The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

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Zim Independent

Editor's Memo

A small victory

NOTHING more reveals the paranoia and insecurity felt by this regime than
the arbitrary way they have dealt with Andrew Meldrum, vindicated in the
courts this week yet threatened with deportation by a spiteful government
that long ago lost the battle for hearts and minds.

I first met Andy shortly after his arrival in Zimbabwe in 1980. He impressed
me as a conscientious journalist keen to acquit himself well in the
challenging environment of a society in transition. Unlike many of the
foreign correspondents already based here he carried none of the baggage of
the past and, if anything, was anxious to give the country's new rulers a
fair hearing.

But like anybody following events here over the years, he witnessed a
once-hopeful beginning turn sour as a result of greed, corruption and an
unwillingness to accept democratic norms. His reports in the Guardian
inevitably reflected the growing disaffection of a society oppressed and
plundered by its wayward rulers. Yet his reporting remained balanced and
fair. As the BBC's John Simpson noted on Monday, it would be hard to find a
more objective correspondent.

When he became a target of the ministerial cronies around President Mugabe,
Andy accepted his fate philosophically and gracefully, as viewers of CNN and
the BBC will have seen.

There were no indignant outbursts, only a principled stand shared by all

"This was a victory, not just for me but for freedom of the press," he
stated after his acquittal on Monday.

But, unbeknown to him and his wife Dolores, the Minister of Home Affairs had
12 days earlier signed an order cancelling his permanent resident status.

This vindictive move was unprecedented. Permanent residents have hitherto
enjoyed the rights and protection afforded to citizens. John Nkomo showed
inexcusable weakness in acceding to the demands of the hardliners around
Mugabe in arbitrarily withdrawing the rights of somebody who had lived in
this country for 22 years without once breaking its laws.

Andy has acquired a home and an adopted family. He has put numerous
dependants of employees through school and college. He has shown nothing but
kindness to friends and colleagues. I have often sought his invariably
sensible advice. To be given 24 hours to leave everything that was dear was
a cruel and undeserved fate which tells us more about this misanthropic
regime than about its victim.

On Wednesday he was given leave to appeal to the Supreme Court and his
deportation order will be suspended until the outcome of the appeal is
known. That is however only a temporary reprieve. They are clearly
determined to get rid of him.

I recall saying goodbye to a number of academics and journalists at
Salisbury airport in the 1970s as the rollcall of the Rhodesian Front's
prohibited immigrants mounted. Guardian correspondent Peter Niesewand was
among them. Then in 1977 I found myself included on PK van der Byl's hit

What this purge of the media and opposition activists revealed most was the
changing fortunes of the RF regime. No government confident of its political
security acts to remove critics in violation of their legal rights.

The Mugabe regime is demonstrating precisely that insecurity that weak
governments everywhere betray. Andy Meldrum was found by the courts to be
innocent of the charges brought against him. This was despite clumsy
ministerial pressure on the prosecutor and a catch-all legal framework
designed to trap all possible transgressors.

It was the government's showcase trial under draconian new laws designed to
"prove" that foreign correspondents peddle "falsehoods" about Zanu PF's
record of violence and misrule.

In the event the court found no such thing. Meldrum had behaved like any
reasonable journalist would be expected to in filing his story, the
magistrate ruled. The refusal of the police to answer queries from the press
was a significant factor in scuttling the state's case. Wayne Bvudzijena was
understandably not called to the witness stand.

It was a signal defeat in particular for Information minister Jonathan Moyo
who drew up the profoundly defective Access to Information and Protection of
Privacy Act. He has proved to be a sore loser as well as a liability to the
regime whose foolish mantras he parrots.

Sadly, the only lesson he and his malevolent master are likely to learn from
all this is the need for "more fire". Having lost this one he will be
all-the-more determined to prosecute others.

President Mugabe himself appeared confused by the outcome. At first he
acknowledged from Cuba that the courts should decide Meldrum's fate. "A
person who has committed a crime must be tried," he insisted on arrival in
Havana. When told Meldrum had been acquitted, he declared that it would
create "gridlock".

In other words court verdicts are useful only where they convict, a point
his host would have appreciated!

As for Andy, this must be a time of great anxiety. As if the ordeal of a
trial were not bad enough, he and Dolores must now face an arguably worse
fate. This is his home. Ties and friendships built over 22 years are not
easily severed.

But he has at least one consolation. He has stood up for all of us in the
media and civic community, been vindicated in the courts, and shown the
world what a mean-spirited regime we are dealing with here.

Together with his successful hearing before Justice Anele Matika on
Wednesday, Andy has secured from the courts a good measure of justice.
Whether that persists remains to be seen. For the time being he should
savour his small but significant victory. It is a victory for all
Zimbabweans in their quest for truth and justice.
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Zim Independent

Farmers fight for survival on land
Augustine Mukaro
ZIMBABWE'S commercial farmers have a history of prevailing against the odds,
be these drought, hail, pests or cyclones. But over the past two years they
have been at the mercy of Zanu PF's naked aggression in the drive to
redistribute land.

Continued disturbances on commercial farms have sparked sharp differences
between the Commercial Farmers Union (CFU) leadership and stakeholders on
how to take on government in a bid to resolve the controversial land reform

Two diametrically opposing positions of confrontation and dialogue have
emerged as the CFU tries to bring sanity to the sector, which in the past
contributed about 17% of Zimbabwe's gross domestic product. But government
has spurned the olive branch proffered and proceeded with its chaotic and
often violent seizure of land with impunity.

The invasion of commercial farms that began in February 2000 has elicited
mixed responses among the stakeholders who at the outset did not expect
government to go to such extremes in the exercise.

After a year of violent disturbances which claimed several lives of both
farmers and their workers, some commercial farmers felt that the land issue
would not be resolved through confrontation with government. Numerous
challenges against acquisition in the courts have not achieved the desired
results. Even in instances where the courts ruled government supporters had
to evacuate invaded farms, the rulings were not obeyed with the police
claiming they could not act as this was a "political issue" or there was
"insufficient manpower". Government at the same time appointed new members
to the judiciary, whom commentators said were more likely to rule in favour
of the land programme with less regard for individual rights.

With confrontation having failed, the CFU convened a special congress in
March 2001 where a group of commercial farmers resolved they would work more
closely with government
They resolved that commercial farmers should be recognised as loyal
Zimbabweans, committed to playing a constructive role in the future of
"Zimbabwe is our home - we have nowhere else to go," the congress announced.
"We must resolve our differences. We must find a Zimbabwean solution.
Indeed, we believe we have found a Zimbabwean solution."

The result was the formation of the Zimbabwe Joint Resettlement Initiative
The congress appointed a team to open dialogue with government and other

The farmers' constructive attitude was well received and representatives of
the private sector joined them to propose a resettlement programme in
support of land reform. This proposal included the essential components for
a successful resettlement programme - land, tillage, inputs, credit and
technical support. In May 2001 the proposals were formally submitted to
Vice-President Joseph Msika. Msika responded before the month was out,
describing the proposals as a "step in the right direction in pursuit of
dialogue". The initiative was endorsed by Sadc and the Commonwealth as a
progressive programme through which land redistribution could be resolved
without conflict. However, violence continued on the farms.
In July 2001, government and ZJRI held their first formal meeting to verify
the submission of 531 farms, representing a total area of 967 452 hectares
out of the pledged one million hectares of uncontested land.

Despite ZJRI chief sponsor John Bredenkamp and leading negotiator Nick
Swanepoel convincing all farmers to withdraw court cases against government,
the state responded by instituting compulsory acquisitions under Section 8,
an order which gave farmers 90 days to vacate farms from the date of service
of the order.

