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Zanu PF MPs stall constitutional reform

Thursday, 11 June 2009 21:49
ZANU PF'S parliamentary caucus has forced the postponement of public
hearings in the constitution-making process that were meant to commence
throughout the country Saturday in protest over allowances.

This has thrown the whole process into disarray amid fears that the
25-member parliamentary select committee to spearhead the crafting of a new
constitution might not meet the 18 months deadline set in the Global
Political Agreement signed by President Robert Mugabe, Prime Minister Morgan
Tsvangirai and his deputy Arthur Mutambara last September.

Sources told the Zimbabwe Independent that the caucus on Wednesday
resolved not to participate in the national exercise if they were not going
to be paid.

The MPs, the sources said, tasked the Zanu PF co-chairperson of the
select committee Paul Mangwana to raise the allowances issue with his
colleagues - Douglas Mwonzora from the MDC-T and Edward Mkhosi of the MDC.

On Thursday, the select committee failed to resolve the crisis at an
emergency meeting.

Mangwana on Thursday told the Independent that the public hearings
were deferred to June 24 at the behest of Zanu PF legislators who said the
timeframe given to mobilise people in their constituencies to their views
was "too short".

"I went to the committee and presented my party's position with a view
of pushing forward the public hearings," Mangwana said. "It was agreed to
move the dates to June 24."

He denied that he was tasked to demand allowances for the MPs from the
select committee.

The select committee had asked legislators to assist them mobilise
people in their constituencies for the hearings that were to be done at ward
level in the country's 210 constituencies.

However, with the issue of allowances high for the legislators and
their assistants in the cumbersome process, Zanu PF MPs elected not
participate in the hearings.

By Thursday night iit was not clear whether government, which is
struggling to mobilise funds to revive the economy, has provided resources
for the constitution-making process.

Last week, parliament's Standing Rules and Orders Committee approved a
US$36 million budget for the process and forwarded it to government for
approval. Donors have indicated interest in funding the process.

The sources said Zanu PF MPs complained that they were not getting
allowances during parliamentary sessions except bed and breakfast at hotels.
They also complained that they were using personal money to buy lunch and
supper while on parliamentary business.

However, the move by the lawmakers  to force the postponement of the
hearings was seen in some quarters as deliberate ploy by Zanu PF to buy

Sources said the MPs felt that more time was needed to mobilise funds
to hire buses to take party members to the centres for hearings.

Zanu PF supporters, the sources said, would be bussed to the centres
in the hope that they outnumber MDC supporters.

Views captured during the hearings would be forwarded to the select
committee's thematic committees that would sift through the data and come up
with a draft constitution within three months, which will be tabled before a
second all-stakeholders conference.

The draft and the accompanying report would then be debated and if
necessary amended in parliament within one month, before it is gazzetted and
a referendum conducted within three months.

The constitution-making process was already marred by the issue of the
Kariba draft document. Mugabe recently told his Zanu PF politburo that the
Kariba draft would be the basis of the constitution-making process as agreed
by the principals in the GPA.

Mugabe wants the Kariba draft because it retains the executive

It reported both MDC formations are against the Kariba draft being the
referral point.

Under the Kariba draft the president would remain head of state and
government, as well as commander in chief of the defense forces.

An attempt to introduce a new constitution between 1999 and 2000
failed after the Lovemore Madhuku-fronted National Constitutional Assembly
and other civil society groupings successfully campaigned against a
government sponsored draft.

Zimbabwe is currently governed under the 1979 constitution agreed at
the Lancaster House talks in London which has been amended 19 times.


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US Denies Zim Economic Aid

Thursday, 11 June 2009 21:49
THE United States Senate has recommended that financial restrictions
on Zimbabwe and targeted sanctions on Robert Mugabe and his cronies be
maintained until there are tangible reforms.

It also proposed that the US should pay salaries and allowances for
teachers, doctors, nurses and other civil servants except the police, army
and intelligence officers.

This emerged ahead of Prime Minister Morgan Tsvangirai's meeting with
US President Barack Obama in Washington Friday.

Tsvangirai is on a trip to the US, Europe and Scandinavian states to
lobby for the removal of financial sanctions and secure aid for the revival
of Zimbabwe's shattered economy.
Obama's meeting with Tsvangirai will signal direction in diplomatic
relations between the US, Western countries and Zimbabwe which is still
reeling from international isolation and economic collapse blamed on
President Mugabe's leadership and policies.

Zimbabwe requires US$10 billion for economic recovery, but has so far
secured just over US$1 billion.
The US move to pay selected civil servants could spark tension in

The issue has already been raised in cabinet. Zanu PF ministers are
opposed to the payment of salaries to some civil servants, except security
services, claiming this would divide the public service.

Western governments do not want to pay the police, army and the
intelligence service whom they accuse of violence against MDC supporters
over the years in their bid to prop up Mugabe's regime.

The US Senate also said in a resolution on Tuesday Washington should
provide "increased resources for non-governmental entities to provide
assistance and to pay salaries or fees to appropriately qualified people in
Zimbabwe to enable progress to be made in the critical areas of education,
health, water, and sanitation".

It said the US should provide humanitarian assistance to Zimbabwe,
support political and economic reforms, provide financial and technical
assistance to the constitutional reform process, urge regional governments
and leaders to promote human rights, restoration of the rule of law and
economic growth in Zimbabwe.

It said Washington should not lift financial sanctions, targeted
measures on Mugabe and his cronies and the arms embargo until there is
"demonstrable progress toward restoring the rule of law, civilian control
over security forces, and respect for human rights".

It indicated there should be "continuation and updating of financial
sanctions and travel bans targeted against those individuals responsible for
breakdown of the rule of law, politically-motivated violence, and other
ongoing illegal activities in Zimbabwe".

Most of the issues would be sorted out during today's meeting between
Obama and Tsvangirai.
Tsvangirai yesterday met US Secretary of State Hilary Clinton who
described him as "a long-time advocate for his country and its people on
behalf of human rights and economic opportunity".

"As you know, he is now in a unified government that is attempting to
move Zimbabwe forward into a better future. And I'm anxious to hear about
the plans and the work that your government is undertaking and to look for
ways that we appropriately can be supportive," she said.

As a build up to the White House meeting, Tsvangirai also met
separately with chairman of the US Senate Sub-Committee on Africa, Assistant
Secretary of State (Bureau of African Affairs) Jonnie Carson and Republican
Senator John McCain, Obama's rival in last year's historic presidential

Tsvangirai also held high-level meetings with the Breton Woods
Institutions, the International Monetary Fund and World Bank.

At the start of his trip to Europe, US and Scandinavian countries,
Tsvangirai met Netherlands Prime Minister Jan Peter Balkenende at The Hague.

The Dutch told him that they would not provide money to fund Zimbabwe's
economic recovery without serious political and economic reforms.

Western countries want reforms on the media, judiciary, civil service,
education, health, and police, army and intelligence sectors, as well as
institutional framework and culture. They also want a new economic policy
and recovery plan.

Besides, donors want a new constitution and free and fair elections as
soon as possible.

Tsvangirai said he was not going around with a begging bowl in his
hand but was trying to re-engage with financial multilateral and bilateral
institutions as well as the international community to support Zimbabwe's
economic recovery.

Indications were that Tsvangirai's would have difficulties convincing
Obama to shift policy on Zimbabwe.
The tone for the meeting had already been set by the US Senate on

In a resolution, the US Senate said financial restrictions, travel
bans and the arms embargo on Zimbabwe, Mugabe and his cronies would remain
in place until reforms were executed. This was the same message Tsvangirai
got at The Hague.

The US Senate said since Zimbabwe was coming from a background of
"pervasive and systematic abuse of human rights, which included unlawful
killings, politically-motivated abductions, state-sanctioned use of
excessive force and torture by security forces against the opposition,
student leaders, and civil society activists", it must reform first before
it could get have the sanctions and get money.

It observed because there had not been much reform to stop "ongoing
illegal activities" to put Zimbabwe on an irreversible path to democracy,
most of the sanctions would remain in place and no money would come.

Tsvangirai said in Washington on Wednesday he would "not gloss over
the issues" but make the case to Obama that Zimbabwe's "irreversible"
democratic transition merits American support.


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US Investors Call for More Reforms in Zimbabwe

Thursday, 11 June 2009 20:45
UNITED States companies on Thursday said no investment would come to
Zimbabwe soon after the removal of sanctions despite interest to establish
business ventures in the country.

The Corporate Council on Africa chief executive officer Stephen Hayes
told local business leaders in the capital that American companies were not
yet ready to invest in Zimbabwe. The group represents 180 corporations
collectively making 85% of United States private sector investment in

"I also want to reinforce that there is a great deal of interest in
Zimbabwe from the American business community. I have been fortunate to be
employed by a board of directors who believe that CCA can be a business
organisation that makes a difference in this world," Hayes said.

"But, just because we would like to invest in Zimbabwe and to work in
partnership with you, does not mean we are ready to do so..Even without
targeted sanctions against individuals and entities that are undermining
democratic institutions and processes in Zimbabwe, or that have materially
assisted, sponsored, or provided financial support to these entities, I do
not believe you would see significant US investment under the present

Hayes remarks could be a blow to a cabinet decision pushing for the
privatisation of loss making state enterprises and efforts by the inclusive
government to boost declining foreign direct investment.

He however said US companies would "work together to support one
another and to prepare for the day when, as partners in businesses" they
would improve the "lives of our families and our respective nations".
Hayes said US businesses were "ready to do business" with any country
that respects the rule of law, arguing that more reforms were still needed
in the inclusive government to attract investment.

The CCA boss also urged the transformation of Zimbabwe's bad image
regarding to property rights through better governance committed to the rule
of law.

On the Indigenisation and Economic Empowerment Act, Hayes said the
piece of legislation was a "formula" for divestment.

"Why would a company stay in Zimbabwe if they give up ownership, which
also means that they have little say in how that company is to be operated,
especially in an environment where the rule of law is inconsistent, at
 best," he said. "It's is a formula for losing one's investment, not gaining
profit that provides jobs and builds a nation."

After endorsing South Africa's Black Economic Empowerment in 2002,
Hayes added that his organisation directs the South Africa International
Business Linkages programme funded by the USAid.

Independent statistics indicate that foreign direct investment in
Zimbabwe has dropped by an estimated 45% in the last 10 years.


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Biti Gains Control of Treasury

Thursday, 11 June 2009 20:30
FINANCE minister Tendai Biti has won his battle with Reserve Bank of
Zimbabwe governor Gideon Gono for control of Treasury.

Sources close to the developments told the Zimbabwe Independent this
week that Gono is now keen on improving relations with Biti, who now has the
backing of cabinet.

The same sources however said Biti and Gono are now engaged in private
talks to improve their working relationship.

The sources said Gono and Biti held a meeting on Monday in bid to thaw
relations between them after serious recent run-ins.

This week's meeting was a follow-up to yet another one held last week
which sources said necessitated the ongoing talks.

Sources said Gono apologised to Biti for washing their dirty linen in
public after Gono's letter to Prime Minister Morgan Tsvangirai complaining
about Biti's "harassment".

In the letter, Gono alleged Biti had injured his reputation and caused
family anguish by calling him an al qaeda terrorist and accusing him of
destroying the economy through quasi-fiscal activities. Gono denies ruining
the economy, saying he saved it from collapse.

Gono also claimed Biti harboured a personal vendetta against him for
investigating possible foreign currency externalisation at Biti's law firm.

But Honey& Blackenberg, the law firm at the centre of the row, denies
any wrongdoing.

Gono claimed the law firm had been involved in fraudulent foreign
currency deals.

Biti succeeded in cabinet recently to get support to institute reforms
at the central bank.

However, he failed to get cabinet's nod to remove Gono as chairman of
the RBZ board after Zanu PF ministers argued there was no precedence for his

Biti had proposed that the RBZ board be reconstituted by independent
directors and called for the appointment of a non-executive chairperson.

In a bid to settle his dispute with Biti, Gono is said to have also
met senior MDC officials.
Sources say the MDC is prepared to sacrifice Gono to get the donor
support the country needs to lift the economy from the doldrums.

The MDC is said to have agreed in caucus meetings recently that it
would implement a three-pronged strategy to remove Gono from office. This
involves using the Global Political Agreement (GPA), parliament and
diplomatic and donor pressure.

Zanu PF on the other hand has counter measures to ensure Gono remains
in office.

