http://www.theindependent.co.zw/
Friday, 01 June 2012 09:18
Faith Zaba/Clive
Mphambela
TWO indigenous banks are experiencing severe viability problems
and face
imminent closure despite that the banking sector remains “safe and
sound”.
The development sends a dark cloud, once again, over Zimbabwe’s
financial
sector barely a year after the Renaissance Merchant Bank debacle
that
threatened to wreak havoc in the nerve centre of the economy.
A
confidential RBZ report dated May 30 2012, seen by the Zimbabwe
Independent
and which details the liquidity positions of various banking
institutions as
at May 25 2012, exposes the extremely low liquidity
positions of Interfin
Bank and Genesis Bank, which have virtually locked up
their entire deposit
bases into non-performing loans and advances, leaving
very little in their
nostro accounts and RTGS settlement accounts. They
also have very low cash
holdings.
Both banks have reportedly failed to settle
interbank obligations as well as
customer withdrawals, with some customers
being restricted to daily
withdrawal limits of as low as
US$50.
Interfin Bank, in particular, was the more exposed of the two,
having a
whopping US$105 489 614 in loans and advances against a paltry US$3
567 in
its RTGS account, US$137 422 in vault cash and US$98 483 in its
Nostros
account. This renders the bank technically insolvent as it has
minuscule
resources to fund demands from its customers.
Given the
interlinkages among banks, this position could cause much
disruption in the
banking community.
As of May 25 2012, Genesis bank had a mere US$4 600 in its
RTGS account,
only US$2 788 in cash (notes) and just US$1 090 in its nostro
balances
against US$1 141 392 in loans and advances.
Market
watchers say supervisory action will have to be taken to rectify
known
weaknesses at Interfin and Genesis banks as they have been stuttering
since
the beginning of this year.
They say, however, Interfin is likely to
be placed under curatorship to give
it sufficient time to conclude ongoing
discussions with potential investors
which may result in the bank being
adequately capitalised. The bank has been
issuing cautionary statements in
the media.
Sources in the banking sector say Genesis will have to be
closed following
its failure to regularise its capital position despite
being indulged with
major concessions and time extensions by the
authorities.
Since the adoption of multi-currencies, Zimbabwe’s
banking sector has been
teetering on the brink of collapse as the majority
of its 26 registered
banks battled to raise the minimum capital requirements
of US$12,5 million.
The Reserve Bank repeatedly extended deadlines for
meeting the thresholds
and it was only early this year that the remaining
banks managed to secure
investment in the nick of time after Reserve Bank
governor Gideon Gono
virtually read the riot act to non-complying banks,
threatening them with
closure.
Banks that just managed to meet
the March 31 deadline include Kingdom,
Renaissance Merchant, and ZABG.
Kingdom Bank was saved in the 11th hour by a
US$9,5 million investment by
AfrAsia Bank Ltd of Mauritius whilst
Renaissance was thrown a US$24 million
lifeline by NSSA.ZABG Bank , which
needed US$15,3 million to plug its
negative capital base and another
US$12,5 million to meet the RBZ’s minimum
regulatory capital
threshold,reached an agreement with Unicapital of
Mauritius and a local
private firm, Trebor&Khays, for fresh capital
injection to meet regulatory
capital requirements
Since then it has been
Interfin and Genesis that have remained outlying
banks,struggling to meet
the statutory minimum regulatory requirements on
one hand,while failing to
meet their financial obligations to customers on
the
other.
Interfin Bank has struggled since the arrest late October last
year of its
major shareholder FaraiRwodzi on charges of espionage. The bank
started to
experience a drain on its deposits which negatively affected its
liquidity.
Asked to comment on the state of the banking sector, RBZ
governor GideonGono
said: “Two out of 26 banks are experiencing difficulties
… one has a deposit
base of about US$100 million while the other has a
deposit of less than US$2
million in a market of about US$3,6 billion.” But
he refused to name the two
banks.
In spite of missing the capital
deadlines, Genesis is in negotiations with a
consortium of investors led by
FMB of Malawi, who had initially indicated
interest in acquiring a 93% stake
in the bank. But the talks seem to have
collapsed and were followed by an
effort to rope in Prime Bank of Kenya,
which later also abandoned its bid
for a 12,5% shareholding in the bank.
Genesis was also linked to an
investment consortium led by Frank Buyanga,
who in April confirmed to the
Independent that negotiations to acquire a
stake in the bank had
collapsed.
TheReserve Bank report, however, shows that the overall
banking system is
stable and market liquidity has improved significantly
since March 1 2012
as shown by the increase in total RTGS balances held by
banks which were
US$333 million as at May 25 2012. Cash held in bank vaults
at US$350 million
now represents 21% of bank balances , whilst US$217
million is in banks’nostro
accounts.
Interfin founder Farai
Rwodzi was unable to comment last night, saying he
was at a dinner. He
promised to call back.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:15
Owen
Gagare
SADC leaders meeting in Luanda, Angola, on Friday to discuss trade
issues,
as well as the political and security situation in Zimbabwe, are
expected to
reject President Robert Mugabe’s demands for early elections
without full
implementation of the Global Political Agreement (GPA) and
polls roadmap.
The explosive meeting could ruin Mugabe’s election plans
and leave him with
a politically-suicidal option of unilaterally calling for
polls later this
year.
The Sadc troika on politics,
defence and security chaired by the regional
bloc’s mediator in the
Zimbabwe, South African President Jacob Zuma is
expected to meet this
morning (8am) to review the political situation in
Zimbabwe before
submitting its report to the leaders who meet later in the
day.
“The troika, which includes Zambian President Michael Sata
and Tanzanian
leader Jakaya Kikwete, meets tomorrow (Friday) morning and
Zuma will present
a report in his capacity as its chairman and facilitator
in Zimbabwe,” a
senior Sadc diplomat said.
“After that the report
will be presented to the main summit in the afternoon
where procedurally it
will either be adopted as it is, with amendments or
rejected.”
The troika
was supposed to meet yesterday but the meeting was delayed to
today because
Zuma was only due to arrive in Luanda last night at 9pm. Apart
from South
Africa, other members of the troika are Zambia and Tanzania.
Mugabe
last week sent envoys to the troika members and other regional
leaders to
lobby for early polls. Zuma’s team was in Harare on Monday.
Sadc
diplomats and Zimbabwe’s political party negotiators said last night
Zuma is
expected to brief Sadc leaders on the progress made in Zimbabwe so
far but
insist on the full implementation of the GPA, the elections roadmap
and Sadc
resolutions made in previous summits, including in Windhoek,
Livingstone,
Sandton and Luanda last year.
Sadc diplomats said it was unlikely
that Zuma and other leaders would allow
Zimbabwe to go for polls without
implementing the GPA, including producing a
new constitution, and elections
roadmap.
Zuma’s international relations advisor Lindiwe Zulu last
night seemed to
confirm Zuma would push for implementation of the GPA before
elections. “The
facilitator will give a report to the troika on the progress
on
implementation of the GPA or lack of it,” said Zulu. “As the
facilitators,
we are committed to the issue of Zimbabwe. We also found all
the parties
are committed to the GPA and as to the implementation that will
be dealt
with by President Zuma and Sadc leaders.”
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:15
Owen Gagare
THE
Zanu PF faction led by Vice President Joice Mujuru has moved to close
ranks
to fight as a united front after sharp differences had emerged among
the
camp’s heavyweights following the death of retired General Solomon
Mujuru,
who initially led the group in the bruising battle to succeed
President
Robert Mugabe.
Although VP Mujuru emerged as the leader of the camp after the
death of her
husband, insiders say she has a frosty relationship with some
key members of
her faction, such as politburo members Nicholas Goche, Sydney
Sekeramayi and
Saviour Kasukuwere, among others.
Last week, Zanu
PF Mashonaland East chairman Ray Kaukonde, who has stuck by
Mujuru, met his
Mashonaland Central counterpart Dickson Mafios in Harare in
a bid to iron
out differences in the camp.
Mafios has been working closely with
Kasukuwere and Goche.
Mafios confirmed the meeting but said it was
meant to find ways of
strengthening the party and not the Mujuru
camp.
“We met as chairpersons to discuss several issues affecting the
party and
our structures,” said Mafios.
“We always do this as
chairpersons. We are calling for unity in all
provinces and we are saying we
should be united and the DCC elections should
not divide the party,” Mafios
said.
Divisions in the camp exploded during the party’s District
Coordinating
Committee (DCC) elections in Mashonaland Central when
candidates backed by
Mujuru lost to those linked to Goche and
Kasukuwere.
Mujuru’s candidates lost in five of the eight districts
in the province in
the March elections, triggering speculation that she was
stumbling in the
succession race after the death of her influential
husband.
Candidates backed by Mujuru lost in Mount Darwin, Mazowe,
Shamva, Mbire and
Guruve. The loss in her home district of Mt Darwin set
alarm bells ringing
as insiders interpreted it as a sign she was losing her
grip.
However, since that emphatic loss, Mujuru has become more
aggressive towards
her bitter rival, Defence minister Emmerson Mnangagwa and
her former allies
Kasukuwere and Goche, while at the same time trying to
engage them
(Kasukuwere and Goche) to close ranks.
A fortnight
ago, she slammed unnamed senior Zanu PF officials fuelling
infighting driven
by their presidential ambitions saying they should respect
the party
hierarchy.
Mujuru implored the party not to tolerate people who
undermine senior
leaders and destabilise structures through their ambitious
agendas.
Mujuru, who was said to have fought “like a tiger” in defence of her
political territory, fiercely attacked senior officials in her camp,
particularly Goche, Kasukuwere and Mafios, for working against her during
DCC polls.
Goche and Kasukuwere hit back, with the latter
accusing Mujuru of
vote-buying and other irregularities.
The
divisions have reportedly spilled into the public arena with officials
attacking each other at rallies and other political gatherings.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:14
Brian
Chitemba
PRIME Minister Morgan Tsvangirai has taken his deputy Thokozani
Khupe to
task over her failure to mass mobilise for the peace prayer day on
May 19 at
Barbourfields Stadium in Bulawayo.
MDC-T insiders said
Tsvangirai confronted Khupe at the party’s national
executive meeting last
week on the poor attendance after she had earlier
assured the premier that
the prayer day would attract a full stadium.
Organisers of the event
had initially wanted to use the 8 000-seater White
City Stadium, but Khupe
objected saying it was too small as a huge crowd
would be mobilised, hence
the booking of the 30 000-seater Barbourfields
Stadium. However, only the
VIP enclosure was packed with less than 5 000
people attending the
event.
“Tsvangirai was not happy about the poor attendance and asked
for an
explanation from Khupe, who was tongue-tied as her assurance had
flopped,”
said the MDC-T official.
Even the presence of renowned
South African gospel music guru Sipho
Makhabane, the local duo of Charles
and Olivia Charamba, and Mkhululi Bhebhe
from the famous Joyous Celebration
could not bring in the crowds.
The poor attendance mirrored the
intense factional battles in Bulawayo
between the group led by provincial
chairman and State Enterprises and
Parastatals minister Gorden Moyo and the
other led by Mzilikazi senator
Matson Hlalo.
Khupe backs Moyo but
Hlalo’s camp has strategically mobilised to the extent
of threatening the
deputy premier’s Makokoba parliamentary seat when the
party’s nomination
process opens.
As a result, the MDC-T has proposed a system similar
to Zanu PF whereby
members of the party’s presidium may choose between
contesting elections or
opt for appointment on the pretext that they are
national leaders.
The MDC-T is probably discussing this proposal on
the assumption that it
would win the parliamentary and presidential
elections.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:14
Nqobile
Bhebhe
MINES minister Obert Mpofu has accused a minority of member
countries in the
Kimberley Process Certification Scheme (KPCS) of trying to
smuggle in human
rights issues ahead of its meeting in the United States
next week.
In an interview with Zimbabwe Independent, Mpofu said he would
attend the
KPCS meeting in Washington DC confident that plans by some
affiliates to
smuggle in human rights issues would be quashed by 99% of the
members.
He said human rights issues can be “clearly dealt with at
the United
Nations”.
“Our position as Zimbabwe is very clear,”
said Mpofu. “We have adhered to
KPCS as we are part of the founding members.
We have realised that some
countries want to take advantage of the coming
meeting to introduce certain
measures or issues to do with human rights and
transparency which have
nothing to do with KP, but a majority of members are
uncomfortable with
this,” he said.
