing bills to
secure the loans.
"Investigations carried out by police so far have revealed that some of the
money...was being used to buy forex by the accused on the black market which
was used to buy expensive luxury cars and houses," the state prosecution
said in its case.
Defence lawyer Eric Matinenga asked the court not pursue the charges, saying
the state had presented no evidence to show they acted outside normal
practice for asset managers.
Zimbabwe's official Herald newspaper said on Tuesday police had seized eight
of 18 luxury cars worth billions of Zimbabwe dollars bought by the two
directors in the last few months.
The central Reserve Bank of Zimbabwe said on Monday it had closed Century
and cancelled its licence to protect depositors and creditors after finding
that the firm was not "in a sound financial condition".
Local media have speculated on the imminent collapse of several mostly new
banks formed after President Robert Mugabe's government liberalised the
sector in the 1990s.
Critics say the central bank has failed to put in place appropriate
supervisory measures to monitor the institutions and that some have misused
investors' money in speculative deals for personal gain.
They say skewed government policies since independence from Britain in 1980
have led to an economic meltdown shown in soaring inflation, unemployment of
70 percent and acute shortages of food, fuel and foreign exchange.
Mugabe argues the economy has been sabotaged by local and foreign opponents
of his drive to redistribute large tracts of white-owned commercial farms
among landless blacks.
Zimbabwe wealth gap widens as prices soar
Financial Times 06 Jan 2004
By Tony Hawkins and John Reed
In a global climate of falling prices and record low interest rates,
Zimbabwe offersa rare glimpse of a foe most of the world vanquished years
ago: spiralling inflation.
The world's highest inflation rate - 691.5 per cent year-on-year in
November - is eroding poor Zimbabweans' incomes, gobbling up carefully
nurtured nest eggs, and pushing basic necessities and services out of reach.
While market inefficiencies offer rich pickings for the speculators, some
working families are cutting back on meals and taking their children out of
Technically, Zimbabwe has not yet breached the hyperinflation threshold of
50 per cent a month: in November, prices increased by 33.6 per cent, making
for an annualised rate of over 1,900 per cent. That figure still lags behind
the annual price rises of 3,000 per cent or more recorded in Bolivia,
Argentina or Ukraine in their hyperinflationary heydays over a decade ago.
But economic niceties mean little to the millions of Zimbabweans struggling
to feed their families.
Two years ago Z$500 (about 60 US cents at today's official rate) bought 200
loaves of bread; today it buys a few slices from a single loaf. A decent
compact car could be bought then for Z$4m. Today it will buy a top-end toy
To lighten the load for Zimbabweans tired of carrying bricks of cash, three
months ago the central bank issued high-denomination "bearer cheques" in
lieu of new banknotes. The Reserve Bank of Zimbabwe initially said they
would expire in the first half of 2004, but they have now been extended
until the end of the year.
To stay ahead of the game, supermarket managers routinely reprice goods on a
weekly basis. Big-ticket purchases such as computers or cars are priced in
US dollars or South African rand, and many employers now review wage packets
Zimbabweans' average real incomes have almost halved since the mid-1990s,
and an estimated two-thirds of the population live on less than US$1 a day.
Much of the working middle class is sinking into poverty as wages fail to
keep up with prices that double every three months.
But at the other end of the income scale, inflation has brought rich
windfalls. Some well-connected Zimbabweans have made fortunes on smart
arbitrage deals in the country's multi-tiered foreign currency and interest
rate markets. These come alongside the ill-gotten gains from gold smuggling
or the war in the Congo reaped by insiders close to President Robert
The skewed economy makes Harare, Zimbabwe's capital, a study in contrasts.
Once a week at a supermarket in the smart suburb of Borrowdale Brook, rich
matrons descend from smart four-wheel-drive vehicles to fill their shopping
baskets with fresh crayfish and lobster flown in from South Africa. The
business finds ready takers for Scotch whisky priced at the equivalent of
$90 a bottle.
Property prices in the capital have roughly doubled in real terms this year,
especially in secure locations; Zimbabweans working in the UK or
neighbouring South Africa are among the main buyers. "People are bringing
money in, and buying properties in forex," says one real-estate agent.
"Everybody's terrified of keeping Zimbabwean dollars in cash."