A Zanu PF source said the party is prepared to stall talks over
outstanding GPA issues in a bid to buy time for Gono and mobilise support
for him in public.

President Robert Mugabe, army chiefs and war veterans recently pledged
to back Gono. The MDC has appealed to Sadc over the Gono issue, but Mugabe
is using his regional contacts to block the issue.

Prime Minister Morgan Tsvangirai this week said it was important to
resolve the Gono dispute, saying that it was not a personal but a reform

"It is a very important issue, that is why it is a deadlocked issue,"Tsvangirai

"The credibility of the Reserve Bank -- not the merits of  the
individual -- is very important."


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Muchinguri to Challenge Mujuru for VP's Post

Thursday, 11 June 2009 20:30
SWEEPING changes are expected to take place in Zanu PF's youth and
women's leagues at their congresses in July and August that should result in
former cabinet minister Oppah Muchinguri being elected vice-president of the
party at the main December congress ahead of Joice Mujuru who is accused of
working with the Morgan Tsvangirai-led MDC-T.

Impeccable sources in Zanu PF told the Zimbabwe Independent that a
faction in Zanu PF aligned to secretary for legal affairs Emmerson Mnangagwa
has put in place an elaborate plan that would result in Mujuru losing her
seat in the presidium in December and will also see the leadership of the
youth league shaken up.

The sources said during the four-day women's league congress starting
on August 26, the Mnangagwa faction, using its control of at least six
provinces, would elect Muchinguri as head of the organ ahead of fellow
politburo member, Olivia Muchena who is aligned to retired army general
Solomon Mujuru's camp.

Solomon wants his wife Joice to succeed Mugabe.

"During the women's league congress, Joice Mujuru is going to be
denounced for allegedly working with Tsvangirai's party and for furthering
the political interests of her husband instead of those of the party," one
of the sources said. "Given the current power relations in Zanu PF,
Muchinguri will beat Muchena for the leadership of the league at the

The sources said during the main congress, the Mnangagwa faction would
push for the election of Muchinguri as vice-president of the party to
replace Mujuru and if vice-president Joseph Msika resigns, current national
chairman John Nkomo would succeed him.

Nkomo, the sources said, would be supported by the Mnangagwa faction
for the post against Mines minister Obert Mpofu of the Mujuru camp.

The Independent last month revealed that Msika wanted to quit politics
because of ill-health and intensifying power struggles in Zanu PF between
the two factions and his restive former PF Zapu colleagues.

The Mnangagwa faction is reportedly in firm control of six of 10 Zanu
PF provinces -- Masvingo, Midlands, Manicaland, Bulawayo, Matabeleland North
and South --enough to win the influential party post.

Mujuru, the sources said, has the backing of Mashonaland East, while
Mashonaland Central and Mashonaland West were reportedly divided on whom to

Elections are yet to be held in Harare to elect provincial leaders,
but the province was likely to be headed by Mnangagwa's faction that is
reportedly backing Deputy Energy minister Hubert Nyanhongo to become
chairperson ahead of ex-Mines minister Amos Midzi.

The sources said MPs aligned to the Mnangagwa faction this week
started implementing their plan to weaken the Mujuru camp after the Zanu PF
caucus on Wednesday rejected the election of the party's Goromonzi
legislator Beatrice Nyamupinga as chairperson of the Parliamentary Women's

The matter was referred back to the party's women caucus because
Nyamupinga was elected ahead of Zanu PF's official candidate, Chimanimani
Senator Monica Mutsvangwa, amid reports that Mujuru and her allies last
month voted with Tsvangirai MPs against Mutsvangwa from the Mnangagwa camp.

The Independent reported last month on the gathering of momentum of
political realignments involving Zanu PF and the MDC-T.

The move led to the manoeuvres to remove Mujuru by Mnangagwa's faction
and also sent shockwaves through the party in the run-up to the party's
crucial six-day congress that begins on December 8.
President Mugabe is likely to be re-elected for yet another five years
as party leader because no one in his party is prepared to challenge him.

Muchinguri, the sources said, was also reportedly working on roping in
First Lady Grace Mugabe to kick out Mujuru who came in 2004 with her

Mujuru and Muchinguri, who were allies when the former beat Mnangagwa
for the position of Zanu PF vice-president at the 2004 congress following
the Tsholotsho political debacle, have fallen out and now belong to
different camps in Zanu PF's factional politics.

This has changed the complexion of the Zanu PF power struggle as
members crisscross factional divides.
During a recent women's league meeting held at the Zanu PF
headquarters in the capital, Vice-President Mujuru came under intense fire
from her rivals.

Former Deputy Youth minister Shuvai Mahofa reportedly led the charge,
accusing Mujuru of destroying the party by fanning factionalism and working
with the MDC-T.

Mahofa and other bigwigs in the women's league are now reportedly
campaigning full throttle for Mujuru's ouster.

The sources said while Mnangagwa's faction had an elaborate plan in
place, the Mujuru camp was fighting back.

The Mujuru camp, the sources said, had come up with a team to fight
for the retention of Joice as party vice-president and has been meeting
regularly in the past weeks mapping out strategies to claw back lost ground.

Former provincial governors Ray Kaukonde and Ephraim Masawi,
Nyamupinga, ex-deputy minister Joel Matiza, ex-minister David Parirenyatwa
and Mashonaland East provincial chairperson Paddy Zhanda are reportedly some
members of the team.

Muchena, the sources said, was picked by the Mujuru faction to
challenge the leadership of Muchinguri at the August congress.

The sources said the leadership of the youth league would be
overhauled to reflect the dominance of the Mnangagwa faction in Zanu PF.

Current youth secretary in the politburo Absolom Sikhosana and his
deputy Savior Kasukuwere, the sources said, would have to step down in line
with the party's constitution that members of the league should be below 30
years of age.

"The whole youth leadership will go at the youth league congress," a
Zanu PF politburo member said. "We are going to have a new leadership
predominantly coming from the Mnangagwa faction."

Kasukuwere, sources said, has since confided in his party colleagues
that he would be leaving the youth league and was hopeful of becoming a
member of the party's main wing.

The Youth minister and secretary for security in the politburo
Nicholas Goche back Mugabe's continued stay in office and were reportedly
against either Mujuru or Mnangagwa succeeding Mugabe.

Mujuru was instrumental in the appointment of Kasukuwere into cabinet
by Mugabe.


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MDC Activists Apply for Supreme Court Hearing

Thursday, 11 June 2009 20:09
THE High Court will make a ruling on June 22 on an application by four
MDC-T activists facing banditry charges for referral of their case to the
Supreme Court to determine whether or not their constitutional rights were
violated when they were allegedly abducted, tortured and kept incommunicado
by the police and state spies.

Justice Tendai Uchena, sitting with Marco Mutambira and Alexander
Mhandu as assessors, on Wednesday said he needed time to go through
submissions made by the MDC-T activists -- Concillia Chinanzvavana, Fidelis
Chiramba, Violet Mupfuranhewe and Collen Mutemagau -- and the state before
making a ruling.

The quartet are part of 16 human rights and MDC-T activists who
claimed that they were abducted by state security agents between October and
December last year on allegations of banditry.

In the case of Chinanzvavana, Chiramba, Mupfuranhewe and Mutemagau,
the state alleges that between July and October 30 2008 in Banket, the four
acting in common purposes, unlawfully and intentionally recruited Tapera
Mupfuranhewe and other MDC-T youths to undergo military training in Botswana
"for the purpose of committing acts of insurgency, banditry, sabotage or
terrorism" in the country.

In their application for referral of their case to the Supreme Court
made by lawyer Alec Muchadehama, the four accused said the country's highest
court should determine whether or not their alleged abduction, torture and
detention constituted unlawful deprivation of liberty, inhuman and degrading
treatment and violation of the right to the protection of the law.

They also want the Supreme Court to determine whether or not that as
victims of enforced disappearances they can lawfully be prosecuted, that the
denial of access to their legal practitioners violated their rights to
protection of the law and that the court has the power to direct the
Commissioner-General of the police to institute an investigation into the
alleged offences committed on them by state security agents and the police.

In the application the activists chronicle how they were allegedly
abducted and tortured. They also name some of the police officers and state
security agents who allegedly carried out the kidnappings.

In her founding affidavit, Chinanzvavana alleged that between October
30 and November 3 last year, the quartet was abducted by the police.

Chinanzvavana claimed that she and Mutemagau were kidnapped along the
Harare-Chitungwiza Road on November 3 2008 when the vehicle they were
travelling in was blocked in its path by five vehicles. She said they were
driven to Harare Central Police Station in one of the vehicles.

"One of the police officers who abducted us was one Detective
Assistant Inspector Maria Phiri of the Law and Order department,"
Chinanzvavana's affidavit read. "She together with her colleagues handed us
over to Chief Superintendent Magwenzi."

She said she was "informed and verily believe" that Chiramba and
Mupfuranhewe were "abducted" from their homes by police officers who
included Magwenzi, Detective Sergeant Mavinga, Phiri, Detective Chief
Inspector Mpofu.

Chinanzvavana said she was advised that the police through officers
from the Attorney-General's office were insisting during their initial
appearances in court that they were not involved in their kidnapping.

"I contend however that the police and in particular Supt Magwenzi
knows the other kidnappers as he participated in our kidnapping," she

"In the event that the police deny knowledge of who kidnapped us, then
I aver that our abduction was widely reported such that the police should
have promptly arrested our kidnappers when they handed us over to them and
they would have facilitated our identification of those who handed us over
by ensuring that the blindfolds were removed before those who handed us over
had left."

Chinanzvavana said there was no doubt that the police were working
"hand in hand" with security agents "like the assistant director in the
external branch of the Central Intelligence Organisation (CIO) Asher Walter
Tapfumaneyi, before, during and after our abduction".

She said she and Mutemagau were kept incommunicado for 49 days while
Chiramba and Mupfuranhewe spent 53 days.

"During the period we were kept incommunicado, we were subjected to
torture, inhuman and degrading treatment. We were assaulted. We were
subjected to long hours of interrogation, in which we were being forced to
confess to crimes we did not commit," Chinanzvavana said.

In his affidavit, Mutemagau said there was no doubt that their
"traumatic experiences at the hands of the CIO and the police fit the clear
definition of inhuman and degrading" treatment.

"Our physical and bodily integrity was violated. Our abductors poured
boiled water on the 2nd applicant (Chiramba)'s private parts," Mutemagau

"They mocked his genitals and made him pose nude in front of persons
of the opposite sex. My wife, the 3rd applicant (Mupfuranhewe), had cold
water poured onto her private parts. My two-year-old son, Nigel, who was
with the mother, was beaten up for crying for food."

He claimed that there were a lot of abuses "some of which cannot be
repeated herein".

"Should all these be swept under the carpet only because the state and
its organs chose to ignore them? Why should we be tried when we clearly are
the victims?

Would it not be correct that the determination to try us is an attempt
to give a semblance of legality to the horrendous crimes committed against
us?" questioned Mutemagau.

But Michael Mugabe, representing the Attorney-General's office, said
the application was frivolous and vexatious and meant to scuttle the trial
proceedings of the four MDC-T activists.

Mugabe said the state had always submitted before the court that the
four MDC-T activists were formally arrested by the police on December 22
2008 and prior to that were in the custody of state security agents.

"The state has never made it a secret that prior to December 22 2008,
the applicants were in the custody of the state security agents and that is
the reason why we have .an affidavit compiled by the then Minister of State
for National Security Didymus Mutasa," Mugabe said.

"He (Mutasa) doesn't hide the fact that they (applicants) were in the
hands of state security. There was no over detention by the police because
the police arrested them on December 22 and they appeared in court on
December 24 2008."


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Farmers in Spending Spree at Tobacco Auction Floors

Thursday, 11 June 2009 20:09
A CURSORY view of the armed police officer and two security guards
paints a picture of a fortified area. But the emptiness in the huge white
tent pitched at one end tells a different story.

It is Friday night and farmers are loitering while others are in deep
thought, perhaps hoping for a better trading day at Boka Tobacco Auction
floors the following day.

With their luggage and groceries close to them, some choose to retire
for the night on the verandah along the auction floor entrance.

Also seen outside are cash-rich farmers loading groceries into a small
truck before driving away to their homes.

They sing and dance leaving some remaining farmers green with envy.
This year's tobacco marketing season was not spared from the perennial
delays, but the selling of the cash crop in hard currency was irresistible
for farmers.

