http://www.theindependent.co.zw/
Friday, 09 March 2012 10:00
Faith Zaba/Chris
Muronzi
THE family of the late army commander General Solomon Mujuru and
business
associates have been locked in a fierce battle with the Dubai-based
Rani
Investment for the control of the hotly-contested River Ranch diamond
mine
in Beitbridge.
The fight for the money-spinning asset took a
dramatic twist last week when
Rani Investment, headed by the Saudi-based
tycoon Adel Abdul Rahman al
Aujan, said it was now negotiating with
government for the sale of its stake
in the mine.
Rani
Investment is the majority shareholder in Limpopo Resources, a company
that
owns 80% of River Ranch diamond mine in which the Mujuru family holds a
20%
stake.
General Mujuru, a Zanu PF politburo member and liberation
struggle hero,
died last August in a mysterious blaze at his Beatrice
farmhouse, 60 km
south of the capital Harare, sparking national outrage
which forced an
inquest into the incident.
Documents of an
indigenisation plan done before Mujuru’s death, seen by the
Zimbabwe
Independent this week, show there was a serious running feud
between him and
Aujan over the indigenisation of the mine.
The documents also reveal
an important detail about a clash between Mujuru
and Aujan in Victoria Falls
in May last year over the mine. Since that day
when Mujuru and Aujan,
initially close friends, quarrelled, the conflict
continued until the
general’s death.
To add to the mystery, Mujuru died the night before
he was due to travel to
Beitbridge with Indigenisation minister Saviour
Kasukuwere to present an
indigenisation plan for River Ranch. mine, which
included a 45% shareholding
for Khuphukile Resources, whose directors are
former Zanu PF legislator
Tirivanhu Mudariki and his daughter, Nyasha Mujuru
del Campo, who has now
replaced him.
Kasukuwere had met Mujuru
two days before his death at Harare Sports Club
where they had discussed the
River Ranch issue.
Mujuru, who had vast business interests across
different sectors of the
economy and also a stake in the much-coveted
Zimplats, wanted to go to
Beitbridge to sort out the issue once and for all
but it was never to be.
According to the indigenisation plan, Rani
Investment was to remain with a
39% shareholding, while 10% would have gone
to the community trust and 6% to
the mine workers.
In a letter to
Kasukuwere dated October 18 2011 and copied to Vice-President
Joice Mujuru,
the general’s wife, and Aujan, Mujuru’s daughter Nyasha says:
“On August 15,
the late General Mujuru intended to travel to Beitbridge to
have a meeting
with you with a view to concluding the River Ranch diamond
mine
indigenisation plan.
“The proposed plan was as follows; Khuphukile
Resources 45%, Rani
International 39%, community trust 10% and workers’
trust 6%. To honour and
fulfill the wishes of the departed general, the
above proposal is hereby
submitted for your approval to you honourable
minister, where 61% of the
shareholding will be held by indigenous
Zimbabweans.”
However, Aujan rejected the plan. The Mujuru family and
Mudariki have been
pushing for changes in the ownership structure in line
with the
indigenisation policy, which Rani International has been
resisting.
Kasukuwere had initiated the plan after writing to Rani
International on
September 2 2010 telling the company to re-submit its
provisional
indigenisation implementation plan. Rani Investment refused to
comply.
Kasukuwere, seen as ally of Mujuru, did not relent. “After
having appraised
your IDG01 form and your proposed provisional
indigenisation implementation
plan, I observed that in your plan you intend
to list on the Zimbabwe stock
Exchange so as to comply with the 51%
indigenous shareholding requirement,”
he wrote back.
“Please note
that listing on the Zimbabwe Stock Exchange does not guarantee
compliance
with the Indigenisation and Economic Empowerment Act
(Chapter14.33) because
the shares can be bought by non-indigenous
Zimbabweans.”
In the
IDG01 document, a form of notification of the extent of
indigenisation, Rani
Investment former Group CEO Kamel Abdallah indicated
that the estimated
value of the business by assets as at April 15 2010 was
US$5
million.
In a letter attached to the form, Abdallah says: “We believe
we are in
compliance with the Indigenisation Act, given that we are a
specialised
sector (mining) and given our previous and current community
development
efforts within our mining area.”
He continued: “We
have also contributed immensely in technological and
skills transfer to
Zimbabwe as well as employing local people. The mine
currently employs local
people in these key operational areas -- chief
executive officer, chief
finance officer and security to mention but just a
few.”
In
another letter dated November 30 2011 to the new Group CEO Salim Bitar,
Kasukuwere once again pressured Rani Investment to comply with
indigenisation.
“I hereby advise you that the indigenisation
implementation plan of River
Ranch shall of necessity be guided by the laws
of the country. In this case,
the Indigenisation and Economic Empowerment
(General) Regulations 2010, as
amended and General Notice 114 of 2011,
prescribe the framework within which
mining busineses shall meet the 51%
indigenization requirement,” Kasukuwere
says.
“It is regrettable
that you seem to have ignored the contents of this letter
and are urging me
to operate outside the parameters of the law. I hereby
request that you
submit a final indigenization implementation plan guided by
the legal
requirements obtaining in Zimbabwe within 14 days from the date of
receipt
of this letter otherwise I will be left with no option but to invoke
relevant penalties.”
Aujan and his son had earlier met with
Mudariki and Nyasha in October last
year where he indicated that he would
sell all his shares if he loses his
majority shareholding. Nyasha then wrote
to Aujan informing him that her
family and friends were in a position to
fully fund the purchase of the
shares.
In another letter to Aujan, dated
30 January 2012, Mudariki says: “Your
offer to sell the two companies to us
is accepted, Mr. Aujan did say when
the matter was discussed, that he would
like the sale to be concluded by 31
December 2011. However, it was not
possible.
“We have not had sight of the audited accounts for 2010 nor
have we ever
seen any management reports or production reports from the
mine. We are
prepared to pay an agreed price for the shares based on the
fair value of
the mine. In order to ascertain what is a fair value, we need
to be given
facts and figures about production from the mine over the last
few years.”
Mudariki in the process warned Aujan not to move all
files and documentation
relating to River Ranch to the mine.
“We
need those files in Harare, as we do not want them to disappear. Adel,
taking cognisance of the fact that in Victoria Falls last year you parted
with the General on a bad note and indeed a lot of senior officials in both
the party and government are aware of this…do not rub salt on to the wounds
of the Mujuru family in their time of mourning,” he says.
“If we
cannot agree with you on a price, we will appoint a suitably
qualified
evaluator agreed with you and will pay 80% of what he decides is a
proper
value.”
However, Aujan through his lawyers Sawyer & Mkushi, in a
letter dated
February 3 2012 states he was now looking for other buyers of
his 80%
shareholding at a nominal price, provided the purchaser buys the
majority
shareholder’s loan account then standing at about US$16
million.
“The position now is that our client is looking for other
buyers…Purely
without prejudice however, should you make an acceptable offer
before our
client sells, then your offer will be considered. In the
meantime, please
desist from acting as if you are in control of and are
running Limpopo. At
law the majority shareholder is in control,” he says.
http://www.theindependent.co.zw/
Friday, 09 March 2012 09:56
Herbert
Moyo
THE National Economic Conduct Inspectorate has called for the heads
of
former NSSA chairman Albert Nhau and its current general manager, James
Matiza following its unravelling of a series of financial irregularities in
the way the authority used public funds to acquire properties and
shares.
In particular, the NECI is questioning a share purchase by NSSA into
Zimbabwe Stock Exchange-listed company Star Africa Ltd at a US$2,5 million
premium to market prices, beginning September 2009. The purchase, into a
company analysts warned was declining, has now resulted in a more than US$14
million net loss, as the Star Africa share price has
plummeted.
According to NECI’s report, an investigation into NSSA’s
equity investments
carried out between March 2009 and June 2010 revealed
NSSA bought Star
Africa shares at 12,5 US cents a share instead of the
average 10 US cents
per share then prevailing on the Zimbabwe Stock Exchange
(ZSE). NSSA Board
chairman at the time, Albert Nhau, is said to have
“negotiated the deal at
his home and bought the shares from his
friends.”
“NSSA Senior Management, notably Mr Matiza and the board
chairman (Mr Nhau)
should be held accountable for plunging the Authority
into the purchasing of
shares at a premium, yet the trend was that the share
value was actually
declining,” notes the report.
When the Star
Africa scam was concluded in December 2009, NSSA reportedly
lost US$2,5
million at the onset. However, the investment loss has since
sky-rocketed to
more than US$14 million following the continued plunge in
the value of Star
Africa shares on the ZSE. As at yesterday, Star Africa
shares were trading
at 0,7 US cents from 12,5 US cents upon purchase by NSSA
in 2009, a nearly 1
700% loss.
According to NECI, NSSA could have bought the same shares
at 10 cents or
less through ZSE and saved pensioners’ money.NECI also
suggested that in
their defence Matiza and Nhau lied, saying “there is no
proof at all that
NSSA ever made a bargain at the 10 cents per share
recommended by the
investment analysts as claimed by senior management, the
chairman and
BancABC.”
This followed claims by NSSA management
that their attempts to acquire the
shares at US 10 cents each were turned
down because there was an alleged
competing bid at 12 cents per
share.
NSSA has denied the allegations of corruption contained in the
NECI report.
http://www.theindependent.co.zw/
Friday, 09 March 2012 09:56
Brian
Chitemba
PRESIDENT Robert Mugabe has claimed that the Global Political
Agreement
(GPA) signed by the three political parties to form the current
coalition
government in 2009 was aimed at ending violence which marred the
2008
elections and prepare for fresh elections and not meant for the writing
of a
new constitution.
Mugabe told the ongoing Zimbabwe Council of Chiefs
conference in Bulawayo
that the GPA, signed on September 15 2008 by himself,
Prime Minister Morgan
Tsvangirai and Deputy Prime Minister Arthur Mutambara,
was promoted by Sadc
leaders to end escalating inter-party political
violence.
Mugabe even asked Mutambara, who was on the podium with him
at the chiefs’
indaba if he was not being honest that the GPA was merely
meant to usher in
a transitional period leading to fresh elections.
Mutambara nodded in
agreement with Mugabe’s pronouncement.
Mugabe
said if the new constitution was delayed, he would be forced to use
the
current one to call for fresh elections since the Zanu PF national
conference resolved to have polls before the end of this
year.
“We agreed with the MDCs that we were going to use the Kariba
Draft
constitution when we signed the GPA,” said Mugabe. “So the issue
wasn’t
about a constitution; the question was about violence that had taken
place
in 2008,” he said.
The constitution-making process was
supposed to take 18 months but it has
dragged for over three years because
of bickering between Zanu PF and the
MDC formations.
Mugabe said
there were several irrelevant issues raised in the draft
constitution which
he vowed to outrightly reject.
There has been a storm over proposals
on two presidential terms and 70-year
age limits which Mugabe and his
loyalists have rejected.
Mugabe, who has been endorsed as Zanu PF’s
presidential candidate by his
party and chiefs, is agitating for fresh
elections this year with or
without a new constitution.
He has
repeatedly expressed frustration at the functions of the inclusive
government and demanded early elections to collapse it, but he has been
blocked by Sadc which is lobbying for democratic reforms before any
poll.
“If parties drag their feet on the constitution, we can revert
to the old
constitution and we call for elections. We wonder why people are
also
bringing up irrelevant issues in the constitution,” said
Mugabe.
He also castigated gays, repeating that they were worse than
pigs at his
farm, and lambasted African leaders who have allowed same-sex
marriages in
their countries.
This was in apparent reference to
South Africa, which is the only country in
the region to have legalised same
sex marriages.
“Homosexuality is for those who are sick in the mind.
But we have very few
people who are mad,” Mugabe said.
