Yahoo News
By ANGUS SHAW,
Associated Press Writer
HARARE, Zimbabwe - Cars no longer line up at gas
stations because there's no
fuel for sale. Gone are the meat, bread and
cornmeal that Zimbabweans count
on for their meals. Two weeks after the
government ordered price cuts in
response to the country's rampant
inflation, the economy is coming to a
standstill.
More than 30
company executives have been arrested for hoarding goods and
flouting the
price cuts, and several have been fined up to $6,600, court
officials said
Monday. Among those rounded up were executives of a leading
clothing
retailer, two directors of Zimbabwe's main food distributor and
fast-food
chain, and the chief executive of the largest producer of pork
products.
The sudden drop in prices had led to panic buying,
stampedes and near-riots,
leaving shelves bare of staple foods. Witnesses
said many shops and
suppliers were cleaned out by convoys of ruling party
supporters who came in
after police and inspectors enforcing the price
cuts.
Factories, stores and gas stations have been unable to replace
goods sold at
below cost.
Gas stations have run dry, putting an end
to the long lines of cars. On
Monday, the government ordered private
commuter buses to cut fares by
three-fourths, promising bus owners they
would be able to buy subsidized
fuel from the state oil procurement
agency.
But many ignored the directive and simply abandoned their routes.
Businesses
reported higher numbers of workers failing to arrive at their
jobs.
"We are incurring huge losses. We can't go on like this for much
longer,"
said one industrialist. "We'll have to lay off quite a number of
our people
very soon," he said. "We've shot ourselves in the foot this
time."
He asked not to be identified for fear of retaliation. President
Robert
Mugabe warned Friday that the government would target uncooperative
managers
and seize factories that scaled down their operations. His
government
accuses business leaders of being part of a campaign to bring him
down.
More than 1,300 businesses have been charged and fined over the
past two
weeks, police said.
Economist John Robertson warned
shortages would worsen.
"The crunch can't be far off," he said.
"Retailers who can't recover the
money they spent on their goods are not
going to carry them anymore, and
manufacturers who are not allowed to charge
more than their production costs
are going to stop making them."
By
the end of next week, as gas stations go out of business, "we won't have
much mobility anywhere and we will have run out of options," he
added.
Last week, the government announced it was reviving the
long-defunct State
Trading Corp. to run businesses that had collapsed or
were seized. The
corporation itself collapsed in the 1980s through
mismanagement.
Police spokesman Oliver Mandipaka said the crackdown was
"not a gimmick and
will be sustained at all costs to stop consumers being
ripped off," state
radio said.
He appealed to rural villagers and
farmers "to complement government efforts
by reducing prices of cattle so
butcheries can operate viably," radio said.
Beef, a favorite in the diet
of Zimbabweans, disappeared from shops more
than a week ago.
Cattle
herds already have shrunk drastically since the seizures of thousands
of
white-owned farms disrupted Zimbabwe's agriculture-based economy in
2000.
Cattle are a status symbol in rural communities and often are used
as a
dowry. It was unlikely villagers who have resettled on former
white-owned
land would heed Mandipaka's appeal.
Live goats were being
sold in Harare, but goat meat has not appeared in
slaughterhouses or
supermarkets. Women snapped up cabbages at one open air
market.
"It's
something to put on the table anyway," said one woman who only gave
her name
as Olivia. She said two large cabbages could be made to last about
a
week.
Official inflation is running at 4,500 percent - the highest in the
world -
though independent financial institutions estimate real inflation is
closer
to 9,000 percent.
The government has admitted to printing
extra money - seen as a main cause
of inflation and an obstacle to South
Africa's reported offer to shore up
Zimbabwe's collapsing dollar by pegging
it to the South African currency.
As the crisis worsens, Zimbabweans may
resort to looting, Robertson said.
"I think the government will finally
unleash the impatience and the anger of
our normally agreeable and passive
population," he said.
Zim Online
Tuesday 10
July 2007
By Patricia Mpofu and Nqobizitha
Khumalo
HARARE - President Robert Mugabe's government has dismissed as
"wishful-thinking" reports that the Southern African Development Community
(SADC) was planning to rescue Zimbabwe's increasingly worthless currency by
linking it to South Africa's rand.
Information Minister and chief
government spokesman Sikhanyiso Ndlovu
dismissed the reported plan offhand,
saying Zimbabwe, as a sovereign state
could not surrender control of its
currency to a foreign state.
"I have read those reports, but I can tell
you that is wishful thinking,"
Ndlovu told ZimOnline. "How can that be when
we are a sovereign state?"
added Ndlovu, who spoke as SADC secretary general
Tomaz Salomao left
Zimbabwe on Sunday after holding talks with Harare
officials on how to
rescue the collapsing economy.
The 14-nation SADC
last March appointed South African President Thabo Mbeki
to mediate in
Zimbabwe's political crisis and tasked Salamao to draw up a
plan to end
Zimbabwe's unprecedented economic meltdown that has negatively
affected the
entire region.