Across town in the poor township of Mabvuku, maize plants are sprouting in
front yards as workers scrape to stretch tiny salaries eroded by rising
Ali Karembo, a 37-year-old who weaves sacks for a living, makes Z$120,000 a
month - a princely sounding sum worth about $20 at the black-market exchange
rate. He has cut back sharply on meat in favour of maize meal porridge, and
sent his two school-aged children to the countryside to save on fast-rising
tuition fees. "I'm trying by all means to keep them in school," he says.
Zimbabweans are ploughing what money they can into foreign exchange.
Moonlighting by civil servants, teachers, nurses and middle managers is also
on the rise.
David, a barman who sells the heady local beer called scud, earns about
Z$82,000 a month. With two children of his own, he is also supporting two
more from a brother who died of complications relating to HIV/Aids. Rent
takes Z$20,000 rent and a similar amount goes to his pension and insurance,
To supplement his budget, he is selling some farm animals.
Businesses have also been struggling to keep their heads above water, in
some cases earning hefty paper profits that seem at odds with a collapsing
economy. By raising their prices ahead of costs and especially wages, even
mediocre concerns have managed to keep going.
But overnight money market rates have risen above 700 per cent in the past
month. Some banks have failed as a result, and companies are now realising
that their vaunted profit growth means little in terms of cash flow.
Black markets dealing in currency, food, fuel, and other goods are booming.
The more Zimbabwe's formal economy shrinks, the more vibrant the informal
sector becomes - and the truer the old adage that the poorer the country,
the richer its elite.
President Thabo Mbeki made a grave mistake when he attended ceremonies in
Haiti to celebrate the 200th anniversary of my country's independence.
We view Mbeki's trip as a form of acceptance and tolerance of the fascist
regime of President Jean- Bertrand Aristide. He has tarnished the image of
SA in Haiti, for the majority of Haitians deplored the fact that he
celebrated our independence with the narcotic government in Haiti, while we
were either demonstrating in the streets demanding that Aristide depart, or
silent at home and not attending any official ceremonies.
I don't know if Mbeki's political advisers had informed him about Aristide,
but I want to tell him, clearly and simply, that Aristide is not a priest
who came to power to bring democracy and prosperity to Haiti and its
population of 8-million. He is a corrupt and complex individual who was
smart enough to manipulate people and I dread that Mbeki may be one of those
Aristide is a demagogue. He is always ready to make reforms and concessions
but only in his political speeches. Aristide is corrupt. He has enriched
himself with sources that are known to be illegal. Aristide is the
mastermind behind most crimes in Haiti. He has recruited young, poor
individuals from ghettos (some of them barely 12 years old) and instead of
educating them like he is proclaiming in his literacy programme, he is
urging them to be violent and has developed a militia, infamously known as
the chimeres, to execute his malicious orders.
On December 5, Aristide allowed the chimeres to enter the state university
forcefully and harass students who were peacefully gathered to demand his
resignation. Many students were stoned or beaten with sticks. University
rector Jean-Marie Pacquiot was beaten with iron bars. Both of his legs were
Mbeki must make a public apology to his fellow countrymen and to the Haitian
people. I implore Mbeki to urge Aristide to step down. This will preserve
the image of SA as a liberator and protector of rights, and help it maintain
and regain some dignity.
Gerald Oriol Junior
Radio Station Manager Arrested, Detained
Media Institute of
Southern Africa (Windhoek)
January 6, 2004
Posted to the web January 6, 2004
On January 2 2004, the station manager of
Radio Dialogue FM, Father Nigel
Johnson, was arrested in Bulawayo - approximately 450km from the capital
Harare - whilst filming footage for a music video. Father Johnson told the
Media Institute of Southern Africa (MISA)-Zimbabwe that he was filming a
group of artists performing dances in the high density of Nkulamane when he
was approached by two policemen and a civilian.
"The police demanded to know why I was filming the dances, they took my
video camera and car keys, demanding that I accompany them to the police
station," said Father Johnson.
After his arrest, he was taken to Nkulumane Police station before being
transferred to Bulawayo Central Police Station and detained overnight.
