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Bank looted to a shell

Thursday, 09 June 2011 21:28

Dumisani Muleya

FRESH details about how ReNaissance Financial Holdings Ltd (RFHL) CEO
Patterson Timba and other company shareholders and directors, working in
cahoots with a pliant management, plundered ReNaissance Merchant Bank (RMB)
have emerged as pressure mounts on authorities to recover the looted
depositors’ funds and bring the culprits to book.
Latest information on Timba and his collaborators’ looting spree at RMB —
which is technically insolvent and has been put under curatorship — are
contained in a Reserve Bank of Zimbabwe (RBZ) report on RMB which exposed
probably the biggest pillaging scandal yet within the banking sector.

Timba and his associates, chief amongst them Group Executive Director —
Business Development Dunmore Kundishora, bulldozed RMB to dish out money
like confetti to themselves and their relatives. Timba’s relatives who got
money from RMB included his father, brothers, in-laws and other cronies. The
monies were usually given out or siphoned without board or other necessary

“The level of insider and related party exposures of $12 594 403 is
excessively high and constitutes 24% of total loans whilst the
non-performing insider loans account for 21% of the total loan book. The
proportion of performing insider loans to total loan book was 2,2%,” the RBZ
report says.

$55 504,31, Stephenson Timba, Patterson’s brother, who accessed $376 011,10
through Fresco Packaging, $105 326,48 through Comrel Trading and $82 827,65
via Wovenville Enterprises.

Timba’s cousins got $70 451,88 through Malfroy Investments and his in-laws
got $170 452,87 via CCG Investments. Timba himself on one occasion got $54
783,32 through his company Tolrose Investments. Timba’s family-owned Bethel
Finance Ltd got $65 250,77 at one time. Munotidaishe Farm, owned by Bethel
Trust whose beneficiaries are members of Timba’s family, got $155 645,28.
Covert Investigators in which another of Timba’s brothers is a shareholder
got $198 428,98.

Other companies which got such loans include the RFHL itself ($9 856
428,56), ReNaissance Securities ($315 221,11), Oxford Agrochemicals ($84
064,57), Excel Pharmacy ($47 290,36), ReNaissance Trading ($850 000) and
First Mutual Life Assurance (R1 million).

“The group CEO, Mr PF Timba, in connivance the Executive Director at RFHL,
Mr Dunmore Kundishora, siphoned depositors’ funds under a well-orchestrated,
intricate triangular methodology involving the following steps: transfer to
counterparty, follow, ambush and withdraw,” the RBZ report says.

“There is abundant evidence that Mr Timba put in place an elaborate scheme
for siphoning interbank placements made by RMB via approaching the
respective counter-parties and borrowing on behalf of RFHL, Bethel Trust
and/or himself equivalent amounts which were linked to the placements. The
transactions involving the siphoning of depositors’ funds were done at
counterparty level in a thinly-veiled attempt to conceal the fraudulent
abuse of depositors’ funds. Transactions involving Kingdom Bank, TN Bank and
Metropolitan graphically illustrate this phenomenon.”

The report says Timba’s action bordered on serious criminality and fraud.
This has provoked calls for Timba to be forced to return the money he raided
from the bank and for the law to be allowed to take its course for all the

“The bank designed an intricate web of toxic combination of insider loans,
inappropriate withdrawals from unfunded accounts, imprudent credit risk
management and gross abuse of office to siphon depositors’ funds,” the RBZ
report says.

The report, under the section intra-group indebtedness and undesirable
methods of conducting business, says the RMB looting was on a “Nick
Leeson-type” scale that left the bank bleeding.
Leeson is a former derivatives broker whose fraudulent, unauthorised
speculative trading and other financial engineering activities caused the
collapse Barings Bank, the United Kingdom’s oldest investment bank, for
which he was sent to prison.

“The investigation determined that a significant non-performing related
party exposure to RFHL of $9 856 428,56 constituting 18,6% of the total loan
book was conveniently camouflaged as a ‘dealing limit’. In addition, a loan
to ReNaissance Securities of $315 221 was also disguised as dealing
transactions since 2009. The RFHL increased drastically to $9,8 million
against an expired limit of $750 000. There was no board approval for all
the subsequent draw downs after the expiry of the sanctioned limit.

“Non-performing insider and related party exposures were endemic at the
institution. Such self-dealing is symptomatic of banks in distress. The
investigation determined a very high level of non-performing loans of 38% of
the total loan book of $53 097 759,83 as at 31 March 2001,” the report says.
The RBZ report says the way Timba, Kundishora and others looted RMB would
reduce the Nick Leeson scandal to “kindergarten stuff”.

Timba, who ran into problems after borrowing US$5 million from local tycoon
Jayesh Shah which he struggled to repay, and Group Executive Director,
Business Development Dunmore Kundishora were the ringleaders in the whole
saga. The two have between them direct and indirect shareholdings of up to
68,9% in the group. If the 9,13% of Clementine Sibve, another main
shareholder, in RFHL, is taken into account, the effective shareholding of
the three founding directors shoots up to 78,03%, an unlawful arrangement in
terms of the law.

RMB, whose closure has shaken the market in which several other small and
vulnerable banks are struggling, is wholly owned by RFHL which also controls
ReNaissance Securities Ltd and ReNaissance Capital Ltd in Uganda. In
addition, ReNaissance Financial Holdings Ltd owns 30,89% of Africa
ReNaissance Corporation.

The bank was technically insolvent with negative capital of US$16,7 million
as at April 30 against a prescribed minimum capital requirement of US$10
million for merchant banks. Given the capital deficit, the bank required
US$32,6 million to comply with regulatory capital requirements.

The capital position is projected to worsen to minus US$39,2 million if the
contingent liabilities on account of RFHL amounting to US$22,6 million are
factored into the above position of minus US$16,7 million. Accordingly, the
bank will require approximately US$55,1 million to comply with regulatory
capital requirements. Banks are expected to meet their capital requirements
by June 30.

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‘Zanu PF to deploy 80 000 militia for polls’

Thursday, 09 June 2011 21:24

Faith Zaba

A COALITION of civic organisations has claimed that more than 80 000 youth
militia, war veterans and army commanders will be deployed across the
country to ensure victory for President Robert Mugabe and Zanu PF in the
elections expected after the constitution-making process.
In a damning report titled The Military Factor in Zimbabwe’s Political and
Electoral Affairs launched in Johannesburg yesterday ahead of the Sadc
special summit on Zimbabwe Saturday, Crisis in Zimbabwe Coalition said army
commanders and senior Central Intelligence Officers would be deployed in
each of the country’s 59 districts to coordinate a military campaign to
ensure Mugabe’s continued rule.

The report is based on research conducted between September 2010 and March
2011. The research included interviews with various policy makers, serving
and retired military officers, officials in the inclusive government,
security sector experts, civic society and ordinary Zimbabweans.

The coalition also reviewed various reports on the military by both local
and international civil society organisations, including the Zimbabwe Peace
Project, Zimbabwe Election Support Network, Zimbabwe Human Rights NGO Forum,
Amnesty International, Human Rights Watch, media reports and other material
on the military involvement in politics and electoral affairs.

“The strategy is to unleash enough violence and terror, worse than that seen
in the bloody 2008 presidential run-off poll in which at least 200 of Morgan
Tsvangirai’s supporters died and tens of thousands others were left
homeless,” reads the report.

“The move is aimed at ensuring that a thoroughly cowed electorate will on
voting day back Mugabe in enough numbers to save the veteran president from
having to face another second round vote.”

Mugabe is now ruling the country through military structures and control in
government and the party. The army has helped ensure Mugabe’s continued
rule, mainly during elections in 2002 and 2008.

At the end of last year, Air Vice Marshal Henry Muchena quit the Air Force
of Zimbabwe to work full-time for the Zanu PF commissariat department to
revamp grassroots structures in preparation for the elections.

The report reads: “Air Vice Marshal Muchena will be in charge of the Zanu PF
election campaign, Major-General Engelbert Rugeje will be in charge of
coordinating Masvingo province.

“Rugeje is reported to have already started the terror campaign on MDC
supporters in the province where he has been blamed for several acts of
violence and intimidation.

“In Mugabe’s Mashonaland West home province, Brigadier General David Sigauke
is tipped to run the brutal campaign to keep the Zanu PF leader in power,
while Brigadier-General Douglas Nyikayaramba will be in charge of Manicaland

The report went on to allege that retired Brigadier Victor Rungani would be
in charge of the campaign in Mashonaland East province, while Air Vice
Marshal Abu Masuku would oversee the campaign in Matabeleland South

Brigadiers-General Sibusio Bussie Moyo and retired Major-Generals
Sibangumuzi Khumalo and Etherton Shungu, the report said, would cover
Midlands, Matabeleland North and Mashonaland provinces, respectively.

“Colonel Chris Sibanda and Air Commodore Michael Karakadzai will,
respectively, run the campaign to neutralise opposition to Mugabe in the
metropolitan provinces of Bulawayo and Harare that are seen as Tsvangirai’s
strongholds,” read the report.

The report said top soldiers of the ranks of major-general,
brigadier-general or air vice marshal, assisted by CIO agents would head
provincial command centres that will direct the onslaught against the MDC.

“Some of the senior commanders have already started work in the provinces
meeting Zanu PF and traditional leaders to plot the way forward. Junior
commanders and hundreds of lover ranking soldiers, some of who have already
been deployed in recent months in villages in some districts will be at the
disposal of the senior commanders,” said the report.

According to Crisis in Zimbabwe Coalition, sources close to Zanu PF have
said the party has agreed to demands made by the military that 25% of all
legislative seats that Zanu PF would contest should be reserved for serving
or retired military personnel.

Crisis in Zimbabwe Coalition suspects that the recent recruitment of at
least 5 000 soldiers is to boost numbers ahead of elections.

Efforts to get a comment from Defence minister Emmerson Mnangagwa were
fruitless at the time of going to press yesterday, but state media recently
claimed that the minister had tabled a report last Friday during the
National Security Council meeting debunking claims that the army had
deployed soldiers to campaign for Mugabe.

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GNU tension ahead of Sadc summit

Thursday, 09 June 2011 21:10

Dumisani Muleya

A FULL Southern African Development Community (Sadc) summit will be held
tomorrow in Johannesburg to discuss South African President Jacob Zuma’s
damning report on Zimbabwe which has infuriated President Robert Mugabe,
creating an explosive situation at the meeting.
The report, in the Zimbabwe Independent’s possession, was presented by Zuma
at the Sadc troika of the organ on politics, defence and security summit in
Livingstone, Zambia, on March 31, before it was later sent to Zimbabwe’s
political principals. It indicates regional leaders were becoming
increasingly impatient with parties to the Global Political Agreement (GPA),
particularly Mugabe, over their failure to implement agreed issues.

It also confirms in detail the region and international community are
becoming more fed-up with Mugabe who is seen as the stumbling block to the
implementation of the GPA and smooth functioning of the Government of
National Unity (GNU).

The report, now updated in view of recent developments in the crafting of
the elections roadmap, would be tabled for a potentially-volatile debate. It
influenced the outcome of the Livingstone summit whose resolutions left
Mugabe shocked.

The Livingstone summit was attended by Sadc chairman, President Hifikepunye
Pohamba of Namibia and members of the troika, President Rupiah Banda of
Zambia, President Armando Guebuza of Mozambique and Zuma. Its communiqué was

“The summit appreciated the frankness with which the report was presented by
the Sadc facilitator and commended him for the work that he has been doing
on behalf of Sadc,” the communiqué said.

“The summit recalled past Sadc decisions on the implementation of the GPA
and noted with disappointment insufficient progress thereof and expressed
its impatience in the delay of the implementation of the GPA,” it said.

“Summit noted with grave concern the polarisation of the political
environment as characterised by, inter alia, resurgence of violence, arrests
and intimidation in Zimbabwe. There must be an immediate end of violence,
intimidation, hate speech, harassment, and any other form of action that
contradicts the letter and spirit of GPA.”