Mbeki is this week hosting secret talks between Mugabe's
ruling ZANU PF
party and the main opposition Movement for Democratic Change
party in
Pretoria aimed at finding a negotiated settlement to the political
impasse
between Zimbabwe's two biggest political movements.
In a
dramatic expose, a Sunday newspaper reported that SADC was putting
together
a plan to rescue Zimbabwe's crumbling economy by pegging the
Zimbabwe dollar
to the South African rand.
The paper said SADC wanted to stabilise the
exchange rate of the Zimbabwe
dollar and curb rampant inflation, now
estimated at more than 5 000 percent.
Under the SADC plan, Zimbabwe would
be included in the multilateral monetary
area of, South Africa, Namibia,
Lesotho and Swaziland were the rand is legal
tender.
The South
African government, that in 2005 had a US$500 million loan offer
to Harare
spurned, had by late Monday not yet directly commented on the
reported plan
to link the rand to Zimbabwe's unstable dollar.
Inflation is the most
visible sign of Zimbabwe's deep recession that has
left more than 80 percent
of workers without jobs and left those still lucky
to hold a formal job
unable to feed their families because of ever-rising
prices.
Independent economic analysts on Monday hailed the reported
plan to link the
dollar to the rand saying it could easily help uplift
Zimbabwe's economy
especially if accompanied by a holistic package of
economic and political
reforms.
However, they were quick to add that
they did not see Mugabe accepting a
plan that would in essence see Harare
surrendering monetary control to the
Southern African Reserve
Bank.
"If Zimbabwe is allowed to use the rand it will instantly solve the
country's
inflation overnight and prices will be stabilised instantly," said
Harare-based economic consultant John Robertson, adding that runaway
inflation in Zimbabwe was more a result of government overspending rather
higher prices and wages.
But he cautioned: "Is the Zimbabwe
government prepared to reverse the
destructive political processes it has
embarked on such as the land reform
so as to get that privilege to use the
rand?"
Eric Bloch, an economist in Zimbabwe's second largest city of
Bulawayo, said
he was not optimistic that the Harare administration would
agree to the
obviously stringent conditions that would accompany any plan
allowing
Zimbabwe to link its currency to the rand.
Meanwhile, South
Africa's official opposition Democratic Alliance has called
for political
reforms in Zimbabwe before any help is offered, saying Mugabe
has in the
past broken promises to undertake reforms and could not be
trusted to keep
his word.
The DA, which also called on the South African government to be
transparent
on any help given to Harare, said Mugabe should end repression
against the
opposition and the media and undertake to hold free and fair
elections next
year before he could be helped.
"Any financial
assistance package as well as plans to extend the rand
monetary area into
Zimbabwe must not be used to prop up the increasingly
tyrannical rule of
Robert Mugabe. It can and should only be used to restore
democracy and the
rule of law in our northern neighbour," the DA said.
The South African
opposition party also said that the SADC and the broader
international
community should help to shoulder the burden of any financial
commitment
made to Zimbabwe. - ZimOnline
Zim Online
Tuesday 10 July 2007
By Tsungai
Murandu
HARARE - Zimbabweans are a wily lot, always quick with new tricks
to stay
ahead of President Robert Mugabe's control-obsessed government and
ways to
survive the harsh realities of a comatose economy.
Take for
example the latest trick by Harare's landlords to hike rentals and
beat
runaway inflation right under the noses of Mugabe's police and militia
deployed to enforce a blanket ban on increases on prices of goods, rentals
and service charges.
A growing number of landlords no longer collect
cash from tenants - unless
of course it is in foreign currency - otherwise
many simply demand groceries
such as washing soap, cooking oil and sugar as
payment for accommodation.
With inflation at more than 4 500 percent, the
average rent per room in
Harare's working class suburbs is $200 000, which
is equivalent to US$800 at
the official exchange rate of 250 Zimbabwe
dollars to one United States
greenback.
This, however, translates to
just under US$2 when converted at the
unofficial but more realistic parallel
market rate of 120 000 Zimbabwe
dollars for every US unit.
"We have
been told we can't raise our rentals, which leaves us with no
choice but to
demand that our tenants pay us in kind," said Esnath Mlambo, a
widow in
Harare's sprawling low-income suburb of Dzivarasekwa.
Mlambo, who lets
out three rooms of her six-roomed house, charges five bars
of soap, two
litres of cooking oil and two kilogrammes of sugar per month
per
room.
A bar of washing soap goes for about $120 000 at the new
government-enforced
prices while two litres of cooking oil costs around $250
000 and a two-kg
packet of sugar sells at $40 000.
For several
Zimbabweans such as Mlambo, rentals from properties are the only
source of
income in an economy where a loaf of bread costs anything up to
$60 000 and
a two-kilogramme packet of sugar sells for up to $90 000 on a
thriving basic
commodities black market.
The illegal parallel market has increasingly
become the source of most goods
since commodities started disappearing from
shop shelves following the price
ban.
With unemployment pegged at
more than 80 percent - and hardest hit by the
effects of HIV and AIDS - it
is a daily struggle for most families to meet
the basics.