ZJRI had offered to assist newly-resettled farmers on lawfully-acquired
farms with one hectare of tillage each for 20 000 settler families and to
donate $60 million worth of inputs for crop and livestock inputs to
kick-start the programme.

President Robert Mugabe on Heroes Day said ZJRI was an indication that part
of the CFU members had had a change of heart and wanted to join government
in the land reform programme. He said commercial farmers should continue to
change their style of relating to government.

"Let us turn our swords into ploughshares to work together because we cannot
avoid each other," Mugabe said. "That is still our philosophy, but not at
our peril, we do so provided there is reform, reform for injustice into
justice, unfairness into fairness, division into unity. This is our gospel
as it was in 1980."
Despite these words violence became widespread in Mhangura, Doma and on the
outskirts of Chinhoyi. Farmers, their families and staff had to be
evacuated. Equipment, inputs and cattle were looted and fixed fittings and
fixtures from houses were trashed. At least one house was razed to the
ground. In Hwedza, over 3 000 farm workers and their families were displaced
after war veterans forced farm management to pay them off and truck them

Commonwealth Foreign Ministers met in Abuja in September 2001 at the
invitation of Olusegun Obasanjo, President of Nigeria. Ministers from
Canada, Jamaica, Kenya, South Africa, Zimbabwe and the United Kingdom as
well as the Australian High Commissioner to London and the Commonwealth
Secretary-General attended, giving birth to the Abuja Accord. Resolutions
were passed regarding the land reform programme in Zimbabwe.

The Abuja Accord advocated single farm ownership, respect for the rule of
law, restoration of law and order, an end to new invasions and the
evacuation of illegal settlers on undesignated land. But given government's
track record of adhering to its own criteria, this became another lost

Government proceeded to list single owned-farms, breaching both ZJRI and the
Abuja Agreement.

Government went to court in September seeking an interim relief order
against an interdict granted in favour of the CFU in December 2000 that
government should restore the rule of law on farms and produce a land reform
programme in keeping with provisions of the Land Acquisition Act.

The interdict ordered government to produce proof that it had restored the
rule of law on commercial farms and had a workable land reform programme by
July 2001.
The new Supreme Court bench ruled in favour of government, saying the police
had restored order on the farms. But the aggression persisted.
With ZJRI, Abuja and other forms of dialogue falling by the wayside over the
past two years, farmers have been forced to revert to the legal route with
the formation of Justice for Agriculture (JAG).

JAG, a new farmers' representative body, has been formed to defend the
rights of farmers in place of the CFU which is seen to be backtracking
despite the fact that its members are winning cases against arbitrary land
acquisition in the courts.

JAG is now calling for a return to the rule of law and believes that
Zimbabweans should not accede to a disorganised and chaotic land reform

"To remain naïve would be to betray the hopes and needs of over two million
people who depend on agriculture for their lives," JAG has said.
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Zim Independent

Jury out on prospects for African Union

THE launch of the African Union this week marks a departure of sorts. It
reflects the determination by a handful of African leaders to abandon
Africa's troubled past - particularly its sterile rhetoric - and make the
most of the trade and investment possibilities opened up by globalisation
and measures such as the US African Growth and Opportunity Act.

There is an unambiguous commitment to improved governance by leaders signing
up to Nepad, which the AU has adopted as its lodestar, and an array of
bodies designed to make closer union a reality.

But will it work? Will the understandable cynicism, not least in Africa
itself, about the prospects for a new beginning, prove justified? After all,
grand schemes for African union have proved unattainable before.

Comparisons are being made with the European Union. This is a good template
because it illustrates just how far the AU has to go in making things happen
on the ground. The EU had its genesis in the European Coal and Steel
Community of 1951 which was designed to harness German post-war recovery to
French, Belgian and Dutch security concerns. That in turn grew into the
Common Market set up under the 1957 Rome Treaty and the subsequent European
Economic Community and European Union.

But all these structures with their councils, commissions and parliaments
were built brick by brick over 50 years with endless horsetrading and
inevitable concessions of sovereignty. There were also significant
mutualities such as German industry and French agriculture as well as
far-sighted statesmen working to stabilise the new European order on both
sides of the Rhine. The threat posed by the Communist bloc to their east
concentrated minds. Above all, closer union was built on the strong
foundations of stable national institutions.

African states have few mutualities. They all export unprocessed raw
materials and prefer external trade partners to each other. They are
reluctant to concede sovereignty and have weak national institutions. Nor is
there any commitment to civil society structures or democratic consensus
which underpin the EU.

There is another daunting reality here. While South Africa's Thabo Mbeki has
warned against the politics of blaming the West for Africa's shortcomings,
he is surrounded by fellow rulers who have no intention of departing from
their old habits. Col Muammar Gaddafi's crude demagoguery at Durban's Absa
stadium on Tuesday was a reminder of the obstacles ahead. So was the
presence of President Mugabe, the ghost at the feast.

Understandably the AU leaders agreed not to let Zimbabwe's crisis rain on
their parade. That will be postponed for subsequent peer review. But while
ignoring flawed elections in Zambia and Zimbabwe where ruling parties
ensconced themselves in power, they insisted that Madagascar's Marc
Ravalomanana, whose election was endorsed by his country's courts, be
subject to a re-run because he had the temerity to defeat an incumbent.

It is the concern that the AU will persist as a mutual survival club where
unstable mavericks like Gaddafi and Mugabe can strut upon the continental
stage that poses the greatest danger to the infant AU. If they succeed it
will not be taken seriously. With regional building blocs like Ecowas and
Sadc still struggling to promote intra-group trade, an economic union seems

Mbeki, Nigeria's Olusegun Obasanjo, Senegal's Abdoulaye Wade, and Algeria's
Abdulaziz Bouteflika have a mountain to climb if they want the new-look
Africa to succeed. They at least have on their side international leaders
who are committed to giving them a chance and domestic democratic
imperatives which the continent's rulers can no longer ignore.

There will be plenty of tests for the much-vaunted peer review mechanism
ahead. The AU and Nepad will be judged by how leaders handle their first big
test which they have been studiously ignoring for the past four months on
the grounds that institutional structures are not yet in place. Regional
heads have already told Mbeki they are not prepared to appear before any
review body to account for their performance. And the Nepad implementation
committee has been extended from 15 to 20 members to include its likely

That's a predictable start. It remains to be seen just how serious Africa's
leaders are about projecting a new profile. Until then the jury is out.
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Zim Independent

UN report blames Mugabe for deepening economic crisis

THE forcible occupation of white-owned farms in Zimbabwe has contributed to
the deepest economic crisis in the country's history, one which is set to
worsen, the UN warned on Tuesday in a damning report.

"Zimbabwe is currently a crumbling economy facing a grave economic crisis,"
the United Nations Economic Commission for Africa (ECA), based in Addis
Ababa, said in its annual overview of the economic health of states across
the continent.

"The land issue is at the heart of Zimbabwe's national economic crisis," it
said, adding that President Robert Mugabe's government showed a "tendency
for inconsistency".

"Land redistribution should go hand in hand with good governance to protect
output and jobs," it said.

"The economy has been contracting since 2000 and the outlook for 2002 shows
an increasing incidence of food insecurity, poverty, inflation and worsening
balance of payments," the report said.

Zimbabwe "is facing the worst crisis in its history," said Patrick Esea, the
director of the ECA's Economic, Social and Political division.