Mugabe himself said during the recent Sadc summit in Windhoek that the
outcome of the Livingstone summit was a “bombshell”. After the summit Mugabe
lambasted Sadc leaders, mainly Zuma, saying their role in Zimbabwe was to
“facilitate” negotiations and not “dictate” what should be done. This opened
the floodgates for Mugabe’s overzealous minions to hurl all sorts of abuse
at Sadc leaders.

However, realising their mistake, Mugabe dispatched envoys across the Sadc
region to lobby for support ahead of the recent Windhoek summit.

Mugabe sent envoys to countries in the region who included Vice-President
John Nkomo who went to South Africa and Botswana, Defence minister Emmerson
Mnangagwa to Angola and Democratic Republic of Congo, State Security
minister Sydney Sekeramayi to Mozambique and Zambia, Lands minister Herbert
Murerwa to Mauritius and Seychelles and Minister in the President’s Office
Didymus Mutasa to Tanzania.

This was meant to counter Prime Minister Morgan Tsvangirai’s trips before
the Livingstone summit and influence Sadc leaders ahead of the Windhoek
meeting but Zimbabwe was not discussed in Namibia because Zuma, the Sadc
facilitator on Zimbabwe, was not there.

Zuma’s report, which Mugabe has been complaining about because he did not
see it  before the Livingstone summit although it was later sent to him and
other principals, says regional leaders are now getting annoyed about what
is going on in Zimbabwe.

“We have been engaged in a process of mediating since the establishment of
the GPA in January 2009, and we have not made much progress,” the Zuma
report says. “As Sadc we need to redouble our efforts in finding a permanent
and lasting solution to the challenges that Zimbabwe faces.

“There have been moments which have given us hope in the past that a
breakthrough would be found but we have been continuously disappointed by
the slow pace and lack of progress in areas which are critical. We have been
disappointed by continuous backtracking and lack of implementation of
resolutions and agreements made.”

Zuma calls for unity in Sadc to resolve the Zimbabwe situation which has
been lingering for the past decade and says there would no elections without
a roadmap.

“It is time that Sadc must speak with one voice in impressing to all the
parties concerned that this situation can no longer be tolerated. The focus
that Zimbabwean parties have placed on elections without creating the
necessary conducive climate for those elections is an unfortunate
side-track,” it notes.

“The fact that Zimbabwean parties are in an electioneering mode, and are
more and more agitating for the holding of elections while they have not
done enough groundwork towards ensuring that the building blocks and
institutions are firmly in place towards the holding of free, fair and
democratic elections is counterproductive,” it says.

“We must dissuade all parties from thinking that they can hold elections in
the prevailing atmosphere that is characterised by violence, intimidation
and fear. The holding of elections in this current climate will lead
Zimbabwe back to the situation it as in about three years ago when it held
its last elections, or even find itself in a far worse situation than
before. We cannot have elections when the ground has not been sufficiently

The report warns Mugabe that after the Middle East and North African
uprisings, the world’s attention would shift back to Zimbabwe.

“Before the political ruptures of North Africa and the Arab World which
affectedm Tunisia, Egypt and Libya, the Republic of Zimbabwe was pretty much
a focal point of the international community,” Zuma’s report says.

“Once the dust settles in those countries either way, there is no guarantee
that the world will not return back to its favourite pastime. The
developments in the northern part of our continent should impress upon all
of us within the Sadc region about the need and importance of resolving the
Zimbabwean impasse speedily and in a way that will not just satisfy the Sadc
region but also that would be acceptable to the entire world.”

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Ex ZBC boss withdraws claims

Thursday, 09 June 2011 20:59

FORMER ZBC boss Oniyas Gumbo has admitted that he was never a shareholder in
Time Bank, seven years after the financial institution was closed for, among
other reasons, advancing insider loans to companies run by the ex-finance
director of the national broadcaster.
The bank was re-licensed in 2009 after a bitter legal wrangle in the courts
with the central bank. It is expected to open to the public as an investment
bank later this year.

High Court documents in possession of the Zimbabwe Independent show that on
February 22 Gumbo entered into an agreement with Time Bank founder
Christopher Wesley Takura Tande to withdraw his false claim that he was a
shareholder and director of the financial institution. He also withdrew his
other false claim that he was related to Tande.

“Oniyas Gumbo hereby withdraws both his opposing affidavit filed in legal
case number HC4998/08 and the statement which he made in legal case number
CR 159/9/09,” reads the agreement. “TBIC Investments (Pvt) Ltd (Time Bank
shareholder) accepts the withdrawal of both the said opposing affidavit and

When the bank was closed by the Reserve Bank of Zimbabwe in 2004, there was
a perception that Gumbo was a director and shareholder prompting allegations
of insider loans advanced to his firms. As a result of the perception there
were also allegations of abuse of depositors’ funds.

Tande and Gumbo have since 2004 been at loggerheads with the latter claiming
he was related to the banker and that he was a shareholder in Time Bank.
Accusations and counter-accusations have been made between the two to the
police and the Anti-Corruption Commission which resulted in several criminal
and civil cases.

“Mr Oniyas Gumbo, directly or indirectly through someone, had never been a
shareholder in Time Bank of Zimbabwe Ltd or in companies that own shares in
Time Bank of Zimbabwe Ltd,” reads the agreement, which is part of documents
that were lodged with the High Court on June 2.

“Assetfin (Pvt) Ltd, Shopex (Pvt) Ltd and Total Insurance Company Ltd are
neither shareholders in Time Bank Zimbabwe Ltd nor shareholders in companies
that own shares in Time Bank of Zimbabwe Ltd. There are no common
shareholders or directors between companies owned by Mr Oniyas Gumbo on one
hand and companies owned by Mr Christopher Wesley Takura Tande on other
hand. Mr Christopher Wesley Takura Tande has never been a shareholder or
director of Assetfin (Pvt) Ltd and Shopex (Pvt) Ltd.”

Gumbo is a shareholder and director of a number of companies including
Assetfin, Shopex and Total Insurance Company.

“Mr Christopher Wesley Takura Tande and Mr Oniyas Gumbo are neither
relatives nor related as defined in Section 35 of the Banking Act. Assetfin
(Pvt) Ltd and Shopex (Pvt) Ltd confirm that they got lawful loans from Time
Bank of Zimbabwe Limited. The transactions between the companies owned by Mr
Oniyas Gumbo and those companies owned by Mr Christopher Wesley Takura Tande
were lawful commercial transactions done at arm’s length, in good faith and
with lawful intention,” reads part of the agreement.

In a supplementary affidavit to the High Court case between Assetfin and the
Anti-Corruption Commission, Assetfin director Paul Chidawanyika said the
company had insisted all along that Gumbo had no interest in Time Bank
despite his claims.

“At all material times, we insisted that Oniyas Gumbo had nothing to do with
Time Bank either directly or indirectly through someone or any company. He
was never a shareholder or director in Time Bank of Zimbabwe,” Chidawanyika
wrote. “Thus all the allegations and complaints by Oniyas Gumbo pertaining
to him owning a stake in Time Bank of Zimbabwe were clearly false. Sadly and
regrettably, the Anti-Corruption Commission took Gumbo’s false claims
seriously and magnified them into truths despite our clear warnings and
submission of correct information.”

Chidawanyika said Gumbo had “misled regulatory authorities on Time Bank, and
there are potential damages which can be claimed by Time Bank on Assetfin in
respect of such conduct and we did not want Assetfin to suffer from such
claims, hence as directors we sought to establish the truth, and we are
happy that the position is (now) clear”.— Staff Writer.

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Tekere declared national hero

Thursday, 09 June 2011 20:58

LIBERATION war hero Edgar Tekere was yesterday declared a national hero by
Zanu PF.
The decision of the party was “unanimous”.

Tekere, who died aged 74 on Tuesday, will be buried at the Heroes Acre in
Harare. At the time of going to press yesterday, Zanu PF was still
consulting the Tekere family on the burial day.

The outspoken Tekere joined nationalist politics around 1960. He was a
member of early nationalist organisations in the then Southern Rhodesia and
was among the five founding members of Zanu.

In 1964, he was detained by the Rhodesian government together with President
Robert Mugabe and Didymus Mutasa, among many other nationalists.

The decision to declare him a national hero was expected after Mugabe’s
fullsome tribute to his fallen comrade, although they never saw eye-to-eye
after Zimbabwe’s Independence in 1980.

That ability to disagree, said Mugabe, made him unique.

“Fearless and highly temperamental, the late Cde Tekere did not hesitate to
take risks for his cause, often paying a heavy price in the process,” Mugabe

“For me personally, his death evoked memories of the hard and arduous road
we walked together, right from the painful days of restrictions, detentions
and imprisonment at the hands of racist Rhodesians, to the days of our
escape from Rhodesia to join thousands upon thousands of young Zimbabwean
fighters housed in various rear bases in Mozambique…” — Staff Writer.

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‘Mahoso should stop toyi-toying for Zanu PF’

Thursday, 09 June 2011 20:56

Paidamoyo Muzulu

MEDIA organisations have slammed Zimbabwe Media Commission CEO Tafataona
Mahoso’s attendance at an extraordinary Sadc summit in Johannesburg as a
Zanu PF representative.
Mahoso, who is also the chairman of the Broadcasting Authority of Zimbabwe,
is part of a Zanu PF delegation led by former Information minister Jonathan
Moyo attending the Sadc summit seeking to map a way forward for Zimbabwe’s
faltering coalition government through the crafting of an election roadmap
acceptable to parties signatory to the GPA.

Other members of the Zanu PF delegation sent to drum up support for
President Robert Mugabe include Christopher Mutsvangwa, Vimbai Chivaura,
Oppah Muchinguri and Sandi Moyo.

Their task they say is to “put the record straight” on Zimbabwe after the
MDC’s version of events was adopted in Livingstone.

Zimbabwe National Editors Forum (Zinef) chairman Iden Wetherell said Mahoso
had to decide whether he wanted to be a political activist or an impartial
media commissioner.

“Dr Mahoso should make up his mind,” Wetherell who is Alpha Media Holdings
Senior Associate Editor said. “If he wants to be a professional officer
serving the needs of a constitutional body, he should refrain from
toyi-toying in a neighbouring state on behalf of a political party. If he
wants to be an activist, he cannot at the same time be a CEO who sits on the
board of a constitutional commission,” said Wetherell.

Misa Zimbabwe director Nhlanhla Ngwenya said this episode merely reaffirms
that Mahoso has always been a Zanu PF functionary and compromises his work
at the two influential media regulatory authorities.

“This does not inspire confidence in the public about his neutrality and
independence on these boards. The courts once ruled him to have been biased
against an independent publication (Daily News) and we are not aware if that
bias has dissipated in the last year or so.

“It’s now clear why Zanu PF manipulated the system to sneak Mahoso onto the
two boards after parliament had overlooked him during its selection
 process,” said Ngwenya.

Zimbabwe Lawyers for Human Rights director Irene Petras said Mahoso’s
presence in a political delegation showed how unprofessional these
constitutional bodies were.

“His presence compromises the work of the commission. That is why civil
society and other political parties have been calling for the
professionalisation of these commissions.

“When commissions are filled with political party representatives, then they
cease to deal with public matters and start to push party political
interests, which should not be the case,” said Petras.

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Councillors block top-of-the range vehicles

Thursday, 09 June 2011 20:54

Brian Chitemba

BULAWAYO councillors blocked the purchase of top-of-the range vehicles for
directors which were estimated to cost over US$2 million at a time when the
local authority is facing crippling cash flow problems.
The MDC-T-led council was planning to buy Toyota Prados and Jeep Cherokees
for top management such as the Town Clerk, Chamber Secretary, Finance
Director and Health Director but the move was turned down by city fathers
who argued service delivery be given priority.

A councillor on the finance committee told the Zimbabwe Independent this
week that the directors were clamouring to be given new vehicles especially
after the ceremonial Mayor Thaba Moyo took delivery of a $65 000 Dodge
Chrysler Journey last year.

The councillor said the directors wanted council to buy them vehicles then
they would repay later or be given cash loans to purchase the luxury
vehicles which were estimated to gobble $80 000 each.

Moyo confirmed yesterday that the directors will only receive new cars “when
residents are satisfied with service delivery”.  He said the procurement of
luxury vehicles was least on council’s priorities.

