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
1. Background
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
3.2 Allotment
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) |
Advance Payment |
80% |
Optional |
20% |
1-30 |
70% |
5% |
25% |
31-60 |
65% |
10% |
25% |
61-90 |
55% |
20% |
25% |
Exchange Control Approved Extensions | |||
91-100 |
50% |
25% |
25% |
101-120 |
40% |
35% |
25% |
121 and above |
0 |
75% |
25% |
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
insolvency.
Supermarkets in the capital, Harare, displayed notices
warning customers
that no cheques would be accepted from some of the
country's best known
banks.
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.
The Star
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
publish.
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
refused to
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
corrugated-steel shacks
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
not legally.
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
stability.
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
peasants.
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.
The Herald
Societies accused of abusing patients’
subscriptions
Herald Reporter
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
Moyo.
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
dividends.
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
the
doctors.
"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
statement.
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
Stephanie Nolen
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
better breastfeeding.
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
abrupt cutoff.
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
breast milk.
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
him.
Comment from The Mail & Guardian (SA), 5 January
Mbeki's smoke and mirrors
Iden Wetherell
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
given every
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
kin" in
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
Reuters
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
school.
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
model.
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
monthly.
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
Mugabe's government.
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
prices.
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.
Business Day
Mbeki's
mistake
----------------------------------------------------------------------------
----
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
unfortunate people.
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
broken.
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
Port-au-PrinceHaiti
Radio Station Manager Arrested, Detained
Media Institute of
Southern Africa (Windhoek)
PRESS RELEASE
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
to court.
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.
BACKGROUND
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
Harare
ZANU-PF has won
three rural district council wards in Mt Darwin, Makoni and
Buhera
unopposed.
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
year.
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.
Financial Times
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
crisis.
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
system.
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
rates.
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
herds."
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
export market.
Hargreaves
said the chances of success against FMD outbreaks would depend on
whether the
country managed to raise the foreign currency needed to fight
the
disease.
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
such movements.
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
South.
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.