The report said that the occupation of white-owned farms, coupled with poor
weather conditions, had led to "the lowest agricultural performance in
recent years". In May, Zimbabwe's Finance minister, Simba Makoni, announced
that the country's overall economy shrank by 7,3% in 2002, while the
agricultural sector, the historical pillar of the economy, suffered a
decline of more than 12%. The ECA report projected negative growth of 5% for
2002. It noted that 75% of the country now lived in poverty. - AFP.
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Zim Independent

UN steps up Zim probe
Dumisani Muleya
THE United Nations panel of experts investigating the plunder of Democratic
Republic of Congo (DRC) mineral resources is deepening its probe on

Diplomatic sources said the UN team - which last year blamed Rwanda and
Uganda for pillage in the DRC - is now digging deeper into the scramble for
DRC mineral wealth.

The initial five-member group led by former Ivorian Energy minister Safiatou
Ba-N'Daw admitted failure with its Zimbabwe probe in April 2001.

However, a technical advisor to the current UN panel, which has more
experienced experts, was in the country last week to intensify
investigations into the complex Zimbabwean network of military-controlled
companies operating in the DRC.

The UN team, which is trying to uncover wide scale and systematic looting in
the DRC, is expected to release its report in two months. Zimbabwe was last
year accused of trying to chop down vast DRC rainforests in a US$300 million

Sources said controversial South African businessman and diamond dealer Niko
Shefer, who featured prominently during the rush for DRC mineral
concessions, was at the centre of the probe.

Information at hand indicates Shefer, former chair and chief executive of
Greater Diamond Company (Liberia) Ltd which was linked to the "blood
diamond" trade in Sierra Leone and Liberia, met Zimbabwean and DRC military
and political leaders over diamond mining deals.

Shefer is said to have met the late DRC President Laurent Kabila, his
cabinet secretary Kalal Lukani, leading Zimbabwean politicians, senior
defence force commanders, and retired Major-General John Dauramanzi in
December 1999 and January 2000.

Their discussions, sources said, revolved around mining activities.

Companies involved in mining exploration at the time included Comiex, which
represented Kabila and his immediate circle of political and military
advisors, Osleg which stood for Zimbabwean military interests, and Cosleg
which was a joint venture between Comiex and Osleg.

Another enterprise linked to the network was the Mineral Business Company
(MBC) established to extract diamonds, gold, copper-cobalt and other
strategic minerals.

Sources said MBC was initially financed by Cosleg although it later failed
to raise the required capital. Kabila, in consultation with Zimbabwean
defence force commanders and Dauramanzi, sources said, offered Shefer 50% of
MBC's business in return for the capital. About US$30 million was needed.

Shefer, also former chief executive of the collapsed Tandan International
Holdings (Pty) Ltd, was supposed to use a Zimbabwean company, Thorntree
Industries (Pvt) Ltd, as a corporate vehicle for his investment.

Efforts to get comment from Dauramanzi were unsuccessful.

However, Shefer - who was convicted for fraud in 1989 - denied these claims.
In an interview from Johannesburg last week, Shefer said he was not involved
in diamond deals.

"I was not involved because I don't deal in diamonds," he said. "I was only
invited during the launch of MBC in Kinshasa about two years ago."

Asked whether he met Zimbabwean leaders, Shefer said: "I have never met them
in my life. But I have met this retired old man, Dauramanzi for tea at
Meikles Hotel."

Sources said Shefer's Tandan Group helped to train Zimbabwean military
officers to grade and evaluate diamonds in January 2000.

Shefer, who was born in Ecuador and holds Israeli and South African
passports and speaks six languages, confirmed linking army officers to the
Diamond and Gold Exchange in Johannesburg for training.

"I introduced them to the School of Diamonds and gave them contact telephone
numbers," he said. "Whatever happened after that I don't know."

However, ZDF spokesman Mbonisi Gatsheni yesterday said: "The Ministry of
Defence and ZDF have no records of officers sent to South Africa for that

But sources said about 24 officers, mostly majors, both retired and serving,
were trained as diamond buyers in teams of six each.

"The first two-week course ended during the third week of January 2000 and
the following one was held on January 24," a source said.

"They were expected to cut 5 000 carats a month, which meant that 30 000
carats a month could be achieved when the first batch was deployed to work.
The officers were paid military-scale salaries."

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Zim Independent

GMB officials arrested
Loughty Dube
POLICE in Matabeleland North have arrested 30 officials for allegedly
abusing food aid for personal gain. The officials obtained the maize for
distribution to hungry villagers from the Grain Marketing Board (GMB).

Some of those involved have appeared in court.

The arrested suspects include GMB officials, war veterans, councillors and
District Development Fund (DDF) officials.

A source in Bulawayo said the arrests could just be the tip of an iceberg.
This would confirm claims by humanitarian food organisations and donor
age-ncies that food distribution had been politicised and diverted to feed
Zanu PF supporters, the source said.

The food scandal allegations surfaced amid reports that DDF truck drivers at
the Bulawayo depot had been suspended pending investigations into
allegations that they were demanding payment for food deliveries to drought
relief recipients.

The 30 suspects are believed to be part of a team of government workers
operating in cahoots with war veterans and Zanu PF councillors in diverting
food relief meant for starving families in Matabeleland North.

Most of those arrested were operating in the drought-ravaged districts of
Binga, Bubi-Umguza and Tsholotsho.

A DDF official in Bulawayo refused to comment on the suspension of the truck
drivers and referred all questions to the provincial governor, Obert Mpofu,
who was not available for comment.

Five of the accused war veterans from Tsholotsho appeared in court on
Tuesday and were remanded in custody after they failed to raise $20 000 each
in bail.

A police spokesman confirmed the arrests and said some of the suspects had
already appeared in court.

"It is true that police arrested some officials involved in a food scam and
some of them have appeared in court. Others are yet to appear," said the
police spokesman.

According to information gathered by the Zimbabwe Independent, the 30
arrested were diverting truckloads of drought relief maize meant for
starving villagers and selling it at inflated prices on the black market.
Some of the maize was sold along political lines.

Under the government drought relief scheme, maize is official-ly sold at
$500 for a 50kg bag but the officials are said to have been selling it for
as much as $1 500 a bag.

"War veterans took advantage of the fact that they are overseeing the
distribution of drought relief in the districts and they charge as much as
$1 500 for a 50kg bag of maize," said the source.

"The war veterans are running thriving businesses from their homes and one
can buy maize and other scarce goods at very exorbitant prices but if one is
a known Zanu PF supporter one can buy the food cheaper," said the source.
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Zim Independent

Citrus farms face disease threat
Blessing Zulu
THE citrus farming sector worth US$45 million is under threat from a major
outbreak of psylla and black spot diseases on farms seized by war veterans
in Mashonaland Central province.

Marauding war veterans have seized listed and unlisted farms in the

There are fears the new settlers may not be able to buy the chemicals needed
to halt the spread of the diseases.

Diseases such as psylla and black spot ruin the appearance of citrus
products, thereby rendering them unexportable. Both re-occur every year and
are spread by wind and the movement of oranges to market.

"Psylla has to be sprayed now with Citramet and Azodrin," said an
agricultural expert. Spraying of black spot begins in October using
chemicals such as Benlate and Diathane.

"The EU will not acecpt black spot-infested fruit and those with psylla will
be lucky to make the local market," the expert said.

Zimbabwe exports around three million cartons of citrus every year valued at
about US$15 a box.

"There are fears that the settlers who are just reaping the oranges after
forcibly evicting the farmers will not be able to buy the chemicals needed
to combat the spread of these diseases," the source said.

Jenni Williams, spokesperson for the Commercial Farmers Union (CFU), said
the looting of farm produce had been stepped up at the multi-million dollar
horticulture-producing Insingisi Farm near Bindura.

"The invaders who have been hand-picking the farm produce have now moved in
with two tractors and two trailers to harvest the oranges in the farm
orchard," Williams said.

The owner of the farm, Collin Taylor, told the Zimbabwe Independent last
week that the farm was not listed for resettlement. The farm has an orchard
valued at $5 million and a $25 million packhouse for oranges. The farm also
grows roses for sale in the lucrative Dutch market.