“We shot down the idea because council is facing serious financial problems
and it will be unwise for the directors to drive the luxury cars when
service delivery is bleeding,” Moyo said.

Bulawayo council is reeling from a $9,2 million debt that saw Zesa
disconnecting electricity from City Hall that houses the mayor’s office and
council chambers, and Tower Block where most of the local authority’s
administration work is done. Council is now relying on diesel

Due to poor cash flow, council has failed to repair burst water and sewer
pipes while refuse collection has not improved for years. Council blames
poor revenues of over $70 million locked in unpaid rates by residents and

Even the purchase of the Mayoral Dodge Chrysler Journey sparked furore with
residents’ associations questioning the local authority’s priorities.

The councillor said instead of buying the luxury vehicles for the managers,
councillors resolved to order 54 trucks and five refuse compactors that are
expected to be delivered before the end of the month.

Of the 54 trucks, 14 were delivered a fortnight ago and will be allocated to
the engineering services department to improve response to burst water and
sewer pipes that are over 50 years old.

Council was only collecting between 25 and 30% of the targeted revenue, the
councillor said, adding that even payment of salaries was lagging behind by
a month.

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‘2,5m registered ghost voters in Zim’

Thursday, 09 June 2011 20:51

Paidamoyo Muzulu

AN analysis of Zimbabwe’s voters’ roll by the South African Institute of
Race Relations (SAIRR) has revealed that there were over 2,5 million
registered ghost voters as of October 2010.
The SAIRR report released this week titled Preventing Electoral Fraud: A
Report on the Voters’ Roll in Zimbabwe was authored by Professor R W Johnson
and called for an urgent compilation of a new up to date voters’ roll before
any elections could be held.

In the report, Johnson says Zimbabwe’s population stood at 10 million in
2008 after factoring in that about four million people migrated to the
Diaspora and neighbouring countries fleeing the deteriorating economic
climate and increasingly repressive political conditions in the past decade.
The report says of the 10 million people, 40% were above the voting age of

“That still leaves us with a maximum registration of some 3,2 million
eligible voters, while the real figure might well be less. This indicates
that the 2008 register of 5 727 902 voters had more than 2,5 million too
many people on it. It goes without saying that, by thus providing the
authorities with a reservoir of over 2,5 million fictitious voters, the 2008
roll made electoral manipulation easy. Such fictitious votes could be added
to totals wherever Zanu-PF was vulnerable,” Johnson wrote in the report.

Johnson argued in his report that unless there was a clean and authoritative
voters’ roll, there could not be authoritative and democratically accepted
elections in Zimbabwe.

Elections could be credible, Johnson said, once “the ZEC has been
reconstituted without any members of the preceding, discredited commission,
a new and independent Registrar-General should be appointed and an impartial
and international body should be employed to draw up a new biometric voters’

According to the report, the voters’ roll contains far more centenarians
than the UK which has a population approximately five times bigger than
“Overall, the full voters’ roll shows no less than 41 119 centenarians. This
is an impossible figure. The UK, with a total population of over 60 million
and an average life expectancy more than 30 years longer than Zimbabwe’s,
has only 10 000 centenarians,” read the report.

The report further questioned the authenticity of 4 368 newly registered
voters over the age of 90. It said it was incredible for a country with an
average life expectancy of 44,8 years to have an amalgamated total of 132
540 people over the age of 90 on the voters’ roll.

“The fact that new centenarians are among the voters added to the October
2010 roll suggests that some (perhaps many) of these very old voters have
never existed at all.”

Johnson suggested that the Registrar-General had a hand in the manipulation
of the voters’ roll since his office prepared the register.

“There are no less than 16 828 registered voters with the same date of birth
given as 1 January 1901. It might be argued that the enumerator simply gave
this birth date to all very senior citizens who were in doubt as to their
true age, though that already suggests an impermissible degree of official
intervention in the registration process.”

Most of the centenarian voters were registered in Mashonaland provinces
which are traditional Zanu PF strongholds. Mount Darwin East constituency
had 118 registered voters above 100 years and most of them have their date
of birth recorded as 1 January 1901. President Robert Mugabe’s home area of
Zvimba had 1 101 registered voters born on 1 January 1901.

Equally incredible, the report revealed, was that the full voters’ roll of
both “old” and “new” voters included 624 794 voters over the age of 70,
making up more than 10,6% of all registered people.

Compilation of a new updated voters’ roll is one of the outstanding issues
parties in the coalition government are squabbling over under the GPA.

Johnson’s report said the ZEC had turned down a US$21 million quotation from
South African company Waymark which has extensive experience in creating
biometric voters’ rolls in the Sadc region. The company had stated that it
could prepare a new roll in 90 days.

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Zimbabwe Parly ducks austerity duty

Thursday, 09 June 2011 20:49

Paidamoyo Muzulu

PARLIAMENT last week missed an opportunity to enforce austerity measures on
the government’s insatiable appetite for contracting foreign debt to finance
projects that are not urgent, such as the US$98 million Chinese loan
facility for construction of a military college.
With a 20-year repayment period, this Chinese deal is the second loan to be
ratified by parliament since the formation of the coalition government in
2009. Parliament ratified a US$45 million loan from the Chinese to upgrade
state-owned mobile network operator NetOne to a second and third generation

Ironically, both loan deals were ratified after sterile debates in an
increasingly impotent parliament. For the umpteenth time since Independence,
MPs shirked their responsibility of keeping the state’s purse strings in
check by failing to rein in government’s ballooning debt.

Defence minister Emmerson Mnangagwa defended the loan by arguing that the
erection of the college would save the country over US$1,8 million annually
it has been paying for senior military personnel to study abroad. The
officers study in universities in Kenya, Pakistan, Egypt and Nigeria.

The House’s ratification of the loan without any stringent conditions on the
executive is in stark contrast toother parliaments in any democracy which
demand the executive presents concrete debt management strategies first
before ratification of new debt.

Zimbabwe presently has a staggering foreign debt amounting to about US$7,2
billion and the country has been blocked from accessing any loan facilities
by most bilateral and multilateral institutions because of failure to
service its huge debt.

Unlike the rubber-stamping Zimbabwean legislature, parliaments in Ireland,
Portugal, Spain, Greece and the UK recently had heated debates on spiralling
government expenditure, ballooning debts and how to arrest them in the
aftermath of the 2008/9 global economic recession ignited by a debt crunch.

These governments are recipients of the European Central Bank bailouts to
protect the eurozone from member states’ struggling economies.

Greece has so far received the largest bailout of $110 billion to stave off

In the US, President Barrack Obama is faced with an uncompromising Congress,
which is withholding authority to contract further debt until his
administration can ably demonstrate how it is going to cut expenditure.

Political analyst Charles Mangongera blamed the country’s ballooning debt on
a quiescent parliament beholden to the dictates of the executive.

“Why can’t our own MPs rise to the occasion and also make demands to
(President Robert) Mugabe before agreeing to ratify his partisan projects?
Why can’t they force Mugabe to agree to pay decent wages to civil servants
before ratifying the Chinese debt, for instance,” said Mangongera.

Parliament’s role has been further compromised by the absence of an official
opposition since the formation of the coalition government. Most motions
sponsored by the executive sail through parliament with little debate since
principals in the government would have agreed to the issues beforehand.

Passage of the 2011 national budget bears testimony to the absence of robust
debate in the House. The budget sailed through without any debate or
amendments after all parties to the coalition government whipped their MPs
into line at their respective caucuses.

Budget and Finance Portfolio Committee chairman Paddy Zhanda deplored the
continued accumulation of national debt without a debt management strategy
in place.

“It is ironic that the country contracts new debts without a tangible plan
in place to retire those debts. We have to sit down as a country and come up
with a clear policy on how we manage national debt,” said Zhanda.

Labour Institute for Development and Research in Zimbabwe director Godfrey
Kanyenze said parliament was impotent in the current environment but hoped
the tide would soon change.

“Parliament should soon play a much more critical role in national debt
management after the Finance minister implements the scheme of creating a
special purpose vehicle to manage all national debt. Going forward after
that, parliament will ensure an accountable and transparent debt
accumulation,” Kanyenze said.

The ratification of the Chinese loan flies in the face of Finance minister
Tendai Biti’s Arrears Clearance and Debt Strategy he announced in the 2011
budget presentation.

Biti argued that the country should audit all its debts and find a means to
reengage bilateral and multilateral institutions to unlock new lines of
credit. He said government should implement debt restructuring measures that
would encompass restructuring, commercialisation and privatisation of debt
ridden state-owned enterprises.

The first phase targeted 10 companies Agribank, Air Zimbabwe, GMB, CSC,
NetOne, TelOne, Ziscosteel, NRZ, Noczim and Zesa.

Out of the 10, only Ziscosteel has been privatised after Mauritian entity
Essar Group bought a 54% stake in the derelict steel manufacturer.

It remains to be seen whether parliament can unshackle itself from the yoke
of the coalition government albatross and draw up a coherent strategy to
manage the country’s crippling debt and re-engage multilateral institutions
for new capital.

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Zanu PF at the epicentre of electoral violence

Thursday, 09 June 2011 20:37

By Pedzisai Ruhanya

AS the Sadc special meeting on Zimbabwe scheduled for South Africa this
weekend approaches, Zanu PF’s propaganda machinery, supported by elements of
the partisan securocrats, has been desperately trying to create a false and
delusional violence narrative in which they portray themselves as the
paragons of virtue, and the protector of citizens’ fundamental civil and
political liberties.
In the process, Zanu PF’s delusional propagandists have sought to depict
their political opponents as architects of violence and human rights abuses.
This opinion attempts to unmask this shameful charade and false narrative
that is premised on the unfortunate murder of police inspector Petros
Mutedza two weeks ago by culprits yet to be convicted by the courts of law
through a professional and competent judicial process. Zanu PF is
opportunistically exploiting Mutedza’s murder for convenient political gain.

There is need to expose/remember the pervasive nature of the selective
application of the law by the security establishment in Zimbabwe, Zanu PF’s
legacy of impunity, the crimes against humanity committed by security forces
from the Matabeleland and Midlands massacres between 1981-1987, the 1985
violent elections, the 1990 electoral violence which resulted in the
shooting of Patrick Kombayi, the 1998 food riots, the 2000 violent farm
invasions and the murder of more than 15 white commercial farmers and
workers to the 2000, 2002, 2005 and 2008 violent polls.

The systematic arrests and attacks against journalists from the independent
media and lawyers as well as the fire-bombing of the Daily News printing
machine in February 2001 and its offices in central Harare in 2000, with no
single prosecution to date, clearly show the political thread of violence
associated with the Zanu PF government.

My argument is that the extra-legal and extra-judicial behaviour of the
security apparatus associated with events during the above periods must be
put into context whenever the discourse on human rights violations, the rule
of law and the democratisation of Zimbabwe is raised at any level and

These cases prove that the political violence narrative that Zanu PF
attempts to blame on the democratic forces struggling to return Zimbabwe to
the path of democracy premised on the observation of the rule of law and the
protection of individual liberties is a nullity and an exercise in futility.

Failing to take these historical events into account in post-Independence
discourse on Zimbabwe’s democratisation will allow the devil to run away
with the Bible, exactly what Zanu PF and the security apparatus are
attempting to do as President Robert Mugabe prepares for the Sadc meeting
this weekend.

Zanu PF and the security apparatus’ attempt to blame the democratic forces
and mainly the Movement for Democratic Change (MDC-T) for acts of political
violence is meant to hoodwink Sadc leaders, the general public and the rest
of the international community who want to see the democratic resolution of
Zimbabwe’s twin crisis of legitimacy and governance through free, fair and
democratic elections.

The critical issue is that there is a well-defined, structured institutional
thread of violence by the security apparatus and vigilante groups associated
with Zanu PF.

Mugabe, the leader of Zanu PF, publicly confessed that his party is a
violent institution when he ranted about “having degrees in violence” in the
run up to the violent June 2000 elections. After Mugabe threatened his
political opponents, the country experienced an orgy of violence where
perceived opponents of Zanu PF were murdered in cold blood, while others
lost their properties.