Mugabe
also threatened to seize under-utilised farms from beneficiaries of
his
government’s failed land reform programme, adding that a land audit
would be
instituted soon, without elaborating.
http://www.theindependent.co.zw/
Friday, 09 March 2012 09:50
Owen
Gagare
RIVER Ranch diamond mine, located 15 kms northwest of the southern
border
town of Beitbridge, is now synonymous with controversy and has over
the
years become something of a poisoned chalice. It always appears good
when
one is acquiring it but the story always ends in tears.
At the
beginning those who have been associated with it enjoyed the benefits
of the
gems from the Kimberlite pipe that apparently runs across the region
and
yields good quality stones, but in the end the story of River Ranch,
formerly Auridium and Bubye Minerals as it went through different hands, has
come to be associated with controversy, including fierce ownership wrangles,
allegations of smuggling which at one point sucked in the United Nations and
World Bank, and mysterious murders.
At the height of the
protracted legal battle for the control of the mine
between River Ranch
owners Rani Investment, a Dubai-based firm headed by
Saudi Arabian tycoon
Adel Abdul Rahman al Aujan, and the late General
Solomon Mujuru’s Khupukile
Resources on one hand and Bubye Minerals owned by
Michael and Adele Farquhar
on the other, there were protracted court battles
which ended up in the
Supreme Court with the latter losing the nasty fight.
When the
Farquhars, who had been arrested and detained in the process, lost
the
fight, they were escorted from the mine at gunpoint.
But that was
before tragedy struck in February 2010 when Adele’s brother,
Richard Amyot
and his wife Tecla were shot dead, bringing to a head the
battle for the
control of the mine.
Police investigations concluded that Amyot shot
his wife four times before
turning the gun on himself. However, their
families dismissed the findings
after conducting their own investigations.
An independent forensic expert
they hired concluded that they were murdered.
The Farquhars believe that the
deaths were linked to the ownership battle
over River Ranch mine.
According to their forensic results, Tecla was
shot four times from close
range at the back of her head while she was
lying on the floor, while
Richard was found slumped in a door frame as
though running from the room.
He, too, was shot in the head, but from medium
range. No gunpowder residue
was found on either his hands or at the bullets’
entry point.
Now those familiar with the River Ranch story are trying
to draw parallels
between the death of Richard Amyot and his wife Tecla and
General Mujuru’s
demise. It would appear they suffered the same fate,
although the
circumstances might be slightly different. While Richard and
Tecla were
openly shot, it is not clear whether Mujuru, who died in a blaze
last August
at his Beatrice farmhouse, 60km south of Harare, was also shot
before being
burnt to ashes.
Although some security guards told a
recent inquest into Mujuru’s death that
they heard gunshots on the fateful
night, mystery remains over the real
motive behind his murder, just like in
the case of Richard and Tecla.
The truth about these deaths will
probably never be known, although they
appear to be linked to the story of
River Ranch. What is only certain is
that they died, although in the case of
Mujuru some still question whether
the body buried at Heroes Acre was his in
the first place. This is largely
because the results of the forensic tests
were not thorough and remain
contested.
To add to this mystery,
Mujuru died the night before he was supposed to
travel to the mine to
present an indigenisation implementation plan, which
Rani Investment, with
80% shareholding, was resisting. It has since emerged
that Mujuru had a
nasty fight with Aujan in Vitoria Falls in May last year
over the
issue.
Mujuru wanted to take over the controlling equity under the
rubric of
indigenisation, leaving Aujan with a 39% shareholding but the
Saudi
billionaire resisted, sparking a fierce battle which would not end
even
after the general’s death. As we report in our lead story, the battle
for
the mine is still raging.
The controversial mine was discovered by De
Beers in 1974 during an
exploration exercise in the then Rhodesia. It was
acquired by Auridiam in
1991 with production starting in 1992, but was
closed in 1998 due to
viability problems.
The Farquhar family,
through Bubye Minerals, took control of the then
insolvent mine in September
1998 and managed to turn it around after
bringing in investment partners,
including Aujan.
However, misfortune was to strike in 2000 when the
mine experienced several
problems, including hurricane-induced flooding,
which impacted negatively
on production.
First to feel the pinch
in the aftermath of the cyclone was the Farquhar
family, forcing it to give
Aujan a 30% stake in the company in 2002. This
came after their borrowings
from Aujan had risen to US$1,5 million and they
had failed to
repay.
As a result, relations between the Farquhar family and Aujan
soured in 2004
when they defaulted in repaying the loans.
The
Saudi billionaire then injected a further US$2,5 million arguing that
the
only way he could recover his investment was for the mine to be
resuscitated
so that diamonds could be extracted. He then called in his
previous loans,
which Bubye Minerals failed to repay resulting in him moving
in.
Aujan
reconstituted the company as River Ranch Ltd and brought in Khupukile
Resources, owned by Mujuru, which acquired a 20% stake, thereby sparking a
protracted and bitter legal battle with the Farquhars.
A few days
after the reconstitution, the Farquhars were driven off the mine
by police
at gunpoint, but they fought hard to reclaim the mine, to no
avail. They
managed to get several legal judgments upholding their rights to
the mine
but these were subsequently ignored.
At one time River Ranch was
prevented from selling diamonds because of an
injunction won by the
Farquhars’ legal team.
In 2006, Bubye Minerals lost control of River
Ranch Mine after the High
Court threw out its application to compel the
Minister of Mines and Mining
Development to reverse his decision to cancel a
special grant to the mine.
The rest is now history, except that the
mysterious deaths — including
that of Mujuru — haunting River Ranch may
never go away.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 17:26
Faith
Zaba
MOVES by Zanu PF’s Mashonaland Central youth leaders to unseat
Guruve South
legislator Edward Chindori-Chininga, who is currently
bed-ridden after
surviving a car crash last week, have failed after
villagers from his home
area refused to sign a petition recommending his
suspension from the party.
Chindori-Chininga was involved in a car
accident 5 km along the
Mazowe-Centenary road on Friday and is currently
receiving treatment at a
private hospital in Harare. He sustained broken
ribs, a fractured right arm
and serious injuries to his legs, collarbone and
back.
The petition started circulating soon after
Chindori-Chininga was fired from
the Parliamentary Constitution Select
Committee (Copac) in October last year
and was crafted by youth leaders from
Guruve, including Zanu PF national
youth treasurer Obert Mutasa, who is
vying for the Guruve South
parliamentary seat held by
Chininga.
Provincial youth league secretary for finance Takawira
Maluku and provincial
youth league secretary for legal affairs Macklas
Gangarahwe are also among
those pushing for Chindori-Chininga’s ouster from
the party and were among
the first to sign the petition.
The
party’s Mashonaland Central chairperson Dickson Mafios has confirmed
seeing
a copy of the petition but bemoaned that his province was wary of
people
“cooking up stories” to disqualify strong contenders in the coming
elections.
Mafios said: “Yes, the petition was written by the
youth but they cannot try
to suspend a senior member of the party through a
petition. They are not a
disciplinary structure for the province. They will
have to recommend the
matter to the District Coordinating Committee (DCC)
which then forwards it
to the Provincial Coordinating Committee, which will
determine whether he
has a case to answer, and if it determines that he
does, it will endorse and
institute a disciplinary hearing. But the youth
have to formalise it first.”
He added: “What we have to be careful
about is that some of the people might
be electioneering and they may cook
up the bulk of the case to give a chance
to those interested in that seat.
Remember elections are around the corner.”
Petition instigator Mutasa
would not answer any questions.
According to the petition,
Chindori-Chininga stands accused of
de-campaigning President Robert Mugabe
in the run-up to the 2008
elections.
“The league started having
problems with (Chindori)-Chininga in 2008 during
the run-up to the
harmonised elections held on the 29th of March.
(Chindori)-Chininga was
suspected of pasting posters of Simba Makoni of
Mavambo political party. He
did so on his own, mostly during the night,
where his posters were put up
together with Makoni’s. As if that was not
enough, (Chindori)-Chininga did
not only fail to campaign for the
president, but actually de-campaigned him
whenever he addressed his rallies.
He exclusively urged party members to
vote for Zanu PF candidates for the
posts of councillor, MP and senator
whilst urging them to make their
decision on the presidential candidates. In
some points he said: ‘We want
new blood ma comrades,’” reads the
petition.
This is the youth league’s second attempt to oust
Chindori-Chininga after
their initial attempt in 2008 hit a brick
wall.
The youths also alleged that Chindori-Chininga was one of the
five Zanu PF
legislators suspected of voting for MDC-T chairman Lovemore
Moyo for the
Speaker’s post in the House of Assembly.
Moyo won
with 105 votes against Zanu PF chairman Simon Khaya Moyo’s 93.
The
youths also accused Chindori-Chininga of disrespecting secretary for
administration Didymus Mutasa on his Facebook page after he was fired from
Copac for allegedly leaking Zanu PF’s preliminary draft constitution
framework to MDC-T officials. Another accusation levelled against him is
that he almost beat up Copac co-chairperson Munyaradzi Paul Mangwana at a
meeting in early October.
“We are also worried by his continuous
use of independent media to attack
the party’s leadership,” the petition
read.
http://www.theindependent.co.zw/
Thursday, 08 March 2012
17:22
Nqobile Bhebhe
THE reunification of the fractured Zimbabwe
Congress of Trade Unions (ZCTU)
would require a political process
superintended by an eminent power-broker,
secretary-general of the Lovemore
Matombo-led faction Raymond Majongwe
(pictured) has said.
This was
because the split was a “battle of personalities” which left the
labour body
feeble.
ZCTU split into two factions in August last year with
one under Matombo and
the other led by George Nkiwane. Nkiwane was elected
at a congress boycotted
by the Matombo group in Bulawayo.
Matombo
disputed the results, saying delegates who voted for Nkiwane were
not bona
fide ZCTU members.
However, Majongwe told the Zimbabwe Independent
this week that reunification
was critical and long overdue, but the process,
which he described as
political, needed an eminent broker.
“The
bottom line is the two parties must come together to form one
formidable
labour movement. A political process is needed to achieve this
where both
parties agree on a road map for reunification. A respectable
power broker
would be needed to see through this process,” said Majongwe.
Majongwe said
possible power brokers could be church luminaries, National
Constitutional
Assembly chairman Lovemore Madhuku or someone from the
Congress of South
African Trade Unions (Cosatu).
He said the split was unwarranted but
“a battle of personalities took centre
stage”.
Majongwe said the
road map should address the leadership issue.
“There would be
trade-offs, sharing of spoils in the political process, but
the leadership
issue is critical. Workers need strong leaders,” said
Majongwe.
However,
the Independent understands that those calling for reunification
talks were
bowing to a financial squeeze as major funders are concerned by
the
split.
The talks began early this year and presently involve junior
officials from
both factions meant to culminate in “real talks” involving
leaders of the
factions.
Sources said the ZCTU’s traditional funders,
including Dutch Trade Union
Federation Federatie Nederlandse Vakbeweging,
were in contact with both
camps in an effort to reunite
them.
“Low key reunification talks are in progress but some faction
leaders are
not keen for the public to know this,” said a member of
Nkiwane’s camp.
Sources which used to fund the ZCTU, which gave birth to the
MDC in 1999,
have reportedly imposed a purse squeeze.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 17:20
Paidamoyo
Muzulu
FOR the second time in just over a decade, Zimbabwe will hold a
referendum
on a new constitution and again President Robert Mugabe and Zanu
PF could be
the determining factor in whether the draft is adopted or
rejected by the
electorate.
Zanu PF’s position on the constitution-making
process and shifting political
sands on which the MDC formations find
themselves make any prediction of the
referendum outcome
uncertain.
While the initial understanding between the three parties
in the Global
Political Agreement (GPA) was that they would work together to
ensure the
draft is adopted, the reality may be different.