A
burgeoning HIV/AIDS pandemic claiming the lives of at least 3 000
Zimbabweans every week and many of these breadwinners has only helped
exacerbate poverty with an increasing number of families in urban areas now
depending on the little income they get from tenants for their daily
upkeep.
Analysts yesterday described the charging of rent in kind or
foreign
currency, mostly US dollars or South African rands, as an "implicit
dollarisation" of the economy and as a "coping strategy" being employed by
long-suffering Zimbabweans to escape economic challenges facing the
country.
University of Zimbabwe political scientist Eldred Masunungure
said by asking
for rentals in kind, the Zimbabwean landlords were
compensating for the
rapid loss in the purchasing power of the local dollar
in recent months.
"This is a demonstration of the lack of faith in the
national currency,
particularly the stability of the dollar," said
Masunungure.
The Zimbabwe dollar has crashed by more than 50 percent
against major
international currencies since the beginning of last month,
prompting prices
of most goods and services to rise five-fold in a space of
two weeks.
The government reacted by issuing a directive two weeks ago
forcing
producers and retailers to reduce their prices by more than 50
percent.
It also outlawed rental increases to cushion tenants after the
cost of
accommodation started going up.
But, as Mlambo noted, the
landlords and manufacturers would always find
other means of beating the
government directives.
She said: "There are only two choices. It is
either we start charging
realistic rentals or we starve to death while
trying to be good citizens." -
ZimOnline
Zim Online
Tuesday 10 July 2007
By Hendricks
Chizhanje
HARARE - The National Association of Non-Governmental
Organizations
(NANGO) has rejected charges that it is hoarding basic
commodities saying
the charge was a ploy by Harare to restrict their
operations ahead of next
year's elections.
Industry and
International Trade Minister Obert Mpofu at the weekend
said the government
was investigating several NGOs that were hoarding
foodstuffs for
distribution at election time next year as part of plans to
effect regime
change in Zimbabwe.
NANGO spokesperson Fambai Ngirande said the
allegations were patently
false and were meant to restrict operations of
humanitarian agencies
involved in food distribution in
Zimbabwe.
"It is their (government) usual plan. They start with
political
statements to pave way for such operations. They are increasing
repression
of civic society.
"It (repression) has become such
an integral part of the government's
pre-election strategy," said
Ngirande.
The Zimbabwe government has in the past threatened to
shut down NGOs
involved in human rights work and governance matters accusing
the groups of
pushing a regime change agenda.
Mpofu's comments
to crack down on NGOs followed a raid by the police
at National Foods in
Harare where the police seized 36 000 bottles of
cooking oil stashed at the
company's warehouse.
The Zimbabwean government last month ordered
business leaders to roll
back prices to June 18 levels following a massive
hike in prices over the
previous two weeks.
Harare accused the
business leaders of working with the government's
western enemies to
increase prices so as to foment an uprising against
Mugabe, a charge
business denies.
The Harare authorities have since deployed
soldiers and police to
enforce the price freeze. At least 1 300 company
executives and shop
managers have been since been arrested in the crackdown.
- ZimOnline
Zim Online
Tuesday 10 July 2007
By Regerai
Marwezu
MASVINGO - Ruling ZANU PF party youths in the southern town of
Masvingo on
Sunday threatened to seize goods from shops that fail to heed a
directive by
President Robert Mugabe to slash prices of all commodities by
50 percent.
At a meeting held at the Roger Howman training centre in the
working class
suburb of Mucheke, the youths threatened to loot all shops
that fail to
implement the government directive on prices.
ZANU PF
legislator for Masvingo South, Walter Mzembi, convened the meeting.
"We
resolved to loot all shops that are defiant. We have spoken to all
relevant
government departments and everything that we discussed at the
meeting will
be implemented," said Raison Muunye.
It was not possible to establish
from Muunye, who is the party's organizing
secretary for youths in Masvingo,
when the youths planned to go on the
looting campaign.
Contacted for
comment yesterday, Mzembi said: "We are going to back these
youths in their
efforts to make sure that government policies are strictly
adhered
to."
There have been scenes of chaos and pandemonium around the country
as hungry
Zimbabweans stampeded to take advantage of reduced prices to stock
on
essential commodities.
Most shops in Harare and Bulawayo have been
cleared of basic goods following
the government order issued last month to
roll back prices to June 18
levels.
Mugabe accuses business of
working in cahoots with his western enemies to
hike prices so as to foment
rebellion against his government. The veteran
Zimbabwean leader says his
government will seize all businesses that defy
his order to slash prices and
stop production.
"We are living in perpetual fear," said a businessman
who spoke to ZimOnline
in Masvingo.
At least 1 300 business
executives and managers have been arrested around
the country since the
crackdown, codenamed Operation Dzikisa Mutengo
(Operation Reduce Prices),
began last month. - ZimOnline
SW Radio Africa (London)
9 July 2007
Posted to the
web 9 July 2007
Tichaona Sibanda
There are reports that
thousands of businesses, including manufacturing
firms, countrywide are
grinding to a halt despite threats by Robert Mugabe
that government would
seize firms that stop producing basic goods. Already a
number of companies
are laying off workers as a result.