"There are no lighting and ablution facilities here, so we would
rather spend the night on the stoep than sleep in that tent," said a Karoi
communal farmer who spoke to the Zimbabwe Independent.
She was annoyed by the situation that she has to endure.

"Before the start of the marketing season radio advertisements
announced that we would get our payments within a day but for me it is now
over a week without getting any payment. They normally start paying us at
10am and finish just after lunch, save for a few days when they get to 5 o'clock
in the evening."

Under the official payment arrangement, farmers are paid US$1 500 in
cash for tobacco deliveries with the balance, if any, being deposited into
their foreign currency accounts.

The evidently poor quality of the tobacco delivered at the auction
floors could be a result of the shortages of fertilisers that were
experienced last season. Resultantly the unattractive rates paid for the
deliveries could signal a gloomy season ahead owing to lack of funding.

Poor grade tobacco, according to the farmers, is being bought at US$1
per kilogramme while a high-grade flue cured kilogramme is attracting up to
US$5 from the bidders.

Farmers who spoke to the Independent said payment delays resulting
from cash shortages were forcing them to buy impulsely.

After getting payments for deliveries, they hurriedly buy imported
blankets, boxes of laundry soap and cooking oil with only a handful buying
seed for the next season at inflated prices.

Notwithstanding the removal of government subsidies on farming inputs,
farmers, however, remain hopeful that they could either raise enough funds
for ploughing or get contracted to grow the cash crop next season.

The farmers added that despite the payment delays, they dread walking
around Harare's central business district with "big bucks" in their pockets.

"After spending many days at the auction floors, they have become my
second home. So I would rather buy groceries from traders who come here than
buy groceries worth US$1 000 in town," said another farmer staring at a
banner advertising generators, hanging close to the auction floor entrance.

He claimed that last week was the second week for him waiting for his
payment for bales delivered to Zitec - one of the three tobacco auction
floors in the country.

For the auction floors it's just over a month of buying the golden
leaf from the farmers since opening last month.

Zimbabwe Tobacco Association president Andrew Ferreira said delays at
the auctions could have resulted from the early sales, adding that no
payment should extend beyond a week.

"From my perspective, deliveries are going alright. What is happening
is that there is congestion at the floors," Ferreira said. "To say farmers
are being delayed for a week or two is an exaggeration."

Asked why there were delays in paying farmers, ZB Bank chief economist
Best Doroh said: "That is a reflection of foreign currency shortages on the
market. There could be a mismatch arising from the high volume of farmers
selling their tobacco and the hard currency in circulation."

Aware of the hunger pangs that come after a long day of waiting for
the elusive greenback, Nestar Makura, of Waterfalls has seized the business
opportunity. After knocking off at five, Makura - a tailor by training -
drives her white Datsun 120Y the auction floors together with her
nine-year-old son Tapiwa who assists her with the catering services.

"This is my first time embarking on such a business and I'm really
impressed with the way the business is going," Makura said. She has no
monopoly of her new business but seeing her food being sold in less than an
hour is enough to bring a smile to her face.

"I think the secret to my success is the perfection I put to my work.
I interact with them and sometimes I advise them on where to get cheaper
goods in town," she said.

Despite all the risks associated with her business, for now she is
assured that her US$1 meals will be sold out until end of August when the
auction floors are scheduled to close.


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Nyanhongo Accused of 'hijacking' Mabvuku Constituency

Thursday, 11 June 2009 20:02
ENERGY deputy minister and Harare South MP Hubert Nyanhongo and MDC-T
Mabvuku-Tafara legislator Shepherd Madamombe are in a turf war after the
former allegedly meddled in housing cooperative dispute in the latter's

Madamombe this week accused Nyanhongo of "hijacking" his constituency
by addressing a meeting of Kugarika Kushinga Housing Cooperative on June 3
in the constituency without his knowledge.

The meeting followed a petition by members of the cooperative to
Madamombe to investigate allegations of corruption against the leaders of
the housing group.

Nyanhongo, Madamombe claimed, told the meeting that members of the
cooperative should not seek mediation from the MDC-T MP and also that their
case should be resolved through Zanu PF structures in the constituency.

In the petition, the cooperative members wanted Madamombe to
facilitate a special general meeting that would result in an independent
financial audit from 2004 to 2008 and also to deal with issues of title
deeds of 818 housing units the housing group built.

Madamombe said Nyanhongo jumped the gun by interfering in an issue in
his constituency and ordered the closure of the cooperative's offices until
"all its members" join Zanu PF.

Nyanhongo allegedly claimed that the 21-year-old cooperative was
founded and allocated land by Zanu PF.
"Nyanhongo has shown no respect for me. He has no business in my
constituency," Madamombe fumed.

"He cannot act on behalf of the people of Mabvuku. In his Harare South
constituency there are MDC-T supporters but if they have grievances they do
not go and report to an MDC-T MP in another constituency. What Nyanhongo did
is tantamount to hijacking the constituency from me."

He said he was exploring ways of engaging Nyanhongo over the matter.

When contacted for comment yesterday, Nyanhongo told the Zimbabwe
Independent in a telephone interview that: "The programme (cooperative) was
not started by Madamombe but it is a Zanu PF programme.

"Members of the cooperative are not happy with the way their money is
being used by the executive committee, so we as a party it is our duty to
protect them."

Nyanhongo is eyeing the Zanu PF Harare provincial chairmanship in an
election expected to be held before the party's congress in December. He
will fight it out with former Mines minister Amos Midzi.


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Gono Builds Silos Whilst GMB Stocks Run Dry

Thursday, 11 June 2009 19:57
A KILOMETRE from Norton's New Donnington Farm pupils from Dudley
Primary School swapped books for political posters as they lined up along
the Harare-Bulawayo Road to welcome guests to an event they would not

Carrying posters of President Robert Mugabe and King Mswati III, the
pupils were extolling the virtues of the 85-year-old president with their
teachers directing operations.

It was last Thursday and another day of schooling had to be cut to
welcome the Swazi king.

Not out of choice, the pupils patiently sang and waved the posters
braving the hot weather.

So sweltering was the heat that Zanu PF Mashonaland West provincial
chairperson John Mafa was saved from a near fall by Local Government
minister Ignatious Chombo as he patiently waited for Mugabe and Mswati's

Shortly after lunch, farm workers at Donnington looked in awe as the
approaching convoy of offroader 4x4s left a cloud of dust that engulfed
their compound.

Before long, they saw Mugabe and Mswati disembarking from a Toyota
Land Cruiser V8.

Also making part of the procession was Zimbabwe Defence Forces
commander Constantine Chiwenga who travelled in the same car with Defence
minister Emmerson Mnangagwa.

Four steel corrugated grain storages silos standing tall and close to
farm brick houses were the attraction that had brought the octogenarian
leader and the king to this farm.

But who owned this 4 000ha piece of land that drew the Swazi leader,
Zanu PF stalwarts and service chiefs to an event Mugabe described as "rare
and historic"? The embattled Reserve Bank governor Gideon Gono owns the

For the farm labourers, meeting the president was restricted to
election campaign time. But this time Mugabe and a band of invited guests
were at the farm for a different cause.

Earlier in the day Mugabe and Mswati, together with their spouses, had
visited a Mazoe farm belonging to the first family.

The commissioning of the four silos by the Swazi leader bolstered
Mugabe's recent pronouncement that Gono would not be forced out of the
central bank as demanded by the Morgan Tsvangirai-led MDC.

More interestingly, these silos were built at a time when GMB grain
storage facilities in nearby Chegutu and those in Banket and Lions Den stand

Recent official statistics indicate that grain output would increase
slightly from last year's although it falls far short of meeting the
estimated two million metric tonnes of annual consumption.

GMB boss Albert Mandizha was this week quoted saying the loss-making
parastatal is now charging a paltry US$3 tonne in storage space at its silos
spread across 14 depots. Gono spent US$40 000 on each GSI grain storage silo
at his farm.

But Gono, speaking to journalists before the start of the
commissioning event, said the silos were part of his long-term plan to
position the farm project for intense competition for stock feeds. He added
that he had plans to partner with other farmers neighbouring his U-shaped

According to Gono, the late former defence forces chief Vitalis
Zvinavashe acquired a farm nearby.

According to Gono the farming project is "financed and owned by a
consortium of six farming experts" with him as chairman. Despite boasting of
constructing a dam, Gono and his partners had not planted any winter wheat
at the time of the visit.

Unlike the Nicole family of Banket that established huge silos
towering along the Harare-Chirundu road more than a decade ago, last
Thursday's event was hyped as a state event.

Gono took the occasion to vindicate himself from any fraudulent
activities with state coffers during his first term of office when he
announced that regional and international banks had funded his farming

"The first phase involves a capacity of 8 000t between the four silos
with the 15 000t silo completing the programme early next year," said Gono
in a written statement.

"This capacity will be adequate for our poultry feeding needs.
Stanbic/PTA Banks have supported this vision since the beginning of 2007.
The silos have been constructed at an average cost of US$40 000 each. The
operation boasts an average of 4 500 beasts acquired with the farm in 2001/2
with support from Barclays and proper management has seen us maintaining the
same level stock of cattle even though we do sell a sizeable quantity each
year for slaughter."

To dissociate his project from the corrupt activities that marred the
government farm mechanisation programme, Gono claimed that the farm was
mechanised from "day one of purchase" before the government exercise.

Seemingly aware of intensifying dispute over Gono's tenure, Mswati
argued that the farm project justified the central bank governor's position.

"I am glad to see that the man who is implementing this (silo project)
farm is governor of the central bank. I understand why he is the governor,"
Mswati said.

His remarks came barely two weeks after Tsvangirai announced that he
had referred the re-appointment of Gono and Attorney-General Johannes Tomana
to Sadc.

After the commissioning of the silos of which one of them was less
than half filled with soya beans, invited guests drove for close to five
kilometres down a gravel road towards the farmhouse.

Along the way was a stretch of cultivated land with no crops grown on
it and part of the cattle herd grazing.

Security screening at the main gate to the house stopped scores of
singing Zanu PF supporters from being lavished with the food and wine that
was served at what looked like an old tennis court.

Apart from agriculture, Gono is understood to have business interests
in the media and petroleum industry.


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Energy crisis poses threat to success of Sterp

Thursday, 11 June 2009 18:22
MOST households and industries in Zimbabwe are limited to less than 18
hours of electricity supply daily because of lack of investment in power
generation since Independence.

Only about 30% of the country has access to grid electricity.

No new power generation stations have been built in the country since
Kariba in the early 1960s and Hwange thermal power station which was
completed in 1986.

Despite advances in technology, power experts say a lead time of up to
five years is needed to build a power station.

The current power shortage stems from a failure by government to
implement numerous power generation projects.

In its System Development Plan approved by government 19 years ago,
Zesa Holdings was to build a new power station at Batoka Gorge between the
Victoria Falls and Kariba. Like Kariba, it was to have a north and south
bank station. \

Batoka, which was to be a run-of-the-river station, had been planned
to take into consideration environmental concerns. There was no need to dam
the river. Batoka was to be built in conjunction with expansion at Kariba to
use the water optimally.

However, the Batoka project ran into problems as the Zambian
government was not keen on it then because its economy was unstable and was
unwilling to undertake a project with a neighbour they accused of
shortchanging them during the sharing of the Central African Power
Corporation assets. Capco was the predecessor to the national power

About US$1,6 billion was needed for the north and south bank power
stations in 1996.

The next project in the system was the expansion of Hwange by adding
two new generators. To be known as Hwange 7 and 8, the project was to be
financed by the World Bank and tenders had been adjudicated when government
decided the tenders be given to YTL, a Malaysian construction giant.
The problem was that the YTL was not a power station construction

The plan later changed. Hwange was to be privatised by selling it to
YTL. The sale eventually fell through because YTL insisted they could not
inherit a US$800 million loan used to refurbish the station and improve its
operation efficiency provided by the World Bank.

So the second power generation project fell through.

The default plan was Sengwe in Gokwe north where there are coal
reserves to last for the next 100 years. Sengwe was to be developed by
mining giant Rio Tinto and the power station was to be built by National
Power of the UK.

It had been planned that Sengwe would then generate power to replace
the capacity which would have been generated by Batoka and an expanded

The souring of relations between Zimbabwe and Britain after 1997 got
in the way and Sengwe was never built. Plans for gas turbine runners to
generate power in Lupane south also suffered the same fate. The project was
initially linked to the British and later to the Chinese before it fizzled

The old thermal power stations built in the late 1940s - Harare,
Bulawayo and Munyati, despite their refurbishment in the mid-1990s - are too
expensive to run and are almost obsolete.