The
draft constitution could be stopped at various levels, including the
drafting and negotiation, referendum and parliament stages.
Although the
inclusive government is hobbling on, the constitution-making
process has
exposed its sharp differences, jeopardising chances for free and
fair
elections.
Zanu PF is now geared to reject the draft unless it fits
its political
designs. Although the clauses on term and age limits have been
abandoned
after furious protests by Zanu PF, the atmosphere is already
poisoned.
The other problem is Zanu PF is sulking over several issues
in the current
draft, including the structure of government which may
include a weakened
president and prime minister, a stronger parliament, dual
citizenship,
stronger social rights including those of gay rights and
devolution, among
other issues.
This may lead to the blocking of
the draft, something which fits perfectly
well into Mugabe and Zanu PF’s
current political strategy for elections to
have polls this year under the
flawed Lancaster House constitution amended
19 times.
In a recent
with ZBC, Mugabe also warned he would reject clauses he does not
want. This
approach is what galvanised civil society into action like in
2000.
Given that Zanu PF has said it would campaign for a No vote
if its demands
are not met, the situation dovetails into civil society’s
position, putting
pressure on the MDC formations to compromise if the draft
is to survive.
After rejecting the Kariba draft, which was reached
through consensus and
ignoring warnings from different quarters, including
the media, that the
current constitution-making process was tricky, the
MDC-T now finds itself
in a dilemma: Damned if it supports the bad Copac
draft; damned it doesn’t.
Among civil society organisations likely to go to
bed by default with Zanu
PF — motivated by entirely different agendas — are
the National
Constitutional Assembly (NCA), Zimbabwe Congress of Trade Union
and the
Zimbabwe National Students Union, traditional MDC-T
allies.
In interview last week, NCA chairman and law professor
Lovemore Madhuku said
lthe Copac draft’s fate would be sealed at the
referendum.
But civil society is divided, making the situation more
interesting. Crisis
Coalition spokesperson Thabani Nyoni said: “We adjusted
our expectations. If
we support this process we would see an improved
document compared to
Lancaster and thus an incremental
approach.”
Political analyst Ibbo Mandaza said: “If it is done
properly and the
coalition produces a draft jointly, I don’t see how it can
be rejected. The
2000 draft was rejected not because it was a bad document
but because of the
MDC positions then.”
However, Zanu PF
politburo member Jonathan Moyo, who is the party’s
strategist, was sceptical
the draft would even survive up to the referendum
stage. “I don’t know
whether there will be a referendum or whether the
parties would agree to the
draft. If they do, then we will judge the
document. We can only cross the
bridge when we come to it,” he said.
This leaves the fate of the
Copac draft and the issue of elections up in the
air.
http://www.theindependent.co.zw/
Thursday, 08 March 2012
17:19
Wongai Zhangazha
THE African Union Peace and Security
Department has admitted that it has no
capacity to deal with dictatorial
regimes on the continent, saying it was up
to citizens of those individual
countries to liberate themselves.
Norman Mlambo, a senior official in the AU
Peace and Security Department,
told a briefing of African MPs drawn from 14
countries in Addis Ababa,
Ethiopia, this week that the continental body was
hamstrung by a number of
factors in dealing with undemocratic regimes in
Africa and it was up to
member states to trigger their own processes towards
democratisation.
The African MPs were attending an
Inter-Parliamentary Dialogue on Climate
Change in relation to peace and
security at the AU headquarters organised by
the Friedrich Ebert Siftung
Foundation.
Mlambo was responding to MDC-T MP for Musikavanhu
constituency Prosper
Mutseyami, who is also a member of the Parliamentary
Portfolio Committee on
Defence and Home Affairs, who had asked what the AU
has been doing to deal
with dictators in Africa.
Mlambo said the
AU was very concerned about dictatorship in Africa and had
put in place
protocols that encouraged democracy. He said the AU’s Political
Affairs
Department had recently passed a document which encourages democracy
and
criminalises the unconstitutional change of government in a member
state.
“This indicates that the AU is trying to do something
about democracy. Of
course, there are still areas where leaders refuse to go
after losing
elections or change the constitution. These are issues that are
happening in
member states and it is up to the member states to deal with
them, but the
AU is always ready to help in such situations,” said
Mlambo.
He said the democratisation process on the African continent
was not an
event but an ongoing process in which citizens in every member
state were
participating.
“At the moment I don’t think we can
make a pronouncement as to whether we
have arrived to a democracy or not.
We face a lot of challenges which you
are all aware of. It is up to the
political processes in the member states
and you as politicians. It is your
job to bring democracy to your countries.
You don’t have to wait for the AU
to bring you democracy,” Mlambo said.
The AU has been accused of
turning a blind eye to genocide in countries like
Sudan and human rights
abuses in Zimbabwe and other countries.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 17:15
THE
controversial issue of nostro accounts and current official demands that
local banks must bring back about US$200 million held in their offshore
accounts has provoked serious debate within government circles and among the
public.
The issue, according to one senior government, was discussed
at a high-level
government on Tuesday. Zimbabwe Independent Chief
Investigative Reporter
Owen Gagare (OG) this week interviewed Reserve Bank
of Zimbabwe governor
Gideon Gono (GG, pictured right) to seek clarification
on the contentious
matter. Find below excerpts of the
interview.
OG: Governor, a lot has been written and said about
Zimbabwean banks holding
money outside the country in nostro accounts. The
Minister of Finance
Tendai Biti and yourself have directed that this money
be returned to
Zimbabwe. Can you, in simple terms, enlighten our readers on
what these
nostro accounts are, their purpose and why local banks opened
them in the
first place?
GG: Well, well, that’s a mouthful of a
question which requires an equally
mouthful answer. Financial institutions
the world over establish
relationships with other financial institutions in
foreign countries to
facilitate receipts and payments of funds for and on
behalf of their clients
and themselves.
When a local Zimbabwean
bank has a relationship with a foreign bank, the
foreign bank becomes its
correspondent bank or counterparty.
A correspondent bank is defined
as a financial institution that provides
financial services on behalf of
another financial institution residing
outside the jurisdiction of the
correspondent bank. Since physical movement
of currency and establishment of
branches in every country is impractical,
the correspondent bank conducts
business transactions, accept deposits and
gather documents on behalf of the
foreign financial institution. Thus, it
acts as a domestic bank’s agent
abroad through correspondent accounts.
Correspondent Banking is one
of the core areas of international banking
activity which dates as far back
as 1800 in the US when interbank deposits
were established to provide a
means of redeeming bank notes outside of one’s
own geographical area.
Correspondent accounts usually take the form of two
accounts called the
nostro and vostro accounts.
OG: Can you define and breakdown these
nostros and vostros in simple terms
governor?
GG: A nostro
account is a bank account held in a foreign country by a
domestic bank,
usually denominated in the currency of that foreign country.
The word
“nostro” is borrowed from a Latin word “noster” which translates to
“ours”.
In simple terms, a “nostro” account is interpreted as “our account
of our
money, held by you”.
On the other hand, a “vostro” account derived
from “voster” is a bank
account of foreign bank held with a local bank in
domestic currency. In
simple terms, a “vostro” account is interpreted as
“your account of your
money, held by us”.
OG: Before we move on,
may you further unpack the issue of correspondent
accounts.
GG:
Correspondent accounts are used by banks internationally to undertake
financial transactions in jurisdictions where they generally have no
physical presence.
There is a wide range of services that can be
settled through a
correspondent banking relationship, which include the
following:
receipts and payments in foreign currency;
access to
lines of credit;
investments in foreign instruments;
receipt of investment
funds;
custodian account arrangements; and
trade finance transactions —
receipt of export funds and payment of imports
such as raw materials and
other commodities and services.
OG: Are there any other important details you
would want to add on this
issue?
GG: Furthermore, a
correspondent bank relationship also helps local banks
and their clients to
access external lines of credit and other syndicated
loans as well as access
to foreign markets.
Nostro accounts are useful when facilitating
settlement of foreign exchange
and trade transactions. Many cross-border
payments are actually settled in
a specific country’s domestic settlement
system.
For example, a Zimbabwean company making a Rand payment to a
South African
company; the local bank debits the company’s local account
with the
equivalent US dollar amount, and transfers the Rand amount from its
Rand
account held by a South African correspondent bank (eg Nedbank, Absa or
First National Bank) to the South African company’s Rand bank account in
South Africa.
Clearing of cheques and drafts is one of the most
basic services
traditionally provided by correspondent banks through nostro
accounts. A
correspondent account can be used as a means of settlement for
cheques drawn
on foreign banks.
A correspondent bank can
facilitate access to offshore credit facilities and
their settlement. The
contracted offshore lines of credit are deposited in
the nostro accounts,
whilst repayments including interest are also done
through the same
account.
Besides, a correspondent bank can be of particular service
to a local bank
in managing its investment portfolio and meeting liquidity
requirements.
These services include trading of securities; safekeeping and
custodial
services; and investment advice. Trading in these securities is
done using
excess balances in their nostro accounts.
OG: A lot of
exchange control directives have been issued to banks of late
as well as
ministerial orders on this matter such that our readers are
having trouble
keeping pace with them. Can you again, in simple language,
explain what
Zimbabwe’s regulatory framework is regarding the operation of
nostros
accounts so that exporters, investors and individuals get a clearer
picture
on this?
GG: Well, it is true indeed that there are various exchange
control
directives that we have issued out as a bank since 1996. Work is
under way
to consolidate them taking into account the new multicurrency
environment.
Some are outdated while others are still valid.
All
Zimbabwean banking institutions are required to seek Reserve Bank
approval
to open and operate such accounts. This requirement ensures that
the central
bank can monitor developments in those accounts.
Zimbabwean banks
including the Reserve Bank hold nostro accounts largely for
the purpose of
facilitating foreign receipts and payments.
The Reserve Bank has
correspondent relationships with fellow central banks
and other reputable
financial institutions in various parts of the world.
If not closely
monitored, correspondent banking relationships could be
vulnerable to money
laundering and terrorism financing. In this regard,
banks are expected to do
risk and due diligence assessments before entering
into correspondent
relationships.
It is for this reason that most financial regulatory
institutions, including
Zimbabwe authorities, have regulations that govern
correspondent banking
relationships.
OG: Can you explain why this
plethora of regulations directives and
intensity of monitoring, besides the
need to improve the country’s internal
liquidity situation?
GG:
Apart from monitoring the nostro accounts for our balance of payments
purposes, we have an obligation within the community of central banks to
ensure that the money in our backyards and beyond is both fully accounted
for and that it is used in a legal and proper manner.
To be
continued next week…
http://www.theindependent.co.zw/
Thursday, 08 March 2012 16:29
Chris
Muronzi/Owen Gagare
FOREIGN-owned banks operating in Zimbabwe have
resisted the Reserve Bank of
Zimbabwe’s directive that they should
repatriate 75% of the money they hold
offshore in their nostro accounts,
businessdigest has established. According
to the Reserve Bank figures, a
total US$312 million is held offshore by
banks.
A nostro account is an
account held in a foreign country by a domestic bank,
denominated in the
currency of that country. The accounts are used to
facilitate settlement of
foreign exchange and trade transactions.
Reserve Bank governor Gideon
Gold (pictured) confirmed to businessdigest
this week that the majority of
foreign-owned banks in the country were
resisting the exchange control
directive, with others asking for permission
to keep their nostro account
balances above the stipulated 25%.
The central bank issued an order
for the banks to repatriate nostro funds
mid-last month in a bid to improve
the liquidity situation in the country.
“In line with this directive,
authorised dealers were advised that the
maximum limit of funds to be in all
nostro accounts (aggregated and
equivalent is USD terms) shall be kept at
25% of the authorised dealer’s FCA
as designated by Exchange Control. For
purposes of calculating the 25% of
the authorised FCAs as designated by
Exchange Control,” said Gono.