Elton Mangoma, a businessman and
acting treasurer-general of the MDC, said
the majority of other companies
were scaling down operations following a
weeklong campaign to stop rampant
inflation by physically forcing businesses
to lower prices. This move
sparked frenzied buying from shoppers leaving
most shops with empty
shelves.
Price controls have generally been short-lived and loosely
enforced but in
contrast, the latest crackdown appears to be gathering
momentum as enforcers
moved over the weekend to halt price increases by
wholesalers and
manufacturers as well as retailers.
'This is history
repeating itself. In 2000 Mugabe grabbed farms and
distributed them to his
cronies and we have no food in the country as a
result. Now he wants to grab
companies and who ever will take over to manage
them will fail like what the
new farm owners did,' Mangoma said.
Mangoma believes the price controls
being enforced by the regime are edging
the nation close to total chaos,
because 'this will leave many Zimbabweans
with lots of cash in their pockets
but with nothing to buy.'
Mugabe on Friday told manufacturers to carry on
with normal production
despite an official price freeze, warning that his
regime will take over
firms that stopped producing basic goods. Addressing
thousands of his rented
Zanu PF party supporters in the capital, he warned;
'This is no joke ...
there are some people who think this (freeze) will not
succeed because they
say there are empty shelves. We are saying to all
factory owners you must
produce. If you don't produce we certainly will
seize the factories.'
Amid the ongoing economic chaos the MDC's secretary
for Labour and Social
Affairs Getrude Mtombeni said they were busy compiling
figures of workers
who have lost jobs in the last week. She said employers
are being forced to
lay off workers because they are not making any profits
or extra money to
pay them. She said most companies would cease to operate
in the next six
weeks.
Spiralling prices and soaring inflation are
part of an eight-year economic
crisis caused by government's mismanagement.
Economists believe the price
freeze will finally destroy what remains of the
country's struggling
industry, as manufacturers will not be able to produce
goods at a loss.
'Nobody wants to lose money deliberately and nobody
wants to invest into a
company that makes losses instead of profits. This is
real economic
madness,' Mtombeni said.
She added that the price
rollbacks were unsustainable and that shops and
manufacturers would soon
shut down and lay off their workers.
Pretoria News
Editorial
July 10,
2007 Edition 1
Zimbabwe's descent into chaos has been as predictable
as it has been tragic.
President Robert Mugabe's economic policies and
anti-democratic tendencies
have brought the country to its knees.
Now
official inflation is running at a world record 5 000%, with unofficial
estimates at about double that. Businessmen are being rounded up by police
in what appears to be a desperate attempt by Mugabe to quell a public
uprising. Store shelves are empty and petrol pumps dry.
Perhaps the
only positive from this grim scenario is that it gives some
leverage to
those trying to persuade Mugabe to change course.
Today, for example,
talks between Zimbabwe's ruling Zanu-PF and opposition
Movement for
Democratic Change begin in South Africa. These talks have been
mandated by
the Southern African Development Community (SADC), as have
attempts to find
a solution to Zimbabwe's economic crisis.
In normal circumstances it
might be held that the economic recovery should
follow a political solution,
but Mugabe's reign has hardly been normal.
Perhaps now a financial
solution will be more compelling for Mugabe. This
may come in the shape of
the sort of loan that he has rejected previously,
or even a common monetary
area.
Whatever form such an initiative takes, it must be on condition
that Mugabe
launches a comprehensive set of political reforms.
This
will require of the SADC a toughness that it has failed to muster in
previous dealings with the Zimbabwean despot.
Hopefully the
seriousness of the situation in that country - and the
devastating impact on
ordinary Zimbabweans - ensure more decisive action
this time.
Business Report
July 10,
2007
By Ethel Hazelhurst
Johannesburg - An attempt to rescue
Zimbabwe from hyperinflation by
replacing its increasingly worthless
currency with the rand would be
pointless unless the move was part of a
broad programme of economic reform,
economists said
yesterday.
Inflation in Zimbabwe, officially at 3 713.9 percent in April,
is likely to
be much higher and is rising so quickly that its population is
reportedly
resorting to barter. And according to Zimbabwean economist John
Robertson,
the country's fiscal deficit - the shortfall between government
revenue and
spending - is equal to about 140 percent of gross domestic
product.
After the government knocked three noughts off the exchange rate
in April,
the currency officially trades at Z$250 to the US dollar. But on
the black
market, it has reportedly been trading as high as Z$400
000.
The Sunday Independent said that the Southern African Development
Community
"is reportedly considering a proposal that the Common Monetary
Area [CMA] be
extended into Zimbabwe".
The CMA is made up of South
Africa, Namibia, Lesotho and Swaziland. The
smaller economies' currencies
are pegged to the rand.
Jac Laubscher, Sanlam's chief economist, said
that if the rand were to
replace the Zimbabwe dollar, there would have to be
greater integration of
the two economies.
Among other things, a
common monetary policy implies the same interest rates
in the
countries.