Mpofu said there was the UN
Human Rights Commission, which was better placed
to deal with issues of
rights violations and any attempts to smuggle them
through redefining the
KPCS charter would be blocked as decisions are made
through
consensus.
Rights groups have accused the military of engaging in
forced labour,
smuggling, beatings and even killings at the Marange diamond
fields. Human
Rights Watch insisted that during the 2008/2009 period,
soldiers went on a
rampage throughout Manicaland assaulting people and
looting property from
terrified villagers, businesspeople and travellers
whom they accused of
amassing wealth through illegal diamond
mining.
Mpofu said a questionnaire sent to all member states by the
current chair,
the US, seeking a review of the future of the KPCS had an
overwhelming
response rejecting any changes.
“99% of the
respondents are for the current KPCS charter and they indicated
that they
would not accept any changes to the current charter,” he said.
http://www.theindependent.co.zw/
Friday, 01 June 2012
09:05
Faith Zaba
INTERNATIONAL Criminal Court (ICC)
prosecutor-elect Fatou Bensouda has
hailed efforts to bring to justice
Zimbabwean officials accused of
committing crimes against humanity, saying
such moves would ensure that
countries that have not ratified the Rome
Statute establishing the ICC are
not immune to prosecution.
Bensouda said
this last week in Cape Town at the Open Forum 2012
conference — whose theme
was “Money, Power and Sex: The paradox of unequal
growth”. He was asked
about the ICC’s view on a South African High Court
ruling last month which
required the South African government to investigate
Zimbabwean officials
linked to acts of state-sanctioned torture.
Former Liberian President
Charles Taylor was on Wednesday sentenced to 50
years in prison by an ICC
court at The Hague in the Netherlands over his
role in atrocities committed
in Sierra Leone during its civil war in the
1990s.
Elsewhere a
former member of the European parliament, Glenys Kinnock who was
minister of
State for Africa in the last Labour government, last week
questioned why the
British government was not pushing for President Robert
Mugabe’s prosecution
at the ICC for “crimes against humanity”.
According to Kinnock,
Mugabe should be investigated and subsequently
indicted by the ICC over the
Matabeleland massacres in the 1980s; also
continued state-sponsored violence
against political opponents and ongoing
atrocities in the diamond fields in
Zimbabwe. There was evidence of his
responsibility, she said.
In
response, the British Minister of State at the Foreign and Commonwealth
Office, David Howell said Zimbabwe was not party to the Rome Statute and to
get an ICC charge against him would require a UN Security Council
resolution.
He said permanent UN members like China and Russia
were reluctant “to see
these matters taken up by the UN and remitted to the
ICC for charges” which
meant people “who have committed unsavoury acts” were
outside the reach of
the ICC.
The South African case was brought
before the High Court by the South
African Litigation Centre (Salc) and the
Zimbabwe Exiles Forum (Zef)
Bensouda said: “I just want to congratulate you
and the team that these
steps are being taken to address ICC products. This
just demonstrates how
much can be done when the Roman Statute is ratified,
especially in the case
of South Africa which has both ratified and
domesticated it— how much can be
done to address the serious crimes against
humanity and genocide.”
She added: “It also demonstrates that even if
the state has not ratified
this statute, if you commit the crimes you are
not entirely out of the loop
for these crimes to be addressed. This is a
great initiative that has been
taken and I understand that there is an
appeal which is coming. We are
looking forward to seeing how far this can go
— it is a great step and great
initiative especially within the
law.”
Zimbabwe has ruled out ratifying the Rome Statute establishing
the ICC,
accusing the body of targeting Africans. It fears becoming a full
member of
the ICC could precipitate the indictment of Mugabe and other
senior
officials for alleged crimes against humanity.
Bensouda,
however, criticised influential individuals who used the
“pro-West” and
“anti-Africa” mantra to lobby for non-support of the UN
criminal
court.
“Anti-ICC elements have been working very hard to discredit the court
and to
lobby for non-support and they are doing this with complete disregard
to
legal arguments,” she said.
“With due respect, what offends me
most when I hear criticism about the
so-called African bias is how quick we
are to focus on the words and
propaganda of a few powerful and influential
individuals and forget about
the millions of anonymous people who suffer
from these crimes because all
the victims are African
victims.
“Indeed the greatest offence to victims of brutal and
unimaginable crimes --
women and young girls raped, families brutalised and
robbed of everything
and entire communities terrorised and shattered – is to
see these powerful
individuals responsible for their suffering trying to
portray themselves as
the victims of the pro-West and anti-African
court.”
http://www.theindependent.co.zw/
Friday, 01 June 2012
09:04
Wongai Zhangazha
THE Zanu PF Youth League has challenged the
International Criminal Court to
haul former US President George W Bush and
former British Prime Minister,
Tony Blair, before the court on war crimes
charges as was the case with
former Liberian President Charles
Taylor.
Taylor was convicted on all charges in April and sentenced to a
50-year
prison term on Wednesday after being found guilty of assisting
rebels in
Sierra Leone’s civil war from 1991 to 2002.
Bush and
Blair top the list of Zanu PF’s enemies despite leaving office more
than
five years ago.
Zanu PF youth secretary Absalom Sikhosana told the
Independent in an
interview on Wednesday that there were strong grounds for
the ICC to indict
Bush and Blair, but nothing was being done because of the
court’s bias
against African leaders.
He described Taylor’s
sentence as the “height of insanity” and said the ICC
was “positional” and a
curse to the African continent.
“This animal called the ICC was
created to deal only with African leaders
who do not agree with the wishes
of the West,” said Sikhosana.
“They said Taylor did not (personally)
commit any of the crimes but some
people did it, so Taylor is innocent and
has no case to answer. These are
the kind of things we are fighting
against,” he said.
Sikhosana said there was a need for research in
Africa on where arms used by
rebel leaders in Benghazi or Ivory Coast come
from and those supplying the
ammunition should be brought to
book.
“Africa does not manufacture arms but has aserious
proliferation of arms.
Where are they (arms) coming from? It’s the very
same people who arm rebel
groups on the continent who try our leaders for
war crimes,” he said.
Sikhosana said Bush lied that there were
weapons of mass destruction in Iraq
and when nothing was found after the
country had been bombed to ruins by
American and British warplanes, the ICC
turned a blind eye and pretended
nothing had happened.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:04
Paidamoyo
Muzulu
PRIME Minister Morgan Tsvangirai’s maiden visit to China appears
to be the
strongest signal yet that China is planning for the future beyond
President
Robert Mugabe and recognises that the MDC-T could take over the
reins of
power following Zimbabwe’s next elections.
The Asian giant’s
economy is widely expected to become the world’s biggest
economy by
2020.
Tsvangirai met Chinese Premier Wen Jiabao at the Great Hall of
the People in
Beijing on Monday, and, according to a statement from
Tsvangirai’s office,
told him “with the support of … friends such as China,
we will be able to
hold a free and fair election in
Zimbabwe,”.
Tsvangirai visited China at the invitation of the Chinese
government in what
that country’s outgoing ambassador Xin Shunkang termed “a
familiarisation
tour”, but is seen by some as a sign that the country is
actively courting
Mugabe’s opposition.
Jonathan Gandari, an
international relations specialist and former
post-graduate student in China
said the visit also proved that support from
China was the most realistic
proposition for the coalition government at the
moment.
The unity
government is broke and the West has been demanding that it must
fully
implement the Global Political Agreement before it loosens its purse
strings.
“Beijing is looking ahead and preparing for a new
dispensation,” said
Gandari. “The policy wisdom in China is ‘it does not
matter if the cat is
black or white so long as it catches the
rat’.”
Gandari said the visit was “symbolic and
substantive”.
Economist Godfrey Kanyenze agreed that China is now a
major player in the
world economy and it makes sense to look in that
direction.
“China is an emerging economy and recently became the
second largest economy
in the world,” said Kanyenze. “It is the only centre
with economic growth
after turmoil in the United States and Western Europe;
therefore, this visit
makes economic sense,” said
Kanyenze.
However, he warned that any deals must be negotiated openly
and benefit the
country and broader economy.
“The discussions
should be held more transparently and openly to involve a
broader array of
participants so that the nation would benefit. The
negotiations should also
include infrastructural development,” said
Kanyenze.
Regional
programme advisor for the United Nations Development Programme’s
Africa
Governance and Public Administration Brian Kagoro told a conference
in South
Africa last week that Chinese investments were not bad per se, but
African
governments should be able to negotiate the best deals for
themselves when
entering such deals.
Most African countries have been left
underdeveloped after interacting with
the Chinese as most of the investments
are largely in the extractive
industries.
China is engaged in oil
extraction in Sudan while in Zambia and Zimbabwe it
is involved in mining
copper, diamonds and other minerals.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:01
Elias
Mambo
OUTGOING United States ambassador to Zimbabwe Charles Ray has
lambasted the
military for increasingly dabbling in politics saying this was
detrimental
to the holding of free and fair elections.
In an interview
with the Independent, Ray urged President Robert Mugabe to
order the
security forces not to interfere in national politics.
“For elections
to be free and fair there is need for the non-partisan
conduct of state
institutions such as the police, military, intelligence
service, courts and
electoral commission,” said Ray.
“This can only be achieved if Mugabe
is genuine in his call for peaceful
elections.”
Ray’s remarks
come in the wake of repeated open declarations by the military
of their
support for Zanu PF, contrary to their constitutional
responsibilities of
remaining non-partisan while defending the territorial
integrity of the
country.
Last month, army chief of staff Major-General Martin
Chedondo told about 3
000 soldiers at 2 Brigade that the military must be
allowed to participate
in national politics and called on them to support
Zanu PF.
Ray said for Zimbabwe to hold free and fair elections and
avoid the violence
that plagued 2008 polls, the three parties in the
inclusive government
should commit to reforms as outlined in the Sadc
roadmap for elections.
“Negotiators from all three major parties have
to be committed to a roadmap
leading to elections which was facilitated by
Sadc. The roadmap includes the
adoption of a revised electoral law,
preparation of a new voters’ roll, new
delimitation of constituencies and
other reforms,” he said.
“We call on the parties to honour their
commitment and implement the roadmap
provisions fully before any election is
held”.
It is important, Ray said, that the next elections are
transparent,
verifiable, free and fair so that the will of the people can be
expressed
and respected.
Ray said contrary to widespread belief
that the West is sympathetic to the
MDC and champions regime change in
Zimbabwe, it upholds democratic rights
for individuals to choose a leader of
their choice.
“We do not sympathise with the MDC, but it is important
in any democratic
system that multiple parties and candidates participate in
elections so that
the electorate has a choice and different viewpoints, and
that policies are
proposed and debated,” Ray said.
He said all
political parties should be allowed to campaign and enjoy broad
access to
the media, and fully participate in an open non-violent election.
Ray said
Zimbabwe’s relations with the US had improved as demonstrated by
his
country’s commitment to ongoing humanitarian support and an active
dialogue
on human rights, economic growth and the establishment of
democracy.
http://www.theindependent.co.zw/
Friday, 01 June 2012 08:59
Elias
Mambo
THE MDC formations have expressed fears that Zimbabwe could be
headed for a
repeat of the 2008 elections bloodbath should polls be held
without full
implementation of the Global Political Agreement (GPA) and
necessary
reforms, as Zanu PF gears for victory in the polls by fair means
or foul.
President Robert Mugabe is stepping up pressure for elections to be
held
this year, most likely in November, when he is still fit to campaign.
The
veteran leader is battling old age complications and failing
health.
He has insisted he wants elections this year without fail,
whether or not
the constitution-making process has been completed, but the
MDC parties said
reforms should first be implemented to create a conducive
atmosphere for
free and fair elections.
Mugabe last week sent
envoys across the Southern African Development
Community (Sadc) to lobby
regional leaders to endorse his plans for
elections this year. The proposals
would be tested at the extraordinary Sadc
summit in Luanda, Angola, today.
The Sadc troika on politics, defence and
security met yesterday to discuss
the situation in Zimbabwe and other
trouble-spots in the
region.
MDC-T’s secretary for defence Giles Mutsekwa, in an interview
with the
Zimbabwe Independent said Zimbabweans should brace themselves for a
possible
bloody poll campaign, similar to that of 2008, if Mugabe and Zanu
PF are
allowed to dictate the terms of the elections. He said the
involvement of
security forces in politics and elections was a harbinger to
violent
elections.