Zesa does not have funds to buy the coal and bring it all the way from
Hwange. The Hwange Colliery Company has failed to provide Zimbabwe
Electricity Distribution Company - a subsidiary of the Zesa Holdings - with
adequate supplies.

To add to their woes, the railway line is in a state of serious

Zimbabwe intends to increase industrial capacity utilisation to 60%,
according to the Short Term Emergency Recovery Programme (Sterp). The
Confederation of Zimbabwe Industries says industry is currently operating at
below 20%.

Questions have been asked about how government will be able to
increase power generation to meet increased demand by industry, when the
utility is failing to meet demand when industry is operating at below 20%.

Regionally, most countries also have power deficits and it will be
difficult to import power when the country has no foreign currency.

Kariba generates 750 megawatts and Hwange 850 megawatts, but the
country needs about 1 700 megawatts. About 1 000 is being generated at the

Zesa chief executive Ben Rafemoyo told the Zimbabwe Independent that
Sterp was a plan which would increase demand for electricity and that the
nation should brace for increased load-shedding for the next few years.

"We are at an advanced stage to have between 400-600 megawatts from
Hwange and Colliery to make up for the increased winter demand. It will be
for a short period, but we have to look at the long-term, that is increasing
capacity by building another generation station," said Rafemoyo.

Rafemoyo said depending on the site, type of generation station and
amount of work, a power station takes between four to seven years to

This suggests that apart from stopgap measures the country will have
increased load shedding for about five years.

"With regards to the NamPower deal, people should look at the basis of
the transaction. We (Zimbabwe) did not have foreign currency and they did
(Nambia). The refurbishment needed to be done," said Rafemoyo.

He said Namibia was exporting power to Zambia because the country was
currently in a crisis after it lost two of its generators.

"The amount of electricity generated in Zimbabwe varies each day. At
present there is increased demand because it is winter. We need about 1 900
megawatts. We are however generating about 1 000 megawatts," he said.

Rafemoyo said in the event of increased capacity by industry "it was
mostly likely that households would not have electricity during the day to
ensure industry operates, but the opposite would occur during the evening".

Coronation Financial Service economist and investment analyst Lance
Mambondiani on Wednesday said the problems at Zesa affected all parastatals.

"The parastatal has been hemorrhaging for a considerably long time and
teetering on the brink of insolvency. Zesa, like many other struggling
state-owned enterprises such as Air Zimbabwe and NetOne, has always been
grossly undercapitalised, poorly managed and surviving only because of
government funding," he said.

"Research has shown that load-shedding itself can leave the equipment
that Zesa has in a poorer state due to the frequent switching on and off.
The only solution to avoid load-shedding in the event of increased demand
would be a massive investment in the energy sector which the state is
perhaps unable to undertake since the government itself is broke,"
Mambondiani said.

He said there was no investment in the energy generating sector in
Zimbabwe because the sector was a capital intensive industry and genuine
investors for such a project are generally few.

"Worldwide, there has been a massive transfer of ownership and control
over electricity assets from the public to private companies. The companies
that have taken over electricity provision in most countries are
multinational companies with little interest in the welfare of local
citizens," he said

He said increasingly such companies were concentrating through mergers
and acquisitions into a small group of very large conglomerates that
dominate national and international electricity provision.

"Electricity restructuring and privatisation can also result in
massive job losses so it's an industry that cannot be rushed into a
privatisation. A private buyer could increase energy prices for profit which
can result in public revolt," Mambondiani said.

Economist Brains Muchemwa said: "Government needs to urgently engage
private sector and create a conducive environment for independent power
producers based on sustainable long term power purchasing (pricing)
agreements from Zesa, solid and credible internationally binding dispute
settlement frameworks and flexible regulations. That is the long-term

Muchemwa said with regional shortage of electricity spanning from
Tanzania to South Africa, it was imperative to make sufficient steps towards
self-sustenance in power.


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IMF Delegation in Zim to Assess State of Economy

Thursday, 11 June 2009 21:04
A SIX-member delegation from the International Monetary Fund (IMF) is
in the country on a fact-finding mission to evaluate the country's economy
since the formation of the government of national unity.

Part of the delegation which arrived on Wednesday, yesterday held five
meetings with Ministry of Finance officials on the external domestic debts,
revenue and expenditure.

Other members of the delegation are expected in the country by June 21
for a week's stay.
During their stay, a series of high profile meetings with government,
banking, industry and agricultural officials have been lined up.

The delegation is composed of Vitaliy Kramarenko (head of mission)
Wouter Bossu, Lars Engstrom, Gilda Fernandez, Richard Hughes and Denevieve

On completion of their work on June 29, the mission is expected to
hold a "report back meeting" with Finance minister Tendai Biti,  Economic
Planning and Investment Promotion minister Elton Mangoma and Reserve Bank
governor Gideon Gono.

According to the mission's work schedule seen by businessdigest, all
sectors of the economy, including health, education, infrastructure and
current food situation will be scrutinised.

The Reserve Bank's governance and accounting reforms will come under

The IMF has in the past pointed out key governance weaknesses
including lack of enforcement of the Reserve Bank of Zimbabwe Act's
accountability requirements and non-compliance with the International
Financial Reporting Standards.

The IMF will discuss with key central bank technical staff and the
Finance ministry on "recent developments on the monetary and fiscal policy,
the central bank's financial statements for 2009 and mid-year 2009 budget
revision assumptions".

The current foreign currency inflows and international reserves will
also be reviewed.

According to the IMF document, the Reserve Bank would be tasked to
disclose "estimates for foreign currency in circulation, its currency
composition and any new legislation, regulations orders and circulars
related to monetary financial and exchange restriction areas that have been
introduced since March 2009".

Early this year, government adopted the use of multiple currencies but
foreign currency inflows have remained limited.

On the monetary sector, the mission will seek "revised and updated
data including a monetary control programme, broad money survey, and
detailed data on other items (assets and liabilities) quasi-fiscal
operations, gross foreign assets, net foreign assets and net international

According to the IMF, quasi-fiscal activities by the Reserve Bank
increased in the context of the bank's weak governance last year.

"They are estimated at US$1,1 billion (36% of GDP) in 2008, and
included election-related expenses, transfers to parastatals, subsidised
directed lending, subsidised provision of equipment and fertilisers to
farmers, and allocation of foreign exchange at subsidised exchange rates,"
the IMF says in its May 4 Executive Board assessment on the  Article IV
consultation with Zimbabwe

Efforts if any, undertaken by government to "reconcile the external
debt number with creditors" would also be looked into.

The IMF team is also interested in reviewing government line
ministries' domestic debt payment arrears between January and May.

The soundness of the banking sector which Biti recently said was under
"severe stress" would be reviewed.
Each bank would be required to disclose "monthly data on reserve
requirements and actual reserves held during the first five months of 2009".

 An outline of the "re-capitalisation plan that banks are required to
finalise by June 15" will be studied.
The banking sector has shrunk as reflected in deposits that declined
from almost US$1billion at the end of 2005 to about US$300 million (of which
local currency dominated currency deposits amounted to an equivalent of US$6
million) at end of last year, the IMF noted.

Several donors have advanced aid packages to Zimbabwe and the mission
wants "a data table on newly contracted short-term and long-term external
credits for 2009 by currency, and borrower agency.indicating whether these
credits will fund public or private borrowings".

It said it wants a summary of the size and timing of budget support
from South Africa and other potential donors for 2009.

The Development Bank of South Africa, DBSA, has pledged to assist in
infrastructure development programmes by providing funding and technical

The financial institution, which was mandated by the South African
government to assist in the rehabilitation of infrastructure, expressed its
intentions to support different infrastructural projects in areas of
electrical power supply, educational institutions and road rehabilitation.

The mission will also meet the United Nations Development Programme
(UNDP) and Donors' Economists Group to discuss the humanitarian appeal for

However, donors have set conditions around political and economic
reforms before they release any money.

To date Zimbabwe has only been able to secure over US$1 billion and
yet the country needs U$10 billion in the next three years for economic

The mining sector, which government says under the Short Term
Emergency Recovery Programme was crucial in the recovery of the economy,
would be reviewed.

On agriculture, the IMF team will discus output projections for each
commodity with farmer organisations and food requirements and supply with
the World Food Programme.


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Govt Accuses Fuel Companies of Shortchanging Consumers

Thursday, 11 June 2009 19:52
GOVERNMENT has accused fuel companies of charging "illegal prices" in
response to soaring world prices.

Ministry of Energy and Power Development permanent secretary Justin
Mupamhanga  said his ministry would "strongly look" into the issue of
companies that raise fuel prices without government approval.

Mupamhanga said the legal price of petrol was now US$1,30 and diesel
US$0,95 after factoring in the movement of oil, internal costs and
transportation. He however said fuel dealers started to charge the high
prices before June 7.

There are 80 oil companies registered in the country.

"We do price reviews every month to ensure we do not destabilise the
market and a review is made if there is need," Mupamhanga told
businessdigest on Wednesday.

"The increases by local oil companies were illegal as the ministry and
the oil companies had agreed that price changes would only be effected on
June 7," he said.

The price of petrol has increased by about US$0,30 inside two weeks in
what oil companies said was a response to rising international fuel prices
which have seen crude oil prices leap from US$55 per barrel last month to
US$71 per barrel on Wednesday this week.

Economists say a US$0,30c rise in fuel price translates to an average
increase of about 25% in the price of basic goods.

"The price oil companies were charging before June 7 was illegal, oil
companies were short changing consumers. Any prices above the agreed prices
are illegal," he said.

A litre of petrol that cost US$1 three months ago is being sold for
between US$1,30 and US$1,35 at most service stations in the country.

Diesel rose marginally to between US$1,05 and US$0,95 from US$0,85.
A litre of paraffin costs US$0,75.

Mupamhanga said recent shortages of petrol on the market were mainly
due to uncertainty in the pricing structure of the commodity. He said oil
companies had assured the ministry that there would be a consistent supply
of fuel.

He said since the end of the first quarter, low-quality fuel was being
sold on the market at very low prices to attract customers.

Mupamhanga said an audit carried out at 12 filling stations in
Bulawayo late last month revealed that only two were selling diesel with
sulphur content below acceptable levels.

Under the existing regulations, fuel companies are only allowed to
sell diesel with a maximum sulphur content of 0,05 particles per million.

Excessive sulphur in diesel leads to the generation of sulphurous and
sulphuric acids which cause premature engine wear from corrosion.

"We are having problems with fuel coming from the South as opposed to
the fuel coming from the East, which is transported via the Beira-Feruka
pipeline and is subjected to quality checks.

"However, our officers are in the field checking right round the
country and we expect to have a more clearer picture by mid-month,"
Mupamhanga said.

Zimbabwe draws most of its fuel from Beira and this is distributed
mostly to areas north of Zimbabwe while the southern parts are supplied by
fuel obtained from South Africa by rail and road transport.

By Paul Nyakazeya

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No Borrowings, yet Still Unattractive to Lenders

Thursday, 11 June 2009 19:49
IN good economic times, it is normal to be in debt.  This is true for
businesses as it is for governments and individuals.

However, in difficult times borrowings can be a heavy burden as shown
by the recent events in the US and in other rich countries. The current
global financial crisis is a result of excessive debt.

In Zimbabwe, just like in many developing countries, the global credit
crisis did not have a direct impact because the financial markets are not
interrelated to those in the West in any way.

The effects are, nonetheless, being felt indirectly through reduced
assistance from international aid organisations that are funded by Western
countries. The debt market in the country has not been very active since the
economy got into a hyperinflation mode.

During hyperinflation it was not viable to borrow given the punitive
rates that were always benchmarked to central bank overnight lending. In
addition, many suppliers had started demanding payment in stable currencies
which made the Zimbabwe dollar unusable for procuring raw materials.

Instead, businesses were forced to quickly convert their Zimbabwe
dollar receipts into foreign currency and other assets. Buying shares also
became a fashionable venture for companies that were generating lots of cash
in their attempts to retain value.

Credit to households was also minimal because of perceived default
risk. Building societies were not giving mortgage loans, and even when they
did, the preconditions were deterring. Prospective mortgagees were being
asked to pay large deposits. The regular installments were also unaffordable
to many.