Jim Davies, a farmer in Bindura, was served with a Section 7 order which
allows him to contest his farm's acquisition in court.

"I planted my oranges 10 years ago and I was just about to reap the benefits
but my farm has been affected by settlers," said Davies.

"Last year I earned US$14 000 and this year I am expecting more because as
trees grow older you reap more. Last year I exported the fruit to Europe and
this year I am exploring the Russian market which is offering better

Workers at Thrums Farm said the farm owner, Brian Crawford and most of their
fellow workers, had fled after being threatened although the farm had not
been listed. Guy French of Nyamuwanga Farm in the same province was also
evicted by the settlers who have descended on his orchard for his orange

The oranges are being sold at Mbare Musika while some are left to rot on the
ground, posing a serious disease hazard.

Some farmers have opted to leave the country in search of greener pastures.
Mike Hood of Sun Croft Farm in the province has already left the country for

Fred Wallis, the managing director of the $450 million Biri Dam, said his
plans to venture into horticulture had been dashed.

"Most of the 68 farmers who had invest-ed in the scheme are affected by
either Section 5 or Section 8 orders," said Wallis.

"Horticulture, especially citrus, would certainly have been on the programme
of a significant percentage of various far-mers in our scheme but as the
situation stands, no one can invest in horticulture, or anything else for
that matter," said Wallis.
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Zim Independent

Chinamasa tried to 'use' parly - Blackie
Dumisani Muleya
HIGH Court Judge Fergus Blackie, who retired yesterday amidst a storm of
controversy after he sentenced Justice Minister Patrick Chinamasa to three
months in prison for contempt of court, has said the minister had tried to
use parliament to avoid arraignment.

In his ruling, Justice Blackie, who stepped down at the age of 65 after 24
years of judicial service, said Chinamasa was an interested party when he
introduced the General Laws Amendment Bill in parliament earlier this year.
He said the minister wanted to duck the charge of "scandalising the court".

The Bill, which also contained amendments to the Electoral Act, proposed to
alter the Criminal Procedure and Evidence Act to stop the courts from
initiating contempt of court proceedings against individuals.

The minister however failed in his endeavour because the Supreme Court later
set aside the Bill as unprocedural.

Blackie said the amendment inserted a new section saying a court or tribunal
may, on its own motion, only institute proceedings for contempt of court
against any person if the contempt occurred before the court or when the
contempt took place in relation to an ongoing case.

It would also prevent retrospectively the courts from instituting charges
against people accused of scandalising the judiciary.

Blackie said Chinamasa claimed the reasons for this amendment was to help
the public to freely express their opinions on judgements because currently
"the public's voice is muffled by fear of being charged with contempt of

However, the judge dismissed Chinamasa's claims.

"Chinamasa has given no explanation or justification for the need to make
this amendment retrospective," he said. "In the circumstances of this case
the reason is obvious, though at no stage in the debate (in parliament) did
Chinamasa reveal that reason."

Blackie said Chinamasa's change was calculated to compromise the
independence of the judiciary.

"The amendment merely takes away from a court the independence and
discretion to determine for itself whether to institute proceedings for this
type of contempt," he said.

The judge said the minister's claim was not supported by precedent.

"This case (against Chinamasa) was the first of its kind in the High Court
in 20 years," he said. "There has been no instance in Zimbabwe of abuse by
the court of this prerogative or its procedures. There has been no public
outcry and no academic writing in Zimbabwe against its use or its

Blackie said the amendment was self-serving and insincere.

"This bald statement by Chinamasa of the reasons for the amendment is
couched in terms of concern for the right of the general public to feel free
to criticise judges without fear of being held liable for contempt," he

"It is ironic that the amendment was introduced into parliament in the same
session as two other Bills, the Public Order & Security Bill and the Access
to Information and Protection of Privacy Bill. Both of these Bills are now
Acts. Both of them limit, on the pain of severe penalties, the public's
right to criticise the executive."
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Daily News

      Councils accused of failure to account for ZINRA funds

      7/19/02 8:24:20 AM (GMT +2)

      From Sandra Mujokoro in Bulawayo

      THE Zimbabwe National Roads Authority (ZINRA) has blamed urban
councils of failing to account for money drawn from the Road Fund.

      This has led to delays in disbursements amid allegations that the fund
does not have enough money.

      During a meeting in Bulawayo between the Urban Councils' Association
of Zimbabwe and members of the parliamentary portfolio committees early this
week, Harare Executive Mayor, Elias Mudzuri, asked where the money was going
as only a few councils were benefiting from it.

      Mudzuri said most councils were struggling to raise money and taxing
already overtaxed
      residents to fund road repairs when the Road Fund was set up
specifically for that purpose.

      He said most roads were in urgent need of repair in most cities and
towns but this could not be done as there were no funds.

      The Minister of Transport and Communications, Swithun Mombeshora, said
the authority had so far collected about $2 billion from the two-and-a-half
percent levy from fuel pump sales.

      More money was expected from traffic offence fines and vehicle

      According to a reliable source, only $600 000 is currently in the fund
's coffers, not enough to meet the demands of local authorities.

      James Bwerazuva, a ZINRA board member, could not confirm the amount in
the Road Fund, saying the money was available but the councils who failed to
account for the money they received last year would not be given any more.

      The money is used for refilling potholes only while the cost of
resurfacing and building new roads was met by individual councils.

      "Some local authorities do not have qualified engineers and
accountants to give comprehensive acquittals on how the funds were used,"
said Bwerazuva.

      He said before the money was disbursed, the councils should approach
ZINRA with a detailed works programme indicating the roads to be repaired
and the expected costs.

      He said the initial money was given without conditions but the second
tranche could not be given out before the councils fully accounted for the
first tranche.

      "Our secretariat has received several complaints that some councils
have diverted the Road Fund to other council commitments. This is very easy
to trace since the money is deposited into a specific account," said

      He said about 20 urban councils had come back for the second
allocation but none had come back for the third time.

      He said most urban councils were reeling under a financial crisis and
had been forced to divert funds to cover long-standing problems.
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Daily News

      Lawyers attack Moyo's outburst over Chinamasa

      7/19/02 8:23:41 AM (GMT +2)

      By Sam Munyavi

      Lawyers' associations and civic organisations yesterday strongly
criticised Jonathan Moyo, the Minister of State for Information and
Publicity, for his vitriolic attack on Justice Fergus Blackie following his
judgment against Patrick Chinamasa, the Minister of Justice, Legal and
Parliamentary Affairs, on two counts of contempt of court.

      The Law Society of Zimbabwe (LSZ), the Legal Resources Foundation
(LRF) and the
      National Constitutional Assembly (NCA) said Moyo's outburst in the
government-controlled Herald newspaper was in contempt of court and he
should be charged.

      Blackie on Wednesday sentenced Chinamasa to pay a fine of $50 000 or
serve three months in prison on the first count and three months in prison
without the option of a fine on the second.

      The first charge arose out of criticism Chinamasa made in The Herald
in September 1999 on sentences imposed by Justice Mahomed Adam on three
Americans convicted of possession of arms of war.

      Chinamasa said the sentences were too lenient and induced "a sense of
shock and outrage in the minds of right-thinking people".

      The second charge was that he did not attend a contempt of court
hearing relating to the first charge.

      Moyo attacked Blackie's judgment as a "kangaroo judgment" and accused
him of racism.
      Sternford Moyo, the president of the LSZ, would not comment for
ethical reasons since he had represented Chinamasa in a related matter.

      Speaking on behalf of the society, Mordecai Mahlangu, a counsellor
with the society, said Moyo's comments were "most unfortunate and the
language was most intemperate".