“It’s a sad development that the securocrats
have decided to be actively
involved in the politics of the country,” said
Mutsekwa. “This means
Zimbabwe should be gearing for a violent election,
given the preparations
that are taking place. The military has agreed to be
used as tools to
unleash untold violence and this will make the 2008
bloodbath a plaything,”
he added.
Mutsekwa hinted the MDC-T was
considering appealing to Sadc to help deal
with military involvement in the
country’s politics before violence breaks
out.
However, Zanu PF secretary
for administration Didymus Mutasa dismissed as
speculation that polls would
be violent, while admitting security forces,
the army, police and
intelligence agencies, were partisan.
“There is nothing odd for the
police and soldiers to support Zanu PF, and
that does not mean the elections
will be violent,” said Mutasa. “We are all
political players and their
allegiance to Zanu PF does not provoke violence.
When trade unions support
MDC, does that provoke violence? We want a
peaceful election. Soldiers and
the police must also exercise their vote,”
Mutasa
added.
Political analyst Charles Mangongera said chances of a violent
election
campaign are very high given the current volatile political
environment.
“Indications are high that the election itself will be
violent given the
massive recruitment by the military,” said Mangongera.
“The persistent
announcement by the military to meddle in the country’s
political affairs is
a cause for concern.”
He added: “The
military is becoming more entrenched in the politics of the
country and if
this goes unchecked, then we are heading towards another
bloody showdown
which may be worse than that in 2008 ”.
Deputy Justice minister and
MDC-T senator Obert Gutu said Zanu PF was likely
to use violence to win the
next elections.
“Zanu PF has little chance of winning the
forthcoming elections because
they have failed,” said Gutu. “This is the
reason why the top military brass
has engaged in panic mode, but the people
will never accept to be bludgeoned
to death in order to vote for a party in
terminal decline.”
The Welshman Ncube-led MDC’s policy director
Qhubani Moyo said violence is
likely to be used as a campaign tool by Zanu
PF, given the high stakes in
the next elections.
UN human rights
chief Navi Pillay said last week: “Concern is also rising
both inside and
outside the country that, unless the parties agree quickly
on some key major
reforms and there is a distinct shift in attitude, the
next election which
is due sometime in the coming year could turn into a
repeat of the 2008
elections which resulted in rampant politically motivated
human rights
abuses, including killings, torture, rapes, beatings, arbitrary
detention,
displacements and other violations.”
http://www.theindependent.co.zw/
Friday, 01 June 2012 08:54
Herbert
Moyo
ZIMBABWEAN women involved in politics and civil society have warned
against
holding elections without creating a peaceful environment for free
and fair
polls. They argue that it will have disastrous consequences for
them and
expose the vulnerable girl child to gross human rights violations
including
harassment, rape and displacement.
Women, who often bear the
brunt of violence in society, said the conclusion
of the constitution-making
process, implementation of various peace and
conflict-resolution mechanisms
on issues specifically affecting them
contained in regional and
international protocols was the only way to secure
protection during
elections.
Regional Integration and International Co-operation
minister Priscilla
Misihairabwi-Mushonga said women were the worst affected
by violence in
previous elections and implementation of the Global Political
Agreement
(GPA) was part of ways of ensuring peaceful, free and fair
elections.
“That is why we are saying elections should only be held
after the full
implementation of the GPA, because only then can we create
conditions
conducive to peace,” said Misihairabwi-Mushonga. “Everybody,
particularly
women, need protection during events like
elections.”
Women’s Coalition of Zimbabwe chairperson Virginia
Muwanigwa said women
endured all sorts of human rights abuses, including
sexual assault, torture
and displacement in the past elections. She said
that might be repeated
unless measures are taken to curb the
problem.
“We therefore believe that without the finalisation of the
constitution-making process that will address gender concerns, we do not
have the right environment for elections,” said Muwanigwa. “Redress for
victims of past elections, including women, is still 'work in progress', as
the Organ on National Healing, Reconciliation and Integration is supposed to
adopt measures which may even include reparations or at least an audience
for victims,” she said.
Women’s Affairs, Gender and Community
Development deputy minister Jessie
Majome said it was unhelpful to talk
about elections when the environment
has not changed much to ensure peaceful
polls. She said ordinary people,
mainly women, are the most vulnerable when
election-related conflict
explodes.
Majome said Zimbabwe has a
history of violence and that now needs to be
stopped through various
measures, including domestication of international
and regional protocols
and resolutions on the rights of women, as well as
through peaceable
elections.
http://www.theindependent.co.zw/
Thursday, 31 May 2012 17:29
Faith
Zaba
AS the power struggles triggered by President Robert Mugabe’s
succession
dramatically intensify ahead of the next elections, and
anticipation of his
departure by retirement or natural causes — the ongoing
district
Coordinating Committee (DCC) polls have become the battleground for
Zanu PF
factions tussling to wrestle control of strategic party
structures.
Mugabe’s leadership succession battle has now become one of
the biggest
political questions in Zimbabwe, intertwined as it is with the
fate of Zanu
PF and the nation.
Infighting has rocked DCC
elections across the country as the factions led
by Vice-President Joice
Mujuru and Defence minister Emmerson Mnangagwa
battle for control of the
provinces.
The situation is complicated by emergence of a strong
security
establishment-based group rooting for Mugabe to stay on. While Zanu
PF has
two main camps, there are various factions within factions fighting
for
positions of power and influence.
Internal strife has never
been so pronounced in Zanu PF as has been the case
during the DCC elections
countrywide. This has forced Mugabe to publicly
denounce factions and their
leaders, saying they are destroying the party.
This has raised
public debate and questions about the significance of DCC
polls in the
broader scheme of things.
Zanu PF infighting is rampant and has
become an issue of public interest
given the years the party has been in
power and the nature of the divisions.
The party’s factionalism is defined
by regional and ethnic loyalties in the
context of political power and
economic interests. Those fighting to take
over from Mugabe mainly want
power to gain access to resources. That is why
they have not advanced any
ideological and policy alternatives to
distinguish themselves from one
another.
While there is a lot of informal debate in Zanu PF about the
need for the
88-year-old leader to retire because of old age and ill-health,
none among
those interested in replacing him has come forward with different
policies
and programmes.
The focus has always been on power and
money. That is why even though Mugabe
remains the party’s candidate for the
next elections, Mujuru and Mnangagwa
would still fight to strategically
position themselves for the inevitable
post-Mugabe era. They are looking
beyond Mugabe as Zimbabwe goes through a
transition.
Mugabe was
re-elected as party leader at the 2009 congress in Harare and he
remains
Zanu PF’s presidential election candidate until the next congress in
2014
after he was endorsed by the party’s national conference in Bulawayo
last
December.
However, if he is not fit to run in the next polls, an
extraordinary
congress may be convened at the instance of the majority of
central
committee members or by the president at the request of not less
than
one-third of central committee members. It may also be held at the
instance
of at least five provincial executive
councils.
According to the Zanu PF constitution, one of the powers
and functions of
the congress is to elect the party presidium.
So
how do the DCC elections fit into this power matrix?
According to the
party constitution, it all starts at district level, which
elects the DCCs.
The DCCs are an important component in this whole chain of
events; they
represent the grassroots in the districts which can cover as
many as four
constituencies in some areas.
In addition to being the face of the
grassroots, they also elect the
provincial executive councils which make up
part of the provincial
coordinating committee (PCC).
A national
youth executive member said: “They are the ones who decide the
set-up of the
provinces and they are the ones who run the constituencies. A
DCC
chairperson is a very powerful person. For those individuals with
aspirations to succeed the president, they use the DCC elections to try and
gain control of the provinces so that they can determine the provincial
leadership and thereby, in theory, influence the succession issue although
the reality might be different”.
The central committee
composition is determined at provincial level. Of the
245 central committee
members, the PCCs nominate the presidium and 190, who
include 50 women and
provincial chairpersons, while the rest come from the
women and youth
leagues and 10 members are nominated by the presidency.
The PCCs
elect the party’s four top positions which make up the presidium —
the
president, two vice-presidents and the national chairperson.
“All of whom
(the presidium) shall be elected by congress directly upon
nomination by at
least six provincial coordinating committees of the party,”
reads the party
constitution.
The congress, which elects or endorses the provincial
nominations of the top
four positions, is composed of the central committee,
national consultative
assembly, national council of the women’s league,
national council of the
youth league, PCCs, provincial executive councils,
DCCs and eight district
executive council members.
That is why
the succession issue is currently playing out in the DCC
elections.
Zanu PF national spokesperson, Rugare Gumbo, said: “It
could be possible
that there are some people who want to use the DCC
elections to control the
provinces. They might want to set up provincial
executives so that they will
get support in the succession race at the next
congress.”
Senior Zanu PF officials believe the Mnangagwa faction’s
strategy is to
seize control of the party at a time when Mujuru is
struggling to take
advantage of her position in government and the party to
claim the throne
following her husband’s death in a mysterious fire in
August last year.
However, political analyst, Dr Ibbo Mandaza,
believes the DCCs’ role in
determining Mugabe’s successor is
“exaggerated”.
“There is a long-standing belief that the people who
go into the DCCs are
the ones that go to the congress and they are the ones
singing the names of
people who are supposed to be elected,” he
said.
“It’s erroneous. By the time they go for congress, a lot would
have
happened. You could have the succession issue resolved by then and I
don’t
see a new president calling for a congress. People are misreading the
party
constitution. The present DCC fights are related to either early
elections
or a special congress. But in the past, there was no relationship
or logical
co-relation between DCCs and the congress outcome. The
co-relation is
exaggerated.”
But senior Zanu PF officials argue
it is difficult to gain control of the
party without the support of the
structures. That is why infighting at the
structures is intensifying.
http://www.theindependent.co.zw/
Thursday, 31 May 2012 17:22
Tendai
Marima
FOR the second time in four months, Zimbabwe’s civil servants have
renewed
pressure for salary increases by appealing to the highest office in
the land
to intervene in their deadlock with the Public Service Commission
ahead of
elections either this year or next year.
The move would
bring back and put into sharp focus debate on the wage bill
in relation to
government revenues. While public servants want salary hikes,
Treasury has
consistently warned the wage bill is already unsustainably high
and that it
has no “fiscal space” to accommodate salary increases for 230
000 civil
servants without plunging government further into dire
straits.
The agitation for salary increases would also put
the spotlight on the
question whether civil servants are lowly paid or not
in relative terms in
the context of the Zimbabwean economy and regional
salaries. Some say civil
servants are poorly-paid in general terms, while
others say in relative
terms they are not.
The issue, which is
politically sensitive, is likely to become prominent and
explosive ahead of
elections as politicians would want to exploit it to win
votes.
Workers’ appeal to President Robert Mugabe to help resolve
their grievances
by July 1 came after Prime Minister Morgan Tsvangirai, who
supports the
civil servants’ demands, had been unable to sort out the issue.
Biti has
warned that government and civil servants need a reality check on
the issue.
The latest letter by workers was written by the Civil
Service Apex Council,
which includes the Zimbabwe Teachers’ Association,
Progressive Teachers’
Union of Zimbabwe, Teachers’ Union of Zimbabwe and the
Public Service
Association.
Civil servants are demanding a US$242
increase for the lowest paid worker
from US$296 to US$538, but the
government is already struggling to pay its
US$1 billion wage
bill.
Currently 64% of the national budget goes towards salaries — an
unsustainable situation and this has raised debate within government,
business and public circles about the civil servants’
salaries.
After its Article IV Consultation visit last year, the
International
Monetary Fund (IMF), commenting on the issue of government’s
employment
costs, said: “The wage bill in Zimbabwe is one of the highest in
sub-Saharan
Africa”.
The IMF recommended that balancing of
Zimbabwe’s budget “could be achieved
through reducing the wage bill closer
to the initially budgeted amount
(e.g., elimination of ghost workers, strict
controls on hiring, initiation
of a due process for irregular civil
servants).”
In the previous year, roughly six months after the
introduction of the
multiple currency system, the IMF after its March 2010
mission raised issues
of wage bill and government spending as key concerns.
It raised alarm bells
over “rapid unsustainable government expenditure
growth, including of wages,
a large reduction in capital inflows because of
increased uncertainty about
the indigenisation process, and exuberant credit
growth which have
negatively affected the macroeconomic outlook and
intensified external and
banking system vulnerabilities”.