The official rate at which the Reserve Bank lends to the
private sector
banks is 9.5 percent, about 3 percentage points above its
benchmark
inflation rate.
The equivalent rate in Zimbabwe is 600
percent, according to Robertson -
thousands of percentage points below the
inflation rate.
Monetary union with South Africa would imply a switch to
positive real
interest rates. But while positive rates are used to restrain
inflation,
they can never work in isolation.
"Zimbabwe has been
funding its deficit by printing money," said Rudolf
Gouws, the chief
economist at Rand Merchant Bank.
Unless the Zimbabwean government takes
the politically difficult route of
sharply reducing its expenditure, sound
monetary policy and a new currency
will be ineffective.
Greater
integration of the two economies would hurt South Africa and its
currency.
But Laubscher said the impact would be limited because
Zimbabwe's economy,
at about US$4.5 billion, was much smaller than South
Africa's, which is
worth more than US$240 billion.
MONEYWEB: Off to Harare now, where we link up with Dzika Danha, an analyst at Renaissance Capital in Harare. Good to be with us this evening, Dzika. Let's maybe start off with the controversial laws that have been introduced by President Robert Mugabe, trying to force retailers to halve their prices. I guess the impact of that has been retailers aren't going to be putting too much up for sale?
DZIKA DANHA: Yes, precisely. The immediate impact is there's been a reduction of goods on the shelves. I think we will really feel it in a big way in probably a couple of weeks, because the government is very heavy-handed about trying to enforce it. So I think guys are just going to try and get rid of their stock while they can, but the problem is down the line - manufacturers are already sort of slowing down production.
MONEYWEB: I guess it's no surprise there, because who would like to produce something when you're guaranteed that you are being forced to sell it at a loss?
DZIKA DANHA: Ja, that's the problem and the replacement cost of this stock - that's we're going to miss our stock cycle, and there will be widespread shortages probably in a couple of weeks. The black market is already showing signs of leaning to a lot of these commodities.
MONEYWEB: Dzika, where to from here? When there isn't food in the shops, I guess one would say simplistically that there are going to be riots in the streets.
DZIKA DANHA: That would be the obvious logical step, but I'm not so sure. I don't know how long they are going to enforce this, once they realise how serious their actions are. But you're right, social tensions will escalate if there really is no food on the shelves. But I mean, the main product is this, it's going to see inflation spike like we've never seen before.
MONEYWEB: Dzika, what about what's happening at the fuel pumps? The Financial Times of London or FT.com was reporting today that police have instructed filling stations to cut their prices by two-thirds, and then gone on to tell bus owners they must cut their fares by 80%. Are people complying?
DZIKA DANHA: From what I see, the few, I mean people who stop selling fuel - and consequently the black market price has spiked beyond even the actual power market rates value of that fuel. So it's a case of guys are just holding it now, they are not selling it. And there is no fuel readily available. As for the bus drivers - look, if they were to comply, they would be out of business fairly quickly.
MONEYWEB: There were reports today that the financial director of Edgars has been arrested.
DZIKA DANHA: Yes, we had the front pages of the The Herald, the daily here, 32 directors were arrested for flouncing these price control regulations. So yes, it's getting quite ugly on that side.
MONEYWEB: Now you work with a multi-national, Renaissance Capital. What kind of reports are you sending back to people in other parts of the world?
DZIKA DANHA: Well, I'm [indistinct - poor line] valuation perspective, and trying to buy when the market is cheap. So far the Zim stock exchange has done actually quite well in hoding value, but with [indistinct] and we are probably going to see some sort of dollarisation or indexation. So I think the demand for currency is going to go through the roof, which might make assets cheaper again.
MONEYWEB: We have, however, seen the Zimbabwe Stock Exchange plunging last week. It's gone up expedentially so far this year, but it took an awful hammering last week with these new laws.
DZIKA DANHA: Ja, it's down 26% from Thursday last week to yesterday. So it has taken a pounding and, look, these companies are under serious [indistinct] and our margins are being eroded completely. They will be making some losses fairly soon.
MONEYWEB: But certainly from that perspective, Dzika, if you are being forced by government to sell at below cost price or face being grabbed, I suppose, in the same way as some of the farms were grabbed by the president and his cronies, then the companies that are listed on the stock market can't be worth a whole lot?
DZIKA DANHA: No, you're right, from a customer perspective, no. But in terms of value perspective, ja, it's still the cheapest market in the world. But yes, this raises a bit of issues and there's going to be a lot of selectivity in stock-picking going forward. It's just [indistinct] blue chips and dual-listed stocks.
MONEYWEB: Earlier this year there was quite a lot of hope that this was the beginning of the end. It certainly seems to have got a lot worse since then.
DZIKA DANHA: Yep, it has, predictably. And it's going to get a lot worse a lot quicker now. I think in two weeks' time or in a month's time, inflation will ratchet up even more, and I don't know how the end is going to look like. But we're closer than we've ever been, really.