For the purposes of calculating the 25%
held in nostro accounts, balances in
the corporate Foreign Currency Accounts
(FCAs) exports, FCAs banks,
corporate FCA (transitory), individual FCAs and
nonresident transferable
accounts (NRTA), would be used to arrive at the
25%.
Standard Chartered Bank Zimbabwe Ltd (StanChart) requested to
keep its
nostro balance above 25%, but the central bank did not grant the
request.
StanChart had a nostro account balance of US$109,318 million as at 2
March
2012. Under the regulations, the bank was supposed to remit 75%
(US$80,945
million) of the nostro account balance.
Barclays Bank
Zimbabwe Ltd had a nostro account balance of US$37 million as
at March 3.
According to Gono, Barclays did not comply with the central bank
directive.
The bank was supposed to have remitted US$16 million.
Barclays
applied for a dispensation to keep an excess balance of US$19,997
million
but the request was not granted.
Stanbic Bank had a nostro account balance of
US$67 million as at March 2.
But the bank was spared because it has
committed to pay Zesa’s US$50 million
debt. Apart from the Zesa debt,
Stanbic has also pledged a US$20 million
youth empowerment fund, which will
be launched next week, and another US$10
million for a client who cannot be
named for legal reasons, whose support to
the economy the central bank
commended.
MBCA Bank Ltd had a nostro account balance of US$53,457
million as at March
2.
The bank, according to RBZ, has requested
for a dispensation to keep more
than 25% of its nostro balance offshore
until March 12. Its request was not
granted.
FBC Bank had a
nostro account balance of US$17,897 million as at March 2.
Gono said the
bank is considered to have complied because it transferred
US$14 million
on-shore to cater for cash imports.
Although ZB Bank provided the
central bank with a breakdown of its nostro
balances, the institution did
not comply with the directive to transfer 75%
of its nostro balances because
its US$3,8 million is blocked under Zimbabwe
Democracy and Economic Recovery
Act (Zidera). Gono said he understood the
bank’s case.
Gono
observed that banks with large balances in nostro accounts had applied
for
dispensations to keep funds offshore.
He said there was need to “urgently”
resolve the issues.
Gono said: “In line with the need to ensure
compliance with exchange control
directive RN32 dated 21 February 2012,
Exchange Control will enhance the
verification and analysis of the weekly EC
Form Nostro Return and reconcile
it with the weekly submission of FCA
balances so as to ensure that banks
maintain nostro balances within the
stipulated thresholds.”
http://www.theindependent.co.zw/
Thursday, 08 March 2012
15:53
Reginald Sherekete
THE recent move by the RBZ compelling
banks to repatriate offshore bank
balances may not be a solution to the
current liquidity crunch since the
problem emanates from bad banking
practices and lack of adequate regulation
of the financial sector.
In a
bid to improve the liquidity situation in the country, RBZ governor
Gideon
Gono and Finance minister Tendai Biti announced measures that
included
forcing banks to return balances held in nostro accounts.
But is this
the source of the liquidity problem? Have the individual
international banks
that have huge nostro deposits been facing liquidity
challenges?
If not,
then that is not the source of the problem.
The current liquidity
challenges being faced by one of the big banks is a
clear sign of the
problem of bad banking practices.
Banks have to actively manage their
liquidity gap, and any huge asset and
liability mismatch ultimately creates
a liquidity crunch.
A bank mobilises deposits of varying tenor
periods and should also lend the
money in a way that ensures that it can
meet its contingent liabilities.
Various banks are facing liquidity
problems due to huge balances of
non-performing loans. Despite the technical
argument by one bank that its
loans cannot be classified as non-performing
since customers were still
servicing the loans by paying interest, the non
repayment of the outstanding
capital amounts is creating a serious liquidity
crisis.
The short nature of deposits and the incessant rolling over
of outstanding
loans has also precipitated the liquidity crisis across the
banking sector.
This, analysts say, is largely a result of bad banking
practices by
non-adherence to the proper principles of
lending.
Provision of bank credit to related entities and insider
loans are causing
banks not to adhere to the correct cannons of lending and
the money advanced
to such entities is not being paid back at agreed
periods.
The shenanigans at Renaissance Merchant Bank (RMB) revealed
the depth of the
problem, where loans were being provided to close family
members and related
parties who under normal circumstances would not have
qualified for the
loans and would definitely not be committed to repaying
the loans.
So, is the repatriation of nostro balances by international banks
a solution
to the problem?
The trend shows that locally-owned
banks have high loan-to-deposit ratios as
compared to the conservative
lending approach by international banks which
have relatively lower
ratios.
Analysts say it now seems that the reward for good banking is
punishment.
The current crisis shows the different approaches to banking by
international banks and local banks and the impact on long term viability of
these institutions.
The RBZ has instructed all international
banks to bring nostro balances to
the Real Time Gross Settlement (RTGS)
system and these banks have been given
one week to utilise the funds. But
such short notice will cause banks to
make lending decisions in a rush and
there is a high probability of adverse
selection of clients who will later
default on repayment.
Given that foreign currency balances held at
the RBZ were wiped out at the
height of Zimbabwe’s economic crisis,
characterised by foreign currency
shortages, banks that have repatriated
nostro balances may face sleepless
nights on their depositors’ funds if the
central bank decides to move on
banks that have failed to utilise the funds
before the stipulated timeframe.
Another source of the liquidity
crisis is the lack of adequate
implementation of prescribed measures. The
RMB saga is a clear indication of
a sleeping regulator since the central
bank was failing to keep its eye on
the ball.
For instance, Gono
recently announced that liquidity ratios had been revised
upwards from 25%
to 30%, but at the moment there are banks with liquidity
ratios as low as
5%. At what point does the central bank step in to avoid
the collapse of a
bank, and is enough being done on the ground to police
banking
institutions?
Gono indicated that the minimum capital requirements
could be reviewed
upwards in line with regional levels to further enhance
financial sector
stability. But the current minimum capital levels as a
ratio of gross
domestic product (GDP) are relatively high in
Zimbabwe.
“As monetary authorities we remain vigilant towards
reviewing minimum
capital requirements upwards and these will be announced
in the market in
due course if we see that there is need for that,” said
Gono in his 2012
Monetary Policy statement.
A regional comparison
of ratios of minimum capital requirements (MCR) for
commercial banks to GDP
shows that Zimbabwe is ranked second at 0,14% behind
the Zambian ratio of
0,52% for international banks. For locally-owned banks
in Zambia, the ratio
is lower at 0,11% and South Africa has a MCR-to-GDP
ratio of 0,01%, Nigeria
0,06% and Malawi 0,09%.
Increasing minimum capital requirements may
not necessarily be a solution to
the problem, given that it would not be
linked to economic activity, and
this may stretch banks unnecessarily in an
already constrained operating
environment.
Regulatory authorities
should take into consideration the fact that the
indigenous bank owners had
their savings depleted during the hyperinflation
period and the call for the
shareholders to dispose of their shareholding to
foreigners will not be
concomitant with the current indigenisation laws.
Local banks need a
reasonable turnaround time based on the viability of
their businesses and
also the performance of the economy. Given that most
deposits are transient,
how are banks expected to make a reasonable return
on their investing
activities?
With time, banks can manage to generate profits which
they use to
recapitalise. Most indigenous banks are servicing niche markets
and the
level of their deposits may not prompt a high capital adequacy
ratio.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 17:02
ZIMBABWE
Revenue Authority (Zimra) Commissioner-General Gershem Pasi (GP),
who is
under pressure to go for failing to deliver on key projects, spoke to
Zimbabwe independent Senior political editor Faith Zaba (FZ) recently on the
body searches at entry points which Finance minister Tendai Biti recently
complained about, corruption, fiscalisation project, drug trafficking, his
employment status and revenue collection. Find below excerpts of the
interview.
FZ: There have been several reports in the media on
“inhuman body searches”
at points of entry. What is your comment on
this?
GP: I have not received a single report on what is being
referred to as
“inhumane body searches”.
FZ: What were the
implications of the amendments to the Customs Act which
necessitated these
searches?
GP: The amendments had removed clothing and shoes among
other items from the
travellers rebate. The US$300 limit under which those
items could be
accommodated was changed. So what the amendments had done by
removing,
especially clothing and shoes from the travellers rebate was to
regard any
such items as commercial importations.
FZ: But how did
this affect your operations?
GP: From what I got from the nature of
complaints and reports of harassment,
it was evident that when people were
found with undeclared shoes and pieces
of clothing, some took offence after
being exposed for not making a
declaration. For instance, when we analysed
data over a certain period of
time at the airports, of those people whose
goods were subjected to physical
examination, about 57%, had not made proper
declarations. Having encountered
such a high rate of non-compliance, not
increasing our samples for searches
would have amounted to a dereliction of
duty.
FZ: When these amendments were made, were you consulted as
Zimra?
GP: One of my functions as a commission-general is to advise
government on
fiscal and other issues, and I would of course carry out my
duty and advise,
but it’s only advice.
FZ: So what is the current
situation about the controversial amendments?
GP: Shoes and clothing
have now been put back as allowable under the
travellers rebate, which means
that clients would no longer have to spend
time queuing to pay very little
amounts of duty.
FZ: The minister also introduced surcharge, is it
still there?
GP: Surcharge has been removed on double-cabs, which was
at 25% and on
certain foodstuffs. It only remains on those second hand
vehicles which are
more than five years old.
FZ:There have been
endless complaints of corruption at Zimra and points of
entry. How are you
dealing with this?
GP: There is resolve at the highest level to fight
corruption. The public
should not offer bribes. Where an officer asks for a
bribe, they should
immediately report them to us.
FZ: How have
you dealt with drug-trafficking?
GP: When we seize suspicious items
we take them to government laboratories
for testing. One hopes that in the
near future, as the economy picks up, we
will have sufficient resources to
have state-of-the-art laboratories. As an
immediate initiative, we have
linked up with the Air force of Zimbabwe to
assist us train our officers and
to help us establish a dog section. We
bought pure breeds from South
Africa.
FZ: Any major seizures of drugs so far?
GP: There
have been a lot of seizures especially with marijuana. It usually
happens as
joint operations with the police.
FZ: There have been a lot of
reports on smuggling of minerals. How are you
dealing with
that?
GP:We have the anti-smuggling unit in the police and they work
very closely
with our officers and we hold joint patrols.
FZ: Any
major break-throughs and recoveries
GP: Yes, there have been major
busts but we need to automate. Right now we
rely on intelligence and
observation by our officers. We need to have
requisite
equipment.
FZ: How much progress have you made with your automation
project?
GP: Given the hardships that have hit the country and the
myriad demands on
government’s limited finances, it means that we have not
moved with the
speed that we would have wanted as far as automation is
concerned. While the
intention and the spirit is there in the budgetary
allocation, the release
thereof is governed by the inflows.
FZ:
What are the advantages of using Asycuda World system you want to
install?
GP: The beauty with Asycuda World is that it is now
web-based. Asycuda World
removes the interface between you and the clearing
agent and a Zimra
officer. It removes what we call grey income. There have
been cases where
clearing agents work in cahoots with Zimra officers to
fleece the client.
Asycuda World takes care of that. That is the automation
we want that
improves efficiency and at the same time removes the
opportunities for
rent-seeking.
FZ: So how much is required for
that?
GP: Last year, we needed US$34 million and we put in a bid of
about US$ 15
million last year and we were allocated US$1,2 million and
again it was
released in the last quota maybe because of the shortage of
cash.
FZ: How far have you gone with fiscalisation
project?
GP: With fiscalisation, there have been some challenges,
initially with the
suppliers. The major outcry has been that these gadgets
are not cheap.