As a result of the legacy of impunity associated with Mugabe and Zanu PF’s
rule none of the perpetrators were arrested; some of them remain on the
payroll of the state while others freely roam the streets. In fact, Mugabe
abused his powers of clemency and pardoned Zanu PF activists who had
committed heinous crimes on behalf of his party. Today, some of these
elements continue to abuse human rights because they know that there are no
consequences at law for their criminal conduct because of the protection
they get from the state.

The use of violence by Zanu PF is legendary and uncontested. In his book,
The Story of My Life published by Sapes Trust in 2001, the late
Vice-President Joshua Nkomo described how the Mugabe and
government-controlled media incited violence against him and PF Zapu
supporters before the infamous Gukurahundi massacres begun in 1982.

Nkomo’s book points to a situation of lawlessness and incitement to violence
against Zanu PF’s political opponents. Nkomo tells us how Zanu PF used the
security apparatus to commit extra-judicial killings.

He also tells us that there was no recourse to the justice system because
the whole system was an appendage of Zanu PF. The Dumbutshena (1981) and
Chihambakwe (1983-4)  commissions of inquiry into the Entumbane disturbances
and Midlands and Matabeleland massacres, commissioned by Mugabe, vindicated
Nkomo’s complaints of state-sponsored violence against unarmed civilians, a
flagrant violation of both domestic and international law.

The Catholic Commission for Justice and Peace in Zimbabwe reported in
Breaking The Silence further atrocities committed by the security apparatus
and Zanu PF vigilante groups with the acquiescence of the state. Kombayi was
shot in 1990 by state agents.

Fast forward to 1998, during the food riots, more than 10 Zimbabweans were
shot dead by the security forces. There were no investigations into the
killings. The elections that followed in 2000, 2002, 2005 and 2008 were
marked by similar lawlessness and extra-legal activities including the
murder of Talent Mabika and Tichaona Chiminya at Murambinda growth point in
Buhera in April 2000 and the 2008 murders of Tonderai Ndira and Better
Chokururama, among more than 100 others. The Chiweshe killings in 2008 also
stand out.

In the case of the late Mabika and Chiminya, former High Court Judge Justice
James Devitte ruled during an election petition by the MDC in May 2001 that
the murder of the two activists was “a wicked act” and ordered the police
and Attorney General’s Office to arrest and prosecute among others, Joseph
Mwale, a member of the Central Intelligence Organisation. Ten years later,
Mwale remains an employee of the government and is beyond the reach of the

Zanu PF has no moral authority at all to pontificate about the death of
Mutedza when we have the unconcluded atrocities stretching from 1980 to
For the record, Mutedza’s murder was wicked and must be condemned but we
should not allow well-known perpetrators of violence and human rights abuses
to masquerade paragons of virtue.

Sadc leaders should not be misled by Zanu PF taking advantage of the killing
of Mutedza to hoodwink the public and region about the causes and source of
violence in this country.

Given the magnitude of the violations of human rights associated with Zanu
PF, some of its leaders are potential candidates for the International
Criminal Court (ICC) in The Hague. There is compelling evidence to argue for
their indictment despite the fact that Zimbabwe is not a signatory to the
Rome Statute establishing the ICC. However, like the case of leaders of
Libya and Sudan that are not part to the Rome Statute, a UN Security Council
referral will make them accountable to international justice.

It is important to remind the state, Zanu PF elements in the inclusive
government and the securocrats that Zimbabweans who lost their relatives
during the sad historical episodes described in this article find it very
offensive that Zanu PF leaders and their blind sidekicks want to use Mutedza’s
killing to speak in hypocritical terms about violence and human rights.

Sadc leaders need to put into perspective Zanu PF’s propaganda claims of
political violence because as far as the use of violence for political
survival is concerned, there is a body of irrefutable evidence which shows
Mugabe and his party as the perpetrators of violence on a massive scale.
Zanu PF is the epicentre of violent political activities in Zimbabwe. No one
should be fooled.

    Pedzisai Ruhanya is a human rights researcher.

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Muckraker: We don’t need support, just professionalism

Thursday, 09 June 2011 20:34

THE tenet that all people are innocent until proven guilty is a fundamental
part of Zimbabwe’s legal system and relates to elementary principles of
fairness and justice. Newspapers that ignore this tenet are guilty of
unprofessional conduct and don’t deserve to be taken seriously.
Over the past week the state media has been referring to “suspected MDC
youths” as being responsible for violence, particularly in Glen View two
weeks ago.

A front-page story on Monday contained the following report: “Six more
suspects have been arrested in and around Harare in connection with the
murder of police inspector Petros Mutedza who was fatally assaulted in the
line of duty by suspected MDC-T youths at Glen View 3 shopping centre on May

“This brings to 18 the number of suspects arrested in connection with the
murder case since last week,” we were told. The figure subsequently went up
to 20.

Following this front-page report, the Herald carried elsewhere in the paper
a feature on a police woman who underwent skin grafting after a petrol-bomb
attack in 2007. It was headed “Bombed cop relives horror night”.

The caption made it clear that the attack was the work of “MDC-T activists”.
So did the accompanying text.

“Between March 15 and 25 2007 four police stations in Chitungwiza, Marimba,
Sakubva, and Gweru were petrol-bombed by suspected MDC-T activists resulting
in serious injuries to the women constables and damage of property,” the
article read.

“Police suspected MDC supporters were responsible for both attacks and
arrested five suspects in connection with the Gweru attack.”

What is curious about this is that we don’t recall any successful
convictions against those held in connection with the 2007 “attacks”. That’s
probably because there weren’t any. Despite the branding of MDC members as
“suspects” and “terror-bombers” in the Herald, the state was unable to bring
a credible case against any of them.

Secretary for Media George Charamba provided a good illustration of why
professionalism is important in the public service when he provided a
partisan commentary on the bombing of Tendai Biti’s house carried in the
Herald on Tuesday.

“This was a propaganda political petrol bomb,” he declared, “so poorly done
ahead of the Sadc Summit in South Africa. If the idea was to draw attention
to Minister Biti and his party, then the MDC-T needs to be a little more
inventive the next time.”

Should a senior civil servant be making statements of this sort? Shouldn’t
Charamba hold his tongue just this once in a matter that may be pending
before the courts?

“Anywhere (sic) who uses petrol bombs in the country’s politics –– it is the
MDC-T,” he claimed. “They should not blame violence, which is in their own
party. It’s a poor selling point for their party.”

One of the Herald’s sources said that “indications of previous petrol
bombings that have been reported before have led them to the MDC as
But as the events of 2007 referred to above clearly indicate, individuals
may have been arrested as “perpetrators” but they were not convicted as such
because of a lack of evidence. Yet the Herald continues to brand them as
“suspects” some four years later when they are not guilty of anything.

The same edition of the Herald on Monday carried a statement by
Commissioner-General Augustine Chihuri that “the ZRP will not be part and
parcel of those people who promote the agenda of imperialists”.

“Anybody trying to bring in foreign ideas will have the shock of their
lives…” he was quoted as saying in an interview. “We don’t support them.”

It would be useful to know what “shocks” the public can expect, especially
those who are exercising their constitutional rights to freedom of assembly
and expression. And as far as we know nobody is asking the police to
“support” them. What most people want to see is professional and independent
We are constantly hearing that security reform is not part of the GPA.

In fact it is clearly set out in Section 13 which reads: For the purposes of
ensuring that all state organs and institutions perform their duties
ethically and professionally in conformity with the principles and
requirements of a multi-party democratic system in which all parties are
treated equally, the parties have agreed that the following steps be taken:-

(a) that there be inclusion in the training curriculum of members of the
uniformed forces of the subjects on human rights, international humanitarian
law and statute law so that there is greater understanding and full
appreciation of their roles and duties in a multi-party democratic system;

(b) ensuring that all state organs and institutions strictly observe the
principles of the rule of law and remain non-partisan and impartial;

(c) laws and regulations governing state organs and institutions are
strictly adhered to and those violating them be penalised without fear or
favour; and

(d) recruitment policies and practices be conducted in a manner that ensures
that no political or other form of favouritism is practised.

It was predictable to see the state media backing Sepp Blatter’s rotten Fifa
machinery which involves his closest associates helping themselves to the
soccer body’s largesse. Africa was a particularly fortunate beneficiary last

“We always have attacks from England which are mostly lies with the support
of journalism which is more busy lying than telling the truth,” said a
resentful Fifa senior vice-president Julio Grondona.

“Fifa’s sentiments about the duplicitous Western media resonate with many
Zimbabweans,” the Herald claimed, “who saw their country being dragged
through the mud by the British media that hunts in packs on cue from No 10
Downing St”.

And the Herald’s reporter, Tichaona Zindoga, pitched in with this: “Western
media have been peddling lies about Zimbabwe pursuant to effecting illegal
regime change aimed at replacing the revolutionary Zanu PF party with the
foreign-funded MDC.”

Former Deputy Information minister Bright Matonga claimed that the British
media had a “follow the flag” policy when it came to matters of national
interest whether they were right or wrong.

Anybody witnessing the grilling British politicians get from their media,
especially prime ministers, and then compare that with the supine treatment
Zimbabwe’s leaders elicit from the Herald and ZBC could be forgiven for
thinking the opposite of Matonga’s theory was true.

What we have here is a predictable alignment. Zanu PF commentators lining up
behind Blatter because he successfully dodged the investigations of the
British media.

Blatter remains very much a hero in official circles in Harare. Yet,
interviewed by CNN on Monday, he admitted there should be a clean sweep in
Fifa’s Augean stable. Unlike our own observers, he didn’t seem to think all
was well at the soccer outfit.

Retired High Court judge Simbi Mubako has called for an enquiry into the
creation of the Sadc Trbunal to establish its “real motives”.

“In my opinion,” the former minister and diplomat said, “an enquiry is
called for to determine who was responsible and why.”

“The spectacle of a panel of learned dignitaries in judicial regalia
presiding over a kangaroo court would be a hilarious comedy if the matter
was not so serious,” he declared.

Such tribunals, he said, were detrimental to the image of Africa.

The same of course could be said of states which infiltrate their
judiciaries by handing out favours thus compromising the administration of

Zimbabwe already has a record of chasing independent-minded judges off the
bench including a chief justice. Attacks on the Sadc Trbunal and the judges
that staff it will simply compound the impression of a society where the
rule of law is undermined. There is now nowhere for aggrieved parties to

The CFU pointed out this week that their members have been told there is no
prospect of obtaining land to lease because of their colour. And they have
no recourse to the courts. Which is why the Sadc Tribunal characterised
their treatment as racist and unlawful.

As for “hilarious comedies”, there are enough of those around in the
politburo and Copac to keep us rolling in the aisles for a good while yet.

Is Jonathan Moyo the editor of the Sunday Mail? That is the question
Muckraker began to ask after labouring through his long-winded article in
the newspaper entitled “There is no big brother in Sadc”.

Amid the usual drivel and shrill threats, Muckraker’s eye was caught by Moyo’s
claims that the Sunday Mail was investigating the British government’s
smuggling of “its regime change agenda into the Sadc facilitation process
under the guise of supporting what is claimed to be a Sadc election roadmap”.

What we found strange was how Moyo, a purported columnist, would know what
the Sunday Mail would be leading with on their front page.

We were also amused by the extent Moyo was prepared to go in his efforts to
subvert a well-known fact.

“What is infuriating,” Moyo told us, “is that, because they are ignorant of
the situation on the ground, the South African facilitation team enable the
MDC formations to lie that the electronic media in Zimbabwe is monopolised
by ZBC when the fact is the US-run Studio 7 is illegally broadcasting
nationwide on medium-wave to promote illegal regime change in the country!”

Moyo would have us believe that because Studio 7 is broadcasting
 “nationwide” on medium-wave, it gives ZBC the right to be the sole
broadcaster in Zimbabwe. Studio 7 broadcasts, it is suggested, which are
aired from 7pm to 8.30pm imply electronic media plurality and so the MDC
formations have no reason to complain. The fact that the government
incessantly jams Studio 7 broadcasts is a truth best ignored by the

It is ironic that Moyo is so keen to talk about due process in the
appointments to the ZBC and BAZ boards and yet is not concerned about ZBC’s
abrogation of its public-service broadcasting role.