Concurrently, all credit shops suspended facilities such as lay-bye
and hire purchase because installments were quickly getting eroded by
inflation. Only the government had significant borrowings, estimated at $59
sextillion in the latest central bank report.

All this money was accessed from the local market through issuance of
mainly 1-year treasury bills at 340% per annum. Banks were being compelled
to take up this instrument to avoid a more punitive zero coupon paper that
was being given to institutions with surplus end of day balances.

Local funding was the only available option to the government because
international institutions had ceased supporting the country because of
arrears and governance issues.

The switch from using Zimbabwe dollars to multiple currencies had the
effect of indefinitely deferring the settlement of domestic debt, if at all
it would be paid off.

The best case is that the Zim dollar balances will be converted into
usable currency at some point while the worst could be an indefinite
suspension, if not a cancellation of the balances. It is without a doubt
that the borrowers, especially the government which is the major debtor,
have benefited from the switch while the lenders are worse off.

Nevertheless, the majority of the private sector and individuals in
the country are currently, almost, debt free except for the few that have
secured loans after dollarisation. Most, if not all, of the local companies
require hard currency financing for them to restart meaningful production.

Theoretically, it should be much easier for them to attract funding
given their clean balance sheets. Their counterparts in developed countries
continue to receive funding -- both debt and equity -- despite being already
heavily indebted.

Sadly for the local companies, political risk, albeit improving,
remains a deterrent to would-be financiers. Foreign investors and banks,
which have the capacity to provide funding, expect more political and
economic reforms before they start dishing out money.

The high credit demand in the economy should have been good news to
local banks, but that has not been the case. The lack of liquidity in the
country is hampering lending operations.

Several companies have loan facilities with domestic banks; however,
the draw downs have been few and spaced because of unavailability of funds.
This has given impetus to loan sharking, or chimbadzo in local lingo, where
holders of hard currency are lending it out at very high interest rates. In
such transactions, the probability of defaulting is high. Margins for most
business are already squeezed and as result some might fail to pay off these
high interest obligations.

Recent reports of credit lines coming from such institutions as the
African Development Bank and African Export Import bank are encouraging
although not all companies are going to be financed.

These facilities will reduce funding pressure on local banks and
possibly prompt other offshore institutions to avail more loans to industry.
Debt financing seems to be the most feasible way of raising capital for
local companies presently.

Very few, if any, local companies can successfully raise money through
rights issues or any scheme that involves shareholders. This is because most
local shareholders are not liquid. Companies with foreign shareholders may
possibly get financial and technical support from corporate parents.

Maybe, it is time local entrepreneurs seriously start looking for
partners who can inject equity capital into their businesses. This entails
losing majority control of the company but the advantage is the expansion in
the business. As the Deputy Prime Minister Arthur Mutambara correctly put it
recently, "It is better to own 10% of an elephant than 100% of a rat because
with 10% you will have a bigger share.''

Ranga Makwata

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RBZ Starts Bank Capital Verification Exercise

Thursday, 11 June 2009 19:45
THE Reserve Bank of Zimbabwe has requested each banking institution
whose equity capital does not comply with prescribed minimum capital levels
to submit a detailed re-capitalisation plan by Monday.

Banking institutions "without realistic potential to maintain adequate
capital levels commensurate with their risk profiles on an on-going basis
should seriously consider mergers and consolidations," the RBZ said.

This is part of the Reserve Bank's capital verification exercise
across the sector to determine the capital position of every banking

On Tuesday, Reserve Bank governor Gideon Gono in a circular to all
banking institutions said the enforcement of the revised capital
requirements would be in phases in accordance with standard banking

Gono said the phased approach takes into account the need for the
banking sector to adapt to the new macroeconomic environment to restore
confidence in the banking sector.

"Every banking institution whose paid-up equity capital does not
comply with the respective prescribed level is required to submit a detailed
re-capitalisation plan to the Reserve Bank of Zimbabwe by June 15, 2009 for
its consideration and approval, indicating amounts to be raised and
timeframes," Gono said.

He added that the Reserve Bank would "closely monitor the adequacy of
banking institutions" capital levels and will conduct on-site examinations
in order to enforce on-going compliance with minimum capital requirements.

According to the circular, commercial banks would need to have a
minimum requirement of US$6,25 million by September and US$12,5 million by
March 31 next year.

Merchant banks and building societies would be required to have at
least US$5 million by September and US$10 million by March next year.

Finance and discount houses are required to have a minimum capital
adequacy ratio of US$3,75 million each by September and US$7,5 million each
by during the same period next year.

Asset management companies' minimum equity requirements have been
pegged at US$1,25 million for September and US$2,5 million for March 2009.

Gono said each bank was required to comply with at least half of the
prescribed minimum requirement for its class by September this year, and
fully compliant by March 31.

Economist Eric Bloch said there was "serious" need for banks to
re-capitalise so as to avoid collapsing.
"Although at present there are little signs of weakness in the banking
sector, banks should re-capitalise. Failure to do so, collapsing is
inevitable and depositors will again lose out on their savings," Bloch said.

The IMF team currently in the country has shown interest in the
re-capitalisation of local banks.

Nqobile Bhebhe

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Econet, NetOne Results Poles Apart

Thursday, 11 June 2009 19:45
WHILE mobile operator Econet Wireless presented an optimistic outlook
of the operating environment in the first quarter of this year, its major
rival NetOne told a different tale altogether.

Econet says the first two months of this year contributed close to 32%
of the total revenue realised during the reporting season, despite early
challenges of implementing a new US dollar distribution system for its
The mobile operator said beyond the two months, revenue continued to
grow, but did not state the actual numbers, saying such information would be
made available when the company releases its interim financial results in

Its major rival, NetOne, on the other hand told a different story
during the same period.

NetOne said it was bearing the brunt of "economic hardship" and
appeared sympathetic to its subscribers' plight saying contract subscribers
who accumulated bills during the first quarter of this year following the
dollarisation of the economy had been granted "some kind of reprieve".

But analysts say although NetOne did not issue distress calls, the
company will be happy to salvage whatever it could after giving postpaid
subscribers slight room to make calls following the dollarisation of the

"NetOne understands that dollarisation has affected us all. Taking
into consideration the economic hardships, NetOne is giving you a 30%
discount on bills incurred between January and March 2009, provided you
settle that bill not later than 31 August 2009," the company said.

The company also put a cherry on top of the discount in the form of
easier payment terms and credited customers, who have already honoured their
bills saying such subscribers would be automatically credited with a 30%
discount. Should NetOne subscribers fail to meet the network's benevolent
August deadline, it would be cheaper to cut off such subscribers, analysts

"No interest charges have been levied on the amount due but failure to
pay the total amount due by 31 August 2009 shall attract an interest charge
at the prevailing minimum lending rate applied by our bankers."
At the same time, Econet said management took the decision in November
last year to migrate postpaid customers to prepaid because the mobile
operator could not invest in a new billing system and avoided exposure from
defaulting customers.

Management said at the time the company needed to commit resources to
key components.

 "However, after operators were allowed to bill in foreign currency,
we were able to renegotiate terms with our suppliers. Subsequently, we were
in a position to invite customers back to postpaid. There was no automatic
and wholesale migration of customers that had previously been on contract
back to postpaid. Econet used its prudent systems to reduce exposure to
default," Econet corporate communications manager Rangarirai Mberi said.

"We therefore did not have negative exposure during the changeover to
US dollars. An important point to note is that while the changeover to
prepaid had indeed caused great discomfort, it enabled our customers to have
better control of their costs," he said.

"For instance, corporate customers that had multiple lines on contract
used the opportunity to trim the number of accounts on their books upon
their return to contract, enabling them to have a firmer handle on their
costs," said Mberi.

The company, however, says the use of multiple currencies and the
collapse of the Zimbabwe dollar had essentially made the accounting process
for the first 10 months of the trading year an 'academic exercise'. Econet
added that what was important to the company was what had happened in the
last two months when dollar tariffs were introduced.

The company also announced plans to lift the group's capacity from 2,5
million subscribers to 5 million by the end of next year. Currently, Econet
has a connected capacity of about 1,2 million and expects that number to
exceed two million by the end of this year.

"Whilst this time last year Econet Wireless' income came almost
exclusively from investments, the income statement this year has almost no
investment income," the company said.

The revenue for the year was $87,9 million, and the earnings before
interest, depreciation, tax, and armortisation was $26,6 million, or 30%  of

The company re-valued its assets in US dollars, showing the growth of
its balance sheet to have increased to $176,4 million. However the
revaluation in the assets resulted in a depreciation charge of $18,4
million, which contributed significantly to a net loss of $2,1 million for
the year. Management was not duly concerned with this number, given the
turmoil in the first 10 months of trading.

Econet Wireless controls 60% of the market share while NetOne and
Telecel share the difference.

Chris Muronzi

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'Access to Finance Key to Africa's Competitiveness'

Thursday, 11 June 2009 19:41
AFRICAN businesses need increased access to financial resources to
improve their competitiveness on the global markets, the Africa
Competitiveness Report 2009 released on Wednesday said.

The report reflects research findings of three institutions -- the
World Economic Forum, the African Development Bank and the World Bank.

"Limited access to financial services remains a major obstacle for
African enterprises, but underdeveloped infrastructure, limited healthcare
and educational services, and poor institutional frameworks also make
African countries less competitive in the global marketplace," reads the
report in part.

The report points to a number of success stories in the region that
highlight steps countries can take to improve their business environment.

The joint report was launched on Wednesday before the official opening
of the World Economic Forum on Africa, in Cape Town, South Africa by
President Jacob Zuma.

It is the second report on the region's business environment.

Klaus Schwab, founder and executive chairman of the World Economic
Forum, said: "This year's Africa Competitiveness Report is the second
comprehensive effort by our three organisations to place the continent in a
broader international context and to shed light on the important aspects of
development in the region, which are so critical, particularly at this time
of global economic crisis."

Vice-President of the Africa region at the World Bank in Washington,
DC, Obiageli Katryn Ezekwesili, said investment in infrastructure with a
regional focus would help cushion against the impact of the crisis and
position Africa to take advantage of a rebound of the global economy.

"The countries that will reap the most benefit and limit the adverse
impact of the crisis would be those that sustain reforms, strengthen
governance, modernise local capital markets and make the investments needed
to tap the immense resourcefulness and creativity of their people," said

President of the African Development Bank, Donald Kaberuka, said: "The
most critical issue for us (Africans) at this stage is how we strike the
balance between short-term crisis response while remaining focused on the
long-term issues key for sustaining Africa's growth, such as the development
of infrastructure, and a skilled labour force, as well as economic

The report highlights two short-term and three longer term policy
themes for improving the competitiveness of African economies.

The two short-term themes are increasing access to finance through
market-enabling policies and keeping market open to trade.

The report said protectionist forces were emerging in response to the
global economic crisis; yet such measures would further reduce demand and
restrict growth.

"Africa's leaders must resist domestic political pressures to erect
trade barriers that would make the region's recovery even more difficult,"
the report said.

The three longer term themes are -- infrastructure remain one of the
top constraints to business in African, Inefficient basis education and
healthcare systems constrain Africa's productive potential and more examples
of goods governance and strong and visionary leadership are needed.

"Energy and transportation are among the main bottlenecks to
productivity growth and competitiveness in Africa. Investment in upgrading
infrastructure would both place Africa on a higher growth trajectory as well
as serve as a fiscal stimulus at a critical time," the report said.

The report said unless educational and healthcare systems were
upgraded in Africa, firms would continue to be constrained in their move up
the value chain, and economic development will be hindered.

"Strong and transparent institutional environments have contributed to
the success of Africa's most competitive economies. Much has been done in
recent years to improve these structures; yet in many parts of the region,
institutions need to be more business-friendly to foster competitiveness,"
said the report.

This was said to be particularly important in the current global
economic crisis was threatening to cause reversals in governance reform.

A separate report by experts including former UN secretary-general
Kofi Annan and  former Mozambican first lady Graca Machel said Africa would
continue to need aid, but that it had enough potential and untapped
resources to become a net food and energy exporter and to boost
intercontinental trade.

"We need leadership visionary enough to say where we want to put our
continent in 30, 40 or 50 years, and to take the steps necessary to keep our
continent there," said Machel. "We have the potential, we have the

Africa achieved economic growth rates of 5,5% last year, above the
global average, said Annan. The numbers of people living in poverty are
leveling out, democracy and market reforms are entrenched in many countries,
and great strides are being made against killer diseases such as AIDS and

"Some of this progress is unstoppable but much of it is fragile," he
said. Annan's Progress Panel Report called for more investment in renewable
energy, agriculture and communications.