Companies were struggling to recover from the economic
meltdown, they were
complaining that we could have timed it better at an
opportune time. We also
have technical challenges that the gadgets are not
compatible with the
companies’ accounting systems. From us at Zimra, we
would need to have the
same robust servers — imagine we will be linked to
all the retailers on a
real time basis.
FZ: How are you dealing
with complaints by companies which are being
penalised for
non-compliance?
GP: We now have a law, which says that you must pay
penalities for any day
that you go on without putting those gadgets but we
are aware of these
issues, which need to be looked at. We have our technical
team working with
the ministry. The objective is not to penalise people but
to facilitate for
them so that we can have a successful
implementation.
FZ: Turning to revenue collection, did you meet your
target last year.
GP: In 2011, we surpassed our target by 5% or 6%.
For this year the target
is 3,256 billion and we are readying ourselves to
meet that challenge.
FZ: Talking about taxation, isn’t our income tax
levels too high?
GP: That is so. Unfortunately, when you have an
economy that is not
performing at full throttle or anyway near that you find
that because of the
demands for government funding you then find that the
burden of taxation
becomes much heavier for the limited taxpayers. One hopes
that when the
economy picks up, we will perhaps advise the minister to
reduce the rates.
Currently, those that earn 251-1000 it is 20%, 1001 to
2000 25%, 2001 to
5000 30% and above 10 000 45%. This is over and above 3%
Aids levy.
FZ: We observed that there was an omission of the
commissioner-general in an
advert flighted last week on body searches. What
was the reason?
GP: I did notice but I didn’t pay any attention to
that. I assumed that it
was a minor error. For me, my commissioner there is
guided and given work by
me. I didn’t read much into the absence of my
name.
FZ: But how is your relationship with the Minister of
Finance?
GP: He is my minister and revenue collection falls under his
ministry. We
give each other due respect that goes with the posts. I am a
professional.
FZ: Any tensions with the minister?
GP: No
problems. Really I think we communicate well. Mind you, the authority
is not
a department in the ministry. We are at arms length and we
communicate on
technical issues. We have a board and I respect that. Each
person in
government has their roles clearly defined.
FZ: There are reports
that you are on your way out.
GP: I am also hearing of those reports.
There are processes that are ongoing
at the moment and I can’t comment any
further than that.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 16:57
NEWSDAY
reports that Zanu PF Manicaland provincial chairman Mike Madiro has
admitted
the party had again roped in the Obadiah Musindo-led Destiny for
Afrika
Network (DANet) to spearhead its election campaign by doling out 100
000
residential stands countrywide.
“We are giving out stands to you
people because we realised that
MDC-T-dominated councils are doing nothing
for you in terms of shelter,”
said Madiro.
“Every beneficiary of this
scheme should vote for Zanu PF and betrayers will
be kicked out from here.
You can’t benefit when you don’t want to vote for
us,” he said to hundreds
of home-seekers in Mutare over the weekend.
Zanu PF central committee
member Esau Mupfumi added: “Zanu PF realised that
people are not getting
housing stands in urban areas and Destiny for Afrika
Network was given state
land to develop so that we give out housing stands
to our
supporters.”
“We don’t need to remind you that on election day you
need to vote for Zanu
PF. Voting for MDC when you are a beneficiary of this
scheme is inviting
trouble because we will not hesitate to move you
out.”
State land is again being offered by a moribund party in its
desperate
attempt to cling to power. Hapless home-seekers no doubt will have
a
distinct sense of déjà vu. Musindo and Zanu PF always dangle the same
carrot: They promise desperate home seekers housing stands and cash for
“income generating projects” just before elections which mysteriously
disappear just after.
Musindo
recently revealed to the Zimbabwe Independent that DANet was close
to
securing a R1 billion loan from a South African financial institution to
fund its housing projects.
“We are in the process of securing R1
billion for the project and we will be
developing pre-engineered houses just
like the Chinese because the process
is faster and cheaper,” he
said.
We have serious doubts about that Cde Musindo. We will be keen
to know which
South African financial institution is prepared to fund your
organisation’s
schemes.
As for the “pre-engineered houses”, are
they not the same as those
constructed by Chinese diamond mining company
Anjin Investments in Chiadzwa
which were badly damaged by gusts of wind.
Desperate villagers, NewsDay
reported, pointed to “substandard imported
Chinese nails”.
“The type of nails used here are not the usual nails
that we know for the
purposes of roofing. The construction of these houses
was done haphazardly
and nothing was done to ensure that we are safe here,”
said an angry
villager.
Forewarned is
forearmed!
The Sunday News carried an
interesting picture on its front page recently
showing villagers from
Nyamandlovu organising transportation of grain they
bought from the GMB. The
government is providing subsidised maize to areas
affected by drought, we
were told.
A few days later under the heading “Govt help needed to
save starving
people”, the Daily News carried a report saying a government
decision was
needed to compel the GMB to distribute grain to help over a
million people
facing starvation.
“It is a challenge to our
mitigation efforts,” Ministry of Labour and Social
Welfare permanent
secretary Lancester Musekwa told a parliamentary portfolio
committee. “The
government should simply declare its position to GMB so they
distribute it
immediately to needy people to avoid starvation.”
So is the grain
available or not? It was certainly available when Obert
Mpofu threw his
lavish “bash” in his constituency a few weeks ago. What is
the priority
here? Perhaps the diamond kings could tell
us!
We were interested to see Botswana’s
military chief being rapped over the
knuckles by his country’s MPs over
remarks he made to the press during his
Zimbabwe visit. He went much too far
in proclaiming undying bonds with
Zimbabwe, we understand. This is of course
a new development as only a few
months ago Botswana was providing refuge to
Morgan Tsvangirai.
And just as General Tebogo Masire was declaring
historic ties to Zimbabwe
Simon Khaya Moyo was in Gaborone saying how
indebted Zimbabwe was to the
Botswana Democratic Party
(BDP).
Khaya Moyo, at the BDP 50th anniversary celebrations hailed
the “strong
relations” between his party and the BDP, saying Zimbabwe is
indebted to the
latter for the role it played during the country’s
liberation struggle.
“It was the sacrifices of the gallant sons and
daughters of the Republic of
Botswana under the leadership of the BDP who
contributed so immensely to the
liberation of Zimbabwe,” he
said.
Khaya Moyo added that Botswana continued to support Zimbabwe,
especially in
calling for the scrapping of the “illegal” economic sanctions
against the
country.
This is in stark contrast to the views of
Zanu PF Politburo member Jonathan
Moyo who once said: “When a country has
more goats than people, it suffers a
serious leadership deficiency as is
happening in Botswana where a primitive
and intolerant military junta is
masquerading as a democracy.”
This was in response to the deportation
of journalist and Zanu PF apologist
Caesar Zvayi from Botswana where he was
an economic refugee.
Zvayi, in his tirade against the Botswana government
also stated that it was
“sworn to the politics of Western
appeasement”.
These are very divergent views indeed from the same
camp.
We sympathise with Reuben Barwe who
was reportedly duped by a colleague a
year ago and was only able to recover
a small portion of his“investment”. It
is never nice being swindled. But
what we have to say here is that ZBC
commentators are full of opinions on
the economy and how the MDC-T is not
qualified to run things the way Zanu PF
does. And here they were making all
sorts of injudicious loans and generally
mismanaging their own finances.
Barwe, who was owed US$20 000, made
frantic efforts to recover his money.
Indeed, a lot of pleading appears to
have been going on at Pockets Hill
followed by meaningless
IoUs.
What strikes the reader of the Herald story is the naivety of
the
individuals involved. People were pleaded with to “invest” in dubious
circumstances and further amounts were subsequently sought. The victims then
“realised” (a favourite Herald word) they had been duped.
We won’t
comment here in too much detail as the matter is before the courts.
Our
source is the Herald!
But what we can say is that the next time ZBC officials
threaten to sue us
for accusing ZBC of unprofessional conduct we will do no
more than cite this
case.
Another
comment is called for here. In its same edition of Tuesday this week
the
Herald carried a Page 2 story on South Africa’s comments on Zimbabwe’s
election process. It was headed “SA speaks on Zim
elections”.
Foreign minister Maite Nkoana-Mashabane told parliament
in Cape Town that
Pretoria expects full implementation of the GPA before
elections.
“The GPA envisages that an election in Zimbabwe will only be held
following
the finalisation of the constitution-making process,” she said.
“Our
government expects there will be no deviation from the provisions of
the
GPA.”
What is interesting here is
the dilemma that must have arisen over how to
handle this manifest
contradiction of Zanu PF policy. President Zuma, after
all, speaks for the
region, not just South Africa.
So this is what they did. Firstly they
exiled the story, of huge national
and international importance, to Page 2
where it struggled for prominence
among “exciting” stories such as “Utilise
land, Mujuru challenges
development associations”, “Mining fees consistent
with projected growth”,
and Zanu PF’s favourite subject, “Scottish Catholic
leader condemns
homosexuality”.
Scotland is a largely Protestant
country.
In its place on Page 1 went a story headed “Satanism scare
in Mufakose”.
They then felt they couldn’t junk the SA story altogether so
it was
interspersed with paragraphs on what President Mugabe had said about
elections over the past few months. So a story about South African policy on
Zimbabwe became an adulterated story on what Mugabe thought about
elections!
Meanwhile Jonathan Moyo has
again taken it upon himself to excoriate another
Sadc country, this time
South Africa, for “gross interference” in Zimbabwe’s
internal
affairs.
Moyo, on Monday, said South Africa’s Foreign Affairs
minister, Maite
Nkoana-Mashabane, should “shut up” after she stated that
there “would be no
deviation from the provisions of the GPA” requiring a new
constitution
before elections, as reported above.
“The future of
Zimbabwe is not dependent on a new constitution, and if she
doesn’t know
that then she must shut up. What she is saying about the
constitution is
delinquent. She has no locus standi to make these
pronouncements which
constitute a gross interference in our national
affairs, she has no remit to
talk about us.” Moyo told New Zimbabwe.com
A bit of restraint would
do you a lot of good Prof! South Africa has every
right to demand the full
implementation of the GPA since they would deal
with the consequences of
another sham election.
They have had to absorb the economic and
political refugees of Zanu PF
misrule over the years, over three million,
estimates say. It is in their
interest to see the end of the more than
decade-long Zimbabwean political
crisis and no amount of vitriolic posturing
on sovereignty can conceal that
fact.
Readers have probably been
following the Masimirembwa case where the state
media is claiming that his
exclusion from the Law Society is a personal
matter. He is fully entitled
to join the society we are told.
But what is interesting is that
nowhere in this narrative is there mention
of what Masimirembwa is alleged
to have done in order to suffer exclusion.
Perhaps the next time one of the
Herald’s apologists goes to work, he or she
could disclose the real story.
That, by the way, is the Law Society of
Zimbabwe registration story, not the
one where he almost single-handedly
sabotaged the economy.
That
needs to be told as well as he bids for a ticket in Zanu PF’s
unedifying
primary election process. We need to know what role if any La
Farge are
playing in that. Does Nicolas Sarkozy
know?
Embattled Malawian President, Bingu
wa Mutharika, has taken a swipe at old
African leaders who overstay in
power.
Wa Mutharika said although he has been called a dictator, arrogant and
other
names, he is a democrat because he doesn’t intend to elongate his stay
in
power at the expiry of his constitutional mandate in 2014, reports the
Nyasa
Times.
He said after the elections in 2014 he would “hit
the road to Ndata Farm in
Thyolo” for retirement.
“If I wanted, I would
easily say I will go for another term and no one would
stop
me.
“I am not like 87-year-old Wade [of Senegal] who is gunning for
another
seven-year term. Imagine he is much older than me and he wants
another term.
He will be 92 by the end of such a term,” Wa Mutharika
said.
There is a better example of an ageing leader, clinging to
power, closer to
home Cde Wa Mutharika which you did not care to
mention.