      Mahlangu said: "Our greater concern as the Law Society is that on his
own admission the minister had not seen the judgment. On what basis can he
base his criticism of a judgment he has not seen? It was not an informed

      Mahlangu said Moyo was "given to outbursts. He is an expert on

      Sarah Moyo, the chairperson of the Legal Resources Foundation board of
trustees, condemned Moyo's language as "intemperate and disrespectful".

      She said: "As a government minister he should conduct himself in a
more sober manner. He doesn't do anybody any good. The language is terrible,
even the conduct of the minister himself."

      Lovemore Madhuku, the chairman of the NCA and a lecturer in
constitutional law at the University of Zimbabwe, said: "Moyo's utterances
are even worse than Chinamasa's. The courts should charge him with contempt.
If they don't, the public will lose confidence in them."

      He said Moyo's utterances were "a very serious attack on the rule of
law. The first thing they should have done is go to the Supreme Court. That
is how the rule of law operates. You simply cannot say you are not going to

      He said it was wrong for Moyo to label Blackie a "Rhodesian racist"
when he was, in fact, appointed to the bench in 1986 by President Robert

      Madhuku said Chinamasa risked being arrested by members of the public
as he was "a fugitive from justice."

      Blackie, who retired at the end of the day yesterday, refused to be

      Chinamasa, who was said to be out of the country, could not be reached
on his cellphone yesterday.

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Daily News

      Kangai acquitted of $228m corruption

      7/19/02 7:55:13 AM (GMT +2)

      By Pedzisai Ruhanya Chief Reporter

      KUMBIRAI Kangai, the former Minister of Lands and Agriculture, and a
luminary of the liberation struggle, was yesterday acquitted by the High
Court in Harare on corruption charges involving $228 million.

      His former permanent secretary, Tobias Takavarasha, and Martin
Muchero, the suspended chief executive of the Grain Marketing Board (GMB),
were also set free by Justice Charles Hungwe.

      Hungwe noted that the State failed to lead evidence against the three
and the allegations levelled against them were based on suspicions that
criminal offences might have been committed.

      He said the investigating officer's suspicion that criminal acts might
have been committed failed to stand because under cross-examination by
Jonathan Samkange, the defence lawyer, the court was not convinced by the
police evidence.

      Hungwe ruled that as far as Kangai and Takavarasha were concerned,
there was no evidence to show they did anything wrong in the conduct of
their business as public officials.

      He rejected allegations by the State that Kangai and Takavarasha
connived with Muchero to defraud the government.

      The judge said because Kangai, Takavarasha and Muchero were doing
their work separately, the onus was on the State to convince the court they
connived to commit criminal offences, especially in awarding tenders to four
different companies, for their benefit.

      He said Muchero was overzealous in carrying out his duties when he was
tasked by the government to turn around the GMB into a profit-making
organisation, but that did not
      constitute a criminal offence.

      Hungwe said he accepted the evidence of Charles Kuwaza, the former
permanent secretary in the Ministry of Finance and Economic Development.

      Kuwaza said the correct procedure was that if failure to go to tender
resulted in financial prejudice, the minister could take action against the

      Hungwe ruled that if the State believed that by failing to go to
tender to procure maize, Muchero acted unlawfully, then his juniors should
also have been charged.

      The judge said there were so many inconsistencies and contradictions
in the State's case and the investigations were incomplete.

      He said the State also failed to establish whether the maize allegedly
exported was the same maize being imported, as alleged.

      Hungwe dismissed the evidence given by Renson Gasela, the MDC MP for
Gweru Rural, and former GMB general manager.

      He said Gasela gave his opinions on the procurement of maize and tried
to implicate the three.

      Kangai yesterday said he wanted to rest and would comment on the court
outcome later.
      "I am very happy, but right now I need some rest. You can come back to
me later," he said.

      Kangai, 64, was on $250 000 bail on a charge under the Prevention of
Corruption Act.

      During the trial, Kangai maintained that he was innocent of any
wrongdoing and alleged that some politicians were out to destroy him. Kangai
lost his Cabinet post following his arrest.

      Takavarasha was on $50 000 bail for allegedly misappropriating nearly
$160 million through fraudulent deals at the GMB.

      Muchero, also on $50 000 bail, faced charges of fraud and corruption
involving $176 million.

      The State alleged that following a poor farming season in 1997/8, the
GMB was tasked to import 460 000 metric tonnes of maize for domestic
consumption and to replenish strategic grain reserves.

      Kangai, the State alleged, convened a meeting attended by Takavarasha,
Muchero and the late deputy secretary for Lands and Agriculture, Gordon
Sithole, in June 1998 at which he underlined the need to stick to proper
grain buying procedures.

      That entailed the GMB going to tender and adhering to pricing and
import and export programmes and other regulations that govern parastatals
in terms of the Audit Exchequer Act and the GMB Act.
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Zimbabwe courts v government

Andrew Meldrum, Harare
Friday July 19, 2002

An extraordinary showdown looms between President Robert Mugabe's government
and the country's judicial system after the justice minister Patrick
Chinamasa was sentenced to three months in jail for contempt of court.
A leading government official said the order by a high court judge to jail
Mr Chinamasa would be defied. "The sentence imposed on the minister has no
force of effect," said David Mangota, permanent secretary of the justice

Mr Chinamasa's prison sentence, and a fine of Z$50,000 (£650), were imposed
on Wednesday by judge Fergus Blackie after the justice minister repeatedly
refused to appear on contempt of court charges.

Mr Chinamasa, one of Mr Mugabe's most trusted ministers, was called to the
court on the grounds that his harsh public criticism of a court decision
showed contempt. Mr Chinamasa had attacked as too lenient a sentence of six
months' imprisonment on three Americans convicted of illegal possession of
arms. Mr Chinamasa said the sentence "induced a sense of shock and outrage
in the minds of right thinking people".

"He has deliberately scorned and avoided the process and directives of the
court. His only response to the authority of the court has been abuse and
threats," Judge Blackie said on Wednesday.

The influential information minister, Jonathan Moyo, attacked the jail
sentence handed to Mr Chinamasa as "shocking, outrageous and sinister".
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Business Day

Harare mocks judge's sentence


HARARE Zimbabwe's government yesterday ridiculed a judge who sentenced
Justice Minister Patrick Chinamasa to jail on contempt of court charges,
saying the sentence was of "no force or effect".

This followed Wednesday's decision by Judge Fergus Blackie, who retired from
the bench yesterday after 24 years, to sentence Chinamasa to three months in
jail and a Z50000 fine on two charges stemming from his criticism of the
sentence given to three Americans found guilty of possessing illegal arms in

Police refused yesterday to enforce the sentence, while Information Minister
Jonathan Moyo described Blackie as "a racist Rhodesian" who presided over "a
kangaroo court".

Observers said the government's defiance was dragging the country into open
conflict between President Robert Mugabe's regime and the judiciary, much of
it regarded now as seriously compromised by the appointment of pro-Mugabe
judges to the bench.

Legal experts, who asked not to be named, said attacks on the judge
"constitute direct interference in the judiciary".

"Only the supreme court can strike down a judge's ruling. Now we have a
civil servant telling a judge his judgment will not be obeyed," one said.
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Zimbabwe Farm Seizures May Be Jeopardizing Drought Aid
Elaine Johanson
United Nations
18 Jul 2002 22:32 UTC

Donors pledging emergency drought assistance to southern Africa Thursday
have expressed concern about what they consider misguided government
policies in the region, that may be worsening the crisis. U.N. officials
admit this concern could limit the amount of aid the major donors are
willing to give.