Police charged him under the Miscellaneous Offences Act and homicide. Father
Johnson told MISA-Zimbabwe that he was not informed why the two charges were
preferred on him. He was released on January 3, 2003. The police informed
him that they would proceed by way of summons should they decide to take him
On Monday January 5 the police picked up Father Johnson from the Radio
Dialogue offices in Bulawayo for further questioning on the activities of
the aspiring community radio station.
"Most of the police officers seemed unaware about anything concerning
community radio or Radio Dialogue", said Father Johnson.
The video camera was returned on his release.
Radio Dialogue FM is an aspiring community radio station based in Bulawayo.
The station is yet to be licensed.
The Supreme Court in 2003 struck down as unconstitutional a section in the
Broadcasting Services Act that said that the Minister of Information and
Publicity shall be the licensing authority. The government is yet to make
amendments to the law to fill the "licensing authority vacuum" created by
the Supreme Court ruling.
Zanu-PF Wins Unopposed
The Herald (Harare)
January 6, 2004
Posted to the web January 6, 2004
ZANU-PF has won three rural district council wards in Mt Darwin, Makoni and
Results of the nominations court for the urban and rural council
by-elections released by the Registrar-General's Office yesterday showed
that the ruling party had won unopposed in the three wards while four other
wards would be contested.
Elections would be held in Masvingo ward 25 and Chiredzi wards 3, 4 and 5.
The Zanu-PF candidates who won unopposed were Cde Jacob Masere in Mt Darwin
ward 20, Cde Lucius Chinyanga in Makoni ward 4 and Cde Machino Musiwokufa in
Buhera ward 25.
Cde Livison Mudzonga of Zanu-PF would contest in Masvingo ward 25 against Mr
Cletos Chisvoro of MDC.
In Chiredzi ward 3, Cde Thomas Wasosa of Zanu-PF would contest against Mr
Chatinyare of MDC.
Zanu-PF candidate Cde Fannie Vandirai would contest against MDC candidate Mr
Hebeas Chigwerewe of MDC in Chiredzi ward 4.
Cde Gerazimos Bambazha of Zanu-PF would contest against Mr Jesitiyas
Chikwanda of MDC in Chiredzi ward 5.
The by-elections would be held on February 2 and 3 at the same time with the
parliamentary by-election for Gutu North.
Cde Josiah Tungamirai of Zanu-PF and Mr Crispa Musoni of MDC are vying for
the Gutu North seat.
The constituency fell vacant following the death of veteran nationalist and
Vice President Cde Simon Muzenda last year.
Zanu-PF has won unopposed most of the rural and urban by-elections held last
The ruling party recently retained 13 urban wards in Chinhoyi and seven
rural wards in Marondera, Bindura, Shamva, Mangwe, Umzingwane and Mutoko.
The party also won unopposed the mayoral posts in Chinhoyi and Marondera.
It also won the Kadoma Central seat in a parliamentary by-election beating
the MDC which had won the constituency in the 2000 parliamentary elections.
Zimbabwe's banks running out of cash
By Tony Hawkins in Harare
Published: January 6 2004 17:40 | Last Updated: January 6 2004 17:40
With more than a third of country's 17
commercial banks unable to
honour their customer's cheques, Zimbabwe's financial system is in its worst
For the last week,
six banks - including one owned by the government -
have been excluded from the daily clearing because they do not have the
necessary cash to pay other banks.
Trust Bank, the largest, said on Tuesday that an audit by the Reserve
Bank of Zimbabwe had shown it to be "one of the most solvent institutions"
in the country. It tried to calm depositor nerves, amid reports that leading
retailers have refused to accept its cheques. Trust said "the only
challenge" was its liquidity situation - which was being addressed.
Zimbabwe's banking crisis was foreshadowed by the International
Monetary Fund last year when it warned that four years of "persistent
economic decline" posed a serious threat to the health of the banking
With inflation trebling from 199 per cent at the end of 2002 to 619.5
per cent last November, the authorities finally moved to tighten monetary
policy late last year.
Money market interest rates surged from well under 100 per cent to as
high as 900 per cent, forcing some banks to increase their prime lending
rates to between 300 and 600 per cent. At the same time, the stock market
collapsed. Industrial share prices have halved over the last four months.