Wa Mutharika also accused Western donors of funding an opposition
protest
movement that is challenging his increasingly tight grip on
power.
He urged his supporters to “step in and defend their father rather
than just
sit back and watch him take crap from donors and rights
groups”.
The less said the
better!
Finally we were sorry to hear
that the representative of Essar was unable to
attend the Zimbabwe
Investment and Trade Conference in Johannesburg last
week. Apparently he had
a bout of typhoid. Not the best advertisement for
Zimbabwe.
http://www.theindependent.co.zw/
Thursday, 08 March 2012
16:52
FIVE months ago, with great trumpet-blowing, government announced the
creation of Dimaf, “Distressed Industries and Marginalised Areas Fund) in
order to demonstrate its alleged profound concern for the distressed
circumstances of industry in general, and Bulawayo in
particular.
However, with the lapse of time, that entity has proven
itself to be a
pronounced non-event. Clearly Dimaf is actually an acronym
for “Don’t
Imagine Monetary Assistance is Forthcoming”, for, despite the
immense
urgency for industry to be assisted in endeavours to revive, nothing
has
been forthcoming from Dimaf, and industry is declining ever
more.
The fund is endowed with a total absence of substantive action,
over and
above the fact that the quantum of the fund is ludicrously low. In
total,
its funding is apparently a niggardly US$40 million. In reality, the
needs
for a substantive recovery of industry are at least US$2 billion, of
which
at least US$1 billion is required for those industries situated in
Bulawayo,
if a comprehensive recovery is to be achieved. Of the token
funding being
provided for industrial revival, half has been availed by
government’s
beleaguered and emasculated Treasury, and half by Old
Mutual.
Indications are that, because the funding is so minuscule, the
maximum
assistance as will be given to any one industrial applicant is
US$500 000
and in most instances very considerably less. But for many
industries, if
they are to be revived and are to survive, the funding needs
are markedly
greater.
Provision of inadequate funding equates
to a critically ill patient being
given a quarter of a medical tablet, when
the prescribed dosage is two of
such tablets. As a result, the patient
either remains ill, or dies. This
too must be the consequence of industry
being given inadequate funding, as
against that necessary to achieve a
significant recovery.
The processing of applications for facilities from
Dimaf is another of the
fund’s negative features, months are elapsing
without applicants receiving
any advice as to the outcome of their
applications. Meantime, in
anticipation of receiving much-needed recovery
funding, the industries
struggle on, endeavouring to remain operational,
with their circumstances
ever-worsening and their losses
intensifying.
And it is not only those industries that are confronted
by the intensifying
operational constraints, but also their employees, who
cannot be adequately
remunerated, as well as the employees’ families and
dependants. Suppliers
remain unpaid for goods and services, thereby
jeopardising their survival.
The economy continues to contract, consumers
are deprived of access to
essential commodities, and revenue flows to the
fiscus are minimised.
Despite the as yet non-distribution of funds by
Dimaf, indications from
information given to applicants suggests that the
terms and conditions of
funding to be provided are out of touch with
realities. The fund’s
administrators have intimated that any funding
provided will be repayable
within 12 months. That is an unreasonably
curtailed period for most
distressed industries.
On receipt of
the funds, the manufacturer has to place orders for inputs
from suppliers,
and await delivery thereof. Concurrently, he must solicit
customers’
orders. Once the inputs have been received, the products must be
manufactured, despatched to customers, and payment for those goods awaited,
whereafter the manufacturer must repeatedly engage in the same cycle of
operations.
Each such cycle can take many months, and only
progressively as it is
repeated does the manufacturer begin to regain
viability and accumulate
funding required to repay borrowed money and to
continue operations.
Although this may be variable from one enterprise to
another, most
manufacturers require two to three years to regain total
operating security,
including repayment of loan funding and accumulation of
working capital for
future operations. As a general rule, the realistic and
ideal terms of
Dimaf funding should be loans of an overall three-year
tenure, with
staggered repayments quarterly from the commencement of the
second year.
Yet another unrealistic condition and constraint being
prescribed in order
for a company to be considered for a Dimaf facility is
that the applying
manufacturer must be wholly up to date in servicing
payments to the Zimbabwe
Revenue Authority (Zimra). Although all
enterprises are lawfully obliged to
effect timeous, full payment to Zimra of
taxation liabilities, and although
the enterprises that have sustained
operational losses do not incur income
tax indebtedness, they do have the
obligation to pay fully all Pay As You
Earn (Paye) pertaining to employees’
remuneration, and Value Added Tax (Vat)
on sales.
But when the
business has very severe cash flow constraints, to an extent
that it cannot
even pay its employees fully when payment is due, it cannot
fund the
payments to Zimra. How can it remit tax on unpaid employee
earnings prior
to being able to pay such earnings? And how can it remit Vat
before
receiving payment from customers?
Indications have also been
forthcoming from the Dimaf administrations that
applications will only be
considered in respect of enterprises which have
large labour forces, in
order to maximise employment continuity. This is an
ill-considered and
destructive policy, for there are many industrial
operations which have
small or medium sized labour forces, but which have
immense importance to
the economy (and, in time, can employ significantly
greater
numbers).
They produce goods which would otherwise have to be
imported, with
concomitant inflationary impacts. They beneficiate the
economy downstream,
including large-scale employers who provide the
manufacturing inputs and
support services needed by the manufacturer. As
they progressively regain
viability, they once again become a meaningful
source of inflows to the
fiscus.
The Fund’s administrators also
need to be realistic and flexible in their
requirement that borrowing
industries should provide security for the Dimaf
loans. Not all companies
have immovable property which can be encumbered in
favour of the fund, save
in some instances by way of a second bond, their
property (if they have any)
already being encumbered by a first bond.
Contingent upon the
amount being provided by the fund, and the nature and
financial
circumstances of the intending borrower, most such borrowers are
able to
provide alternative reasonable security, such as general covering
bonds over
plant and machinery, and other moveable assets, cessions of
debtors,
supportive guarantees, and the like.
If Dimaf is to fulfill its
intended objective of saving troubled industry
and aiding its recovery and
growth, it is essential that it be adequately
funded to a far greater extent
than a niggardly US$40 million. It needs to
process applications rapidly,
with reasonableness and real understanding; it
must not impose untenable
conditions and must provide for the duration of
funding provided to be
apposite to the entity’s needs, on economically
practical and reasonable
terms.
If it is so transformed, Zimbabwe in general, and Bulawayo in
particular,
will progressively attain former industrial heights, and even
greater ones,
and the economy and the Zimbabwean people will be the
beneficiaries thereof.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 16:43
Brian
Chitemba
WHEN the US$40 million Distressed Industries and Marginalised
Areas Fund
(Dimaf) aimed at resuscitating Bulawayo industries was launched
five months
ago, the city’s business community was ecstatic that the
country’s former
industrial hub would be on a rebound and start creating
job opportunities
once again.
More than 20 000 workers had been left
jobless when Bulawayo industry ground
to a halt and job opportunities in the
city had virtually come to naught.
But prospects of revival have remained a
pipe dream as months have passed by
with no movement on the ground since
only three out of 58 companies, which
applied for financial assistance, have
managed to access the fund.
The major challenge in reviving
Bulawayo’s decimated industry are the cheap
Chinese products flooding the
Zimbabwean market, squeezing most local
manufacturer\s out of business as
more consumers in the low-income bracket
opt for these imported
goods.
Archaic machinery, equipment and high electricity costs are
part of a raft
of challenges which forced the city’s 87 firms to shut shop
while others
relocated to the capital Harare. So the US$40 million sourced
by the
cash-strapped coalition government and Old Mutual had come as a
relief to
the failed entities but the situation on the ground remains the
same. The
trouble is some of the companies which need to be revived can no
longer cope
in the changed business environment or survive the influx of
cheap foreign
goods.
Over the years, goods produced by local
industries remained unchanged for
decades despite rapid business model and
technological changes in the global
economic landscape.
This has,
in some cases, made locally-produced goods more expensive than
imported
goods mainly because of high production costs. Given all these
challenges,
reopening industries which produce the same products as those
flooding the
market would be a futile exercise.
The same companies being
resuscitated will at some point have to shut down
again since it doesn’t
make business sense to operate factories producing
expensive goods when they
are cheaper alternatives.
In the frontline years, Bulawayo used to
boast of mass-employing firms such
as Merlin, National Blankets and Monarch,
which used to produce goods both
for the local and international
markets.
Analysts, however, say most of these companies and their
products have now
been overtaken by events, including the rise of China as
the world’s second
largest economy.
Flourishing flea markets
selling cheap imports, which started mainly in the
mid-1990s, have
adversely affected locally-produced products.
This has gradually
eroded the competitiveness and viability of local
industries, mainly in
Bulawayo which used to thrive because it was a link
between industrial hubs
like Hwange and Redcliff when Ziscosteel was still
performing well.
Bulawayo, the headquarters of the National Railways of
Zimbabwe, was the
nerve centre when such companies were thriving.
Bulawayo-based
economist Eric Bloch said although the fund’s recipients
could use the US$40
million on upgrading their archaic machinery, the fund
was just a drop in
the ocean since over US$1 billion is actually required
for the purchasing of
new equipment and setting up of new relevant
companies.
He said the US$40
million was only enough for reviving existing companies
which employed
thousands of workers.
“During the first phase of Dimaf, it’s
important to revive companies then in
the second phase people can talk about
mordenisation because US$40 million
is not adequate for such a huge task,”
Bloch said.
He added that Dimaf was likely to be a failure after it
took more than five
months for companies to access capital and the terms for
firms to qualify
are stringent.
Former Zimbabwe National Chamber
of Commerce president Obert Sibanda said
the US$40 million could not finance
the cost of reviving the city’s huge
ailing industrial
zone.
“Buying new machinery requires a lot of capital and in this
case Dimaf is
not adequate. For now, companies want to boost production and
employ
workers,” said Sibanda.
Bulawayo mayor Thaba Moyo said the
priority should be focused on reviving
existing companies because opening
new firms was a daunting task given the
limited financial resources, a view
which some say needs to be interrogated
given the changes in terms of the
global economic structure and markets.
“We want to see the over 20
000 employees who were affected by the company
closures back at work. The
rest will follow,” said Moyo.
He said the Bulawayo Development
Association headed by Bloch was also in the
process of organising an indaba
for all businesses and potential investors
drawn from across the globe.
Details of the investors’ meeting are still
sketchy but the indaba is aimed
at encouraging investment in Bulawayo.
“The slow pace of the
disbursement of Dimaf is discouraging and thus we will
look at ways of
stirring economic growth,” said Moyo. However, given the
current political
and policy uncertainty attracting investment is always an
arduos
task.
Bulawayo based socio-economic commentator Chamu Mutasa said it
was prudent
for Bulawayo firms to adjust and compete for markets.
Even
though some Chinese goods and those imported from the Sadc region may
be
sub-standard compared to those produced locally, the fact is they are
affordable.
Mutasa said the prohibitive conditions set by CABS,
which is responsible for
disbursing the fund, were hampering
Dimaf
Only firms which can afford collateral of US$150 000 can access
the fund,
even though some are applying for only US$100 000. This further
complicates
an already problematical situation, analysts say.
The
bank has stated that other minimum requirements for companies to qualify
for
the funds included a “minimum of two years accounts (management accounts
or
financial accounts) audited if possible, acceptable collateral,
projections
for capex (capital expenditure) loans covering the tenor of loan
(12
months), budgets and cash flows and turnaround strategies as well as a
business plan”.
“The stringent conditions for accessing the money
are not helping the
situation situation. Business is losing faith in Dimaf.
It’s just a pie in
the sky,” said Mutasa.