MONEYWEB: And what are you doing with your family? Are you keeping them indoors or are you quite happy for your kids to walk to school and your wife to perhaps shop if there is a place to shop?
DZIKA DANHA: I'm not married, unfortunately. But look, physically it's safe. There's nothing really wrong. I mean, that's a gross misconception that people have about Zimbabwe. It's actually a very safe place, even now. It's just an economic thing which is the real story here - it's the ordinary person trying to struggle to make a living. In terms of safety, crime-wise, it's a lot safer than, let's say, Jo'burg.
MONEYWEB: But at some point in time that has to change, surely?
DZIKA DANHA: You'd have said so, but it hasn't happened so far, I think, given the nature of the people here. But if they carry along in this vein here, it might well change.
MONEYWEB: How do you see all of this panning out, or how do you see it all developing from here?
DZIKA DANHA: I'm not prepared to give a view sort of six months, but a couple of months down the line, I think inflation is going to peak in the next six months. We are going to reach that vortex of hyper-inflation when things just don't function, and from them on that might be some sort of tipping point for a change.
MONEYWEB: Dzika Danha, talking to us from Harare. He is with Renaissance Capital.
VOA
By Carole Gombakomba
Washington
09
July 2007
A prominent Roman Catholic priest in Zimbabwe said
Monday that "vulgar"
attacks by President Robert Mugabe on senior church
officials had
extinguished hopes for a reconciliation between Harare and the
country's
Catholic hierarchy.
During a consultative assembly of his
ruling ZANU-PF party on Saturday in
Harare, Mr. Mugabe criticized "some
bishops" for "rallying behind the
opposition MDC and openly supporting the
Western backed regime-change
lobby."
Earlier this year the country's
nine Roman Catholic bishops issued a
stinging rebuke to Mr. Mugabe in an
Easter pastoral letter. The prelates
reproached him for failing to meet the
needs of the people, and urged him to
resign or face a popular
revolt.
In his remarks on Saturday, Mr. Mugabe accused church leaders of
failing to
practice democracy within their institutions and of straying from
their vows
of celibacy.
Roman Catholic Archbishop Pius Ncube of
Bulawayo, one of Mr. Mugabe's
toughest critics, last week urged Britain to
invade Zimbabwe to remove him
from power.
Father Oscar Wemter, a
Harare-based theologian and writer, told reporter
Carole Gombakomba of VOA's
Studio 7 for Zimbabwe that although different
church leaders have taken
different approaches to Mr. Mugabe, he has proven
unrepentant.
VOA
By Jonga Kandemiiri
Washington
09 July
2007
The National Constitutional Assembly, a leading
Zimbabwean civic
organization, said police and agents of the Central
Intelligence
Organization harassed and detained its members in Mashonaland
East and
Manicaland provinces last week.
The Harare-based
organization said 12 members in Marondera, Mashonaland
East, were detained
for four nights by police after being arrested for
holding a private
meeting. Those arrested included three women with babies,
NCA officials
said.
All of those detained were released on Monday without any charges
being
pressed against them, the NCA sources said.
Elsewhere, the
NCA's Manicaland provincial chairman, Elisha Makuyana, and
another activist,
were picked up Friday night by suspected CIO operatives,
the NCA
said.
Organization sources said state agents confiscated more than 50
T-shirts,
shortwave radios and fliers. Makuyana and the other activist were
released
late Friday night, but were ordered to report to the CIO's offices
the next
day, the NCA said.
NCA National Chairman Lovemore Madhuku
told reporter Jonga Kandemiiri of
VOA's Studio 7 for Zimbabwe that he
believed such tactics were intended to
instill fear in his group's members
to keep them from demanding reforms like
a new constitution.
VOA
By
Blessing Zulu and Ndimyake Mwakalyelye
Washington
09 July
2007
The stampede for bargains last week after Zimbabwe's
government ordered
prices slashed gave way Monday to long lines as consumers
hunted
increasingly scarce basic commodities such as bread, maize meal,
cooking oil
and sugar.
Fuel, cement and other durable items had also
disappeared, increasing the
complexity of accomplishing ordinary tasks for
Zimbabweans at all income
levels.
A source in the Ministry of Finance
disclosed that only 1 million liters of
fuel are in the government's energy
supply pipeline and when that is done
the future is bleak. The government is
chronically strapped and most
suppliers demand cash up front.
Yet in
the face of a deepening economic crisis, Harare was adamant that it
would
not back off its campaign to reverse hyperinflation. Authorities said
they
arrested some 1,300 shop owners and business executives in recent
days - 33
managers appeared in court Monday. All but two pleaded guilty to
violating
the Prices Control Act that went into effect on Friday. They were
freed
after posting Z$3 million dollars bail each.
Trade Minister Obert Mpofu
promulgated a one-month statutory instrument
legalizing the state's blanket
ban on price increases - no price can be
raised unless the ministry approves
and the instrument obliges all
businesses to clearly display
prices.
Business leaders said they can only wait and see what happens
next, noting
that their efforts to reason with the government had failed and
that the
latest directives are understood to come from President Robert
Mugabe
himself.