As if that was not enough, Moyo claims that “the only reason why Zanu PF
signed the Sadc-mediated and guaranteed GPA on September 15, 2008 is because
it sought to defend and reaffirm the sovereignty of Zimbabweans to make
their own national choices freely including to form the government of the
day at a time when Britain, the US, EU and the white Commonwealth were
rushing to the UN Security Council in July 2008 with fraudulent claims that
Morgan Tsvangirai had won a presidential run-off election.”

Really? We thought it was because no one recognised the results of the
one-man sham election in 2008.

Turning to another political shape-shifter, ANC Youth League president
Julius Malema now claims that Thabo Mbeki “is the best leader the ANC has
ever produced”.

“There are those who hated him with a passion but forgot that Mbeki, during
his leadership, had produced a two-thirds majority during elections.

“Those who hate Mbeki are jealous of his achievements. He was the most
educated and clever.”

Malema’s comments have been widely seen as an attack on Zuma.

Malema had said in September 2008 that “we are leaving no stone unturned to
make sure that Thabo Mbeki leaves”.

He referred to Mbeki as a “dead snake” saying: “We are no longer beating it
and we are burying this snake this weekend.”

Strange how the sands shift isn’t it?

Finally, we salute Edgar Tekere who died this week. Unlike the current gang
of yes-men in Zanu PF, he was not afraid to speak his mind.

This would be a good time to review his autobiography, A Lifetime of
Struggle, which casts a bright light on the record of others claiming to
have led the struggle.

It’s just a pity that in reporting the news of his death the Herald claimed
he had problems with his “prostrate”.

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Eric Bloch: Disaster if currency changes now

Thursday, 09 June 2011 20:30

EVER since Zimbabwe’s currency was demonetized in February 2009, and a
multicurrency system substituted in its stead, innumerable voices have
repeatedly called for reintroduction of a national currency.  Endlessly,
there are demands for the country to revert to its own currency, with many
in the national hierarchy, and large numbers of the public at large,
vociferously insisting that the Zimbabwe dollar be brought back into

That so many do so is unsurprising, for  with the sudden discontinuance of
attributable value to the Zimbabwean dollar, whatsoever monies held by the
populace was valueless.  Pensions declined to miniscule sums, creating great
hardships for tens of thousands of retirees.

Funds accumulated (by the few who had been able to save), whether held in
banks or building societies, under mattresses, or in wall safes, ceased to
be worth the paper they were printed on.  With the sudden, virtually total
eradication of value, almost all lost sight of the fact that their monies
were, in any event, becoming worthless at an exceptional pace.

By July 2008, when the then Central Statistical Office was last able to
determine the rate of inflation, based upon Zimbabwean dollar prices,
inflation had risen by an annualised rate of 231 000 000%.

And that inflation was massively less than the inflation sustained in the
few months that followed.  Real inflation, although not authoritatively
measured, soared to estimate levels of billions, if not trillions.

The magnitude of inflation was so gigantically great that the Reserve Bank
of Zimbabwe (RBZ) had to resort to printing bank notes of a value as great
as 100 trillion dollars!  Even that did not suffice to purchase a small
basket of essential groceries.  To all intents and purposes, the Zimbabwean
dollar was valueless, and the bank notes were not worth the money that they
cost to print, let alone their denominated values.

As a result, the only practical and realistic policy that RBZ and government
could pursue was to demonetize the valueless Zimbabwean currency, and
especially so as the undertaking printed on each bank note became a trite,
meaningless obligation incapable of fulfillment.  Each and every note
carried a commitment, signed by the RBZ Governor, that “I promise to pay the
bearer”  an amount equal to the note’s specified value.

Thus, RBZ was bound to pay, as and when required to do so, one hundred
trillion dollars for each bank note of the value presented to it, but it did
not have the resources with which to do so.

Discontinuance of the valueless currency, and the substitution of a
multi-currency regime, was the key factor that brought to an end the chaotic
and catastrophic hyperinflation, and set Zimbabwe on a path of deflation,
followed by only minimal inflation in the course of 2010 and thereafter.  I

t was a major economic boost, facilitating the ready import of goods
required from abroad, ending innumerable constraints upon all sectors, and
upon the population in general, such as almost ceaseless non-availability of
petroleum products.  It virtually eliminated the unlawful, and very costly,
illegal informal sector foreign exchange trading which had virtually been
the  only source of currencies of value.

But most have forgotten the ills that prevailed during the last few years of
existence of the Zimbabwe dollar, and instead are focused upon the
considerable fluctuations in exchange rates which are occurring between the
currencies which now comprise Zimbabwe’s multicurrency system, and the
inconveniences and inflationary consequences of pronounced insufficiencies
of coins.

At the same time, some politicians not only disregard those factors, but are
also incensed by a perceived loss of Zimbabwean sovereignty.  They therefore
incessantly demand a reversion to Zimbabwean currency.  Calls for the
restoration of the Zimbabwean dollar are endless.

In contrast, and very rightly, the Minister of Finance Tendai Biti has on
several occasions stated emphatically that that currency will not be
restored and reverted to until such time as the economy is indisputably

He has very credibly contended that the proof of economic stability, to an
extent justifying Zimbabwe having its own currency, is no  less than two
successive years of economic growth of not less than seven per cent per
annum.  This implies that the very earliest that Zimbabwe can contemplate
reintroduction of a national currency is 2013.

The advocates of an immediate reinstatement of the Zimbabwean dollar are
oblivious to the fact that such a currency would be devoid of substance and
of any national or international credibility unless there are sufficiently
great reserves to support it.  Zimbabwe has no such reserves.  Government is
insolvent, without even the resources required to pay its employees a
reasonable living wage, let alone to fund adequately its parastatals or to
effect critically necessary infrastructural development.

RBZ, being Zimbabwe’s central bank, is in like catastrophic circumstances.
It has accumulated debts exceeding US$1,5 billion.  It has not even been
able, by mid-2011, to refund the private sector the foreign currency
earnings of exporters, the inward remittances of non-governmental
organisations, and the foreign currency payments due to others, let alone to
redeem bonds, which matured in February 2010.

Some argue, fallaciously, that Zimbabwe’s mineral resources constitute the
necessary reserves to back a national currency, but that is not so.  Until
those resources are mined, and are not sold but are held as reserves, they
have no reserve value.  And, as was the case during traumatic
pre-demonetisation era, an unsupported currency is devoid of international

When a currency has no entrenched, real, and realistic value, none outside
of the country have any faith in it.  They will not invest in a country
whose currency has no international value, nor will they provide loans and
lines of credit. And yet investment, loans and credit lines are key
prerequisites of a comprehensive economic recovery, which recovery is
Zimbabwe’s most critical and urgent need, to curb and contain pronounced,
very widespread poverty and suffering.

Premature reintroduction of a national currency, and abandonment of the
prevailing multi-currency regime will not only prevent economic recovery,
but will also reverse the first, albeit small, recovery that has been
achieved since early 2009.

It will herald a resumption of the worst hyperinflation ever experienced,
anywhere in the world, at any time in economic history.  It will further
intensify the overwhelming poverty stresses that afflicted the majority of

If Zimbabwe is so foolhardy as to reinstate its currency precipitously and
prematurely, then in order realistically to reflect the consequences of so
doing, it should not even call the currency dollars and cents.

Instead, if using the Shona language, in lieu of the cent should be the
Hazviko, and one hundred Hazviko will be one Zvapera.  In the alternative,
in Ndebele, the basic unit should be the Azikho, and one hundred Azikho will
be Pelile!!!

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Zanu PF Mat bigwigs jostle to succeed Mugabe

Thursday, 09 June 2011 20:16

Brian Chitemba

WHILE Vice-President Joice Mujuru, Defence minister Emmerson Mnangagwa and
military chief Constantine Chiwenga jostle to succeed President Robert
Mugabe, Matabeleland has also been engulfed by a fierce power struggle
pitting political heavyweights seeking to strategically position themselves
for a post-Mugabe era.
The battle is particularly fierce between Vice-President John Nkomo, Zanu PF
national chairman Simon Khaya Moyo and Mines minister Obert Mpofu, who are
all keen to control the province by trying to resuscitate the former
liberation movement which has repeatedly lost the Matabeleland vote since
the 2000 elections.
The rise of the MDC as a formidable opposition to Zanu PF saw the former
ruling party overwhelmingly lose support in the region. Even the acrimonious
split in the MDC in 2005 following irreconcilable differences between party
leader Morgan Tsvangirai and his erstwhile secretary-general Welshman Ncube
provided no respite for Zanu PF. The Matabeleland vote was simply split
between the two MDC formations.
Nkomo first lost his Bulawayo North parliamentary seat in 2000 and then quit
participating in polls when he became Zanu PF national chairman on the
grounds that his party position was an important national position.
Khaya Moyo lost the Bulilimamangwe seat in the 2000 elections and was
rescued by being posted as the country’s high commissioner to neighbouring
South Africa.
From that point on, both Nkomo and Khaya Moyo have remained on the national
political landscape only as Mugabe’s appointees.
This means that for the past 11 years Nkomo and Khaya Moyo’s constituency is
Mugabe. With Mugabe’s advanced age and failing health increasing swelling
calls for him to step down, there is trepidation among all his appointees
since they face a bleak future with a new person at the reins.
As Mugabe fast approaches the twilight of his political career, Matabeleland
political bigwigs all want to hold sway in the region so as to fit into the
national equation when a new leader takes over from Mugabe and plays the all
too familiar tribal balancing act.
And Mpofu seems to have the upper hand at present as he enjoys the support
of influential politburo members Jonathan Moyo and Jacob Mudenda, central
committee members Fati Mpofu, Melly Nkomo, Rebecca Fameli and Josephine
Mpofu is already playing a crucial role in shaping the political future of
the region and successfully orchestrated the removal of Matabeleland North
provincial chairman Senzo Ncube and had him replaced by his close ally
Zwelitsha Masuku last year. Bulawayo chairman Isaac Dakamela is also an ally
of Mpofu.
Nkomo and Khaya Moyo have the backing of spent forces such as Sikhanyiso
Ndlovu, Small and Medium Enterprsies minister Sithembiso Nyoni, Matabeleland
North governor Sithokozile Mathuthu and her Matabeleland South counterpart
Angeline Masuku, as well as Bulawayo Metropolitan governor Cain Mathema.
These all happen to be also recipients of Mugabe’s patronage.
The continued protection of the two presidium members has bred
disgruntlement in Matabeleland as some party officials argue that Nkomo had
Khaya Moyo are practically divorced from the grassroots.
In the run-up to elections to choose a successor to the late Joseph Msika in
2009, Mpofu pointed out that Nkomo was not a suitable candidate because he
was struggling to lure the electorate. Mpofu further boasted that he was one
of a rare breed of Zanu PF gurus who were able to contest in the heart of
Matabeleland where calls for regime change were rampant and win.
Mpofu is the MP for Umguza, about 40 km northwest of Bulawayo.
It is this voter disparity between Nkomo and Mpofu that is fuelling a fierce
but muffled succession debate cascading from the Mujuru and Mnangagwa camps.
Mpofu is linked to Mnangagwa while Nkomo is closer to Mujuru.
He pitches himself as the president’s “ever obedient son”.
This perhaps explains why Nkomo has shown an interest in contesting for his
home constituency seat of Tsholotsho and has been donating significantly to
schools and communities in the district.
He needs a constituency to lean on to secure political relevance in a
post-Mugabe era. Nkomo and Khaya Moyo have lately been holding meetings
lobbying for developmental programmes in Matabeleland in an effort to
appease a region which has constantly complained of marginalisation.
Political analyst Kucaca Phulu said it was critical for politicians like
Nkomo and Khaya Moyo to remain relevant to the electorate for them to
sustain their political jobs.
Some Zanu PF insiders say Nkomo and Khaya Moyo have been seriously stung by
Mpofu’s growing influence. Mpofu’s profile grew in the region when he bailed
out Highlanders Football Club from a US$21 000 debt, which was threatening
to tear the club apart. Highlanders is emotionally supported in this region
and anyone who positively associates themselves with the country’s oldest
soccer club automatically finds favour in Matabeleland.
Ever since Mpofu assumed the Mines ministry, his influence has grown at
unprecedented levels and he is said to have easier access to Mugabe and the
securocrats than Nkomo and Khaya Moyo. Just two months ago, security chiefs
rejected summons by Nkomo to appear before the Organ on National Healing.
Phulu said the Zanu PF heavyweights had realised that assisting in critical
community projects bolstered their battered images much better than
“MDC-T and MDC have won previous elections in Matabeleland and it’s an
uphill task for Zanu PF gurus to penetrate. They have to do more to lure
voters,” said Phulu.
In a bid to bestow more power on Khaya Moyo, Mugabe and his cabal tried in
vain to replace House of Assembly Speaker Lovemore Moyo, who had been
technically dethroned by a Supreme Court judgement.
Khaya Moyo’s failure to land the speakership made him lose more clout in
Matabeleland where his ascendency to the Zanu PF chairmanship was bitterly
Bulawayo-based analyst Chamu Mutasa said: “There is serious disgruntlement
in Matabeleland because those at the top do not have the mandate of the
masses. Nkomo and Khaya Moyo are basically serving at the pleasure of Mugabe
unlike other veteran politicians like Mpofu, Mujuru and Mnangagwa.”
But Mutasa also warned that if Nkomo and Khaya Moyo contested in the
forthcoming elections and lose, then they risked fading into political
“Their (Moyo and Nkomo) future after Mugabe is uncertain because those who
will come into power may not accommodate them, so they better get
constituencies. The issue of former PF-Zapu seniority will also die in the
near future and this may mean the officials will be challenging each other
in an open race, therefore political relevance is important,” Mutasa said.

