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Two banks face closure

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

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

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

Interfin founder Farai Rwodzi was unable to comment last night, saying he
was at a dinner. He promised to call back.

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Sadc to reject Mugabe election demands

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

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

“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
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.”

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Mujuru faction reunites

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.

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Tsvangirai takes Khupe to task

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.

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Mpofu attacks KPCS minority

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

“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.

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Zim officials not immune to ICC prosecution

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

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

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.”

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The Hague must indict Bush and Blair, says Zanu PF

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.

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China looks beyond Mugabe

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

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

“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

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
China is engaged in oil extraction in Sudan while in Zambia and Zimbabwe it
is involved in mining copper, diamonds and other minerals.

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Ray lambasts military in politics

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

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

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‘Zim heads for another election bloodbath’

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

“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
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.”

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Women warn against early polls

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

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.

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Mugabe succession gets messier

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

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

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

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.

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Civil servants’salaries politicised

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

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

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

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

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.

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AAG to grill RBZ, foreign banks over empowerment

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.

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Banks call for RBZ re-capitalisation

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.

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New board for NRZ

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

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.

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Greenfuels, Essar deals and incompetent inclusive govt

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
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

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Debt fuels Zim’s desire for consumption

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

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

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

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

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

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
(, an enterprise development and consulting company. He
writes in his personal capacity.
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MuckRaker: A visit to Mali would do Chinamasa some good

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

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

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

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
“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

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.

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Eric Bloch Column: Parastatals constraining economic recovery

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

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.

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Firms lose focus on hard currency

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

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

“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

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.

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Mugabe must read signs of the times

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

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
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
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.

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Evolution of civil society, opposition parties in Africa

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

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.

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Editor’s Memo: Get it right once and for all!

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

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

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

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

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.

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Candid Comment: Indigenisation — Problem lies with none but ourselves

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

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.

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