In his
2012 budget strategy paper, Finance Minister Tendai Biti made calls
for more
effective controls to reduce what he calls, “an unsustainably high
civil
service wage bill”.
“It becomes critical that measures aimed at
controlling the wage bill are
adopted and enforced, including implementation
of the results of the payroll
and skills audit freeze,” he
said.
Biti also emphasised the need for a concerted effort to address
longstanding
irregularities on the payroll. “We must sort out all
irregularities,
complemented by various on-going capacity building
interventions in the
public service with support from countries such as
China and India, as well
as other co-operating partners such as African
Development Bank, the World
Bank and others, should strengthen the quest for
a more efficient public
service,” he said.
An audit has shown
that government has 75 000 “ghost workers” on its payroll
who were mainly
recruited by Zanu PF for political reasons just before the
2008 elections
and the presidential poll run-off.
Civil servants’ renewed demands
are coming against this backdrop.
However, Mugabe and Tsvangirai, for
political reasons, have continued to
promise to resolve the
situation.
Asked whether directly petitioning Mugabe would produce
any results,
Progressive Teacher’s Union of Zimbabwe secretary-general
Raymond Majongwe
said: “Going to Mugabe might not solve the issue but it
will satisfy the
political aims of those who think so. The issue of salaries
is a political
issue; it comes down to a battle between Mugabe and
Tsvangirai. Those who
thought of going to Tsvangirai went, those who think
going to Mugabe will
produce a magic wand are not going to get it (salary
increase).”
Majongwe’s fiery comments sharply contrasted with the
diplomatic tone of the
letter which seeks Mugabe’s arbitration after the
Tsvangirai-led National
Joint Negotiating Council failed to produce concrete
results.
“We are convinced therefore that no other office in this
land other than
yours understands that improved salaries and conditions of
service translate
into improved social service delivery,” read part of the
letter. “It is with
the above understanding that we request your office to
intervene in our
salary reviews for 2012,” the appeal reads.
On
Independence eve last month, Mugabe publicly apologised to teachers for
late
payment of salaries and went on to claim United States and European
Union
sanctions on the sale of the Chiadzwa diamonds were responsible for
their
low wages and plight.
Civil servants in the past used to get salary
increases just before
elections.
At a rally in Matabeleland North
less than two weeks before the March 2008
general elections, Mugabe
announced he had signed a new salary schedule of
huge salary increases for
teachers and civil servants and “I hope they will
be happy because we have
worked out very good salaries”.
Treasury is currently battling to pay
the 230 000-strong workforce. February’s
wage bill totalled US$229 million,
including January back-pay and marginal
salary increments, but government
only collected US$227 million. Treasury
continues to operate on a
month-on-month deficit, partly because of
mismanagement, high government
expenditure and below-target remittances from
diamond sales.
Like
Mugabe, Tsvangirai has said the problem is with diamonds in a different
context. The premier says lack of accountability has resulted in civil
servants not being well-paid.
However, analysts argue while
diamond royalties could help, they are not a
permanent solution. Analysts
say downsizing and removing “ghost workers” is
also not the solution. They
say economic recovery and job creation is the
best option.
Some
Zimbabwean diplomats are “stranded” in foreign lands after government
has
failed to pay their repatriation costs at the end of their tour of duty
while others risk eviction from their embassies and homes as they are unable
to meet operational costs and rentals.
Whatever the situation and
will happen going forward, the volatile civil
servants salary issue has now
become a theatre for electioneering ahead of
the next polls.
http://www.theindependent.co.zw/
Friday, 01 June 2012
09:07
HEATED debate is expected at an Affirmative Action Group (AAG)
symposium at
a hotel in Harare today, where the Reserve Bank and
foreign-owned banks are
expected to be grilled over indigenisation.
The
AAG meeting, under the theme Banking for Broad-based Economic
Empowerment
and Prosperity, seeks to get clarification from the central bank
governor
Gideon Gono on the indigenisation of foreign banks.
Banks are caught
in the indigenisation debate. Gono is on record saying he
supports
indigenisation, but foreign banks in the country should not be
taken over
because the sector is already dominated by indigenous banks. The
governor
has called on those interested in opening banks to come forward to
get new
licences.
Gono position is similar to that of the Bankers Association
of Zimbabwe
(BAZ) which maintains the sector is already in the hands of
indigenous
players as most of the 26 banks are locally owned.
BAZ
president George Guvamatanga is expected to defend this position, while
Gono
is expected to stand by his views.
However, Gono’s and BAZ’s views
are in sharp contrast to those of Minister
of indigenisation Saviour
Kasukuwere’s call for all foreign banks’ ownership
to be
localised.
AAG president Keith Guzha will outline how banks should
economically empower
its members.
“For AAG it’s not about
indigenization per se, it’s about economic
empowerment. We want to be
furnished with the Indigenisation Act
practicalities and implications,” he
said.
“For instance, how do our members who want to start their
projects get
assistance from the banks? Banks should not hide behind
collateral and
security issues. They should come up with measures that can
economically
empower us,” Guzha said. — Staff Writer.
http://www.theindependent.co.zw/
Friday, 01 June 2012 09:09
Faith
Zaba/Clive Mphambela
THE Bankers Association of Zimbabwe (BAZ) has
rejected government’s
proposals for a new special purpose vehicle (SPV) to
assume the
lender-of-last-resort (LOLR) function currently reserved for the
Reserve
Bank of Zimbabwe (RBZ), arguing that the central bank is better
placed to
carry out that role, the Zimbabwe Independent can reveal.
BAZ
has now come up with its own proposals which the RBZ and Ministry of
Finance
are considering as part of efforts to unlock close to US$1 billion
in the
local market to improve the liquidity situation. Banks are said to be
sitting on US$400 million in cash and US$400 million in real time gross
settlement surplus funds at the central bank. There is also more funds in
nostro and other offshore accounts.
Although this would not
resolve the liquidity problems embedded in the
economy, the money would
alleviate the crisis.
According to a letter by BAZ president George
Guvamatanga to RBZ governor
Gideon Gono, dated May 14, 2012, seen by the
Independent, the bankers said
instead, the central bank should be
capacitated to fulfil its function of
LOLR. The Reserve Bank of Zimbabwe Act
(Chapter 22:15) vests that role in
the bank.
Bankers feel the
creation of the SPV was a short-term solution premised on
fears that
re-capitalising the RBZ might result in a diversion of funds.
However,
considering the existing legal framework and expertise within the
RBZ, they
believe it is best placed to manage the interbank market. All that
was
needed were checks and balances to be put in place to ensure there is no
diversion of funds once the RBZ is capacitated.
“Currently, RBZ
is sitting on US$400 million in the settlement account and
to our knowledge
there have been no issues raised. In addition to strong
checks and balances,
we consider that the ring-fenced structure within RBZ
must be backed by a
guarantee or other form of insurance which could be
sourced from
multilateral or bilateral institutions and priced into the
accommodation
rates,” reads the BAZ letter. “Against this background, it is
our humble
submission that RBZ should be capacitated to fully assume its
role as a
lender-of-last-resort.”
Gono yesterday confirmed receiving the BAZ
proposals.
“I confirm receiving the proposals and consultations are
underway with both
my boss (the) Finance minister (Tendai Biti) and
BAZ.
“Their proposals are commendable, but are not yet ready for
public
consumption. So I can’t go into details about that. Once
consultations with
Treasury are through and a way forward agreed, all market
players and
stakeholders would be advised.”
Bankers argue the
major challenge was on the question of whose money the
participating banks
would invest in the proposed vehicle.
“Banks cannot invest
depositors’ funds as capital into the SPV as they have
no legal authority
over these funds. We estimate that transitory deposits
constitute over 80%
of total deposits … this means that, notwithstanding the
legal issues, it
would be technically difficult to invest short-term
deposits in the SPV,
which requires relatively long-term funds,” BAZ said.
The BAZ pointed
out that if its members were required to inject their own
capital,
shareholders’ approvals would be required. However, shareholders
are likely
to be reluctant to approve such an investment considering that
banks had
struggled to meet their own minimum capital requirements.
BAZ argues
that due to the absence of a substantive guarantor in the SPV,
this would
create concentration risk as most banks would be directly exposed
to the
vehicle should default occur, magnifying systemic risk within the
sector
since banks would be holding the same assets.
This, it said, was
because the bulk of the SPV assets would, in fact, be
exposed to stressed
entities.
The bankers were concerned that there was no clarity on how
the investors
would recoup their funds in the event of the entity being
wound up. Moreso,
investors needed to be assured of a sufficient return on
their money.
The bankers proposed that instead the RBZ could issue
non-negotiable
certificates of deposit (NNCDs) against the nostro balances
transferred by
banks to the settlement account, which amounted to US$243
million between
March and early this week. Together with the US$30 million
from government,
this could be used to ease liquidity.
The
bankers insist the LOLR function should not be based on traditional
overnight accommodation as the liquidity challenges the banking sector faced
were structural and this could only be resolved by offering 30 to 180-day
accommodation to banks.
They feel government should urgently
resume the issuance of Treasury bills
or alternative instruments, using the
RBZ as an agent, as a tool to smoothen
its cash flows, within the cost
budgetary framework by anticipating monthly
collections from the
fiscus.
“We also believe that that the Reserve Bank must be
capacitated to play its
role as lender-of-last-resort as well as banker to
the government with the
necessary checks and balances to ensure
accountability of funds disbursed,”
the letter says.
http://www.theindependent.co.zw/
Thursday, 31 May 2012 16:46
Gamma Mudarikiri
THE
National Railways of Zimbabwe (NRZ) now has a board of directors after
operating without one since 2009, businessdigest has
established.
Permanent secretary in the Ministry of Transport, Patterson
Mbiriri
confirmed the development, adding the new board, whose tenure
shall be
three years, had already taken charge of the
parastatal.
“A new board has been appointed by the Minister
of Transport,
Communication and Infrastructure development on a
three-year
tenure and is already at work,” said Mbiriri.
The
board is chaired by Ambassador Khotso Dube, who is deputised by
David Mangemba.
Other board members include retired
brigadier-general David Chiweza who
is currently the managing director
of Lobels and former acting managing
director of Zupco, Bothwell
Kunaka. Other members are Phumla Ncube and
James Mutizwa, as well as
current NRZ general manager retired air
commodore Mike
Karakadzai.
Mbiriri said the board would see to it that the
deplorable rail, signalling
and telecommunication infrastructure is
rehabilitated.
This would see the replacement of old equipment
such as locomotives,
wagons and coaches.
Mbiriri, however,
did not specify how the rehabilitation process would be
financed.
NRZ needs US$2 billion to recapitalise and modernise
its operations in the
long term.
In the 2012 budget the
parastatal was allocated only US$20 million, a
paltry figure when compare to
what NRZ needs to recapitalise.
The company is currently operating
below 30% capacity owing to financial
constraints to fund its
recapitalisation programme, which continues to be a
missing link in the
recovery of the economy.
According to Mbiriri, dilapidated
infrastructure, theft and vandalism
continue to hamstring the
operations of NRZ.
Lately, NRZ has been struggling to pay its
workers, numbering about 9 000,
resulting in strikes that further disrupted
operations.
At its peak NRZ carried 18 million tonnes a
year.
The railway firm owns 8 682 wagons of which only 3 427 are
operational,
transporting over six million tonnes of goods per
year.
The parastatal is currently in a parlous state, with its
wagons long beyond
their economic lifespan of 40 years.
http://www.theindependent.co.zw/
Thursday, 31 May 2012
16:37
By Takura Zhangazha
THERE are currently two major investment
deals that the government of
Zimbabwe is surprisingly unsure of how to
handle, even after initially
approving of them. The first, which was
launched amid much fanfare was the
Essar deal that was intended to ensure
the revival of Ziscosteel in the
Midlands province. It is now being reported
that cabinet has ordered a
review of the deal because apparently the
processing plant and the iron
deposits were sold for too little.
The
other investment deal is the Chisumbanje/Greenfuels where the Minister
of
Energy Elton Mangoma has publicly told the company involved to export its
ethanol. Apparently, Mangoma has not seen any cabinet minutes as to a
directive that the ethanol from Greenfuels be compulsorily blended with all
imported petrol in Zimbabwe.
Deputy Prime Minister Arthur
Mutambara has since told parliament that
cabinet has set up some committee
or other to look into the matter. There
are other controversial government
investment deals that are not as publicly
disputed, but the above cited
deals leave one perplexed as to what exactly
is going on in cabinet and in
the offices of various ministers.