There are six countries in crisis in southern Africa: Lesotho, Malawi,
Mozambique, Swaziland, Zambia and Zimbabwe. It is Zimbabwe that is causing
donors most concern. Of the 13 million people facing starvation in the
region, about six million of them live in Zimbabwe. Meanwhile, the
government there is engaged in a very controversial land-reform program,
which involves seizing and breaking up the farms of white farmers.

Donors and U.N. officials agree the land redistribution policy has made a
bad situation worse in Zimbabwe. Kenzo Oshima of Japan, the U.N. coordinator
for emergency relief, notes that in 1992, during one of the worst food
crises to hit the region, Zimbabwe was still a food-surplus country. Today,
Zimbabwe is a food-deficit country.

"We have noted that there are a number of policy issues affecting the crisis
and compounding the crisis," he said. "The fast-track land resettlement
program has seriously affected one of the most productive sectors, and is a
leading cause of the decline of the economy and a factor that is
contributing to the crisis."

U.N. officials say Zimbabwe has other policy flaws, notably in the private
sector. The government is said to have a virtual monopoly in the marketing
and distribution areas.

A Zimbabwean representative told the gathering of donors that the government
is trying to make some policy adjustments. But apparently not in the land
program. He explained Zimbabwe believes measures to meet drought situations
in the longer-term hinge on giving the land back to the people.

But it is the present crisis and the possibility that donors will hold back
on aid that commands the attention of relief workers. Mr. Oshima says some
major donor governments seem to be treading carefully and keep coming back
to the so-called issues of governance.

"The extent to which the governance-related problems influence a donor
decision to provide emergency assistance, I do not know. But I think the
process of dialogue has started, including in Zimbabwe," he said.

The United Nations has appealed for more than $600 million in emergency aid
for southern Africa. This would be used primarily for food shipments. But
some of the funds would go toward propping up nutrition, health, water,
education and child protection services.

U.N. Secretary-General Kofi Annan has named James Morris, the director of
the World Food Programme, as his special envoy for the humanitarian
situation in southern Africa. Mr. Morris will work with African governments
to promote a better response to the food emergency. He is also expected to
keep in touch with the donors to ensure the aid is used efficiently and
going to those most in need.
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Agape Press News Summary July 18, 2002
 Bob's Buddy, Farrakhan "most evil ever..."

One of the nation's most prominent black conservatives calls the current
liberal black leadership the most evil combination ever -- and he believes
they are also "traitors". Jesse Lee Peterson says while President Bush
prepares for war against Saddam Hussein, Nation of Islam leader Louis
Farrakhan is showing his support for the Iraqi dictator. Peterson points out
Farrakhan actually made a trip to the rogue nation and was quoted as saying,
"The Muslim-American people are praying to almighty god to grant victory to
Iraq". Peterson thinks Farrakhan should stay in Iraq. In addition, he says
"the NAACP, Jesse Jackson, Louis Farrakhan and others are traitors to this
country," and says even black members of Congress are part of this liberal
black "Rogue's Gallery." Peterson says Cynthia McKinney of Georgia made the
comment the president allowed the September 11 attack on America to happen
so he, Bush, could profit from it. Peterson asks: "How wicked can you get?"
Peterson says liberal blacks like Farrakhan and McKinney are domestic
enemies who hate America and are out-of-step with most black Americans on
these issues.
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EU urged to turn screw on Mugabe

Ian Black in Brussels
Saturday July 20, 2002
The Guardian

Britain is urging the European Union to impose new sanctions on Zimbabwe
after President Robert Mugabe's failure to meet international demands on
democratic reforms and ending violence.
EU foreign ministers, including Jack Straw, will meet in Brussels on Monday
for what promises to be a heated debate on the issue, with deep divisions
among member states about how to proceed.

Diplomats said yesterday that Britain, backed by Germany, Sweden and the
Netherlands, wanted the immediate extension of a visa ban and assets freeze
to 20 more senior members of the ruling Zanu-PF party.

Mr Mugabe and 19 of his closest ministers and security chiefs were targeted
in earlier sanctions agreed in February, though those measures have been
widely criticised as ineffective.

Other EU members want to put off any action until a meeting between the EU
and the Southern African Development Community group of countries - which
includes Zimbabwe - in September.

Amid mounting demands for action, Geoffrey Van Orden, vice-chairman of the
foreign affairs committee of the European parliament, said yesterday: "EU
countries are not enforcing sanctions. There is supposed to be a travel ban
and asset freeze in place on Mugabe's close supporters but senior Zimbabwean
ministers and officials have been at large in Europe in recent weeks.

"Unless the bans are extended to include any key regime figures, ie all
ministers, senior military and police officers, as well as leading
businessmen who have helped to bankroll Zanu-PF, then the EU will have

The Save Zimbabwe campaign also called for the "real and enhanced
application of smart sanctions" against the regime. It demanded more aid to
help stave off the threat of famine while ensuring any humanitarian
deliveries were not creamed off by the regime.

Sanctions were imposed after Mr Mugabe refused to let EU observers freely
observe the presidential elections. Europe also cut off ?128m (£82m) in
development aid.

The EU condemned the electoral process as "deeply flawed" after months of
state-sponsored violence and intimidation, a huge propaganda campaign by
state media and widespread disenfranchisement.

Since his disputed victory Mr Mugabe has stepped up his campaign to
redistribute farmland to landless blacks, telling white farmers to stop
working their fields in preparation for giving them up.
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Zim reduced to spectator at AU launch
Paul Themba Nyathi

In Durban last week the African Union (AU) came into being, finally replacing the Organisation of African Unity (OAU) which has for the past 39 years represented Africa's collective fortunes and misfortunes.

The OAU can, to some degree, claim credit for expediting the total decolonisation of Africa, and it can to a large extent also be credited with creating an intra-African appreciation of the need for continental unity. What has clearly been the OAU's major achievement has been its ability to promote the African continent's distinct identity.

The OAU's attempts at conflict resolution among its member states have been less successful as evidenced by continued internal and cross-border conflicts still raging in some parts of the continent. But the OAU's sigal failure is to be found in Africa's economic decline and the poverty which relentlessly stalks the continent. Hopefully the AU will deal with the issues that matter most to ordinary citizens of Africa. These issues all come back to good governance whose direct windfall should be peace, security and economic stability, leading to affordable lifestyles as well as food security for Africa's people.

Should the AU allow the likes of Gaddafi and Mugabe to use it as a platform for parading their philosophies of hate and racism, then the AU will go exactly the same way as the OAU - economically and dogmatically. The archaic nature of the Gaddafi/Mugabe paradigm is a direct cause of the misery of those countries' populations.

"Musoro wegudo wave chinokoro," so our combative anti-imperialist appeared shut out of the Durban conference. It took Gaddafi's eccentric posturing to remind the delegates that Mugabe was also in attendance. Mugabe, the destroyer of his country's economy, the impoverisher of his own people and the man who boasts of degrees in violence, had nothing to offer at a conference where serious leaders sought ways out of their countries' difficulties.

Even far away in Durban, where Africa's place in the community of civilised nations of the world was being mapped out, Gaddafi brought everybody down to earth with a thud. There are in Africa still people like Gaddafi and Mugabe who have defined their leadership around tormenting their citizens on the basis of colour.

"My friend Mugabe, forgive the whites. They are now poor - forgive them. You are free. You are bigger than them. We are mighty." So ranted Gaddafi in that incautious moment of vintage dementia.

How many times have we heard neighbours pleading with a crazed wife-beater to stop beating his wife because the "errant wife" has now learnt her lesson and that the violent crazed husband is bigger than the wife? "Hayibo Gushungo umyekele usezwile baba. Kambe usungaze umbulale?" Gaddafi's plea to Mugabe is played over and over in violent households where wife-bashing is prevalent. In most cases, the crazed husband is not aware of his demented and destructive behaviour until it is too late and there is a fatality.