Africa is the continent most vulnerable to the economic downturn
because it does not have the economic and social levers to cushion the
crisis. Annan warned the world not to turn its back on Africa despite its
reputation as a basket case because of wars and corruption.

"We ignored Somalia and it is now come back to bite us with piracy and
destruction to global trade." he said.


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Parastatals Should Charge Commercial Rates, say Economists

Thursday, 11 June 2009 19:21
GOVERNMENT plans to raise funds to revive the economy through a
commercialisation and privatisation plan which will take different forms as
part of a rationalisation, reconstruction and transformation agenda.

Economic analysts however said the way the plan would be crafted was
important in attracting foreign investors as the issue has been on the cards
for more than a decade.

ZB Financial Holdings economist Andrew Chirewo said if it was a
revenue generating plan for the parastatal, the first stage could be the
rehabilitation by government through rationalisation of operations.

"If government has funds or can secure strategic or technical
partners, recapitalisation then the idea is noble," Chirewo said on Tuesday.
"The entities can then be allowed to commercialise, that is, charge
economically viable rates, but on a phased basis to avoid social

Chirewo said commercialisation would enhance the entities' self
sustenance, less reliance on government resources as well as ability to
operate as going concerns.

"When viability is achieved through commercialisation and with
relative policy certainty, it would be easier for government to subsequently
identify private sector players, to either partner with in a private-public
ownership arrangement, or to completely cede control to, for the efficient
operation of the entity," he said.

He however said whatever the ultimate ownership arrangement, there was
a need to come up with proper pricing mechanisms to avoid disposal of the
state assets at discounted prices.

"A viable alternative or complement to privatisation is listing on the
capital markets, for example the Zimbabwe Stock Exchange, as was the case
with AICO, CBZ and DZL," Chirewo said.

Economist Brains Muchemwa said most parastatas such as Zesa did not
need privatization.

"They need a supportive rational policy framework from the government,
restructuring and a strong economy where it can raise debt, whilst the
consumers pay the right tariffs. Thinking of privatising them is taking
capitalism experiments too far, and the results will always be disastrous,"
Muchemwa said.

The country needs close to US$10 billion to rivitalise its battered
economy and so far has received close to US$1 billion.

Minister of Finance Tendai Biti last week told businessdigest that
government would assess different state assets and decide on whether to
commercialise or privatise them.

"Cabinet has approved the process of commercialisation and
privatisation. This includes how it will be done, timing and objectives,"
Biti said.

Biti said the process had been divided into different categories and
classified state enterprises under each of the groups to ensure maximum
benefit for the country.

He said there were high-value state companies which had huge potential
but needed capitalisation and good management.

These categories include companies such as TelOne, POSB, power
stations, Zisco and National Railways of Zimbabwe. He also said there are
some strategic high-value enterprises which however are seriously draining
the fiscus such as Air Zimbabwe.

Coronation Financial Services economist and investment analyst Lance
Mambondiani on Wednesday said privatisation maybe one of the solutions to
solving the problem of an inefficient state-owned enterprises.

"This would be based on the assumption that the best way of turning
around a state-owned enterprise is to subject it to market forces and open
up competition and not propped up or subsidised by the government,"
Mambodiani told businessdigest.

"This policy change would increase the country's international
competitive strength, increase efficiency, lower the costs of goods and
services and help to balance the budget. Also, a key political value
dictates that if citizens want a good or service they should pay for it," he

Mambodiani said privatising a state-owned enterprises was not easy as
no investor would come without guarantees.

"In accounting terms, most parastatals are probably technically
insolvent, the value will be in its re-organisation and not whether it's
functional or not," said Mambodiani.

KM Financial Solutions chairman and investment expert Kenias Mafukidze
told businessdigest that privatisation required a lot of investment. "Given
the sums required to take full advantage of our unique position, there is
need to open up this space for private sector participation in a manner that
will push the country and indeed the region forward," he said

Economist Philip Chichoni said the current global financial crisis
makes it impossible for any buyer to raise the funds required to bring the
parastatal to modern standards.

"Years of no capital injection and low tariffs mean equipment at
parastatals had been run down and in need of replacement," said Chichoni.

Paul Nyakazeya

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Rentals Spike Family Bread Basket - CCZ

Thursday, 11 June 2009 19:17
FAMILIES have to pay between US$10 and US$30 in extra rentals for the
month of May following increases in rentals in most parts of the country,
according to the Consumer Council of Zimbabwe (CCZ).

The consumer watchdog said its monthly basket for May rose to
US$437,62 from the previous month figure of US$427,11 largely due to
increases in rentals.

Rentals constitute about 40% of the CCZ monthly basket.

"The increases were a result of rises in rentals and municipal
utilities," said the CCZ in a statement.

"Of major concern was the element of rentals, as there seems to be no
agreed standard on how rental space is charged. Landlords seem to be setting
rentals willy-nilly and this is impacting rather negatively on tenants," the
consumer watchdog said.

However, surveys by estate agents and financial institutions during
the first quarter of the year said rentals had declined by an average 15%,
while prices of residential properties had gone down by an average of 30%.

The chairman of the Estate Agents Council of Zimbabwe, Oswald
Nyakunika maintained that Zimbabwe's prices were the lowest in the region.

"Our rentals at US$2 per square metre to US$5 per square metre are the
lowest in the region," he said.
Analysts said the number of properties offered for sale had improved
significantly from the first quarter whilst able buyers have continued to
dwindle in this predominantly buyers market.

They said low activity had also been exacerbated by sellers and estate
agents who continued to quote high prices from the last quarter of 2008.
Households are already burdened by high costs as domestic bills that are
almost twice what the region was offering.

As the country's economic performance begins to improve, the property
market is still struggling to find its feet, say analysts.

It has continued to experience a slump in activity with rates in
rentals and property prices far beyond the reach of many.

Apart from increased in rentals, the CCZ
said there was a reduction in the cost of the food
basket from US$111,31 in April to US$111,06 last month.

Food constitutes 25,41% of the family basket, 10% for transport, soap
and detergents make up 2,8%, while rent, water, health, education, clothing
and footwear constitute the remainder.

The South African basket ranges at US$82. Botswana's monthly basket is
at US$95 while that of Mozambique is US$113,02.

This reduction was attributed to competition on the market, zero duty
on basic food which has allwed more people to buy for themselves directly
from foreign markets.

There is real increase in the cost of the basket on transport, rent,
water and electricity, health, education, clothing and footwear from US$304
to US$314, reflecting an increase of 3 percent.

Prices of most basic commodities in shops are still beyond the reach
of many consumers as civil servants only receive an allowance of US$100.

The CCZ urges the Ministry of Finance to urgently consider the use of
the local currency that is currently in circulation, as this will benefit
consumers who have Zimbabwe dollars lying idle in their accounts.

Paul Nyakazeya

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Eric Bloch: Suicidal Demands of Labour

Thursday, 11 June 2009 18:29
INCREASINGLY, collective bargaining agreement negotiations of wages in
different industrial, commercial and other economic sectors are breaking
down, with a total deadlock between employer and labour representatives.

The divide between the minimum wages demanded by labour, and those
offered by employers is continuously widening, invariably to unbridgeable

More and more  frequently the deadlock cannot be resolved by
negotiation and, therefore, proceeds  to arbitration, either voluntarily  to
an arbitrator whose appointment  is agreed by employer  and labour
representatives, or where voluntary arbitration cannot be agreed upon, then
compulsory  arbitration  by an arbitrator  appointed by the Ministry  of

Although,  of course, there  are many exceptions, all too often the
arbitrators strive to please all parties, by  pursuing the King Solomon
approach of "cut  the baby in half", by determining  an award fairly closely
approximating the mid-point  between the labour demands  and the employer

This occurs with total oblivion to both labour and employers
thereafter being dissatisfied with the determination, labour contending the
arbitral awards to be inhumanely below minimal survival needs, whilst
employers are confronted with businesses downsizing or closure due to the
unsustainability of the wage awards in relation to the business cash

As a result, very often one or other of the parties proceeds to the
High Court to challenge the arbitral award, or many employers apply to their
National Employment Council (NEC) for exemption from such award.

The stance of labour in its wage demands appears, at first glance, to
be very reasonable. According to the Consumer Council of Zimbabwe (CCZ), the
Poverty Datum Line (PDL) for a family of six was, in April, US$427,11,  the
PDL being the minimum amount required to  meet the costs of the basic
essentials necessary for life without endangering health.

It can be readily understood that labour aspirations are to earn at
least such an amount, if not more.
However, in repeatedly founding its stance in wage negotiations,
labour invariably overlooks two key factors.

First of all, usually in a family of six there are at least two income
earners, albeit not to an equal extent.

Therefore, at best, labour should seek a minimum wage of two-thirds of
PDL (in April that would have been approximately US$280 per month).

However, this is always disregarded by labour's negotiators who almost
without exception focus upon PDL as the minimum acceptable wage.

The second and very greatly more significant factor which is
consistently ignored by labour negotiators, whether the employer has the
capacity to pay the wages demanded.

If the demands exceed the ability to pay, the inevitable consequence
is either the total collapse of the employer's business or, occasionally, a
very marked reduction in the size of the business operations. In either
event, one of the results is a mass termination of employment for many.

Whilst  earning wages below the PDL means  considerable  hardship and
suffering  for the  employees, their families and other dependents, loss of
employment and consequential  cessation of all wage income results  in
grossly  greater hardships  and suffering.

This is particularly  so as, in the prevailing  Zimbabwean
circumstance, prospects  of obtaining  alternative  employment  are minimal
and, if there is miraculously some opportunity of such alternative
employment,  it too would undoubtedly  be with wages below  the PDL.

Concurrently the demands for wages are almost always at levels which
preclude attaining the economic upturn and recovery so desperately needed
for the wellbeing of all Zimbabweans.

The magnitude of most wage demands is gargantuanally greater than
wages paid for like services in neighbouring territories in general, and in
South Africa in particular.

As a result, not only would payment of the demanded wages destroy
Zimbabwean export market competitiveness, but in addition Zimbabwean
products would become increasingly price uncompetitive in the domestic

Already, Zimbabwean manufacturers  are faced with  very great
difficulties  in competing  with those elsewhere in the region, and further
afield,  by virtue of far  lower production  volumes,  according the
non-Zimbabwean  manufacturing  competitors  the immense  advantages and
benefits of economies  of scale.

The obstacles to Zimbabwean price competitiveness is exacerbated  by
the very markedly  higher  charges in Zimbabwe for utilities  such as
electricity, water, telecommunications, and the like, and for local
authority owner's rates and like charges.

Employers must have sympathy and understanding for the overwhelming
stresses and tribulations that are the lot of almost all employees and, to
that end, must be willing to pay substantive remuneration as their
businesses can reasonably sustain.

However, concurrently, it is very long overdue for trade unions,
workers' committees, and other labour representative bodies, to recognise
that the employers do not have unlimited resources.

They need to recognise  that the Zimbabwean economy has been so
greatly decimated over a period of more than 11 years that almost all who
still have employment are extraordinarily fortunate, notwithstanding the
distressing  gap between cost of living and their incomes, for by now
approximately 90%  of the employable Zimbabwean  population is  without
formal  sector employment. Surely it is not the wish of the remaining 10% to
join that unemployment majority!

It would be greatly in the interests of employers and employees alike
that remuneration  for workers should comprise a combination of an agreed
basic  wage (at levels which are realistically within the means of the
employees whilst addressing,  insofar as reasonably  possible,  the critical
needs of the workers ),  and of incremental  remuneration based upon
productivity  (provided that such productivity  is attained without
prejudice  to quality).

The greater the worker productivity, within prescribed standards, the
greater is the business viability. The enhanced viability facilitates
enhanced worker remuneration, and maximizes the security of continuance of

In contrast, dogmatic rigidity in worker demands, with myopic
disregard for employer circumstance and prevailing economic conditions, is
naught but actions of suicide, for such demands not only trigger business
collapses and recurrent and intensifying economic decline, but also
intensified unemployment.

Not only do workers need to be conscious of this fundamental factor in
wage negotiations, but so too should arbitrators, the Labour Court and the
High Court, when wage deadlocks are referred to them, and also so should the
National Employment Councils, when wage level exemption applications are put
to them.