Many companies, financial institutions and individuals that borrowed
heavily during three years of substantially negative real interest rates,
well below the inflation rate, have now been squeezed by the steep rise in
borrowing rates, forcing them to liquidate assets.
Financial institutions and companies have been dumping foreign
exchange on the parallel market. Consequently, the exchange rate has
strengthened from Z$7,000 to the US dollar three weeks ago to Z$4,750.
There are reports too of forced selling of vehicles and real estate as
companies and banks scramble to convert assets into cash.
Last week, an asset management group, ENG Capital, collapsed and the
central bank closed one of its subsidiaries, Century Discount House.
The ENG group, whose directors have been arrested on allegations of
fraud, was managing funds worth Z$190bn (US$230m). Three large financial
institutions, including a leading insurer First Mutual Ltd, have large
exposures to ENG.
When he unveiled his new monetary policy last month, Mr Gideon Gono,
the governor of the Reserve Bank of Zimbabwe, announced an end to the policy
of providing easy access by banks to central bank credit at low interest
But as the crisis deepens, bankers and economists say Mr Gono will
soon be forced to choose between pumping cash into the system to relieve
troubled banks or risk pushing them to the wall with far-reaching
consequences for the economy.
Foot and Mouth threatens beef export industry
BULAWAYO, 6 Jan 2004
(IRIN) - Fresh outbreaks of foot and mouth disease
(FMD) in parts of Zimbabwe continue to threaten the beef industry's chances
of resuming exports to the European Union and other emerging markets.
Stuart Hargreaves, the national director of Livestock and Veterinary
Services, said the department, which is struggling to control recurring
outbreaks in the Harare area, had failed to get the US $25 million needed
for a two-year effort to free the country's herd of the disease.
"It is very sad to note that the country does not have the money required
for the FMD eradication programme," state-run media quoted him as saying.
The government had pinned its hopes for a successful fight against FMD on
vaccines imported from the Botswana Vaccine Institute. But Hargreaves noted:
"These are insufficient, as we also need to vaccinate the non-affected
Four fresh outbreaks were reported last week in the prime cattle-producing
areas of Beitbridge in Matabeleland South province, Mwenezi and Mberengwa in
the Midlands and parts of Masvingo in the southeastern Lowveld.
The disease has occurred continuously since August 2001, when it was first
reported on a farm belonging to the parastatal Cold Storage Commission (CSC)
in Bulawayo, the country's second city.
A spate of outbreaks followed, leading to cancellation of the livestock show
at the Zimbabwe International Trade Fair and other provincial shows. Since
then the disease has expanded into zones producing export quality beef.
Insufficient efforts to contain the swift spread of FMD resulted in an EU
ban on Zimbabwean beef, causing heavy losses to one of the country’s major
sources of foreign currency.
Under the Beef and Veal Protocol, the EU had been importing 9,100 mt of
Zimbabwean beef annually, earning the country an average of US $36 million.
The new outbreaks have come at a time when Zimbabwe was expecting to resume
beef exports to the EU as well as other new markets.
The country's international trade ministry and the CSC had clinched deals to
supply clients in the Democratic Republic of Congo, Libya and Malaysia, all
of which have since embargoed Zimbabwean beef as a result of persistent FMD.
In the deal between CSC and Malaysia, the parastatal would have supplied
5,000 mt of beef valued at US $15 million a year.
Offcials in the beef industry charge that the CSC's failure to raise an
estimated Zim $33 billion (US $42 million) has jeopardised plans to restock
herds as part of a long-term strategy for ensuring eventual return to the
Hargreaves said the chances of success against FMD outbreaks would depend on
whether the country managed to raise the foreign currency needed to fight
Efforts to control FMD have been undermined by heavy livestock movement as a
result of the government's land resettlement programme, despite a ban on
The arrival of newly resettled people and the theft of boundary fences from
conservancies and other wildlife sanctuaries has led to the uncontrolled
movement of wild animals, mostly buffalo and kudu.
After a second consecutive year of drought, Zimbabwe has lost over 100,000
head of cattle in the prime beef producing areas of Matabeleland North and
The national herd is now down to 250,000 from 1.4 million four years ago.
Some 10,000 cattle are reported to have died of FMD alone since the
outbreaks began in August 2001.