The only contribution to that historic event that Mugabe could make was a stark reminder from his friend Gaddafi that the world is dealing with a vindictive, violent man who had to be prised off his helpless victim by being humoured into believing that he is mightier than the prey. I hope the assembled African heads of state understood what ordinary Zimbabweans have to live with every day. I hope they understood how meaningless most of the AU's Constitutive Act provisions are when Africa tolerates and condones actions of leaders who brutalise their own citizens.

Zanu PF is not an ordinary political party. It is a cult that inflicts violent rituals on its political opponents. Its economic policies belong to the world of the occult, and these policies lend themselves to the voodoo economic processes that have led Zimbabwe's economy to the graveyard. The country is being bled to death by the forces of darkness in Zanu PF.

Is it possible that someone at the Durban conference finally noticed this sorry condition of Zimbabwe? Does that explain why those who would normally be Zimbabwe's high priests of voodoo economics, its delegation, joined the rest of the Southern African Development Community, according to a report, to reluctantly endorse Nepad?

Despite the presence of Gaddafi, Mugabe and other relics of that feature of African leadership that is absolutely obnoxious, the Durban conference gave Thabo Mbeki and his reforming colleagues a grudging nod to lead Africa out of its largely self-inflicted poverty and disgrace.

The New Partnership for Africa's Development is indeed a challenging and complex initiative that should inform serious debate in Africa generally and particularly here in Zimbabwe, where all attempts at pursuing specific economic development strategies have met with total failure - remember Esap, Zimprest, Merp, 10-point recovery plan, etc. Remember the first five or six years after Independence when we had, North Korea-style, a tendency to set economic objectives for each year? Who will remembers Gore rekupindura zvinhu? Gore remasimba evanhu? Whatever became of those ridiculous postures?

Zimbabweans will find it difficult to engage in a meaningful debate on Nepad because of the oppressive political environment in the country. Among other requirements, Article 49 of Nepad requires that African leaders take joint responsibility for this juggernaut - promoting and protecting democracy and human rights in their respective countries and regions, by developing clear standards of accountability, transparency and participatory governance at the national and sub-national levels.

With its Public Order and Security Act (Posa), Zimbabwe fails at the very first hurdle. Debate on political matters in Zimbabwe now is less frequent than it was during the worst of Ian Smith's Law and Order (Maintenance) Act. One understands why there is hostility towards Nepad in Zimbabwe: it is considered inconvenient, unAfrican and imperialistic because it espouses concepts like "democratic societies".

In Zimbabwe there is only one interpretation of democracy and that is defined by Mugabe and Zanu PF's will. Anything else is imperialistic nonsense peddled by the MDC and their British sponsors. Nepad, for all its flaws - and they are there - at least attempts to look forward. Mugabe and Gaddafi seek to take Africa 100 years backwards.

Durban accentuated Zimbabwe's isolation vividly. Here is a country with 22 years of governance experience behind it, being upstaged by eight-year-old South Africa on matters that are important and relevant to Africa's future.

Zimbabwe, with some of the most experienced economists found in international financing houses spread all over the world, that was the envy of the region and the continent at large, was reduced to a spectator in Durban, in fact an embarrassing spectator at that. The rest of the world today perceives us as it does thanks to Mugabe's barbaric approach to governance. There is nothing sovereign about Mugabe's brand of governance. It is primitive, predatory and shameful, and we reject it.

Paul Themba Nyathi is MDC director of elections.

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Economy continues spiral of decline
Godfrey Marawanyika

LACK of clear policies has, more than anything else, accounted for Zimbabwe's rapid economic decline since 1997, analysts say.

Due to the ad-hoc economic management for the past two years, analysts see no immediate reversal in the country's fortunes.

Policy inconsistencies and reversals have seen some sectors of the economy running their own exchange rate regimes while the Zimbabwe dollar has remained pegged at an official rate of $55: US$1 since October 2000.

Economic rationale has been overtaken by political expediency as the country lurches from one crisis to another.

Per capita gross domestic product (GDP), which peaked at US$2,115 billion in 1996, has declined to a projected level of US$1,529 million by the end of this year. Export performance has continued to decline since 1997, with the exception of 1999 when some notable gains were registered.

Government's failure to rein-in its run away expenditure resulted in the budget deficit reaching 23,7% of GDP in 2000. Fiscal indiscipline by the government has remained a serious problem, with the domestic debt rising from $25 billion in 1995 to $300 billion by June this year.

External debt service ratio (debt service as a percentage of exports of goods and services) rose from 17% in 1997 to 25% by 2000.

According to the World Bank, debt service difficulties become increasingly likely when the ratio of the present value of debt to exports reaches 200-250% and the debt service ratio exceeds 20-25%.

Savings as a proportion of GDP collapsed from a level of 21% in 1995 to 7,2% by last year, while investment as a percentage of GDP declined from 26,1% in 1995 to 8,6% by 2001.

According to official figures, employment fell from a growth rate of 4% in 1996 to minus 8,7% by last year. By contrast, population growth has remained stable at around 3%.

In December 1997 government was forced by its 50 000 militant war veterans to pay each one of them a once-off lumpsum of $50 000 and a monthly pension of $2 000 each from January 1998. This came to $4 billion, which was not budgeted for.

In another policy adventure in 1998, the government sent troops to the Democratic Republic of Congo at high cost to the economy gobbling at least US$3 billion a month. The following year the government decided to increase the salaries of President Robert Mugabe, cabinet ministers and provincial governors by 178%. In January 2000, all civil servants were awarded salary increases ranging from 69% to 90%, an expenditure not budgeted for but embarked on to woo votes in an election year.

This unbudgeted expenditure meant that the government had to resort to borrowing to meet the payouts. The farm invasions of 2000 led to a general breakdown of law and order and raids on factories, which led to the subsequent resignation of former Minister of Industry and International Trade Nkosana Moyo in protest.

The general decline in the state of the economy took a severe knock ahead of the presidential election March when war veterans and Mugabe supporters were left to run riot on commercial farms and stop all production.

Despite the introduction of the 18-month Millenium Economic Recovery Programme (Merp) in 2000 to arrest the economic decline, there was no political will to pursue this initiative.

Like its predecessor Zimprest, the programme was hardly followed and the economy is now being managed on a crisis basis. The government says it has not ditched Merp but has instead incorporated it into its agro-led recovery programme.

Over the past three years the government has been battling to find a workable solution to address the exchange control problems to avail.

After abandoning the fixed exchange rate system that had been in use in the 1980s, the government embarked on economic reforms in 1991 and operated on a dual exchange rate system until June 1994. The authorities adopted a managed floating exchange rate the following month, but due to inflation the exchange rate had by August 1995 become overvalued. The negative effects were not readily visible until 1997 because the central bank had healthy foreign currency reserves. This, coupled with further crashes in 1998, saw the monetary authorities returning to the fixed systems of the 1980s.

Between February 1999 and August 2000, the currency was fixed at $38 to the US dollar. The exchange rate policy was given the impression that it was working well because of 1997/8 crashes had left the currency significantly undervalued.

However, by December 1999 the under-valuation had all been wiped out by rising inflation and the monetary authorities experimented with a crawling peg system for two months from August to October 2000. Since then the official exchange rate has been fixed at US$1 to $55 and the resultant development of a thriving parallel market where the greenback can be sourced at $700.

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Zim Indep.

The ZSE takes on global capitalism
At The Market with Tetrad

CALL it a blow against international capitalism and American imperialism. Whilst the ZSE industrial index reaches new record levels, international stockmarkets are plunging.