Sibanda said government
has failed to treat the revival of Bulawayo with the
urgency while most
companies were bleeding. He warned the number of closed
firms would increase
if the crisis is allowed to deepen.
“Conditions set by CABS are not
to cater for distressed companies; they are
for viable firms,” said
Sibanda.
Bulawayo governor Cain Mathema has attacked Finance minister
Tendai Biti and
Industry and Commerce minister Welshman Ncube over the
delays in releasing
Dimaf funds.
Dimaf has become a battleground
for the main political parties jostling for
votes ahead of the next
elections, but in the meantime its Bulawayo and its
people suffering.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 16:39
Pedzisai
Ruhanya
WHEN someone is in their late 80s they have a tendency to forget
certain
fundamentals of how society is organised due to old age, yet there
are some
things that define the social and political order which people
should hold
dear.
My presumption is that President Robert Mugabe still
appreciates the role
advocacy networks such as non-governmental
organisations play in the
socio-political arena in Zimbabwe dating back to
the country’s liberation
struggle.
The president would do well to
remember that organisations such as the
International Red Cross Society and
others funded the education of most of
his colleagues and peers through
provision of scholarships while they were
languishing in colonial
prisons.
Unless he decides, as he sometimes does, to have selective
amnesia, Mugabe
knows as a matter of fact that local organisations such the
Catholic
Commission for Justice and Peace in Zimbabwe (CCJP) condemned human
rights
violations by colonial rulers against black Zimbabweans and called
for
democratic rule premised on the respect of fundamental
freedoms.
International groups such as Amnesty International actually
raised alarm in
1975 when Mugabe crossed the border to Mozambique to join
the armed struggle
following rumours that he was missing.
Human
Rights Watch and other Northern NGOs insisted on the respect for human
rights in colonial Rhodesia, now Zimbabwe, and the need for democratic rule
in the former rebel British colony.
Both domestic and
international advocacy groups called for norm-compliance
by the Rhodesia
government. They went further to call for black majority
rule to end white
minority rule.
When advocacy networks locally and internationally
call for norm-compliance,
like his colonial predecessor Ian Smith, Mugabe
accuses them of harbouring a
“regime change” agenda.
Surely if
the government respects the rule of law, protects the fundamental
rights of
its citizens as required by both domestic and international laws,
advocacy
groups will not be calling for norm-compliance which Mugabe
interprets as
attempts to force him out of power.
Mugabe and Zanu PF have remained
stubborn and ironically copied all evil
colonial-type fascist tactics of
ruling. This is the critical reason why
NGOs are calling for
norm-compliance; respect for human rights and
democratic values not
necessarily a drive to oust Mugabe. If he were to be
removed, it would not
be through the work of NGOs but the ballot as a
consequence of his failed
rule and dictatorship. Mugabe should know
Zimbabweans are not passive
recipients of oppression as Rhodesian rulers
would
testify.
However, because Mugabe knows a return to democratic norms
of governance
means loss of political power in credible elections, he twists
the facts and
claims he is being targeted for removal.
It is
important to articulate the role of advocacy networks and the kind of
work
that they do in order to address the misguided belief and claims that
NGOs,
by definition, exist in Zimbabwe to remove Mugabe from power. As
already
pointed out, some NGOs actually helped Mugabe and his colleagues to
rise to
power.
Although there could be no gainsaying some NGOs have played
“regime change”
roles in some countries and campaigned for the toppling of
certain leaders,
trying to define the fundamental role and existence as well
as links of
civic groups with the broad society and people in such narrow
and
unsustainable terms is a travesty. Advocacy networks are organisations
characterised by voluntary, reciprocal and horizontal patterns of
communication and exchange. They are called advocacy networks because they
plead the cause of others or defend a cause or
proposition.
Groups such the Crisis in Zimbabwe Coalition, National
Constitutional
Assembly (NCA), Zimrights, Misa and the Zimbabwe Lawyers for
Human Rights
are organised to promote causes, principled ideas, norms,
traditions and
values.
They were not formed for subversive
activities or to remove Mugabe from
power, but for the broader mission to
promote and protect democratic values,
human rights and accountability. That
is why they involve individuals
advocating for policy changes in areas of
governance, human rights,
environment, women and gender issues that cannot
be easily linked to a
rational understanding of their personal or individual
interests.
Contrary to Mugabe and Zanu PF’s assertions, NGOs in
Zimbabwe are
particularly important in value-laden debates over democracy,
human rights,
infant health and media pluralism, among other
issues.
In the case of the NCA, for over a decade the organisation
has been fighting
for an overhaul of the country’s constitution through a
people-driven
process, not a partisan exercise as is currently the case. To
then for
instance accuse the NCA of trying to remove political leaders is
preposterous. Such views are informed by a gross misunderstanding of civil
society and its dynamics.
Mugabe and his supporters are missing
the point by a wide margin and the
current rallying of Mugabe’s forces to
crack down on NGOs shows how
malicious they can be. The banning of NGOs by
the governor of Masvingo
province, one Titus Maluleke who is unelected, was
clearly a directive from
Mugabe.
It is also important for Mugabe
and Zanu PF to appreciate that advocacy
networks such as the NGOs in
Zimbabwe that he is targeting usually emerge
around issues where
communication channels between them and their government
are blocked or
where such channels are ineffective for conflict resolution.
These
groups will gather information on human rights violations and share it
with
other transnational groups. In order to be effective in pushing for
norm-compliance, these organisations apply pressure through information,
accountability, and leverage politics.
In the case of Zimbabwe,
information politics involves the ability by NGOs
to quickly and credibly
generate politically usable information and move it
to where it will have
the most impact. This involves collecting information
about arrests, abuse
of journalists, illegal detentions, police and military
brutality against
civilians, and sharing it with organisations such as Sadc,
the AU, EU and
UN, pleading for action to stop state-sanctioned violations.
These
are legitimate struggles by NGOs that were waged against the Rhodesian
regime and are now being fought against Mugabe’s government. Mugabe did not
complain then but is now whining. The fact is these advocacy networks have
a legitimate right to continue doing the same until there is respect for the
rule of law and human rights. The aim is not to overthrow the government but
to influence democratic governance.
Ruhanya is a PhD
Candidate, University of Westminster. Email:
p.ruhanya@my.westminster.ac.uk
.
http://www.theindependent.co.zw/
Thursday, 08 March 2012 16:36
By Andrew
Miller
RESERVE Bank Governor Gideon Gono’s proposal in November last year
to peg a
new Zimbabwean dollar to the Chinese yuan made a splash of
headlines.
The Asia Times, for example, announced “Zimbabwe’s yearn for
yuan”, while
Al-Jazeera asked “To Yuan or not to Yuan, that is the
question”.
But the media excitement is misplaced for now. Gono and
his allies in the
Zanu PF cannot institute the peg with the current
government in place.
Indeed, Finance minister Tendai Biti from the MDC-T
made clear that Zimbabwe
would continue using its multi-currency system
until the economy stabilised.
Thus, like so much in Zimbabwe today,
the future of the country’s monetary
regime hinges on the outcome of the
next elections. Disputes over the new
draft constitution notwithstanding,
the polls will likely go ahead this
year. Zanu PF is eager to hold them when
their octogenarian leader Robert
Mugabe is still relatively fit. And MDC-T,
while insisting on constitutional
reforms prior to the vote, wants out of
the coalition government. In terms
of Zimbabwe’s constitution elections must
be held by 2013.
If Zanu PF gains a clear victory that puts a
partisan at the helm of the
Finance ministry, the yuan peg could become a
reality.
From Zanu PF’s perspective, the peg makes perfect sense.
Tying Zimbabwe’s
monetary regime to the Chinese would be a logical step
forward in its “Look
East” policy. Mugabe began reorienting his country
eastward in 2003 as
Western pressure over land seizures and human rights
abuses grew.
Pragmatically, he believed Asia — namely, China,
Malaysia, North Korea,
Iran, and Indonesia — could compensate for the loss
of Western investment.
Asia also fits well with his party’s anti-colonial
narrative. “It is very
important for us in Zimbabwe,” he explained in 2005,
“to develop the Look
East Policy because that is where people who think like
us are, same history
of colonialism as ourselves, and people who have
started developing their
economies.”
China has become
increasingly central to the policy. In the first nine
months of 2011 alone,
Sino-Zimbabwean trade increased 62%, totaling US$171
million, according to
Reuters. China has made investments in a host of
industries including
telecommunications, construction, and most importantly
mining. Just last
November, Chinese investors agreed to put US$700 million
toward developing
Zimbabwe’s mining sector.
Mugabe also uses the partnership to play up
Zanu F’s liberation
credentials — its greatest political advantage. “Let us
not forget,” he
often reminds Zimbabweans, “that the material assistance
that helped us
liberate this country came from China.” That “material”
continues to flow
today as his security forces purchase Chinese arms without
strings attached.
Internationally, China uses its influence abroad to
protect Mugabe and his
associates from Western pressure on human rights. It
was one of the few
countries to stand by Zimbabwe during the 2005 Operation
Murambatsvina, in
which the government bulldozed homes of an estimated 700
000 people. China
has even shown a willingness to veto UN Security Council
resolutions for
Mugabe. It did so in 2008 for a resolution that threatened
to freeze the
assets and prevent the travel of top government officials.
This support
remains invaluable for Zanu PF.
In promoting the
yuan, Gono seems to base his arguments more on Zanu PF
ideology than
economic reality. He told state media recently that “the US
dollar is fast
ceasing to be the world’s reserve currency and the eurozone
debt crisis has
made things even worse... There is no doubt that the yuan,
with its
ascendancy, will be the 21st century’s world reserve currency.”
The
yuan, however, is far from rivalling the dollar in this respect. Today,
the
dollar accounts for 60,7% of global reserves followed by the euro, pound
sterling, and Japanese yen. The yuan’s share of reserves is negligible due
to the strict capital controls China places on its
currency.
Until China loosens these controls, little international
trade can be
denominated in yuan, which precludes its adoption as a reserve
currency. The
dollar currently accounts for 85% of trade compared to 0,3% of
exchanges
using China’s currency. Thus, a yuan peg would limit Zimbabwe’s
access to
international markets at least in the short-to-medium
term.
Alluding to Angolan offers to bail out Portugal, Gono has
suggested Zimbabwe
might find itself in a similar situation. “By adopting
the Chinese yuan,” he
exclaimed, “it will not be long until we will also be
volunteering to bail
out Britain from her debt
crisis.”
Zimbabwe’s debt burden is 230,8% of its US$5,9 billion gross
domestic
product. It is difficult to imagine how Zimbabwe would be in a
position to
bail out the United Kingdom’s US$2,25 trillion economy, which
has a debt
ratio of 79,5%. A more likely scenario seems to be that Western
countries
will eventually forgive Zimbabwe’s debt.
Moreover,
Zimbabwean state run media often touts the trade relationship with
China,
giving the mistaken impression that it’s Zimbabwe’s largest trading
partner.
The African Economic Outlook 2011 report puts China’s share of
Zimbabwean
exports at 3,4%, which compares to 14% of exports going to South
Africa.
Zimbabwe also has an unsustainable US$2 billion trade deficit with
South
Africa. The Zuma administration in South Africa intends to devalue
the
rand. The peg thus would exacerbate the trade deficit.
The
multi-currency system used in Zimbabwe today has served an important
transitional role. The government adopted the system in January 2009 as
hyperinflation, peaking at 79,6 billion percent just a few months prior,
killed the Zimbabwean dollar. A host of foreign currencies — the rand, euro,
pound, US dollar, pula, metical, and kwacha — became recognised legal tender
in Zimbabwe, but the US dollar soon supplanted the others.