The two deals in question, prior to
being approved by the government, had
been reported on for a while in the
media. In some instances cabinet
ministers travelled to various countries to
see examples of where the
relevant investor had a similar
operation.
In other instances, particularly as regards the Essar
deal, there were
further media reports about serious jockeying for the
lucrative tender by
not only the Indian company, but also South African
companies that were
alleged to have strong links to the ANC officials and
former presidents.
After all the foreign trips, lobbying,
verification and other measures had
been undertaken, the government, of its
own volition, decided to award Essar
and Greenfuels the relevant investment
contracts. With both deals however,
there now seems to be a turnaround by
government without adequate reason or
public explanation.
The
versions are many, suffice to say, there is something fishy on the part
of
cabinet in both cases. The lack of clarity on these two matters is not
only
appalling, but patently indicative of a government that does not take
its
work or its own people seriously.
In fact, it appears that government
is more pre-occupied with grandstanding
about private public partnerships
when it does not demonstrate the relevant
knowledge of the intentions of the
private partner and does not dot the ‘i’s
or cross the ‘t’s when putting pen
to paper. It is rather embarrassing to
have a government that argues with
itself about an investment that is
already approved and already on the
ground [a case of the left hand not
knowing what the right is up
to].
Even if one is to assume that in the case of the Essar deal,
government is
seeking to correct an anomaly, it would be irresponsible on
our part as
citizens to let cabinet off lightly. A key question is how does
the
government not follow up with relevant mining departments as to the
content
and nature of iron ore deposits before putting pen to paper? And if
a
minister is dealing with a multi-million dollar investment, to what extent
is he/she assisted with the relevant expertise on the full implications of
the deal?
In the case of Essar, it appears that the government
did not do its homework
and was quick to claim credit for an investment that
invariably turned
sour.
The limited public information on the Greenfuels
deal in Chisumbanje leads
the reader to the conclusion that the actual
problem relates to community
land rights. Instead the problem is that the
government agreed to such a
massive project, only to say it no longer wants
to utilise the end product
(ethanol) locally.
The relevant
minister then advises the investment company, via the media, to
‘export’ the
ethanol. Now, there could be various reasons why the minister
has done this,
including, perhaps political reasons, but the fact is that if
cabinet agreed
to this deal, it must either cancel it altogether or else see
it through.
Moreover, if there are serious differences in the fuel
importation
industry, then the minister must openly seek to iron out these
differences
and explain cabinet decisions for the benefit of not only the
fuel oligarchs
but also the Zimbabwean public. Where government fails to do
this, then the
assumption is that cabinet is not working in the best
interests of
Zimbabweans.
In both deals, it is imperative that government cleans
its act quickly and
demonstrate its seriousness about running this country.
That the inclusive
government is dysfunctional is a counterproductive
argument, since cabinets
worldwide have collective responsibilities and as
such, botched investment
deals are the fault of all political parties that
are in cabinet.
Zhangazha writes in his personal capacity
takura-zhangazha.blogspot.com
http://www.theindependent.co.zw/
Thursday, 31 May 2012 16:36
By
Tafirenyika Makunike
WHEN I was in Zimbabwe recently, I could not help
but notice a resurgence of
activity in the micro-finance sector which had
largely gone aground during
the hyperinflation days.
I spoke to four or
five microfinance entrepreneurs and most of them peg
their interest rates
for the investors in the region around 10% per month.
You immediately
shudder to think what borrowers in this sector are expected
to
pay.
Microfinance institutions provide unsecured lending where loans
are not
backed by collateral and therefore riskier for the institution and
more
expensive for the borrower. The higher the interest rates, the greater
the
capacity of microfinance institutions to transfer the cost of defaults
to
the performing clients.
Some institutions apply coercive collection
mechanisms to ensure that
payment gets prioritised. Some extend further
loans to clients who may
already be debt-stressed.
Micro-loans
from microfinance institutions are generally easily accessible
to the
greater public than formal bank loans. Unfortunately, there does not
seem to
be sufficient regulation of the sector in Zimbabwe.
If the current
wave of micro-loans were focused on developing and building
SMEs in the
country, I would have been very excited. But I found that the
major reason
many people in Zimbabwe are taking debt like
performance-enhancing steroids
is to fuel their insatiable desire for
consumption.
When we
mention drugs, most minds race to extreme drugs like morphine,
heroin or
even cannabis. When I worked in the pharmaceutical industry,
modern medicine
always amazed me. If you break your leg in a car accident,
you would welcome
an urgent injection of morphine. I would characterise
morphine as a wonder
drug which unfortunately has gained notoriety from
inappropriate use.
Similarly, debt when correctly used can fuel wealth
accumulation faster for
entrepreneurs, yet it can also ruin lives.
In the days of the decline
of the Zimbabwe dollar and rapid inflation
growth, borrowing made everyone
look like a genius. Whatever was borrowed
then, even with an interest rate
with a couple of zeros behind it, you
always ended up repaying the debt in
less real value than originally
borrowed.
There is an urgent need
to increase client financial education. Microfinance
can fulfill its
societal mission of expanding financial inclusion by
increasing
transparency, pricing disclosures and building strong markets.
Many
financial products are opaque and do not make clear the implications of
accessing the funds.
Educating clients about the pricing of
microfinance products is essential to
any successful effort toward
transparent pricing. Some borrowers are not
even aware of their effective
interest rate on all their repayment
schedules.
The government
and Consumer Council need to provide intermediary financial
education for
consumers. The need for the establishment of a national credit
clearing
bureau where the names and credit histories of all borrowers can be
accessed
has been previously mooted but not implemented.
The government in
Zimbabwe is the largest employer where most workers
support their extended
families by paying for school fees, medical bills,
and even funerals. It
seems most microfinance institutions are clearly
targeting this group of
workers as it is easier to get repayment of extended
loans.
When
we compare microfinance institutions and traditional banks, there are
several significant differences which affect interest rate levels. For
sustainable microfinance institutions, interest rates must not only cover
their costs but also generate a reasonable profit. The working class
traditionally excluded from the financial system may not understand the
dangers of high interest or the details of their loans before taking on
debt.
Consumer financial vulnerability has been defined as the
state and/or
feeling of being exposed financially, experiencing financial
insecurity
and/or an inability to cope financially. Consumer financial
vulnerability
can result from weak personal and household balance sheets
brought about by
macro and micro-economic factors. Predictors for consumer
financial
vulnerability are income, expenditure, savings and debt servicing
ratio.
Consumer financial vulnerability seems to be also increasing in
Zimbabwe.
In South Africa, just like in Zimbabwe, Mashonisas — which
in Zulu loosely
translates to “one who buries you under”, lend only to
people with regular
salaries, mainly government workers. They secure the
loan by confiscating
borrowers’ ATM cards and using these to withdraw the
money owed to them at
the end of the month before returning them to their
owners.
South African household debt stands at over 70% of disposable
income,
according to a number of recent studies and it may get worse as
banks push
into unsecured loans. Listed entities in South Africa like
Capitec and
African Bank carved out a profitable niche by focusing on black
communities
that had been ignored by bigger banks arising from the apartheid
legacy.
A recent financial wellness study, a collaboration between
the University of
South Africa and Momentum, based on interviews with 2 937
respondents, found
that 4,8% of South African households are in dire debt
from which they
cannot escape and nearly 60% of the households sampled were
shown to be in
bad debt.
Standard & Poors has warned that the
rapid growth in unsecured lending is
starting to create a credit bubble
following a 35% year-on-year increase in
unsecured lending to households for
February 2012.
A culture that prizes high-end brands and other
aspirational choices is also
developing in Zimbabwe. Buying labels is good
if one has the financial
capacity to do so. The dangers of borrowing to do
so are also increasing. I
am alarmed when civil servants have to increase
credit facilities for
clothing, particularly at a time cheaper alternatives
are available from the
world’s factory, China or other emerging factories in
Vietnam and Thailand.
The dangers of uncontrolled credit in an
economy enjoying newly found
stability like Zimbabwe needs to be continually
highlighted to consumers.
Tafirenyika Makunike is the chairman
and founder of Nepachem cc
(www.nepachem.co.za), an enterprise
development and consulting company. He
writes in his personal
capacity.
Readers Comments (0)Add Comment
http://www.theindependent.co.zw/
Thursday, 31 May 2012
17:16
WE were intrigued by Media, Information and Publicity minister
Webster Shamu’s
remarks that his ministry was crafting legislation to
criminalise the use of
hate speech by local media and what he termed “pirate
radio stations”
domiciled abroad.
How long has he had to outlaw hate
speech in his own media? The Sunday Mail
is happy to lend itself weekly as a
platform to abuse civics and
journalists. Why has he let this pass him
by?
What he calls “pirate stations” are needed so long as the
so-called public
media continue to mislead the public about the situation in
the country. It
would cost nothing for him to comply with a cabinet
directive to open up the
airwaves. They also need to introduce professional
standards in the public
media.
Why is a party that won the last
election denied access to the media so Zanu
PF spokesmen can continue to use
it for partisan purposes?
The public media should be open to a variety of
opinions so voters can make
an informed choice at the
polls.
It was interesting to hear UN
human rights commissioner Navanethem Pillay
make the useful point that the
Zimbabwe Media Commission seems more
concerned with controlling and
censoring media than promoting freedom of
expression.
We noted
the ZMC said nothing when a gang of thugs called the Political
Prisoners,
Detainees and Restrictees Association threatened to attack
vendors of
NewsDay and the Daily News if they “demonised” President Mugabe.
The papers
were given a month to find something positive to say about
Mugabe, it was
reported –– a challenging task!
Shamu has asked MPs to support his
legislation. What they need to say is
their support will be conditional on
compliance with Section 20 of the GPA
which includes reconstitution of the
Broadcasting Authority of Zimbabwe
board. It’s as simple as
that.
Meanwhile ZBC’s political
“analysts” this week emerged from the woodwork to
lambast Prime Minister
Morgan Tsvangirai for saying the Broadcasting
Authority of Zimbabwe (BAZ)
board appointments were flawed, describing
Tsvangirai’s sentiments as
“misplaced and mischievous” and bent on
tarnishing the image of the
country.
This comes after Shamu had “clarified” to the Parliamentary
Portfolio
Committee on Media, Information and Communication Technology that
the
appointments were done in accordance with the Parliamentary Standing
Rules
and Orders Committee, says ZBC.
The usual coterie of
talking heads were on call to defend Shamu’s stance.
First off was Goodson
Nguni who castigated Tsvangirai for the “unwarranted
noise” over the BAZ
board given the fact that the appointments were done
according to Section 4
of the Broadcasting Services Act.
Another analyst, Alexander
Kanengoni, said Zimbabwe is run by a constitution
which clearly states that
the BAZ board is appointed by the Minister of
Media, Information and
Publicity in consultation with the president.
Despite stating that
Shamu needed to consult President Mugabe, Kanengoni
conveniently overlooked
the fact that the president was among the principals
who had directed Shamu
to reconstitute the board.
Shamu said without restrictions the media
industry was susceptible to
monopolies, oligopolies and other combinations
that hurt media diversity. It
seems Shamu’s idea of media diversity is two
more Zanu PF-aligned radio
stations.
Also of note was Tendai
Biti’s claim that a small group of powerful
Zimbabweans have grown so rich
they can afford to fly around in private
jets. “There is no doubt that a
small coterie of individuals is benefiting
from Zimbabwe diamonds,” he said
last week at a workshop.
Beneficiaries are not afraid to flaunt their
new-found wealth, he said,
while ministers like himself earn only US$800 a
month. Now who could have
been talking about flaunting their
wealth?
We would be keen to know if
Patrick Chinamasa feels content with his mission
last week to manage
Pillay’s visit. That was obviously his self-appointed
task. This all stems
from a meeting of the UN Human Rights Council in Geneva
a few months ago.
Chinamasa volunteered on that occasion to invite the UN to
visit Harare.
Which explains his shepherding Pillay around and repeated
emphasis that she
was a guest of the Zimbabwe government.
But things weren’t entirely
straightforward. Venues chosen for meetings with
NGOs were rejected by NGOs
as unacceptable. And bogus pro-Zanu PF NGOs who
met Pillay at
government-appointed venues weren’t taken seriously. Then a
story was
circulated claiming Pillay’s conclusions had been reached before
she arrived
in Zimbabwe. This was just plain daft, not to mention insulting.