Trying to be the "good guy" to all, under currently prevailing
conditions, actually does a disservice to all. And this is very particularly
so  when arbitrators or the Courts give wage awards with retrospectively
effective wage increases, for the employers cannot retrospectively  adjust
selling prices in order to fund the retrospective wage increments.

This too is of suicidal consequence, for labour, for employers, and
for the economy as a whole.


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Zimbabwe Needs a New Media Regime

Thursday, 11 June 2009 18:20
RECENT reports in the state-controlled print and electronic media have
deliberately distorted the main purpose of Prime Minister Morgan Tsvangirai's
official trip overseas.

A false and clearly malicious impression is being created that
Tsvangirai has been mandated by Robert Mugabe to travel to Europe and the
United States to specifically call for the lifting of ''sanctions'' that the
MDC called for in the first instance.

The propaganda does not end there. A desperate attempt is made to
denigrate both the person and the office of the prime minister. It is this
myopic approach to news dissemination that will prove the most lethal poison
to the inclusive government.

In its front page story on Tuesday, the Herald reports that Tsvangirai
was in the Netherlands on a brief from Mugabe and cabinet to call for the
lifting of economic sanctions.

While I am not a cabinet minister and I am therefore not privy to the
deliberations of cabinet, I have every reason to challenge the allegation
that Mugabe and cabinet have mandated Tsvangirai to travel abroad to call
for the lifting of sanctions.

I have conversed with a number of cabinet ministers and none of them
was able to give legitimacy and credibility to the Herald story that I am
referring to herein. In short, the Herald story is distorting the main
purpose of the PM's current visit overseas.

I am not surprised by the diehard attitude that still prevails in
certain quarters of the state-controlled media. Most of those people who had
made it a career to be Zanu PF praise-singers are still in control at both
Zimpapers and the Zimbabwe Broadcasting Holdings.

They are still wearing their parochial blinkers and they seem not to
be aware that wherever you go in Zimbabwe today, things are in change mode.

These unfortunate people, for some reason, seem to still think that
Mugabe is solely in charge and that Tsvangirai is just an errand boy.

These delusional characters still believe that somehow, both Mugabe
and Zanu PF will manage to re-invent themselves and make themselves popular
again amongst the majority of Zimbabweans, both within the country and in
the diaspora.

Zanu PF is mortally and fatally wounded. This is a party that is
hopelessly faction-ridden to such an extent that the centre can clearly no
longer hold.

I sometimes wonder how many parties are within Zanu PF. The several
factions in Zanu PF make it difficult to imagine how this party can live to
successfully contest another election against a formidable party such as the
MDC led by Tsvangirai.

Put in its proper context, therefore, the desperate attempt by the
Zanu PF spin doctors at the state-controlled media to paint Tsvangirai as a
weak appendage of the inclusive government clearly has got no takers.

The global political agreement (GPA) marked the beginning of the end
of Mugabe's imperial presidency. Section 20.1.1 of the Constitution of
Zimbabwe Amendment No 19 states that ''the executive authority of the
inclusive government shall vest in and be shared among the president, the
prime minister and the cabinet, as provided for in this constitution and

Surely, for any right-thinking person to therefore think that
Tsvangirai is Mugabe's errand boy clearly boggles the mind.

That there is an urgent need for a serious paradigm shift within the
state-controlled media cannot be over-emphasised.

In fact, Zimbabwe does not need a state-controlled media. What we
need, urgently, is a responsible and professional public media that will
truly articulate and tell the true Zimbabwe story without fear or favour. A
partisan, state-controlled media is a dangerous and lethal poison to the
institution of the inclusive government.

Going forward, it may be necessary to wean off some of these
propagandists from the state-controlled media since they are working at a
tangent to the project to rebuild and re-brand Zimbabwe. I am not advocating
retribution because I do not believe in the primitive notion of an eye for
an eye since that will obviously leave all of us blind.

All I am stating is that if certain individuals at the
state-controlled media cannot embrace the new political dispensation in
Zimbabwe then they should do the honourable thing and to resign.

I am a member of the Parliament of Zimbabwe's Standing Rules and
Orders Committee (SROC) and I am very pleased to note that we are moving at
supersonic speed to ensure that the new Zimbabwe Media Commission is set up
as a matter of urgency.

At our last meeting held in Harare on Monday, June 1 I was quite
pleased when Deputy Prime Minister Arthur Mutambara forcefully argued that
the first constitutional commission to be set up should be the Zimbabwe
Media Commission.

He argued that even the present constitution-making process can be
thrown into serious jeopardy if we fail to urgently appoint the Zimbabwe
Media Commission.

I totally agree with Mutambara's sentiments on this issue. Surely,
Zimbabwe needs a new media regime if we are to move forward as a nation. The
days of media hangmen such as those located in the now defunct Media and
Information Commission led by Tafataona Mahoso should be placed in the
dustbin of history because that is precisely where they belong.

The important role of the Zimbabwe Media Commission in the
democratisation agenda cannot be over-emphasised.

As long as both the mainstream and privately-owned media remain
polarised, Zimbabwe will remain stuck in stagnation.

It does not make any sense to have only one local television station
almost three decades after independence.

This makes us a laughing stock both in Africa and globally. For now,
both Zimpapers and ZBH should simply accept that like him or hate him,
Tsvangirai is the prime mover and shaker in Zimbabwe's present political

lGutu is the Senator for Chisipite.


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Muckraker: Shamu's 'free, balanced media'

Thursday, 11 June 2009 18:25
ON his "rare and historic" visit to Gideon Gono's farm in Norton,
President Mugabe asked King Mswati to take with him back to Swaziland "our
dear love".

The king in turn said he had learnt a lot from Zimbabwe's veteran

"Throughout the many years we have known each other he has always
shown me how much he loves his people," King Mswati said. "Running a country
is not always easy."

Did he say "running" or "ruining"? Until recently Cosatu branded
Swaziland alongside Zimbabwe as a rogue regime where workers' rights were

We can imagine Swaziland's youthful king had much to learn from his
Zimbabwean host. In particular he did not appear to know how Zimbabwe's
patronage system worked.

"I am glad to see that the man who is implementing this (silo project
at Gono's farm) is the governor of the central bank. I understand why he is

So do we. And it has nothing to do with his farming skills!

So now the King can be added to the list of those who are being asked
to say a few words in favour of the governor. Service chiefs, delinquent war
vets and captive editors have now been joined by royalty to add a bit of
class to this motley crew.

Previously, distinguished visitors were asked to voice their approval
of land reform. Then they were induced to appeal for the lifting of
sanctions on behalf of their hosts.

Now it is the governor who they are being asked to speak up for. Is
Gono aware of just how abject he has become in the manipulative hands of his
sponsors? And will any international bankers take him seriously again?

The Herald on Monday carried an anchor story headed "Massive wheat
shortage looms". And there staring out at us was a picture of Joseph Made.

How appropriate that association was. But the Herald had an answer for
these disastrous circumstances. It was all the fault of "sanctions-induced

Zimbabwe National Farmers Union vice-president Garikai Msika said it
was the result of poor planning. The government will now spend more
importing wheat than it would have done by supporting the farmers, Msika

So much for "hyper-induced inflation".

While Tafataona Mahoso's turgid column in the Sunday Mail is usually
unreadable, it should be read this week by human rights defenders and
lawyers for the sinister remarks it contains.

In particular it may be of interest to the representatives of those
countries Morgan Tsvangirai will be visiting this month claiming there have
been "reforms" in the media sector.

Here is what Mahoso said about those Zimbabweans who he claimed were
following in the footsteps of Zambia's Frederick Chiluba who was
discredited, arrested, tried and sentenced: "Our so-called reformers have
not only shown their corrupt tendencies quite early in the first months of
the inclusive government.

They actually run the risk of being arrested and tried for treason
because of their reckless treatment of issues lying at the core of the
national interest."

They were guilty of mishandling "sacred matters" and pursuing personal
conflicts of interest and engaging in subversion of public policy, terrorism
and subverting the rule of law, he charged.

Mahoso is understandably bitter. A court last week rejected his media
pretensions. But who is it who has "subverted public policy"? Who is accused
of committing acts of "terrorism" and "subverting the rule of law"?
Certainly not the new members of the government.

We would be keen to hear what donors think of these remarks while
Tsvangirai travels to Europe and America claiming there has been a change of
outlook in Harare.

And please don't let us hear again from Webster Shamu on how "fair and
balanced" the public media is when this sort of hate speech is given

It is not difficult to discern where Mahoso's rant is heading. "Those
seeking to corrupt the national ideals are focusing on individual incumbents
because they know that corruption is determined to a great extent by
character," he wrote.

"So the incorruptible cadres have to be removed at all costs and be
replaced by those who have indicated a willingness to change critical
national policies in the interest of foreign powers."

Gideon: You appear to have another new best friend: Tafataona Al

Meanwhile, Deputy PM Arthur Mutambara said there was a need to remove
international misconceptions that Zimbabwe was a risky country to invest in.

Speaking to the Marondera business community, he said: "It was now
everyone's duty to reflect the right image of the country."

Indeed it is. Last weekend a group of four freelance journalists won a
high court order freeing them from any need to accredit with the defunct
Media and Information Commission when carrying out their work, with
particular reference to coverage of the Comesa summit taking place at the
Victoria Falls.

Justice Bharat Patel granted them an interim order barring Media
minister Webster Shamu, permanent secretary George Charamba, former MIC
chair Mahoso, and PM Tsvangirai from interfering with their work.

Armed with the court order the four made their way to the Victoria
Falls. There they were told by security officials they couldn't cover the
summit because they weren't accredited.

Here we have a case of lawlessness writ large. Government officials
disregarded the court ruling and prevented the journalists from doing their
work. Quite clearly this was a disservice to the public and to Comesa which
was implicated in this glaring example of misgovernance.

Tsvangirai is trying to explain to foreign leaders that there have
been important changes in Zimbabwe including media reforms. The events at
the Falls last weekend suggest otherwise.

Included in Tsvangirai's delegation is Tourism minister Walter Mzembi
who is not on the sanctions list. While he is travelling with the PM the
Lowveld conservancies are once again facing invasions and disruptions by
thugs allied to Zanu PF. Mzembi is unable to address this crisis because he
is busy helping Tsvangirai claim that Zimbabwe is on the path to recovery.

Meanwhile, Environment minister Francis Nhema will have difficulty
setting up the Zimoza Transfrontier Park with Zambia and Mozambique when it
becomes clear what fate awaits the wildlife of Kanyemba if Mililangwe is
anything to go by!

Returning to the Vic Falls summit, is anyone going to take an outfit
like Comesa seriously when it includes somebody like Al-Bashir, not to
mention other notable reprobates?

How can Mutambara, who by the way appears to be sobering up
politically, speak of rebranding and correcting "international
misconceptions" of Zimbabwe when somebody like Al-Bashir, who is wanted for
crimes against his own people, is given a warm welcome at the Falls?

Is this the sort of organisation that will attract international
confidence and investment?
In mitigation, it does seem that the majority of heads of state
declined to attend. Most countries were represented by vice-presidents and

Congratulations to Botswana whose foreign minister said Al-Bashir
would be arrested the minute he tried to set foot in Botswana. That's the
sort of plain speaking that's needed on governance
issues if Comesa is to have any credibility.

The Sunday News told us that President Mugabe met, among others, with
United Arab Emirates foreign minister "Mr HH Shake Abdul Bin Zaid Alma

Could that be His Highness Sheik Abdul Bin Zaid Alma Hatan?

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Editor's Memo: Distorting Tsvangirai's Goodwill Mission

Thursday, 11 June 2009 19:47
PRIME minister Morgan Tsvangirai's trip to Europe and the US has
elicited a variety of reactions from Zimbabweans.

There are conflicting perspectives between Zanu PF and MDC-T
sympathisers on the merits of the trip. Both are overwhelmed by a third,
internet-savvy and well-networked lobby for whom anything short of an
anti-land reform "revolution" in Zimbabwe won't do.

Premised on the fact that Tsvangirai's tour is to call for the lifting
of sanctions imposed by the same nations on Zimbabwe, diehards in Zanu PF
say the MDC called for the sanctions as part of its regime change agenda and
should therefore call them off.

MDC supporters on the other hand deny that their party called for the
sanctions, whose existence the party leadership has vehemently denied until
very recently. Instead they argue that President Mugabe and his party
invited the sanctions through human rights violations and that Tsvangirai is
being used to do the dirty work for Mugabe and the coalition government.