This
“dollarisation” reversed the runaway inflation and helped resurrect the
country’s short-term credit market. Dollarisation, however, is not the
optimal long-term solution for Zimbabwe. Pragmatically, a paucity of US
coins in circulation makes it difficult for retailers to make change. And,
from a nationalistic perspective, both Zanu PF and MDC-T agree that Zimbabwe
should eventually return to its own dollar. Thus, Zimbabwe has to
incorporate itself into credible, fiscally sound framework.
The
Common Monetary Area (CMA) offers just such a framework. The CMA is a
monetary union tying together many of Zimbabwe’s largest trading partners —
South Africa, Lesotho, Namibia, and Swaziland.
Joining the CMA
would come with substantial economic and fiscal benefits.
Further
integrating its economy with the neighbourhood, namely South Africa,
would
bring down barriers to capital flow, thereby boosting Zimbabwe’s
struggling
long-term lending market and making cash transfers from the three
million
Zimbabweans living in South Africa more fluid. Additionally, the
Zimbabwean
government would gain much-needed revenues from seigniorage,
which roughly
speaking is the fiscal gains from printing currency for less
than its actual
worth.
Rather, the upcoming elections will determine the future of
Zimbabwe’s
monetary regime -- a future that will prove much more promising
if Zimbabwe’s
leaders look south. — AllAfrica.com.
•Andrew
C Miller holds a master’s degree from Georgetown University’s Walsh
School
of Foreign Service. He is on Twitter @andrewmiller802.
http://www.theindependent.co.zw/
Friday, 09 March 2012 10:20
ZIMPLATS, South Africa’s Impala
Platinum’s local subsidiary facing threats
of seizure or having its
operating licence withdrawn by government as the
battle over the
controversial indigenisation policy intensifies, was put
under further
pressure this week after authorities rejected its request to
extend a
deadline to surrender 29,5% of its equity to National
Indigenisation and
Economic Empowerment Fund.
“You are advised that your request for a 30-day
extension has been rejected
by the honourable minister and your company is
expected to comply with the
law as stated in our February 22 letter to you,”
Indigenisation ministry
secretary George Magosvongwe said in a letter
addressed to Zimplats CEO Alex
Mhembere.
The letter was written
on Friday last week. A meeting between the permanent
secretaries of
Indigenisation and Mines failed to take place on Tuesday to
resolve the
issue.
These dramatic events came after Indigenisation minister
Saviour Kasukuwere
told Impala, the world’s second-biggest platinum
producer, last month it had
14 days to hand the 29,5% to the National
Indigenisation and Economic
Empowerment Fund or face “enforcement
mechanisms”.
Government, or precisely the Zanu PF wing of it, which
is escalating threats
to seize control of foreign-owned companies under the
guise of empowerment
as elections draw closer, wants Implats to transfer the
equity to the
state-run fund immediately and without proper
arrangement.
This is how Zanu PF operates and its reckless approach has been
extensively
damaging to the economy.
Given that Zimplats is a
success story and showcase for foreign direct
investment, grabbing the
company’s shares or withdrawing of its licence
would almost certainly
undermine Zimbabwe’s investment prospects and nascent
economic recovery
after a major rebound in the past three years following
dollarisation and
exchange-rate stabilisation.
The economy is already reeling from a
liquidity crisis, threatening to
collapse the fragile banking
sector.
The Zimplats saga could also worsen the country’s political
risk profile,
while damaging its chances of competing effectively to attract
limited and
often timid capital.
Zimbabwe needs a massive
injection of capital and investment to recover from
a decade of cumulative
decline which saw the economy going through an
unprecedented meltdown and
hyperinflation. For the country to recover and
grow, it needs a ruthlessly
efficient government and leaders, a new model
for economic development,
skilled workforce, technology, resources, which
are plenty, and of course
capital. Resources which are underground without
being exploited mainly due
to lack of capital don’t mean much. We have seen
many countries around the
world suffering in the middle of plenty. In fact,
that is the tragedy of
Africa.
So without a doubt, the current indigenisation campaign is
not the best way
to attract the much-needed investment. Instead, there is
overwhelming
evidence that the chaotic process, which is led by officials
who have
demonstrated they don’t understand what needs to be done beyond
personal
interests, has caused massive capital flight, besides undermining
investor-confidence and leading investors to mark Zimbabwe as a “no go
area”.
For Zimbabwe to succeed, the country does not need the ongoing
rabble-rousing. It needs a well-thought out and structured approach to
indigenisation to transform the economy. But perhaps more importantly, the
country needs a viable economic model supported by a competent leadership
which is able to come up with development programmes and meet their
targets.
A policy of seizure or grabbing other people’s properties
through
intimidation and coercion cannot achieve economic growth and
prosperity.
Instead of chasing away the investors already on our shores, we
need to find
a mutually-beneficial model of working with them, particularly
when dealing
with the issue of companies, which is very different from land
reform. This
needs to be understood by those behind this unconvincing and
questionable
indigenisation policy. Although the principle of it is good,
the model is
bad and needs to be changed.
http://www.theindependent.co.zw/
Friday, 09 March 2012
10:14
Dumisani Muleya
AS you would have thought, it was a very
hectic week for us after writing a
corruption story about the National
Social Security Authority (NSSA), a
statutory body which holds sway across
the economy in terms of investments
in equities, the money market and
property.
The story was based on a report by the National Economic Conduct
Inspectorate (NECI), a department under the Ministry of Fina/nce, whose main
duties comprise carrying out investigations into white-collar crimes and
compliance auditing in both private and public companies.
NECI
was tasked by the Minister of Labour to probe allegations against NSSA
and
its senior directors and management after reports that there was
“massive
fraud, corruption and abuse of power” at the institution.
It is not
the first time NSSA has been investigated. Law enforcement
agencies and
organisations like the Anti-corruption Commission, Zimbabwe
Revenue
Authority and Office of Comptroller and Auditor General have
previously done
inquiries into its affairs.
NSSA, a statutory body tasked by
government to provide social security to
workers, invests pooled funds in
different portfolios.
So our story was that NSSA is rotten to the core due to
extended periods of
corruption.
Apart from open corrupt
activities, the NECI report also said NSSA directors
and management splashed
money in buying mansions and luxury cars for
themselves, while contributors
(pensioners are paid US$20 a month) struggle
to lead decent lives after
retirement.
At one time NSSA directors and management bought
themselves vehicles worth
between US$100 000 and US$230 000. The cars
included Mercedes Benz S-class
and a number of Jeep Cherokees. NSSA general
manager James Matiza bought a
house in Borrowdale for US$330 120 after
securing himself an internal loan.
There are many other allegations
in the report. We listed the allegations
received by the minister which led
to the investigation in our story last
week.
Honestly, we find these
sorts of excesses scandalous and insensitive. Most
of the NECI’s findings
demonstrate that corruption is rampant at NSSA,
widely seen as a feeding
trough for certain networks of politicians and
tycoons in
town.
But what was the reaction from NSSA itself and affected
individuals? In
short, it was ballistic. We received angry feedback,
including retorts,
protests and threats of litigation from various
quarters.
The most important reaction came from NSSA itself, through
public relations
firm, MHPR Public Relations Consultants, fronted by Mike
Hamilton. The
thrust of their reply was simply to deny the allegations,
pointing out that
the accusations were “damaging”. While denying the claims,
NSSA, including
Matiza, acknowledged they had neither seen nor read the
NECI’s report in
question.
NSSA denied the allegations, saying
its operations were “transparent”. In
self-defence, it also wondered why the
minister had done nothing about the
report if NECI’s findings were true.
Well, we wouldn’t know why, but what we
do know is that it happens all the
time.
Then without any sense of irony, NSSA concluded saying: “It is
difficult to
comment on a report that we have not seen.”
True. I
rest my case. This is what I told Hamilton.
Another interesting
reaction came from Shepherd Shara, former ReNaissance
Merchant Bank (RMB)
executive director-banking responsible for treasury,
trade finance and
corporate banking portfolios. Allegations against Shara
are that he got or
was involved in a deal in which NSSA through RMB and its
associate
ReNaissance Trading released US$10 million in a botched wheat
importation
deal. He denied the allegations, which is fair and fine.
But Shara,
through his lawyers, goes on to demand that we pay him US$500 000
in
“damages” to his attorney’s offices within a week, “failing which we
shall
sue you”!
Well, our story did not say Shara is corrupt but that he
was investigated
for corruption by NECI, which is a fact. Facing corruption
allegations and
being corrupt is not one and the same thing. Let’s be clear
on that.
Otherwise, we would like to advise mainly NSSA that, instead
of scrambling
to deny these allegations, it must thoroughly investigate and
deal with
these issues. Corruption and rent-seeking behaviour, which have
devastating
economic consequences, apart from being morally repugnant, must
not be
tolerated.
dumisani@zimind.co.zw
http://www.theindependent.co.zw/
Friday, 09 March 2012
10:12
Itai Masuku
WHERE money is not accounted for, a country
should not expect investors.
Period. We’ve heard it all before, that
investors are not coming to Zimbabwe
because the politics are not right etc.
Yes, politics are part of the
problem, but even if that were to be sorted
out, the investors would still
be reluctant to come in critical
numbers.
The NSSA debacle , which in turn has links with the RMB scandal,
reminds us
once again that unless there are serious changes to legislation
in order to
prevent fraud, Zimbabwe will continue to be bleed from it. And
that’s a
serious indictment on the management of our
economy.
For, what investor would want to put their money where the
chances of it
being misappropriated are more than high? When international
fund managers
search for destinations for the moneys entrusted them, they
not only look at
companies where profit could be made, but where there are
companies with
sound management. What happened at NSSA is far from sound and
we have reason
to believe this is ongoing as shall be demonstrated elsewhere
in this paper.
Those in the know call the activities at NSSA
self-dealing, a phenomenon
where leaders (or rather misleaders) of corporate
bodies organize for goods
to be supplied to the companies they head at
inflated prices. Working for a
major newspaper company in the country, the
writer was once involved in an
investigative story in which management was
involved in self-dealing. The
story became the scandal of the year. However,
one was surprised to see that
after all the brouhaha, which included the
incumbents going through the
courts and all, the culprits were back on the
streets shortly afterwards,
scot free, as if nothing had
happened.
Expectations were that the miscreants would be forced to
pay back the monies
they had stolen but this was never to be. In fact there
are many such people
that were involved in similar financial shenaniganss
who have really never
been brought to book. They constitute many of the
“businessmen’ who today
live in fortresses and drive cars that look like
spacecraft. Remember
Gilbert Muponda of the ENG scandal? and David
Matanganyidze of the Access
to Capital fame?
Did those
investors ever get their money back? Never. Why? Because, as
William
Shakespeare said, “the law is an ass”. This is particularly true of
Zimbabwean law. It rewards high level corruption and punishes petty offences
line vending and hawking. Do not be fooled, many so-called executives are
accomplished fraudsters, with a trail of destruction of companies behind
them.
They know that the law doesn’t compel them to restore what
they have stolen,
unlike in the US where one has to pay back four times what
they stole. Which
reminds one, are we ever going to see changes to the
Companies Act as we’ve
been promised? It’s doubtful, because updated company
law must, given
international trends, include issues of corporate governance
and business
ethics. This is anathema to the ruling elite, including the
inclusive
government. It’s like asking turkeys to vote for any early
Christmas.
All the same, our laws must one day not allow an executive
to steal money
and get away with it. There should be disincentives to
corruption. The law
should have a clear position that once it’s proven that
one has stolen,
steps should be taken to recover the money. And if you steal
a dollar you
should pay back a dollar or even more.
Just sending
the culprit to prison, if it ever happens, doesn’t’ sort out
the prejudice
caused to the victims. So in the case of the NSSA scandal, how
is government
going to get our money back from those crooks? It has a duty
to do so. It’s
not good enough to just tell us that corrective measures are
being taken to
ensure that this won’t happen again, because it will. It will
because there
is no disincentive for it not to happen.