Consumer Esther Makoni of Highlands told reporter
Blessing Zulu of VOA's
Studio 7 for Zimbabwe that supplies were running
short in an increasingly
depressing situation.
Reactions to recent
developments included a 60% decline in the benchmark
index of the Zimbabwe
Stock Exchange, which tumbled 30% on Friday alone.
ZSE Chief Executive
Officer Emmanuel Munyuki told reporter Blessing Zulu
that of VOA's Studio 7
for Zimbabwe that most listed companies have been
affected.
Economists expressed deep concern about the impact of the
state initiative.
Reporter Ndimyake Mwakalyele interviewed independent
economist David
Mupamhadzi and Eddie Cross, an economist who serves as
policy coordinator
for the Movement for Democratic Change faction headed by
Morgan Tsvangirai.
Cross said the statutory instruments rushed into force
late last week to
make the price cuts permanent were likely to paralyze an
already traumatized
economy.
The Telegraph
By Byron Dziva
in Harare
Last Updated: 2:03am BST 10/07/2007
Zimbabwe's
economy was approaching paralysis yesterday as petrol
stations across the
country ran dry.
President Robert Mugabe's regime has ordered all
retailers to cut fuel
prices by 60 per cent, a move that forces them to sell
petrol at a loss.
As a result, filling stations across the country
have stopped selling
altogether and petrol is only available on the black
market, at five times
the official price.
Without fuel, the
entire economy is steadily shutting down.
"It is certainly making a bad
situation worse. Many companies will
stop functioning," said John Robertson,
an independent economist in the
capital, Harare.
A bus driver
in Harare said: "At the moment, even on the black market,
there is
nothing."
Basic foodstuffs have already vanished from supermarket
shelves thanks
to the regime's order that all retail prices should be frozen
at their June
18 level.
Inflation has reached such a level that
one banana costs the same
amount as 15 four-bedroom houses seven years ago.
The regime's behaviour has
dismayed many business people.
Masimba Kambarami, the chairman of the petroleum association, said:
"Fuel is
not indigenous, it has to be treated carefully.
"If you arbitrarily
introduce new prices you trigger panic buying,
then subsequent
shortages."
Inflation officially runs at 4,530 per cent - the
highest level in the
world.
New Zimbabwe
By Staff
Reporter
Last updated: 07/10/2007 10:12:40
CENTRAL Intelligence agents
raided the office of a key Zimbabwean government
official and seized a
laptop, documents and a mobile phone days before he
was publicly accused of
being a part of an alleged plot to overthrow
President Robert Mugabe's
government in a military putsch.
The sensational revelations show for the
first time how Emmerson Mnangagwa,
a cabinet minister and powerful leader in
Mugabe's ruling Zanu PF party, was
sucked into the alleged coup plot which
has so far seen the arrest of at
least six men.
Intelligence sources
told New Zimbabwe.com this week that on the evening of
May 25 -- four days
before police made the first arrests -- a team of agents
from the Central
Intelligence Organisation (CIO) broke locks and doors
leading to Mnangagwa's
office and his aides as rumours of an attempted coup
swirled on the streets
of Harare.
In an interview Monday, Mnangagwa confirmed the raid, but
insisted he was
not aware who had broken into his office.
But the
idea that it was an ordinary robbery has looked more and more
unsustainable
after it emerged that the "intruders", after taking
Mnangagwa's laptop, made
no effort to take his secretary's laptop despite
also breaking her
door.
Mnangagwa said: "It is true that my office was broken into and the
intruders
stole my laptop, documents and my Nokia communicator cellphone.
They broke
the locks on all the doors leading to my office, my personal
assistant,
secretary and deputy finance director.
"My PA lost $2
million. In the other two offices, the thieves did not pick
anything
including a laptop that was in my secretary's office."
The CIO head
office at Chaminuka Building is just meters from Mnangagwa's
office.
Last night police confirmed receiving a report from Mnangagwa
and said
investigations were yet to be completed.
"It is true we are
handling a case of theft from the minister's office, but
we cannot say much
as this may prejudice our investigations," said a police
spokesman.
The police revealed they had referred fingerprints to
their forensic team,
but the investigation is yet to be completed almost
seven weeks after the
raid.
As a rule, all government offices and
buildings are under armed guard.
During the day, visitors are subjected to a
body search and stringent
conditions such as producing valid national
driver's licence and/or national
identity documents.
Intelligence
sources said only the CIO could have circumvented the security
and carried
out the operation in Mnangagwa's office which is on the 6th
floor of Kaguvi
Building. The building houses the Ministry of Rural Housing
and Amenities,
for which Mnangagwa is in charge.
The privately-owned Zimbabwe
Independent newspaper reported last week that
the government wanted to
arrest Mnangagwa over the alleged coup while Mugabe
was away in Libya and
later Egypt.
Vice-President Joice Mujuru was the acting president when
the plan was
hatched to seize Mnangagwa. Mnangagwa and Mujuru are bitter
rivals in Zanu
PF, both vying for the control of the
party.