A former
judge, she was perfectly capable, as we soon discovered, of
reaching her own
conclusions.
What emerged in particular was evidence of the large
number of arrests of
civic activists and journalists –– even ministers.
Indeed, the numbers of
those arrested confirmed the impression of a police
state.
Within a day of Pillay’s departure, MDC-T officials reported
the death,
allegedly by Zanu PF thugs, of Cephas Magura in Mudzi. This
followed the
disruption of a MDC-T rally.
Pillay would have had
difficulty ignoring this incident even though it took
place after her
departure. Just a couple of days earlier Chinamasa had said
it was okay for
the army to participate in politics. She made it clear that
was not okay
with her!
It might be a good idea to send
Chinamasa to Mali. That would be a good way
to show him what happens when
the army meddles in politics.
If there was any contest then Chinamasa
takes the plaudits for the most off
the wall comments when he said army
generals have a right to meddle in
politics by virtue of having fought for
the liberation of the country, the
Standard reports.
Chinamasa
said by making political statements, generals were merely
“pointing out the
way” they wanted the country to be ruled.
“The army people were
liberators and you cannot deny them the voice to keep
this country on
course, so that there is justification for those who died
for the country
and those who lie in unmarked graves,” he said.
Chinamasa claimed
that the political statements by generals were meant to
serve as a warning
that returning the country to colonialism and opposition
to the land reform
programme were unacceptable.
“For any country to be called a
democracy, its army must observe strict
political neutrality, Pillay had
said. “As the GPA clearly says, state
organs and institutions do not belong
to any political party and should be
impartial in the discharge of their
duties.”
A Justice minister, of all people, believes the nation
should be held to
ransom by a cabal of securocrats against the will of the
people. Cry, the
Beloved Country
indeed!
What on earth is going on
at the Sunday Times? They have become cheerleaders
for tearful Walter
Mzembi. “Under Mzembi’s three-year old watch, Zimbabwe’s
tourism is slowly
turning around after a decade-long battering induced by
the country’s
economic decline,” the paper declared last weekend.
Mzembi last
week celebrated the latest figures from the World Travel and
Tourism Council
which confirmed Zimbabwe’s new-found return to glory, it
said.
“Zimbabwe
is now the fastest growing industry in the world, second only to
China,”
Mzembi was quoted as saying. But the question everybody is asking:
Will the
energetic minister survive elections projected for next year? The
Herald
carried a front-page picture on Tuesday of UN World Tourism
Organisation
secretary general Taleb Rifai being welcomed at Victoria Falls
by Mzembi and
Ignatius Chombo. They signed an “historic tourism
deal”.
On the same page of the
Herald there was a report on the murder of MDC-T
official Cephas Magura. The
MDC-T said he was its Mudzi North chairperson
and alleged he was severely
assaulted by Zanu PF supporters at Chimokoko
Business Centre.
Dr
Rifai, we assume, reads the newspapers. Mzembi was elected president of
the
African Travel Association at the Victoria Falls conference. We were
interested to note that Jomic and the three parties in the GPA chose this
week to distance themselves from Chipangano. This newspaper drew attention
to the link between Zanu PF and Chipangano several months ago, describing it
as a criminal gang. Only now have they acted.
As for the dramatic
growth in tourism, that comes from a very low base. Just
look around and see
how many tourists you can spot outside the Victoria
Falls. You can count
them on one hand. Where did this dubious report
originate? China’s tourism
growth is admittedly huge. Zimbabwe’s manifestly
isn’t. “Return to glory”
indeed!
Does anybody remember what it used to be like in the 1980s?
You couldn’t
move for Brits, Americans and Australians. Now they have all
gone to Zambia
and Namibia.
And by the way, Rhodes didn’t dream
of a road link to Cairo as the Herald
suggested. It was a rail
link.
ZBC subjected their hapless viewers
to yet another lickspittle news item
involving President Mugabe. They always
seem bent on outdoing themselves.
“On Saturday morning African stars and
Zimbabwean soccer legends trooped to
State House where they were hosted by
the country’s first citizen just
before the Benjani Mwaruwari testimonial
match,” fawned ZBC.
While the focus was on Mwaruwari, one man was
“finally living his own dream”.
“At 62, Cosmas Zulu, affectionately known in
football circles as Tsano,
could not hide his joy at meeting President
Mugabe in person for the first
time,” we are told.
“Sixty two
years your excellence (sic) I have waited for this moment, 62
year (sic),
thank you your excellence, thank you for having me to finally
meet you in
person,” gushed Zulu.
ZBC went on to state that getting a handshake
and a hug would have been
enough “but Zulu got more than he had bargained
for and after decades he
finally sat down with his hero for a photo
shoot”.
“Even if I die now I have met my president,” Zulu
fawned.
Adding to the sycophancy ZBC opined: “Cde Mugabe appeared to be
saying to
Tsano: ‘Not yet my boy, remember you are 26 years my junior and
here I am,
you can go on’.”
At the same event President Mugabe
revealed he is a fan of Spanish side
Barcelona and newly-crowned European
champions, Chelsea.
“When I watch soccer, I do not want anyone to disturb me.
Even my wife knows
where to sit because while they are scoring in the field
I will also be
scoring at home, kicking everything in front of me,” Mugabe
said.
Finally the Huffington Post
came up with some infamous football fans.
Osama bin Laden was an Arsenal fan.
Bin Laden attended four matches at
Highbury in the 1990s while living in
England looking for funds to finance
his operations.
Al-Saadi
Gaddafi, the third son of former Libyan leader Muammar Gaddafi, was
a
Juventus fan. The one-time captain of the Libyan national football team,
Saadi was on the board of the Bianconeri before he stepped down to join
Perugia.
Benito Mussolini, the Italian fascist dictator,
supported Bologna FC.
Mussolini “helped” his club win four Italian league
titles between 1925 and
1937. The Rossoblu were bankrolled by the local
Fascist administration and
the head of the Italian Football
Federation.
Adolf Hitler supported Schalke 04. Hitler may have bombed
Old Trafford, but
he was not a Manchester City fan. The Fuhrer had a soft
spot for Schalke,
who, funnily enough, were German champions six times
between 1933 and 1945.
http://www.theindependent.co.zw/
Thursday, 31 May
2012 17:13
MANY constraints continue to impair substantial economic
recovery which is
critically for Zimbabwe. The recovery is a prerequisite
for the reduction
of poverty and hardships suffered for long by more than
two-thirds of the
population, and restoring overdue wellbeing and happiness
for a deserving
but presently ill-fated people.
The constraints range
from afflictions of nature, with climatic conditions
negatively impacting
upon agricultural production necessary to feed the
nation and generate
export revenue, to the numerous economic recovery
hurdles created by
politicians.
The hurdles include major deterrents to investment
created by Zimbabwe’s
ill-conceived indigenisation and economic empowerment
legislation and
policies, instead of pursuing the attainment of
comprehensive economic
indigenisation and economic empowerment through
constructive enabling
policies. The hurdles also include excessive
bureaucracy, lack of
administrative devolution, unaccommodating tax
legislation, pronounced
corruption and political
instability.
However, one of the main economic recovery constraints
is the paucity of
service delivery by Zimbabwe’s parastatals. Energy
supplies, vital for the
effective operation of industry and commerce,
mining, agriculture and other
economic activity and for the morale and
wellbeing of the populace, are
inadequate and extremely erratic. The same
applies to the provision of
other essential utilities, and to the operations
of the National Railways of
Zimbabwe, Air Zimbabwe, TelOne, and many other
parastatals.
The tendency of the population is generally to attribute
the deficiencies of
the parastatals to negative management. However such
management is mostly
unduly blamed for every attempt is made, albeit
unsuccessfully, by such
management to maximise service delivery. However,
they are grievously
hampered from achieving optimum service delivery they
know is required by
circumstances beyond their control. Those circumstances
are generally
created by government which fails to acknowledge its
culpability and
counterproductive policies.
First and foremost
Zimbabwe’s governments over many years have failed to
provide parastatals
with the capital resources essential for viability of
operations.
Businesses cannot operate productively if they are not
adequately
capitalised, and that is so of almost all Zimbabwe’s parastatals.
In the
absence of capitalisation they struggle to exist with ever-increasing
accumulation of debt and attendant burdensome finance costs, inability to
retain capable and competent personnel. They also fail to maintain,
rehabilitate, refurbish and upgrade their operational infrastructure, plant,
machinery, vehicles and other assets essential to continuing sound
operations. They are also frequently hampered by ill-considered
interventions of the political hierarchy.
Hardly anywhere in the
world have parastatals been able to provide
excellence of service on an
ongoing basis. This is due to the absence of
continuity of control given
periodic changes in governments, ministers and
those of the public service
that handle the state’s interactions with
parastatals. This was so several
decades ago with telecommunication, rail
and other services such as British
Gas, British Airways, British Rail, and
many other parastatals in the United
Kingdom. It applied similarly to many
of the parastatals in the United
States, France, Italy and elsewhere.
But, with very rare exception,
the parastatal enterprises were radically
transformed and became successful
and effective once they were
constructively privatised. That was also the
case when, in the 1990s, the
Zimbabwean government temporarily recognised
the need and desirability for
privatisation with the then successful and
effective privatisation of
Zimbabwe Reinsurance Company, Dairy Marketing
Board (now Dairibord Zimbabwe
Ltd), and a few others. Tragically, despite
the successes of those
privatisations, government reversed its privatisation
policies resulting in
the retention of many parastatals, most of which are
in dire straits, unable
to meet the needs of the economy and the
populace.
Recently there has been talk, and limited action, in
pursuing privatisations
of the parastatals (including the possible, but
repeatedly on/off disposal
of Ziscosteel). The Minister of State
Enterprises, Gorden Moyo, must be
commended for his sound judgment in
recognising the need for privatisation,
although others in government
continue to place obstacles in his endeavours
to pursue such action. The
time has come, and is actually long overdue, for
his government colleagues
to recognise realities.
They must become willing to release the
reins which they have so
determinedly sought to retain over the parastatals,
whilst concurrently with
retaining total ownership of the parastatal
enterprises, they have failed to
provide the necessary funding required. If
the malfunctioning parastatals
are not expeditiously remedied by
privatisation, the recovery of Zimbabwe’s
economy is, at best, doomed to
attain only very miniscule growth and more
likely to recede and contract yet
again. For such privatisation to be
successful:
Private sector
investors must have not only the resources to assure
recapitalisation to an
adequate extent, but must also have the technological
knowledge, or have
ready access to such knowledge to enable comprehensive
technology transfer
to the parastatals.
The stake in the parastatals to be acquired
by the private sector investor
must be not less than 51% so as to accord
that investor effective control.
The intending investor must be
accorded unhindered ability to conduct a
comprehensive due diligence
evaluation of the parastatal, to such extent as
the investor requires, so as
to ensure that such investor is wholly aware of
all features of the
enterprise, its attributes, constraints, requirements
and
potential.
Government must assume the totality of the large
accumulated debts of most
parastatals, for investors are ill-disposed
towards investing in insolvent
enterprises, and to have those enterprises
confronted with debt-recovery
litigation, or to lawful attachment by
creditors of the assets of the
parastatal enterprises that they are
investing in. Admittedly, such
assumption of debt would be another immense
fiscal burden for the
debt-ridden government.
However, in
part the debts would be eliminated by offset between amounts
owing by some
parastatals to others, and applied in the other parastatals to
the
liquidation of such amounts due to them. Concurrently, government
should
give security to those to whom monies are owed by the parastatals by
creation of programmed, interest-bearing, tradeable bonds, which bonds must
be accorded Prescribed Asset status for financial institutions investing in
such bonds.
To achieve the expeditious and effective
privatisations, government needs to
resurrect the Privatisation Agency
which, during its short life in the
1990s, enabled several successful
privatisations effected to materialise.
http://www.theindependent.co.zw/
Thursday, 31 May 2012 17:08
Clive
Mphambela
ALTHOUGH the advent of the multicurrency regime saved
Zimbabwe’s economy
from total collapse at the height of the economic
meltdown and
hyperinflation, it has emerged the move has also brought with
it new
dynamics and behavioural changes within the corporate sector still
trying to
adjust and cope with the altered environment.