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Zimbabwe cursed by diamonds

Thursday, 09 June 2011 20:10

By Eddie Cross

ZIMBABWE is reputed to be the country with the most natural resources per
capita in the world. While we are rated about 136th in terms of investment,
we are number one on the resources per capita table — we have a small
population so do not get too excited, but it does show that we are a
potentially very rich country. The fact that we are one of the poorest
countries on earth has everything to do with our government and nothing
whatsoever to do with our potential or our people.
In 1890, a world-renowned geologist retained by Cecil Rhodes to advise him
on the gold mining potential of southern Africa, told Rhodes (quite
correctly) that the real wealth of the region was in the open veld some 30km
from the new mines on the Witwatersrand. Rhodes went on to act on that
advice and one of the world’s greatest business empires was the eventual
result, with South Africa producing some three quarters of world gold output
per annum for nearly seven decades.
But he was wrong on Zimbabwe — we have in recent years found that we have
the potential for some large mining operations that could result in us
producing up to 100 tonnes of gold a year in the not too distant future.
This would put us up there with South Africa and Australia. But it is the
discovery of diamonds that has caught the imagination over the past two
First came the discovery of diamonds over the Limpopo River near Beitbridge
by De Beers. They decided not to exploit the find and the claims were taken
over by an Australian mining company that opened it up and after a couple of
years, abandoned the mine and their assets, fleeing with whatever diamonds
they could carry.
The claims were purchased from the liquidator by a Bulawayo family who
quickly ran into another problem in the form of greedy, corrupt Zanu PF
leaders who proceeded to dispossess the family and take the mine over — in
partnership with a shady character from the Middle East.
That situation prevails today and the mine, in addition to producing a small
number of diamonds, is used to launder diamonds from other countries, mainly
Angola and the Congo.
Then the same company, De Beers, who have been quietly exploring the country
for diamonds, discovered the alluvial diamonds at Marange — just outside the
City of Mutare on the Save road.
They opened up some trenches and decided that this too was not worth the
trouble and after they had abandoned their claims, a small group of
Zimbabweans in the diaspora formed a company they called African
Consolidated Resources (ACR) in London and  decided that they would mine
this discovery.
Before ACR could begin mining, they too were given the standard Zanu PF
treatment of illegal but forced dispossession, forced occupation of the
claims by various Zanu PF-linked firms and individuals and a wild invasion
of thousands of small-scale miners who simply mined wherever they could and
sold the stones they found to the nearest buyers.
In the melée, hundreds of small-scale miners were beaten, many were killed
by gunfire from army and police. Eventually a sort of armed peace was
imposed where an unholy mixture of corrupt army and police exploited the
small-scale miners on the fringes and an extraordinary collection of
international thieves and thugs conducted formal mining operations protected
by the security services operating sophisticated equipment such as aircraft
and helicopters.
This was not taking place in Serra Leone — this was in Zimbabwe with its
neat roads, clean towns and cities, a standard police force backed by formal
courts with magistrates and judges in robes and white wigs. This was not in
the Wild West — this was in a country that deeply respects the
administration of justice and is generally law-abiding in normal day to day
What we have now at Marange, is an alliance of a Chinese registered company
with links to the Chinese army, two local companies with Russian, Israeli
and South African mafia connections and direct mining operations by both the
police and the army.
The remaining small-scale miners operate secretly and at night and try to
survive on what they can steal or produce from shallow working in the
alluvial sands. The original diamond pipe has been found and is reputed to
be very rich, but is in hard rock and requiring something that the present
operators do not have — real mining experience and expertise.
And none of this is legal or open and transparent. In the deserts of
Botswana De Beers operates a joint venture with the Botswana government.
There the mines are tightly controlled, all diamonds are recorded and sent
to a clearing House in Gaborone where they are graded and processed and then
marketed globally in a transparent manner.
The wealth from the operations flows back into the coffers of a government
that has been able to transform the lives of the people of Botswana in a
couple of decades.
Estimates vary but most industry sources say that the Marange alluvial
diamond fields could be producing in excess of US$100 million a month in
raw, uncut diamonds. If we assume that 75% of the gross revenue from these
sales would normally accrue to the state in one form or another, then this
source of revenue, by itself, could double civil service salaries.
Instead we have people taking diamonds out of the country illegally, we have
plenty of signs of new wealth in Mozambique border towns and we hear of
sales of diamonds in Dubai, China and India. Most recently, just to
emphasise their interests, the Chinese Communist Party Youth League sent a
delegation here and they were given a tour of the diamond fields, closed to
everyone else including our parliamentary committee responsible for
oversight of the mining industry.
And so Zimbabwe limps along, poor, marginalised and abused despite or maybe
because of its wealth and resources. Our only hope being to get to an
election where the votes of our people will finally break the stranglehold
that Zanu PF has on our lives and resources.
They really have given us no alternative; they must go and must go now. The
sorry saga of our diamond discoveries is simply another reason after the
corrupt shambles in agriculture and the destruction of our currency and
industrial economy, as to why Zanu PF no longer has anything to offer the
electorate in Zimbabwe. They are simply beyond redemption.

Eddie Cross is MDC MP for Bulawayo South. This article first appeared on his

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RBZ needs a broader financial stability thrust

Thursday, 09 June 2011 19:49

By Jerry Borerwe

THE Zimbabwe Independent’s (June 3) Comment on the need for the Reserve Bank
of Zimbabwe (RBZ) to “keep eye on the ball” in the wake of the ReNaissance
Financial Holdings Limited (RFHL) Capitalisation saga hit the nail on the
head and raised pertinent questions needing answers. These include the
source of permissible funds required to meet minimum capital requirements
and whether it is illegal to capitalise using borrowed funds. Other analysts
have gone to the extent of pushing for the widening of the RBZ’s supervisory
powers if it is to adequately execute its supervisory mandate.
In light of these topical issues and as a former RBZ Deputy Division Chief,
Supervision of Banks, I felt compelled to respond and possibly provide a
platform that could shape much needed reform in financial sector
supervision, if this function is to meaningfully compliment current economic
turnaround efforts.
First, I must state quite categorically that the RBZ is sufficiently legally
equipped to regulate and supervise the banking sector, backed by world class
supervisory techniques that include risk-based, microprudential,
macroprudential and consolidated supervision; off-site surveillance and
on-site examination techniques, thanks to full support at the highest level
in the RBZ.
Second, the RBZ has some of the best brains on the African continent in as
far as prudential supervision is concerned, at least at senior management
level. With such a scenario, coupled with economies of experience, it is
inconceivable that such an embarrassing incident could have occurred,
particularly coming nearly seven years after another much publicised
capitalisation fraud at a bank that was eventually placed under curatorship
during the 2004 banking debacle. Other past supervisory flaws include
failure to timely detect engagement by some banks in prohibited activities
prior to December 2003; that however, could be forgiven if one considers
that the RBZ was still to strengthen its supervisory systems and sharpen
supervisory skills.
With regard to the issue of capitalisation, it is noted that Basel I and II
requirements prescribe “qualifying” capital components for what is known as
Core Capital and Supplementary Capital. The former comprises those elements
deemed permanently available to sustain business operations and absorb
potential losses. These include paid up ordinary capital and published
retained earnings. Supplementary elements include those with characteristics
of both equity and debt capital, hence inferior to core capital. These
include irredeemable noncumulative preference shares. In this regard, debt
capital/ borrowed funds are expressly excluded from the calculation of
capital adequacy, the rationale being that such funds place an unavoidable
fixed interest charge, in addition to inability to absorb losses.
It must be noted however, that banks are not barred from raising debt
capital to support their operations as long as the resultant overall risk
profile is fully supported by qualifying capital components to an extent
that minimum prudential capital requirements as defined are met. In this
regard, the RBZ has put in place a rigorous capital injection verification
process which, if followed, should detect fraudulent activities. The process
ensures that the bank is able to trace the source of funds which, in the
RFHL case, could have easily been done considering that depositors’ funds
and a loan were used, through an appropriate audit trail.
The above therefore could possibly be a reflection of corruption at the shop
floor level, where some operatives mandated to verify capital injection
could have been bribed in a quest to augment their meagre salaries,
resulting in them not “seeing” or “hearing” anything. In the absence of an
investigation by the RBZ on this aspect, the nation will never know what
exactly happened. Such a flaw could also be a manifestation of serious flaws
in the surveillance quality assurance process.
In criticising the RBZ however, cognisance must be taken of the following
fundamental issues, lest we lose sight of the bigger picture. These include
the dearth of skills at operational levels in the surveillance department
following the departure of experienced personnel due to uncompetitive
remuneration, in turn reflecting the bank’s undercapitalisation and failure
to attain critical mass to sustain requisite competitive packages. Such
deficiencies can only be reasonably addressed once these issues are
resolved –– a development which obviously calls for the resolution of
macroeconomic challenges that have militated against capitalisation and the
RBZ’s ability to engage in core income generating activities such as Open
Market Operations. Everyone at all levels of society knows what needs to be
done if this is to be realised.
In light of the above, I believe there is an imperative need by the RBZ to
not only address current operational deficiencies, but consider revamping
the supervisory regime which currently unduly focuses on the narrow
prudential thrust, to the much broader financial stability thrust. To
illustrate this point, a few examples are necessary:
l A close analysis of the 2004 banking debacle reveals that it was triggered
by undue focus on microprudential concerns where banks determined to have
been engaging in non-permissible speculative activities had to be severely
punished. Unfortunately this thrust was to result in the formulation of an
exceedingly tight monetary policy that failed to address underlying causes
of inflation. This is premised on the fact that the policy became directed
at arresting the speculative tendencies that were deemed to have been
fuelling inflation and not structural causes thereof, including foreign
exchange scarcities. The ensuing inordinately tight policy however, was to
have far-reaching implications on financial sector soundness given that
banks caught with underlying funding gaps occasioned by the tying up of
short-term deposits into relatively illiquid investments had to refinance
the gaps using high cost funds –– a development that triggered unsustainable
operating losses and subsequent insolvency.
l By unduly focusing on microprudential issues, we lost focus of the fact
that the the engagement in prohibited activities had been a manifestation of
structural challenges in the financial sector brought about by the
ill-sequencing of financial sector reforms that had been an integral
component of a stillborn Economic Structural Adjustment Programme (Esap).
The sector had been opened up to new players, coupled with interest rate
deregulation, without a contemporaneous increase in business activities and
strengthening of both supervisory capacity and risk management and corporate
governance at banks (in view of new and amplified banking risks that
normally accompany financial deregulation).
The resultant heightened competition had naturally squeezed profit margins,
hence the need to diversify and stabilise income bases. Due to prohibitive
banking regulations however, the only way for banks to engage in the more
lucrative but prohibited speculative equity and real estate investments had
to be through unsupervised associate companies such as asset management
companies, which activities  could however not be easily detected  due to
the absence of consolidated supervision and generally weak surveillance.
These I believe constituted the fundamental issues the bank should have
addressed in the Monetary Policy Statement of December 2003 in particular,
providing a conducive environment for business expansion and strengthening
of bank risk management and corporate governance practices –– developments
which could perhaps have prevented the 2004 failures.