Vice-President Joseph Msika is said to have intervened and
demanded that the
government should not arrest Mnangagwa until Mugabe had
returned.
Mnangagwa - who has described the coup allegations as "stupid"
- was said to
have been very anxious as word spread that he could be
arrested. He met
Mugabe soon after his return to deny any
involvement.
Mugabe is said to have been furious at his security chiefs
over their
handling of the matter, believing that the operation had
destroyed Zanu PF
unity ahead of key general elections next
March.
"The President was angered by the coup story and the botched
operation by
the security agents. He is angry that this has left the party
embarrassed
and deeply divided," said a source.
Police have arrested
six suspected coup plotters - Albert Matapo, Emmanuel
Marare, Pattison
Mupfure, Nyasha Zuvuku, Oncemore Mudzurahona and Shingirai
Webster
Mutemachani -- after security agents learnt they intended to topple
Mugabe.
However, the coup story has been described as storm in a
teacup after
attempts to link it to Mnangagwa laid an addled egg.
The
six men are currently in remand prison awaiting trial. They all deny
charges
of plotting a military overthrow of the government.
:: The Southern African
Monday, 09
July 2007
TORONTO - One of the questions often asked by those watching
the
Zimbabwe crisis unfold is: "Who provides the foreign currency that props
President Robert Mugabe's Zanu PF government?
After all, every
economic indicator shows an economy that is so
battered it should have
collapsed by now.
Inflation is now estimated at almost 5,000%,
the Zimdollar trades at
such ridiculous exchange rates as 400,000 to the
USdollar, unemployment is
beyond 80%, supply of basic commodities is erratic
and yet, the fat cats
continue getting fat and the government system still
gets foreign currency.
Fingers have previously been pointed at the
more than three million
Zimbabweans in the Diaspora who have propped up the
economy through forex
they send to families back in Zimbabwe.
But much as that is true, it would never be enough to maintain a whole
economy.
But for those who did not know, certain laws and
agreements compel
foreign investors in Zimbabwe to provide forex as long as
they operate in
the country and nothing demonstrates this more clearly than
a story that
appeared in Africa Confidential six months ago.
In
an effort to answer the vexing question of "who props up Mugabe's
economy",
we reproduce the story here in full:
British and South African
banks have provided a more than US$400
million financial lifeline to
President Robert Mugabe's government over the
last two years, much of it
targeted at financing Harare's controversial land
resettlement
programme.
This funding flies in the face of President Mugabe's
routine attacks
on British 'neo-colonial sabotage' and claims that his
government receives
most of its vital funding from its radical allies in
Asia and Latin America.
It also shows that Britain has become
complicit in propping up the
regime, according to opposition MPs at
Westminster.
Britain's Barclays Bank lent over Z$300 billion ($49.3
mn.) in 2005,
on concessional terms, to the government's Agriculture Sector
Productivity
Enhancement Facility, aimed at consolidating the land-reform
programme and
boosting falling farm productivity.
Barclays also
arranged offshore financing facilities of $110 mn. for
Zimbabwean clients in
tobacco, cotton, mining, sugar, manufacturing and
horticultural
sectors.
We understand that Barclays' upcoming annual report for
2006 will show
a similar pattern of lending over the past year.
Until a month ago, Barclays' new partner, South Africa's ABSA, held a
24.1%
stake in the Commercial Bank of Zimbabwe which was formerly run by
Mugabe
ally and current Reserve Bank Governor Gideon Gono.
CBZ - together
with ABSA - managed a Treasury bill portfolio in
Zimbabwe of over Z$2.7
trillion ($443 mn.) in 2005 and reached similar
levels in 2006.
Barclays told Africa Confidential that agricultural lending to the
Zimbabwe
government will continue in 2007, as will investment in treasury
bills and
bonds, 'from time to time, depending on our relationship with the
customer'.
British-based Standard Chartered Bank and insurance
giant Old Mutual
also lend the Mugabe government billions of Zimbabwean
dollars through their
purchase of treasury bills and government
bonds.
Under the Reserve Bank's statutory reserve requirement,
commercial
banks must reinvest 40% of their surplus in government treasury
bills and
insurance houses must bid for them.
Companies say
that they are merely complying with Zimbabwean law.
'This is part of doing
business in Zimbabwe,' Standard Chartered's Sean
Farrell said.
'It affects all banks doing business there.' But several Zimbabwean
economists calculate that Old Mutual's lending to the Mugabe government is
so high that it has become a critical prop for the regime's financial
survival.
Opposition British MPs argue that lending to the
Mugabe government has
become morally indefensible. Liberal Democrat MP
Norman Lamb told Africa
Confidential: 'By going along with the rules
provided by the Zimbabwe regime
they [the companies] become complicit with
the actions of the Zimbabwean
government and complicit with a corrupt
regime.I struggle to see that as a
justification.'
Conservative
party MP Boris Johnson said the lending reflected British
disinterest in the
plight of Zimbabwe: 'its part of a much bigger problem.we
have to face the
fact that we've done nothing to remove a tyrant responsible
for untold
deaths and complete ruination of the economy.'