Adoption of the
multiple currency system in February 2009 resulted in the
Zimbabwe dollar’s
hyperinflation era coming to an end, as people gained
lawful access to
foreign currency, which is now local by certain standards.
Stashes of
currency “externalised” in foreign bank accounts suddenly became
accessible
as the market started formally absorbing the multicurrency regime
which
actually saved the economy from descending into unmanageable chaos.
Even
those who often pretend to be more patriotic than others and would want
to
cling onto symbols of Zimbabwe’s sovereignty — including the now defunct
local dollar — had no choice but to embrace foreign currencies for their own
and the nation’s survival.
While Zimbabweans were still trying to
adjust to the formal use of foreign
currencies, local companies went into an
import overdrive and all manner of
once scarce goods flooded the market and
shops, while prices stabilised.
However, the new era of perceived
plenty has also brought with it new
circumstances whilst at the same time
exposing certain realities about
Zimbabwean companies.
For a long
time, most companies could not refurbish their plants and
equipment and
could therefore not meet the rapidly expanding demand for
goods and
services. The companies were operating at between 15% and 20%
capacity,
whilst a few were within the 30% range. Most goods in the country,
from
essentials like cooking oil, tinned foods to potato crisps, were
imported in
huge quantities.
Companies such as Olivine and Cairns, for instance,
faced a plethora of
challenges trying to restore basic viability in view of
a flood of cheaper
imports and problems of recapitalisation, as well
obsolete machinery and
equipment.
As corporate Zimbabwe tried to
restore normalcy in the market, most
companies lost the urgency to generate
real foreign currency as they used
to. With the US dollar virtually
replacing the liquidated Zimbabwean dollar
as the national currency, few
companies are now working hard to build
foreign currency
reserves.
US dollars earned from trading locally can not strictly be
considered as
foreign currency as this is now merely a new medium of
exchange since
Zimbabwe adopted the multicurrency systems, with the US
dollar dominating
the market.
“The country needs to generate
money from outside in order for wealth to
grow,” said a leading fund
manager. “Money generated from local trade is
simply a medium of exchange
being circulated, not foreign currency.”
The fund manager said
businesses in the country have suddenly lost the urge
to innovate by
developing export markets and offshore operations which was
imperative for
long-term survival before the multicurrency system.
“Foreign currency
generation strategies disappeared from boardroom
discussions and day-to-day
meetings. The real tragedy in all this is that
all Zimbabwean companies
think that it is the next guy’s problem to export
and earn ‘foreign
currency’ for their needs because of the multicurrency
regime,” he
said.
Prominent economic analyst Eric Bloch thinks the reason most
Zimbabwean
companies are not exporting has nothing to do with the
availability of
foreign currency locally.
Bloch said Zimbabwean
companies found themselves seriously undercapitalised
because their entire
capital base was eroded during the hyperinflationary
era when plant and
equipment depreciated and could not be replaced.
“Zimbabwean
companies do not have the funding they need to retool so that
their
production reaches levels at which they can compete against foreign
firms,”
said Bloch.
“Their volumes are low and there are no economies of
scale to talk about.“
He said the country needs a combination of
import controls through a sound
tariff regime, whilst exports are
aggressively promoted via appropriate
incentives.
“We need to
introduce high tariffs on those goods that are available locally
so that
people can still have access to imported substitutes, but traders
compete on
quality rather than price,” he said.
Bloch said the government must
implement measures to make the economy more
liquid, but needs to do this by
attracting more foreign investment.
“We also need realistic export
incentives such as at the 15% export
retention scheme that we used to have.
For example, China gives back 180% of
wage costs to some of its exporters as
an incentive as soon as they dispatch
goods. They virtually have zero labour
costs. Zimbabwe has to offer export
incentives within the scope and realm of
agreements such as the WTO (World
Trade Organisation),” Bloch
said.
University of Zimbabwe Graduate School of Business Professor
Tony Hawkins
said the multicurrency was a “breath of fresh air”.
“It was
a breath of fresh air and brought the realisation that firms had to
be
efficient to compete. Companies could no longer rely on a constantly
depreciating Zimbabwe dollar to give them an edge in export markets or to
price imports out of the market. Instead, firms had to switch from
price-setters to price-takers,” he said.
Hawkins said that firms
like Delta, recognised strategies to exploit
temporary distortions, such as
buying Ariston, were not viable long-term
strategies for a beverage
firm.
“Delta has since gone back to its core business and that is a
useful
strategy. In the past, when it diversified it was less successful,”
he said.
Hawkins, however, said it was true that because foreign currency can
now be
obtained from the bank, firms are less focused on generating their
own hard
currency.
Zimbabwe has always relied on a relatively
small number of export-driven
firms, mostly in mining and agriculture, along
with tourism. The
manufacturing sector has never been able to produce
significant exports to
generate foreign currency, except cotton, sugar and
ferrochrome, he said.
Hawkins argues export growth will depend on
international competitiveness
and on exploiting comparative advantage.
Zimbabwe’s advantage lies mostly in
minerals and agriculture, but farm
competitiveness was seriously damaged by
land reform while mining
competitiveness is being undermined by the
indigenisation policy.
Electricity supply problems and escalating input
costs, including rising
wages, are exacerbating the situation.
Hawkins said resorting to
import controls to bridge the trade deficit gap
and balance of payments
imbalances is a bad idea and unsustainable because
of the treaty obligations
under trade agreements with Sadc, Comesa and the
WTO. Import controls, he
said, breed uncompetitive firms with high costs.
They also foster corruption
and impose a burden on an already over-stretched
public
service.
Hawkins said export promotion is a better option but the
government is
operating under very tight budget constraints and it is not
easy to suggest
incentives that do not cost the fiscus, either in terms of
reduced revenues
or increased spending. He suggested making the country an
attractive low
cost investment destination would boost exports and inward
revenue flows in
the medium to long term.
http://www.theindependent.co.zw/
Thursday, 31 May 2012 16:59
Pedzisai
Ruhanya
FROM Latin America to Asia and from eastern Europe to Africa,
long
entrenched dictatorships have given way to elected civilian
governments. The
outcomes of recent transitions are clear, but nations
emerging from
dictatorships face formidable challenges as they seek to
establish or
restore the rule of law.
Zimbabwe is grappling with a
similar situation after three decades of a
Stalinist-type dictatorship in
which the military, the police and spy
agencies have been meddling in the
electoral and political affairs of the
country, working hand-in- glove with
Zanu PF.
It is important for Zimbabwe to learn about the toxic role
of the army in
political and electoral affairs elsewhere, and how such
regimes became
unacceptable. For instance, military dictatorships in
Argentina and Chile
were once formidable but with the fall of their
communist allies in eastern
Europe, democracy is slowly being restored in
Latin America.
The fall of the Soviet Union in 1990 also saw a wave
of struggles that saw
the birth of newly independent and democratic states,
while in Africa once
autocratic states like apartheid SA gave way to
democratic rule and
dictatorships like Kenya under President Daniel Arap Moi
finally crumbled.
In Zimbabwe, from the Gukurahundi massacres in the
1980s, the 2000 violent
elections, 2002 disputed presidential poll to the
bloody 2008 presidential
poll run-off, people have been enduring and
resisting the military’s
involvment in politics in a bid to rescue of
President Robert Mugabe and
Zanu PF.
Most of the critical players
in this well-defined culture of violence and
the military’s involvement in
the electoral and political affairs of
Zimbabwe still remain in civilian and
military employment. They have not
been brought to account and they seem to
believe nothing will happen.
The military in Zimbabwe has taken the
role of political game- changer,
violating their constitutional obligations
with impunity by involving
themselves in partisan politics and human rights
violations.
Army generals and other securocrats have made partisan
statements blatantly
threatening Zimbabweans, that their vote would not
count if it goes against
Mugabe and Zanu PF. They have gone beyond mere
statements to campaign
publicly for Zanu PF while in military uniforms, a
role that cannot be
associated with a professional army.
Past
elections have shown that the military, the secret agents and the
police
have always come to the rescue of Zanu PF when everything else had
failed.
They are the vanguard of the ruling elite’s continued stay in
power.
The violence that has marred previous elections was partly
unleashed by the
security apparatus. The failure to arrest and prosecute the
culprits of
violence confirms this unholy alliance of the security apparatus
and Zanu
PF.
The late Masipula Sithole described this as the
“margin of terror” when he
accounted for Zanu PF’s narrow victory in the
2000 elections that were
marked by abductions, arson, enforced
disappearances and assaults against
MDC supporters and
sympathisers.
The struggle of democratic forces against the partisan
role of the military
in the country’s political and electoral affairs got a
huge boost from the
preliminary findings of the United Nations High
Commissioner for Human
Rights Navanethem Pillay when she made robust
observations during her
five-day mission in Zimbabwe.
Pillay’s
pronouncements are common cause to the majority of people in
Zimbabwe who
live under this de facto military state with its civilian Zanu
PF de jure
leadership. What is critical, however, is the meaning of her
preliminary
observations.
Pillay is a representative of the UN and its organs
such as the Security
Council and General Assembly, two critical bodies that
can make far reaching
decisions against both member and non-member states in
situations where both
international human rights law and international
humanitarian law are
violated. Her findings will influence how the
international community treats
Zimbabwe, especially relative to the conduct
of elections.
Second, in her preliminary pronouncements before she
left Zimbabwe, Pillay
said concern is rising both inside and outside the
country that unless the
parties agree quickly on some key reforms and there
is a distinct shift in
attitude, the next polls could turn into a repeat of
the 2008 elections
which resulted in rampant politically motivated human
rights abuses
including killings, torture, rape, beatings, arbitrary
detention,
displacements and other violations.
What this means
is that any form of extra-judicial and extra-legal
activities like the
partisan role of the security apparatus will lead to a
disputed poll whose
results would not be acceptable. This warning should
send a serious message
to Mugabe and his political strategists that the
world is watching and like
in the Srebrenica massacres in the former
Yugoslavia, the culprits will be
called to justice in international courts
of justice no matter how long they
hide and survive with impunity. Pillay in
fact has grave reservations about
Zimbabwe’s election preparedness.
Although Pillay was diplomatic, it
should be clear to Mugabe and partisan
members of the security forces that
the world is aware of what they are
doing.
Pillay said: “I have heard
much concern expressed about the role of the
military, including a recent
statement by one of the country’s most senior
army officers suggesting the
army should throw its weight behind one
political party — when for any
country to be called a democracy, its army
must observe strict political
neutrality”.
She went on to quote the GPA which clearly says: “State
organs and
institutions do not belong to any political party and should be
impartial in
the discharge of their duties”. The likes of Major Generals
Martin Chedondo
and Douglas Nyikayaramba and their blind military followers
should take
heed.
Chedondo and his colleagues should know that when they
order soldiers at
passout parades to support Zanu PF and to be involved in
political and
electoral affairs, they are acting illegally.
The
world is watching.
Mugabe has an opportunity to stop this rot. The UN
and the rest of the world
are waiting to take action against violations of
international human rights
and humanitarian law by those who purport to work
for Mugabe. The signs are
all there.
Ruhanya is a PhD Candidate on Media
and Democracy studies at the University
of Westminster, London.
http://www.theindependent.co.zw/
Thursday, 31 May 2012
16:56
Dumisani Nkomo
POST-Independent Africa has experienced the
phenomena of one-party states
and rule characterised by the emergence of
“strong men”, most of whom where
heroes of the anti-colonial struggles for
Independence.
Some countries had de jure single-party systems in
which opposition parties
were banned by law, while other nations had de
facto one-party arrangements
in which one party dominated and the opposition
could not gain power due to
those circumstances and attendant
practices.
Most countries in sub-Saharan Africa were one-party states
after
Independence. The one-party systems and usually concomitant “Dear
Leader”
mentality were prevalent in countries such as Angola, Benin,
Cameroon, Chad,
Ivory Coast, Equatorial Guinea, Ethiopia, Gabon, Ghana,
Kenya, Malawi,
Madagascar, Mali, Mozambique, Rwanda, Senegal, Sierra Leone,
Sudan,
Tanzania, Togo, Uganda, Zambia and the DRC (when it was still
Zaire).
After the abolition of reserved white seats in 1985 and
signing of the 1987
Unity Accord between Zanu and Zapu, Zimbabwe became a de
facto one-party
state, although attempts to make it a de jure single-party
system were
fiercely opposed and defeated.