Then comes the powerful locally-based civic lobby. For this camp,
every day brings forth fresh calamities: political arrests, Gideon Gono and
Johannes Tomana still in office, farm invasions, no new provincial governors
or neutral permanent secretaries and the MDC still part of government!

For this group, the coalition government has utterly failed,
Tsvangirai has been bought, human rights violations have worsened, sanctions
must stay and there should be no aid to Zimbabwe. There has been no "change"
and Tsvangirai should be told as such on his doomed tour.

Unfortunately none of the three positions makes Tsvangirai's case on
his European and American tour any easier. It is as if the whole nation were
on a masochistic campaign to perpetuate its misery in exchange for
international pity and charity.

It is not easy to grasp the specific purpose of Tsvangirai's trip from
the tendentious reporting in the state media that he has literally been
ordered to go and call for the lifting of sanctions and then beg for
financial assistance.

Nothing could be more presumptuous. From what platform would Mugabe
make such an order? How would Tsvangirai be expected to execute it as if he
had power over those from whom he needs help?

Tsvangirai appears to be aware of the hurdles in his way. He is aware
of the conditions for assistance. He knows government has done very little
to meet these conditions, even where there is no need for donor support like
media reform.

He was therefore modest about his mission: to engage "with our
partners". He said Zimbabwe had been in isolation for the past 10 years and
needed to reengage.

I doubt that he expects to be given any money immediately. The IMF is
still demanding its pound of flesh of US$133 million. The best he could
expect were face-to-face conversations with the leaders of the nations he is
visiting and putting across his case no matter however weak.

They have deigned to listen to him, making it a goodwill mission, an
icebreaker. They could very well have refused to meet him. He has a chance
of responding directly to their reservations.

So far the discourse between Zimbabwe and the "international
 community" has been heavily mediated.
But then to read the state media, you would think Tsvangirai accepted
the "brief" from Mugabe to go to Europe so that he could prove whether he
had the open sesame to unlock foreign aid.

That explains headings like "Dutch government turns down Tsvangirai"
as if he were on a personal mission.
Similarly, to listen to howls of protest from MDC supporters about
Tsvangirai being used by Mugabe, you would think they expect him to bring
the "billions and billions" of dollars Finance minister Tendai Biti claimed
were being blocked by the US's Zimbabwe Democracy and Economic Recovery Act
to hand them over to Mugabe.

However, to me Tsvangirai's achilles' heel on his tour is the sudden
volte-face of the MDC on the existence of sanctions, and the party's denial
that it called for their imposition at the height of its vicious fight with
Zanu PF.

This is an invidious position for Tsvangirai because he must tell his
hosts either that he was put under pressure by Zanu PF to admit there were
more than "targeted" sanctions on Zimbabwe, or that all along the MDC was
politicking. Both don't do his image and that of his party much good.

Second, for the MDC to deny calling for the sanctions is at once to
undermine its case and also to lose the moral authority in calling for their
lifting. If the party didn't call for the imposition of sanctions it can't
determine if the conditions for their removal have been satisfied.

That puts the issue beyond its power.

This is politics. It means the coalition can never do enough if doing
so removes the pretext for the non-delivery of promised aid. It's now a
question of how well Tsvangirai knows his "partners" and in turn to what
extent they believe he is still of strategic value to their interests.

The lesson is simple enough: Zimbabweans must have the honour to carry
out political and legal reforms because they are necessary for its national

This should not be done to purchase foreign aid. The fight over donor
money is a symptom of a nation which has lost its soul. No foreign taxpayer
anywhere in the world owes us money.


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Candid Comment: Parly Must Initiate Legislative Agenda

Thursday, 11 June 2009 19:35
THERE has been very limited activity on the legislative front, almost
14 months since the March 2008 harmonised elections.

While it is well-known that protracted Global Political Agreement
(GPA) negotiations delayed the swearing in of MPs, and that important
structures such as the portfolio committees were only set up in March this
year, parliament should now be seen to be demonstrating its relevance.

The legislature is a key pillar of governance and plays a leading role
in driving the legislative agenda. This is because the constitutional
mandate of parliament is "to make laws for the peace order and good
government of Zimbabwe".

Making laws is not the same as fast-tracking bills brought by the
executive such as what happened with the Constitutional Amendment No 19, the
National Security Council Bill and the 2009 National Budget. Parliament must
scrutinise these bills, conduct hearings for public input, and allow
extensive debate in both houses before passing the bills with amendments, if

In addition to law-making, the other two core functions of parliament
are representation and executive oversight. Representation means parliament
must be constituted in such a way as to be representative of all sectors of

Diverse views of MPs, the public and civic society must be fully heard
if parliament is to be effective in carrying out its representative role.

Executive oversight means parliament must closely monitor
implementation of government programmes and projects in order to strengthen
delivery of public services to the people.

The effectiveness of parliament largely depends on whether the country's
governing institutions have a presidential, parliamentary or hybrid
political system.

Individual MPs cannot introduce bills that raise or reduce
expenditure. Although the Zimbabwe parliament does not have the necessary
powers as in a presidential system (executive sets the legislative agenda),
individual MPs and portfolio committees can still initiate legislation
either through private member bills or through a review of existing statutes
and making recommendations for amendments to both the House of Assembly and

There is therefore no reason MPs and the different portfolio
committees should not start undertaking serious work in this area. MPs can
initiate and influence the legislative agenda and be seen to play a major
role in the implementation of the GPA.

The three political formations agreed under Article 17 of the GPA that
"the legislative agenda will be prioritised in order to reflect the letter
and spirit of this agreement" and that "the government will discuss and
agree on further legislative measures which may become necessary to
implement the government's agreed policies and in particular, with a view to
entrenching democratic values and practices".

This will require that bad laws such as Access to Information and
Protection of Privacy Act and Public Order and Security Act be repealed
immediately if we are to entrench democratic values in this country.

Sometimes we forget that the inclusive government is a transitional
arrangement whose main priority is to create the right environment for the
conduct of free and fair elections, leading to the emergence of a democratic
and legitimate government.

Constitution-making, repeal of repressive legislation, overhaul of
electoral institutions and restoration of basic social services to the
people are urgent instruments required to create a conducive environment for
free and fair elections.

Parliament has already been mandated through the select committee to
drive constitution-making. The committee will next week start on a public
outreach programme, a development that is highly commendable if the process
of constitution-making is going to be participatory and the product
legitimate. Legislative reform should however happen concurrently with the
process of constitution-making.

Prime Minister Morgan Tsvangirai, as the leader of government business
in parliament, should get his ministers to immediately bring bills to
parliament in line with Article 17 of the GPA.

A good legislative agenda in addition to the already welcome moves on
constitution-making and transparent setting up of independent commissions
(Human Rights Commission, Zimbabwe Electoral Commission, Anti Corruption
Commission and Media Commission) will send the right signals to the
electorate and the international community that the three parties are
serious in implementing provisions of the GPA.

This will assist in unlocking the much-needed financial aid for
Zimbabwe's economic recovery efforts.
Other areas in need of immediate attention by members of parliament
and the portfolio committees include the implementation of the Short-Term
Emergency Recovery Programme (Sterp) and the execution of the 2009 budget.

It is the duty of parliament to see to it that implementation of
public policies and programmes is realising tangible outcomes on the ground.

The portfolio committees must begin by clearly understanding the
situation in the various sectors that they will provide oversight before
they start demanding answers from senior government officials.

You cannot engage in meaningful interchange with senior government
officials when you do not have sound background knowledge of what exactly is
happening in the sector that you shadow.

Civic society and interest groups working in various sectors can
assist MPs in that regard. The cornerstone of the reform programme of
parliament is increased public participation in the legislative process.

Opening up portfolio committees to civic society and the public should
therefore be at the centre of parliamentary work.

Strong parliamentary institutions help to ensure democracy, the rule
of law and protection of human rights. There is a danger that this
parliament will lose credibility in the eyes of the public if it does not
immediately deal with the legislative agenda and effectively carry out its
representative and oversight functions.

lMakamure is Southern African Parliamentary Support Trust executive


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Comment: A reality check

Thursday, 11 June 2009 19:35
PRIME Minister Morgan Tsvangirai's trip to Europe, the United States
and Scandinavian countries has turned out to be a reality check not just for
him alone but for Zimbabweans in general. While Tsvangirai is well-meaning
and trying his best to rescue the country from international isolation and
economic crisis, his tour has confirmed that the root cause of the problem
lies at home, not abroad.

Attempts by President Mugabe and his cronies to situate the causes of
our crisis outside the country will not help anyone.

All dictators always blame everyone except themselves, especially
outsiders and real or perceived "imperialists", for problems of their own

As we stated on this page last week, there are sanctions which ought
to be removed, but they are not the cause of this economic crisis. Zimbabwe
was slapped with sanctions by the West for repression, human rights abuses
and policy disputes, particularly over land reform.

Until we deal with the causes of those sanctions, we are not going to
resolve the situation because a wrong diagnosis by definition cannot lead to
a correct prescription. Similarly, we can't resolve the economic crisis
unless we correctly identify its causes.

The external factors, including sanctions, aggravated the situation,
not caused it.

Dutch Prime Minister Jan Peter Balkenende told Tsvangirai on Monday at
The Hague that his government would not give Zimbabwe economic and financial
aid until serious political and economic reforms are implemented.

The message to Tsvangirai couldn't have been clearer: no reforms, no
money! By implication, the economic sanctions imposed on Harare would remain
in place until reforms and mindset shift are adopted.

Tsvangirai told journalists at the La Fontaine-zaal at The Hague on
Sunday that he was hopeful the unity government would get international
support, but tacitly admitted that he was not going to get aid. "No dollars
and cents" were discussed, he said, and therefore no funds would be coming
besides humanitarian aid.
Tsvangirai yesterday met US Secretary of States Hillary Clinton and is
today expected to meet President Barack Obama.

These are crucial meetings which should indicate the direction of
Harare's diplomatic relations with the West and the broad international

However, the tone for the meetings had already been set by the US
Senate on Tuesday. In a resolution, the US Senate said financial
restrictions, travel bans and the arms embargo on Zimbabwe, Mugabe and his
cronies would remain in place until reforms were executed.

This was the same message Tsvangirai got at The Hague. The US Senate
insisted on a new constitution, the restoration of the rule of law, respect
for human rights, upholding of property rights and cessation of
politically-motivated violence.

It said other problems such as media tyranny and land invasions must

The Senate indicated Zimbabwe was coming from a background of
pervasive and systematic abuse of human rights, which included "unlawful
killings, politically-motivated abductions, state-sanctioned use of
excessive force and torture by security forces against the opposition,
student leaders, and civil society activists".

It observed that since there hasn't been much reform to stop "ongoing
illegal activities" to put Zimbabwe on an irreversible path to democracy,
most of the sanctions would remain in place.

It was clear Clinton and Obama would raise the same issues with
Tsvangirai who actually anticipated it as shown by his admission that there
could be no cover up of the situation on the ground like he tried to do on
new land grabs.

Tsvangirai said in Washington on Wednesday he will "not gloss over the
issues" but will make the case that Zimbabwe's "irreversible" democratic
transition merits American support.

But herein lies the problem. When Tsvangirai left for the trip, it was
clear he would have a mountain to climb convincing a sceptical world that
things were changing in Zimbabwe.

It would have been better if he had first ensured a paradigm shift in
government, critical reforms and other benchmarks of recovery before going
on the trip.

To plainly demonstrate the point, as Tsvangirai was leaving Harare
Zanu PF hardliners in government were defying a court order to allow
journalists to cover Comesa without official state accreditation.

Four journalists who had obtained a court order in their favour last
Friday were barred from covering Comesa by the same inclusive government
Tsvangirai practically heads.

How then do you convince the West to remove sanctions when government
still blatantly flouts the rule of law by ignoring court orders and refuses
to stop impunity, still harasses opposition and civic activists by dragging
them to the courts on political charges, arrests journalists and lawyers,
allows the army to meddle in civilian matters and does nothing to halt land

The constitution-making process -- which is supposed to lay a
foundation for a new Zimbabwe -- is all but collapsing into confusion.

The flawed and partisan process faces stiff resistance from the
So Tsvangirai was bound to be asked: What has changed in Zimbabwe? His
case would always have been untenable, even with the best of endeavours.

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