In May 2000, the Dow Jones industrial index was at about the same level as the ZSE industrial index at 10 500. Since then, the ZSE index has risen a staggering 748% to 88 644 and the Dow Jones has fallen 20% to 8 470. All of this where the US economy has fallen marginally in a couple of quarters whilst our economy has plunged. Imagine what the index would be if we had had positive economic growth? Doesn't George Bush wish he had our economy?

Probably not. A great deal of the fall in share prices in the US, with most of the world catching the cold, is to do with the corporate governance issues that arise from some spectacular accounting frauds at Enron and WorldCom amongst others. The Americans are beginning to realise that their generally accepted accounting standards (GAAP) allow a fair amount of leeway in how one actually describes the profit figure at the end.

Stories abound over the profit measures used, the favourite being EBITDA (earnings before interest, tax, depreciation and amortisation) or, as the Spectator describes it, the earnings you would have had if you hadn't had to pay any expenses.

Corporate executives' share options were supposed to align their interests with those of the shareholders. In fact, in a number of cases executives did everything to increase share prices so that they could benefit from their options. "Everything" included fudging the figures. Zimbabwe shouldn't have that sort of problem except perhaps with the hyperinflationary accounting standard IAS29 (incomprehensible accounting statements) that increasingly looks as if it was drafted by the Anderson's accounting practice. Like America, however, executive options are not currently expensed when issued, they simply appear as an increase in the number of shares in issue.

Another area where Zimbabwean companies may face problems is of course what exchange rate to use. Zimpapers apparently held discussions with their auditors as to what the appropriate exchange rate would be to denominate a Sterling liability. The auditors felt that it should be at the parallel market rate whilst Zimpapers believed, correctly, that there was no single freely accessible market and that the actual parallel rates talked about were largely "one-off" occurrences. Not to say that there is no parallel exchange rate but only that it is extremely difficult to get any precise information that is consistent across the financial markets.

In addition to the parallel rate, anecdotally between Z$600 and 700 to the US$, there is the blend rate which is the net rate one would get if you sold currency giving 40% to the Reserve Bank at the "official" rate of $55 to the US$. Ignoring the other exchange rates such as tobacco and gold, there is also the implied rate on Old Mutual shares, currently at around $552 to the US$ on the relative prices between London and Zimbabwe.

If George Bush had invested in the ZSE he would have made a spectacular profit but not enough to compensate for the sharp decline in the exchange rate. He might also have had a small problem repatriating the proceeds! Looking back again to May 2000 his US$100 would have bought $3 800 which would now be worth $32 240 or just over half the money he started with in May 2000, at the Old Mutual rate. Even losing money on the Dow Jones industrial index he would still be 38% better off. With those kinds of numbers he probably prefers his own problems.

It is instructive though to revisit our exchange rate problems especially with much rumour and speculation about interest rates coming down. The rumours are so rife that we have had situations where the money market has been $12 billion short and overnight rates have collapsed, with an apparent overnight borrowing rate of 57% pa. At the same time we are bombarded with statements calling for the closure of bureaux de change and castigating banks for dealing in the parallel market because the parallel rate has moved to the new levels in a very short period.

The reasons for the collapse in the parallel rate are quite simple. The Reserve Bank's insistence that tobacco merchants pay in US dollars has seen supply to the private sector drying up, whilst the land issue and general political and economic malaise has contributed to the already large unsatisfied demand for forex.

Another major contributor to these rates has been the unreal monetary policy that we have pursued since January 2001. A great part of our exchange rate woes, with the inflation rates, is self-inflicted by the very people charged with safeguarding the value of our monetary unit.

The argument, splashed over full-size newspaper adverts, is that low interest rates are benefiting industry and the productive sector. There is more than a hint that cheap money is also benefiting conspicuous consumption. That may be true, but at a horrendous cost to the rest of the economy in terms of inflation and of course the exchange rate. Even so, looking at the gearing ratios of quoted companies, there is little evidence to suggest a borrowing binge. Even the money supply numbers show private sector credit creation falling in real terms. So whilst a few corporates benefit from unrealistically low interest rates, savers and consumers suffer.

Savers because they are losing the value of their savings and consumers because prices are rising faster than their incomes. Naturally, government and the public sector generally have been borrowers and there must be an element of subsidised prices in service deliveries. It has been argued that government is not interest rate sensitive. However, this does not explain why they have borrowed so much more when interest rates are lower.

What do the corporates that borrow savers' money actually do with it? If they are importers they buy large stocks of goods, putting pressure on exchange rates, then sit on those stocks whilst the exchange rate falls further and then sell the savers those stocks at higher prices. The saver gets burnt both ways which is why there has been such an asset price bubble in real assets as savers try to keep up with inflation.

The exporter, on the other hand, borrows money to try and slow down his export receipts because he is hoping for higher local dollar earnings. This also puts pressure on the exchange rate. They are not economic saboteurs, they are simply following the policy rules made by the authorities. Easy to fix. Simply increase interest rates to real levels and do away with subsidised lending and of course do something about the exchange rate.

Dropping interest rates and keeping the currency artificially pegged will at best worsen the current situation.

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UN Sets Drive to Avert Famine in Southern Africa

July 19

— By Irwin Arieff

UNITED NATIONS (Reuters) - Widespread food shortages and rampant AIDS have put nearly 13 million southern Africans "on the very edge of survival," the United Nations said on Thursday, appealing for an urgent $611 million in aid.

"There is still an opportunity to avert famine and to save lives, but this window is closing rapidly," UN Emergency Relief Coordinator Kenzo Oshima said.

"I call on the international community and the countries concerned to join hands with the United Nations in a partnership to avert another human tragedy on the African continent," Oshima, speaking on behalf of Secretary-General Kofi Annan, told a meeting at UN headquarters.

UN officials blame the crisis, the region's worst since a deadly 1992 drought, on a combination of severe drought, floods, economic decline and government mismanagement.

The famine has been aggravated by the residual debilitating effects of past conflicts and the region's extremely high AIDS infection rate, which has killed many farmers and left millions of orphans, the officials say.

The 12.8 million people threatened with starvation live in Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe, and about half of them are children, the officials said. Other countries in the region are also threatened although to a lesser extent.

The $611 million in emergency aid would be devoted primarily to immediate food shipments, but the funds would also help prop up agriculture, health, nutrition, water and sanitation, education and child protection services, a UN statement said.


To help the region better provide for itself over the long term, Annan was naming James Morris, executive director of the Rome-based World Food Program, as his special envoy on the humanitarian crisis in southern Africa, Oshima said.

Morris' task would be to travel to the region and work with governments to ensure a "coherent and complete response to the crisis," Oshima said. He would also work with international donors to ensure aid was used efficiently and went to those most in need.

The emergency appeal would funnel the most money--$285 million--to Zimbabwe, where severe food shortages caused by drought and government land seizures threaten more than 6 million of the country's nearly 14 million people.

Zimbabwe is also severely plagued by AIDS, which has orphaned some 600,000 of its children and infected more than 2.2 million of its current residents, according to UN figures.

Another $144 million would be earmarked for Malawi, where more than 3 million people will require food aid by the end of the year, the United Nations said.

Zambia, where some 2.3 million people need emergency food aid and water due to a prolonged drought, would be allotted $71 million.

Mozambique, where some 70% of the population is living below the poverty line, would get $44 million in aid after floods and other natural disasters destroyed three or four consecutive years of crops in many areas, the United Nations said.

In Lesotho, earmarked for $41 million in emergency aid, about a fifth of the country's 2.2 million people require food aid. About $19 million would go to Swaziland, where 21% of the population of 1 million need food assistance after two consecutive disastrous farming seasons, the world body said.

The remaining funds would be used to address the crisis at the regional level, it said.

Copyright 2002 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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