However, things are
changing fast. Most African countries, perhaps with the
notable exception of
Eritrea, have become multiparty systems, some at least
in
theory.
Before all the changes currently taking shape, dictators —
including
military strongmen — had emerged across the continent. These-post
Independent regimes created a culture of monolithic, monopolistic and
dictatorial political systems built around powerful political parties and
usually enigmatic despots.
Political diversity and plurality were
at best frowned upon and at worst
ruthlessly crushed. The growth of
opposition parties and civil society was
thus stunted in most parts of
Independent Africa. This was exacerbated by
the perpetuation of the colonial
legacy of repressive frameworks and
legislation which criminalised civil and
political liberties, including
freedoms of expression, association and
assembly.
Opponents of dictators were ruthlessly crushed, while the
democratic and
public space for debate and dissent were severely restricted.
It is in this
historical context that opposition political parties and civil
society
organisations emerged and evolved in post-Independent
Africa.
Context and typography of states
Civil society
organisations and opposition parties most often occupy similar
spaces in the
public domain although they exist for different reasons.
Political parties
exist to gain, secure, retain and maintain power. Civil
society groups aim
to influence those in positions of power so that voices
of marginalised
communities are amplified and the interests of various
societal sectors such
as minorities, women, youths and informal traders,
among other interest
groups, are clearly promoted and protected.
Failed
states
Countries such as Somalia are largely failed states epitomised
by a
collapsed central governance system, inability of the government to
maintain
law and order, provide social services and to protect the state
from
internal and external threats. They have a congenital incapacity to
deliver
basic services.
Post-conflict
states
Critically countries such as Kenya are typical examples of
nation states
that have experienced intense conflict and violence in the
context of
electoral contests and are currently transitioning to full
democracy through
transitional justice, constitutional review and fresh
processes and reforms.
Arguably Lesotho and Zimbabwe fall under a similar
bracket of transitioning
nation states whose political destiny may be
abortive or successful. The
context and conditions in which civil society
exists has thus been poisoned
with post-conflict contestations for political
power. In Zimbabwe,
Madagascar and Kenya, inclusive governments exist due to
disputed elections.
The governments in these countries are a result of
disputed elections
preceded by organised political violence and massive
voting irregularities
and manipulation of the electoral processes by
incumbents.
Emerging democracies
A number of countries
have evolved into fairly robust democracies epitomised
by democratic
constitutions and institutions, regular free and fair
elections, change of
government and peaceful transfer of power. This was the
case in Zambia,
Ghana and Senegal where elections have resulted in regime
change, a term
that has been criminalised in Zimbabwe but which is common
and in fact best
practise in the pursuit of democracy.
Civil society and
opposition parties are very strong in these countries and
this could be
attributed to the abundant space which is available due to
factors such as a
positive, democratic culture and environments as well as
enabling
legislation. It is critical to be cognisant of why opposition
parties are
strong in some countries and why they are weak in others in the
same way
that it is critical to understand and appreciate why civil society
is strong
in some countries and weak in others. Yet in other counties civil
society is
strong but opposition parties are weak.
Democracy in one-party
states
Several countries have opened space to political pluralism,
citizen
engagement, adherence to human rights and democratic institutions
but these
countries have been ruled by the same parties since Independence.
Opposition
parties could be said to be weak in these counties whilst civil
society is
fairly strong.Incumbent ruling parties have adapted to democratic
conditions
and contexts to maintain power. This is the case in South Africa,
Botswana,
Mozambique and Tanzania.
These countries have been
ruled by one party since Independence and this
could be attributable to
factors such as internal democracy within these
political institutions and
leadership renewal. South Africa has had three
presidents since freedom in
the 1994, namely Nelson Mandela, Thabo Mbeki,
Kgalema Motlanthe (interim)
and Jacob Zuma. Botswana has had Seretse Khama,
Quett Masire, Festus Mogae
and Ian Khama. Mozambique has also been fairly
consistent in its leadership
renewal together with Tanzania where the ruling
Chama Cha Mapinduzi is
facing a stiff challenge from the opposition Chadema
party.
Political/military dictatorships
In these
countries dictators have held on to power for more than two
decades. In this
bracket is Zimbabwe under President Robert Mugabe, Uganda
under Yoweri
Museveni and Angola under José Eduardo Dos Santos. In these
countries the
space for opposition parties has been severely limited and
this is
compounded by internal structural weaknesses intrinsic to the design
and
architecture of opposition parties as well as prohibitive external
factors
created by the dictatorial regimes.
Civil society has however
thrived in these difficult conditions and has
actually offered alternatives
leadership in most of these countries. In
Zimbabwe six elections, including
one referendum, have been held since
2000. Elections are held regularly but
this proves that polls are not in
themselves a reflection of democracy when
the fundamentals of a
participatory democracy characterised by imperatives
such as media
plurality, respect for fundamental rights and freedom of
expression,
association and assembly are not promoted.
The
growth, development and evolution of civil society and opposition
parties
must thus be understood, appreciated and analysed within the context
of
changing political contexts, shrinking space for free political activity
and
structural transformation in the political architecture of emerging
African
democracies such as South Africa, Ghana and Senegal. Important
lessons can
be gleaned from the peculiar experiences of different African
countries and
strategic linkages established across borders between civil
society as well
as emerging democratic movements across the continent.
This
article is part of a presentation made by Dumisani Nkomo at a civil
society
and political trends meeting in Arusha, Tanzania. Nkomo can be
contacted on
dumisani.nkomo@gmail com.
http://www.theindependent.co.zw/
Friday, 01 June 2012
10:07
Dumisani Muleya
AS Sadc leaders meet today in Luanda,
Angola, to discuss, among many other
issues, Zimbabwe’s political and
security situation, there is need for a
tee-total assessment of what is
happening in the country and in that regard
what is to be done going
forward.
Already there is heated debate at home, in the region and abroad
about what
should happen or is likely to happen in Zimbabwe in the months
ahead. The
debates are becoming increasingly robust as the hype about
elections
intensifies.
President Robert Mugabe and Zanu
PF have of late seized the initiative,
setting the agenda by demanding the
fast-tracking of the constitution-making
process to facilitate early
elections. He has even threatened to
unilaterally call for elections if the
constitution-making process –– which
has been going on since April 2009 ––
drags on.
The exercise is currently stalled after party
consultations. At this point
let’s start from the beginning. The GPA, signed
in September 2008, is the
basis of the inclusive government whose lifespan
is not stated in the
document. We are now talking about facts, not
politicking. Not sophistries,
deception and lies.
Parties left
open the duration of the GPA government after haggling because
they did not
want to ignite electioneering while defeating the objective of
restoring
political and economic stability. Zanu PF wanted it to be five
years, others
less. There was an unwritten understanding elections would
come after a new
constitution even though there was a possibility of the
draft being rejected
at the referendum but parties had to work together to
achieve this.
Everybody understood that.
The reason why this was important was
because election disputes in the past
decade centred on the constitution,
political violence and manipulation of
results.
That is why a new
constitution and electoral reforms had to be produced
before the 2008
polls.
Peaceful elections were held in March 2008. There was a hung
parliament.
That combined with the outcome of presidential elections in
March before the
bloodbath in the June run-off rejected by Sadc and the
international
community necessitated the GPA and resultant inclusive
government. So the
understanding was that after the GPA and attendant
reforms, including a new
constitution, Zimbabwe would go to credible, free
and fair elections.
This being a political, and indeed a social
process, not everything could be
written down. History, context and subtext
would provide a complete
understanding of the situation. However, the GPA
parties and stakeholders
have different interpretations of
this.
Mugabe and his loyalists, for instance, now claim the GPA has
expired; the
inclusive government is dysfunctional; the constitution-making
process doesn’t
have a causal link with elections; polls must be held this
year so that
Zimbabwe puts behind it this decade of conflict and doesn’t
disrupt the
farming season; and since efforts to come up with a new
constitution are
stalled polls must be held this year. Except for blatant
misrepresentations,
some of these assertions make perfect sense on the
surface but only until
you look deeper, scrutinise and ask pertinent
questions.
Why all this rush from Mugabe and Zanu PF? Does it have
anything to do with
national interest, democracy or his old age, health,
succession, diamonds or
what has been happening internationally like the
murder of Muammar Gaddafi
and conviction of Charles Taylor at The
Hague?
Why is Mugabe now refusing to adhere to the GPA and the
roadmap, while
secretly sending envoys to Sadc? Is he agitating for
elections because he
genuinely wants to serve the national interest? What
makes him think he will
win the next elections given his record of failure?
What happens after the
elections?
So at their meeting today Sadc
leaders must be wary. Zimbabwe must prepare
properly and adequately as UN
human rights chief Navi Pillay said last week.
We want free and fair
elections which will produce legitimate winners
congratulated by losers. It
would be tragic for Zimbabwe to rush to disputed
elections again and spend
almost two decades fighting about election
outcomes.
There is
time to get it right if there is political will and serious
leadership.
Lawyers say Zimbabwe’s current parliament can constitutionally
and legally
last up to June 28 next year and elections can be held by
October 28, while
Mugabe could be there until November next year. So there
is time to do the
right thing and get it right once and for all instead of
rushing to
elections and reproducing the 2008 fiasco, conflict and perpetual
talks for
a negotiated settlement.
Zimbabweans and the world must demand
maturity from our leaders. Somehow
this madness must cease. We must stop
this madness now and get serious with
ourselves and issues for the sake of
the nation.
dumisani@zimind.co.zw
http://www.theindependent.co.zw/
Friday, 01
June 2012 10:04
Itai Masuku
IT was interesting to note that
government insists that Rio Zim, a company
that was on the brink of
collapse, should be indigenised, now that foreign
investors in the form of
GEM Raintree have been brought on board.
Well, why didn’t the
Empowerment ministry buy the stake that has now been
bought by GEM? Surely,
if they had injected capital, there would be no
qualms in future about their
involvement. This indigenisation grandstanding
sometimes gets to be too
much.
If we are going to go indigenous, let it be all the way then
and have
nothing to do with our Caucasian counterparts. For instance, if you
go the
Black American lobby, theywill tell you that black women ought to
boycott
Dark and Lovely products because they were apparently invented by a
family
of brutal slave traders.
Using black slave women as guinea
pigs, Dark and Lovely had unfettered
experiments towards products that could
“improve” African women, by making
their hair straight as that of their
white counterparts or making their
skin colour closer to that of their
white colleagues.
In fact, there would be no reason why black people
should bank with
Barclays, because John Barclay, the founder of the bank,
made his fortune
from selling black slaves and with the piles of cash he was
sitting on from
this lucrative business, started lending European merchants
and any other
who were interested in doing business to the New
World.
The same people proudly wear Tommy Hilfiger products, whose
owner is
prejudiced against black people, should not wear them because they
are not
human. It is very interesting that people can easily get sidetracked
with
the irrelevant.
What is clear in the case of Zimbabwe is
that we have never followed the
doctor’s orders insofar as sorting out our
economy and therefore have been
bound to be ill and then go on a witch-hunt
seeking those who cursed us. Yet
we brought this on
ourselves.
And as previously noted, the West, the IMF and World Bank
are normally our
scapegoats. But like them or hate them, the Bretton Woods
institutions have
been fairly accurate in their assessment of economies and
the routes those
economies ought to take to get out of their
quagmires.
In Zimbabwe’s case, most of the scenarios they predicted
for the country’s
economy during last year’s Article IV Consultations were
fairly accurate.
For instance, long before we saw tell-tale signs of
a liquidity crisis in
the country, the IMF had predicted it. In the
consultations the fund
commented that liquidity risks in the local banking
sector were rising. It
pointed out that liquid foreign assets had declined
and stressed some banks
were facing tight liquidity, ie, the ratio of liquid
assets to short-term
liabilities.
Doctors’ orders are by their
nature not pleasant and prescriptions may even
be worse.
Men in
general, and particularly those of African descent, have what seems
to be
innate dislike for medicine.
How many times do you learn that a male
patient exhibited symptoms for an
ailment long ago, ignored or neglected
them and by the time they sought
help, drastic steps had to be
taken.
On the other hand, men may view women as hypochondriacs who
shoot off to the
doctor at the slightest symptom. But if you consider that
on average women
outlive men, isn’t this hyponchondria
justified?
The truth is the IMFs and World Banks of this world are
organisatons not
only governments but also myriads of independent economic
organisatons would
love to hate but really the problem is with none but
ourselves.