Borerwe is a Managing consultant for Shamlack Investments Private Limited.
E-mail: .

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Editor's Memo: Security sector reforms crucial

Thursday, 09 June 2011 20:46

Constantine Chimakure

THE debate on security sector reforms has been sidetracked and replaced by
lies and cheap politicking.

There are those who argue that the reforms are part of a grand regime-change
agenda, a hackneyed argument which we have been subjected to for quite some

This strand of argument goes as far as saying the reforms are aimed at
removing the current service chiefs in the army, the police, prisons and the
Central Intelligence Organisation (CIO) and replacing them with those
acceptable to the three ruling parties.

This line of argument should not be taken seriously as no sane person would
take a change of guard to mean reforms. As a nation we have learnt that
applying lipstick to a frog does not make it beautiful and hence security
sector reforms we should embrace as serious are those which would
professionalise the army, police force, the CIO and the prison service.

Professionalising the security sector would ensure that there are certain
values, rules and procedures security forces adhere to to earn the respect
of the populace.

Having serving officers dabbling in politics should be unacceptable in a
democratic society.

It is only after serious reforms, not the removal of personalities, that
people like Brigadier-General Douglas Nyikayaramba would think twice before
they utter political statements likely to bring the name of the security
forces into disrepute. Apart from the lie that the security sector reforms
are aimed at certain individuals, another plain lie is that the reforms are
not captured in the GPA.

To claim that this issue was never discussed smacks of a deliberate
misreading of the GPA and an attempt to hoodwink the masses. These elements
clearly take the country’s population for granted as security sector reforms
are clearly etched in the pact.

Article XIII exhorts that state organs should not belong to a particular
party and should be professional.

We quote: “For the purposes of ensuring that all state organs and
institutions perform their duties ethically and professionally in conformity
with the principles and requirements of a multi-party democratic system in
which all parties are treated equally, the parties have agreed that the
following steps be taken:

“(a) that there be inclusion in the training curriculum of members of the
uniformed forces of the subjects on human rights, international humanitarian
law and statute law so that there is greater understanding and full
appreciation of their roles and duties in a multi-party democratic system;

“(b) ensuring that all state organs and institutions strictly observe the
principles of the Rule of Law and remain non-partisan and impartial;

“(c) laws and regulations governing state organs and institutions are
strictly adhered to and those violating them be penalised without fear or
favour; and

“(d) recruitment policies and practices be conducted in a manner that
ensures that no political or other form of favouritism is practised.”
Clearly, this articles talks of reforms.

Without doubt the security forces have become an appendage of certain
discredited political actors and they have to be rescued from this

The only way of doing so is through enshrining reforms at an institutional
level and not to deal with individuals. Equating these reforms to regime
change is at best a mischievous lie and at worst a calculated misinformation
campaign which should not be taken seriously.

The security sector is a very important component of the state and cannot be
done away with. It has to complement and not derail the democratic process
to which it should remain subordinated. Under no circumstances can they
declare that they are not prepared to salute a person who has been
democratically elected.

Respecting the will of the people is what we fought for in the liberation
struggle, not having army and police officers instructing us on who we
should obey.

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CandidComment: Politics: The bane of African economies

Thursday, 09 June 2011 20:45

Itai Masuku

A LECTURER of mine used to like quoting a BBC reporter who once questioned
an African leader who was about to attend a summit of the then Organisation
of African Unity, what the African leaders had done to spearhead economic
development on their continent. The answer was an honest: “No, we haven’t
done much really; we’re still busy chasing each other.”

The major summit taking place in Johannesburg this week is not a meeting to
discuss the Zimbabwean political problem but a meeting by representatives of
nearly 600 billion sub-Saharan Africans to discuss the future of their
constituents’ economies. The talking point is the establishment of a free
trade area among these nations from eastern and southern Africa.

The Zimbabwe issue is supposed to be discussed, ostensibly, on the sidelines
of the economic summit, but judging from media coverage internationally, the
economic summit appears to be taking place on the sidelines of the Zimbabwe
issue.  But isn’t it funny how politics always overshadow economic

And that seems to be the curse of our continent, we concentrate far too much
on the politics rather than the economics. We should think more of what
should we do to increase food production, give them access to clean potable
water, clothe them, provide more houses, electrify their homes  etc, but we’re
more concerned about who’s ruling the country, what party they belong to and
which is their village of origin.

In all honesty, we’re still busy chasing each other. In the context of the
economic summit that’s supposed to be taking place in Johannesburg, it has
been hijacked because some of the African brothers from Zimbabwe are still
busy chasing each other.

John Naisbirt, one of today’s thought leaders renowned for his series of
Megatrends books, says in one of his later offerings Mindsets that if you
want to know the future of a country, look at its present. He argues that
the future is very much embedded in the present.

Let’s hope that Naisbirt, who’s often been spot on with a number of his
predictions on economic trends, including the emergence of China as an
economic powerhouse before many could imagine it, is wrong this time around.

Because if he’s right, we’re in more than serious trouble. In the US, where
Naisbirt hails from, they had an era they have dubbed Reaganomics, after the
then president Ronald Reagan, whose economic growth drivers they could
really put their finger on.

The point is, the economy grew all the same because the Reagan’s mindset was
to sort out the politics by sorting out the economics. Now in what we may
call chaseonomics, we try to sort out the economics by sorting out the
politics, which is why we’re still where we were two years ago when the GPA
was signed.

So we ask, with this type of thinking, are we really ready to tackle the
complex issue of economic regional integration, given this state of affairs?
Is it not that our current crop of leadership in Africa is better equipped
to deal with political issues and have a thin grasp of economic issues?

To borrow from Naisbirt, the future is embedded in the present. We can only
wait and see.

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Comment: Sadc must stay its course

Thursday, 09 June 2011 20:43

SOUTHERN African Development Community (Sadc) leaders are expected to meet
tomorrow in Johannesburg to discuss simmering political and security issues
in Zimbabwe with a view to coming up with an elections roadmap to ensure
free and fair polls.

For the past decade Sadc leaders have been engaged on the Zimbabwe question
trying to resolve a political stalemate caused mainly by disputed elections.
Although Zimbabwe has always held elections, they have more recently been
characterised by political violence and intimidation.

The situation deteriorated badly after 2000 as President Robert Mugabe and
his Zanu PF battled for political survival. As a result the blood-soaked
elections held in 2000, 2002, 2005 and 2008 were all disputed and the
ensuing political impasse has lingered on, creating a polarised environment
and damaging the economy. Hundreds of innocent people lost their lives in
the process.

Sadc has been struggling for 10 years to resolve the Zimbabwe situation and
now many people are asking: Is there any way out?

There should be. Since Sadc got seriously involved, starting in 2007 when
South Africa was given a facilitation role, there has been some progress in
disentangling the crisis.

Despite that Mugabe remains firmly ensconced in power, the problem has been
significantly untangled. What now remains is for the country to go through
this turbulent period towards free and fair elections within a reasonable

Zimbabwe deserves peace and stability to give its people a chance to realise
their aspirations and dreams. The country has gone on for far too long
locked in a stalemate.

That is why Sadc leaders must keep up the pressure. They must insist on a
peaceful resolution of the crisis based on the Global Political Agreement
(GPA) which envisages free and fair elections after a new constitution. The
process is spelt out in Article VI of the GPA. The elections roadmap being
crafted now is meant to fulfill in practical terms what was agreed and
envisaged in the GPA.

The GPA, which has many grey areas including on the timing of elections,
must continuously be reviewed and updated where necessary to achieve its
ultimate objective to create political and economic stability, as well as
conditions for free and fair elections. That is why constant engagement
between the parties is necessary.

Sadc leaders must tomorrow build on the resolutions of the Livingstone
summit held in March to find a lasting solution to the Zimbabwe situation.

After getting a rude awakening in Livingstone following frank and honest
talks, Mugabe admitted the outcome of the summit was a “bombshell”, and his
propagandists are out there in South Africa trying to reverse resolutions of
that meeting. As part of this agenda, Zanu PF sent an advance team of
publicists — most of whom enjoy little public respect have — to go and make
a noise ahead of Mugabe’s arrival. It’s a mission-impossible of lies and
deception under the  rubric of “setting the record straight”.

The Zanu PF line up dispatched to Johannesburg includes Jonathan Moyo,
Tafataona Mahoso, Vimbai Chivaura, Christopher Mutsvangwa, Oppah Muchinguri
and Sandi Moyo.

Few people in South Africa are likely to believe apologists of this calibre
whose mission is to pretend there are no human rights violations in
The moment you have such a dismal cast, there will be no serious takers for
your message and you are guaranteed failure.

Sadc leaders must reject outright Mugabe’s attempt to reverse the
Livingstone resolutions. They must keep their eyes on the ball and not be
distracted by his predictable protests at the summit and fading liberation
struggle heroics. Mugabe has failed and squandered his legacy. It is too
late to turn around now.

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NEPAD and agriculture - Africa's development plan bears fruit

Editor’s note:  After years of talk NEPAD’s agriculture plan is finally taking root. Africa Renewal reports from down on the farm.



By Ernest Harsch

For most of the 1990s Sierra Leone was best known for its diamonds — and the devastating civil war they helped finance. But a decade after the end of that conflict, the West African nation is tapping a different kind of wealth: the crops that grow on its fertile land. All that was needed, said Marie Kargbo, who cultivates rice on a six-hectare farm in Kambia district in northwestern Sierra Leone, was a little help: “Before now, life for women farmers was very difficult,” she told a reporter for the Inter Press Service news agency. “But now rice production has been fruitful, as we have been receiving supply from the government, ranging from seed rice [to] power tillers, fertilizers and pesticides.”

In 2009, according to the latest UN estimates, Sierra Leone grew 784,000 tonnes of rice, well above the 550,000 tonnes needed for domestic consumption and a third higher than in previous years. The reason, most people agree, has not been agricultural so much as political. In 2008 President Ernest Bai Koroma declared that, after energy, agriculture would be his administration’s highest development priority.

The government put money behind that talk by increasing agriculture’s share of the 2009 budget to 7.7 percent, a dramatic leap from the 1.6 percent allocated the previous year. The 2010 budget pushed up the share further, to 10 percent.

With that step, Sierra Leone became just one of a dozen African countries to reach the target for agricultural spending recommended by African governments in Maputo, Mozambique in 2003. That summit also approved a detailed plan for African agriculture known as the Comprehensive African Agricultural Development Programme (CAADP), which is part of the New Partnership for Africa’s Development (NEPAD), the African Union’s continental development programme.


An agricultural revolution

Through increased investment, better agricultural policies and more support for Africa’s farmers, the continent can achieve an agricultural revolution, says Ibrahim Assane Mayaki, the chief executive officer of the NEPAD Planning and Coordination Agency. “Africa has the potential to become a major food producer, ensuring food security on our continent and beyond.”

Boosting production is not only vital for reducing hunger in Africa, notes the CAADP programme, “but it also makes economic sense.” In virtually every African country agriculture constitutes the backbone of the economy. Yet for decades African agriculture suffered from neglect. Many governments devoted only a minuscule percentage of their budgets to farming, and, despite promises, donor funding remains scarce. .That makes it even more important for African governments to do their part, argues Mr. Mayaki. “We all have to make the necessary funding available. We need to increase our levels of investment into agriculture in Africa.”


Agricultural ‘compacts’

Yet by 2007 only eight African governments were devoting 10 per cent or more of their budgets to agriculture. That year, Rwanda became the first country to sign a formal CAADP Compact. Under it the ministers of finance and agriculture vowed to increase the share of government spending for agricultural development from 4 per cent to more than 10 per cent within five years. By late 2010, 22 African governments had signed compacts, with another six expected to sign later this year. Most governments subsequently hold consultations with farmers’ organizations, technical experts, researchers, donor officials, business representatives and others to develop detailed, multi-year investment plans.


More inputs equal bigger harvests

But the real test is whether those funds reach farmers on the ground. In country after country, experience has shown that farmers’ access to fertilizer, high-yielding seeds and irrigation can be crucial in boosting their harvests.

In 2009 Mozambique distributed 7,300 oxen as part of a programme to expand the use of animal traction, a measure that should enable families to cultivate at least five hectares each, instead of one. That same year Uganda recorded its best-ever maize harvest. “We distributed enormous quantities of good-quality high-yielding seeds,” explained Opolot Okasai, the government’s commissioner for crop resources. In 2010, thanks to the programme the maize harvest was even higher, nearly twice domestic consumption needs.

In Tanzania, greater use of hybrid seeds and fertilizers enabled farmers to produce a surplus rice crop in 2010. That same year Senegalese rice farmers, who generally produce only about 150,000 tonnes annually, were able to grow 350,000 tonnes, about half the country’s rice consumption. In addition to more seeds and fertilizer, a well-funded farm irrigation programme proved decisive.

Particular care must be taken that such assistance reaches women farmers, experts point out. Whether governments provide seeds, fertilizers, marketing assistance or credit, they “must give the necessary support to the women farmers, who produce the majority of Africa’s food,” says Namanga Ngongi, president of the Alliance for a Green Revolution in Africa, a non-governmental rural development initiative.

More generally, farmers’ groups must gain a greater voice in helping to set agricultural policies and programmes, Mr. Mayaki, the NEPAD chief executive, said at the first Pan-African Farmers Forum, held in Malawi in October 2010. The participants included representatives of national farmers’ unions and five regional farmers’ organizations. “Farmers,” Mr. Mayaki said, “have an important role in ensuring the good application of the NEPAD fundamentals — transparency, accountability and local ownership.”

















Dodoma, Tanzania

Farming for development: a farm in Dodoma.

Credit: UN Photo/B Wolff

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A new scramble for African riches – its consumers

Editor’s note: In recent years global companies have started a new scramble for African resources – its upwardly mobile consumers. Africa Renewal follows the money.



By André-Michel Essoungou

When the world’s biggest retail company, US-based Walmart, bought a majority stake in South Africa’s Massmart — also a retail company — for a staggering $2.5 billion last year, eyebrows were raised. Foreign investors in Africa usually put their money in the riches that lie beneath its soil, not over its discount counters. In fact, the steady growth of foreign direct investment (FDI) to the continent during most of the past decade has been mostly concentrated in mining, especially oil.

Yet, much like Walmart, a growing number of investors are betting on the continent’s ultimate wealth — Africans themselves — a report by the UN Conference on Trade and Development (UNCTAD) reveals. And for all the shock that Walmart’s foray into African retailing initially prompted, it still fell well short of the $10.7 billion sale of Kuwaiti telecommunications company Zain’s African assets to Bharti, an Indian competitor, a few months earlier.

Overall, the UNCTAD report notes, amidst a recent slump in FDI flows to Africa caused by the global 2008 financial crisis, “The services sector, led by the telecommunications industry, became the dominant FDI recipient.” Across the continent, new deals involving major foreign corporations are becoming a common occurrence in industries previously considered unattractive. Nestlé, the Swiss food giant, has announced plans to spend $1 billion by 2013 for acquisitions in various African countries, including the Democratic Republic of the Congo, Nigeria and Angola. Less than two years ago, Nestlé’s main competitor, France’s Danone, took full ownership of South Africa’s leader in fresh cultured dairy products, Clover. 

Investments in African infrastructure, services and retail sales, development experts note, could have a very positive impact on African economies. Unlike extractive industries, they say, growth in consumer-oriented sectors often lead to the creation of many more jobs and stimulate domestic spending.


Benefits of growth

Africa’s booming middle class and its recently-acquired purchasing power is the main reason behind the new trend in FDI to the continent. Various researches suggest that the number of Africans who can afford to buy more than the necessities of daily life is rising rapidly. A much-talked about report by McKinsey, a US consulting firm, estimates that the continent is home to around 50 million middle-class households (defined as those with incomes of at least $20,000), as many as in India. One in every 10 Africans, says a study by the French aid agency, is already a “solvent consumer” — those who can afford the latest smart phones, the newest computers and dinners at trendy restaurants.

The rise of this middle class is linked to the strong economic performances recorded in many African countries since the end of the 1990s. Average economic growth has been around 5 per cent a year, while average inflation rates declined to 8 per cent from an earlier high of 22 per cent. From 2000 to 2010, six of the world’s 10 fastest-growing economies were in sub-Saharan Africa, reports The Economist, an authoritative London weekly. In fact, the publication argues that Africa is the site of “the surprising success story of the past decade,” high praise from a magazine that is generally not very enthusiastic about the continent.

Strong growth — and not only in the oil-rich countries that have benefited from booming demand from emerging economies — enabled millions of people to move up the financial ladder. And while growth in oil-producing countries usually did not create many new jobs, growth in many others did, spurring consumer demand and boosting domestic spending. In South Africa, Tunisia, Egypt and Morocco, Africa’s four most advanced and diversified economies, domestic consumption has been the largest contributor to growth in recent years.


Policies, peace and governance

Africa’s improved economic prospects are also a result of good economic policies, says the World Bank. In Ghana, Uganda and Tanzania, for example, business-friendly policies opened new markets to foreign investors and encouraged start-ups. Angola and Rwanda became fast-growing economies after long civil wars.

Some also argue that the continental development plan, the New Partnership for Africa’s Development (NEPAD) also contributed.  NEPAD “did help shape a new, more positive perception of Africa,” argues Patrick Osakwe, an economist with the UN Economic Commission for Africa (ECA) and co-author of a study on FDI to Africa. By emphasizing the importance of good governance, Mr. Osakwe told Africa Renewal, the plan has fuelled a momentous shift in the way the rest of the world sees the continent.


Expanding prosperity

For a continent so long regarded by outside observers as “hopeless,” the coming years are likely to bring more good news. Having weathered the global recession better than most regions of the world, Africa’s growth rate is now second only to that of Asia. Over the next five years, The Economist predicts, “The average African economy will outpace its Asian counterpart.”

Such promising prospects are central to Walmart’s expansion plans in Africa and other Western investors are likely to follow. With the continent’s combined consumer spending forecast to reach $1,400 billion by 2020, up from just $860 billion in 2008, companies from China, India and Brazil are also expanding operations in the region.

As foreign investors rush to benefit from the arrival of upscale African consumers, however, prosperity still remains elusive for too many others. “To expand prosperity, African leaders need to invest in infrastructure and education, to diversify their economies, so that many more people can benefit from growth,” argues ECA’s Mr. Osakwe.  Western investors seem to think Africa is off to a good start.



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In Africa hi-tech is taking centre stage

Editor’s note: In little more than a decade Africa’s embrace of mobile phones and the Internet has revolutionized the ways Africans talk to each other. Now the technology is revolutionizing the ways Africans do business. Africa Renewal’s Andre-Michel Essoungou follows the money to the future.


In many countries, the ICT sector is no longer marginal


By André-Michel Essoungou

For 48 long hours, employees of Senegal’s National Telecommunications Company cut telephone and Internet connections to the rest of the world. That bold action, in August 2010, sought to force the government to back down on a plan to grant a US company exclusive rights to manage incoming international phone calls.

The shutdown itself sent shockwaves throughout the Senegalese economy. Dozens of institutions were affected: banks, travel agencies, customs offices, call centres, calling card vendors, the airport, the harbour. Newspapers ran angry editorials. “Our economy lost CFA50 billion,” (US$100 million), one headline complained.

The event vividly illustrates just how important the information and communications technology (ICT) sector has become in Africa. It is not only a major industry in its own right, but also a backbone for many others.


Unparalleled growth

Nascent only a decade ago, ICT in Africa has been growing in recent years at an unparalleled pace. In some countries, various studies note, the “information economy” is becoming one of the main drivers for growth more generally.  In 2009, South Africa’s ICT sector generated $24.2 billion and contributed more than 7 per cent to the country’s gross domestic product (GDP). In Tanzania, its share reached 20 per cent of GDP. Everywhere on the continent, the ICT sector is expanding rapidly, with annual revenues now estimated at around $50 billion.

Investments in mobile phones, the continent’s dominant information technology, have grown from $8.1 billion in 2005 to almost $70 billion today, reports the UN’s International Telecommunication Union (ITU). Mobile phone companies are now major sources of tax revenue for African governments, averaging 7 percent of tax receipts.



‘Ongoing success story’

Behind these impressive numbers lie three major changes over the past decade. The first was Africans’ unexpectedly fast adoption of ICT services. In 2000, 11 million people in Africa had mobile phones. Five years later the number had grown to almost 200 million, and is now approaching 400 million.  The pace of growth has defied all predictions and is an “ongoing success story” in Africa, notes the ITU.

There also has been steady growth in Internet access on the continent, from 3 million users in 2000 to more than 100 million in 2010. This upward trend will continue as Africa literally becomes wired to the rest of the world with the completion  of a number of undersea communications cables. In the meantime, Africa has emerged as a world leader in “mobile web” technology — Internet access through mobile phones –and a pioneer in the development of sophisticated mobile banking, health and education services.


Outside investors rush in

A second major development has also contributed to ICT economy’s rapid growth: the rush to Africa of foreign investors attracted by the sector’s high profit margins.

In 2008, Britain’s Vodafone, the world’s largest mobile operator in terms of revenue, started an African shopping spree in Ghana when it acquired 70 percent of Ghana Telecom for $900 million. It has since made its way into Egypt and Kenya, and has become the majority owner of South Africa’s Vodacom.

France Télécom has also gotten into the act, announcing plans to invest more than $8.8 billion in Africa and the Middle East. Most notable among foreign investors in Africa’s ICT economy, however, is Bharti of India. In March 2010, Bharti’s aggressive search for a continental presence led it to acquire the Africa assets of Kuwait’s Zain for a record $10.7 billion.

This frenzy of acquisitions is a sharp break with the past. A decade ago, only a handful of African businessmen and companies saw opportunities in the continent’s changing landscape. When Sudan-born Mohamed Ibrahim launched the Celtel mobile phone network in 1998, his company shared much of the African market with just two other companies, South Africa’s MTN and Vodacom.

No more. And even though returns on investments in the region’s ICT sector are now less than they once were, they still remain attractive to Western companies struggling with stagnant markets and low profits at home. Five years ago in Africa, “it took half a year to recover investments in infrastructure for new clients,” says Marc Rennard, head of France Télécom’s African and Middle Eastern operations. “Now it’s more than two years. But that’s still pretty good.”


Regulatory reform

And third, the policies and institutions needed to help Africa’s ICT sector reach its potential are finally in place. “Telecommunication growth has been encouraged by the easing of regulatory restrictions by African governments and increased liberalization across the market,” notes the influential international accounting and business services firm Ernst & Young.  Today most African governments have opened up their mobile phone and Internet markets to competition and to private investment and set up new regulatory authorities to oversee the burgeoning sector. Their powers usually include issuing licences and arbitrating disputes.  

As governments devise multi-year plans for ICT development, national regulatory agencies have also aggressively promoted public wider access to information technologies. In Kenya, where parliament adopted an ambitious plan to transform the country into a regional ICT hub, the national regulator recently asked operators to extend coverage to rural areas in exchange for reduced licencing fees. It also required them to bring down their charges for mobile phone banking.

Rwanda, Egypt, Tunisia, Kenya, South Africa and the Seychelles are among the countries that have adopted ambitious ICT plans with a view to developing their own knowledge-based economies. Long known for mining and tourism, Africa’s booming ICT sector is making a great many people think again.


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