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Mugabe seeks Sadc poll nod

Thursday, 24 May 2012 12:35

Owen Gagare

PRESIDENT Robert Mugabe is intensely lobbying Sadc leaders ahead of a
crucial summit in Luanda, Angola, to secure regional consensus before he can
call for elections possibly by December despite raging disputes over the
Global Political Agreement (GPA) and botched constitution-making process.

The Luanda meeting would be critical in determining Zimbabwe’s direction
amid intensifying fights over the GPA, constitution-making and the elections
Seeing the dangers of unilateral action, Mugabe, who needs regional
endorsement and legitimacy, this week went all out to consult Sadc on
elections before he could proceed.

Regional leaders last year demanded at summits in Livingstone, Zambia;
Sandton in Johannesburg, South Africa; and Luanda the need for Zimbabwe to
follow the roadmap before free and fair elections after 2008’s
hotly-disputed presidential poll run-off.

“Heads of state and government will meet in Luanda on June 1 for the
tripartite summit of Comesa, East African Community and Sadc. Senior Sadc
officials will first meet in the Angolan capital on May 30 followed by the
Council of Ministers on May 31,” a senior Sadc diplomat said last night.

“Apart from regional integration and trade issues, they will discuss the
political and security situation in the region and that’s where Zimbabwe
comes in.”
In a bid to build consensus and avoid confrontation with regional leaders,
Mugabe on Monday dispatched Defence minister Emmerson Mnangagwa to deliver a
special message to Sadc chair, Angolan President José Eduardo dos Santos in

Last month, Prime Minister Morgan Tsvangirai sent Minister of State in his
office, Jameson Timba, to meet with the Angolans.
On Tuesday State Security minister Sydney Sekeramayi met with Zambian
President Michael Sata in Lusaka.

Mnangagwa and Sekeramayi were in Maputo last week for the sixth
Zimbabwe-Mozambique defence and security permanent joint commission meeting
with their counterparts and reportedly sounded out to President Armando

Vice-President John Nkomo was sent to Pretoria to meet South African
President Jacob Zuma, while Zanu PF chairman Simon Khaya Moyo travelled to
Others envoys went across to other Sadc countries, including Tanzania. Zuma
chairs the Sadc Troika of the organ on politics, defence and security. Sata,
a key Mugabe ally, also sits on the troika, together with Tanzanian
President Jakaya Kikwete. Tanzania is incoming troika chair. Mugabe met Sata
last month when he came to open the trade fair in Bulawayo. They also had a
meeting in Livingstone last December.

Zuma, facilitator in Zimbabwe, is expected to brief the meeting when it
discusses the political and security situation in the region. The South
Africa leader in March visited Botswana, Namibia and Angola.

Senior Zanu PF officials said Mugabe’s envoys were not pursuing party
manoeuvres but “national interest”.
“The president is exercising responsibilities as head of state and
government. Zimbabwe is a member of Sadc, not Zanu PF or the two MDC
parties. So these envoys are representing government and not Zanu PF which
is why they are meeting presidents and not party leaders,” a senior
politburo member said.

“The idea is to consult and compare notes because the situation has shifted.
Things have moved and changed. We are no longer at the stage of mediation
but at a point where we are discussing collectively the way forward. The
country can’t be held hostage by the constitution-making process; life has
to go on. To the extent that the constitution-making process is necessary,
let it go on but the country must also move on and that’s why we must have
elections by December 31. Other parties want elections by March next year.
What’s the difference between December 31 and March 31, other than three

Zanu PF is also expected to take advantage of the meeting of
secretary-generals of former liberation movements to be held in Zimbabwe
Mugabe’s envoys reportedly gave the regional leaders an update of the
political and security situation in the country — painting a picture of a
politically stable and peaceful country burdened by a dysfunctional
government. The emissaries reportedly indicated the constitution-making
exercise had reached a dead end,  hence the need for elections this year.

Zanu PF officials say Mugabe (88) is pressing for polls this year due to old
age and deteriorating health.
The MDC parties say they would only agree to polls when a new constitution
is in place and the GPA is fully implemented. Mugabe’s emissaries reportedly
carried messages to convince Sadc leaders it was in the national interest
for Zimbabwe to hold elections this year so that the country starts 2013
without divisive political issues. Further they do not want elections to
disrupt the United Nations World Tourism Organisation general assembly to
held in Victoria falls in August next year.

Zanu PF is also arguing there is no material difference between holding
elections in December and March next year. The party also claims rain
patterns have changed, hence it would be more practical to hold polls in
December than March when people are ploughing fields even though March is
traditional polls month.

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Govt battles to rescue Essar deal from collapse

Thursday, 24 May 2012 12:30

Faith Zaba/Owen Gagare

GOVERNMENT has come up with a collective position on the US$750 million
Essar deal aimed at reviving defunct steelmaking giant Ziscosteel after a
heated high-profile meeting on Tuesday.

The meeting, which was chaired by President Robert Mugabe and attended by
ministers, resolved Essar should be given 20 claims in Mwanezi Ranch while
exploration is being done on the remaining concessions to determine the
quantity and value of iron ore reserves it critically needs in the area.

Government and Essar reached an agreement in March last year in which the
Indian firm acquired a 60% stake in Ziscosteel to form a new company, NewZim
Steel Ltd.
Essar also acquired 80% of Buchwa Iron Mining Company (Bimco) to form NewZim
Minerals Ltd. Bimco held the rights to iron ore claims for feedstock into
Zisco operations.

However, Essar has failed to kick-start operations because the Ministry of
Mines had refused to give it mineral rights to mine in Mwanezi, arguing it
does not know the quantity and value of the iron ore. This was amid claims
there are 30 billion tonnes of high-grade reserves and the country could
lose billions of dollars in the process.

In March, Mugabe instructed Mines minister Obert Mpofu and Industry and
Commerce minister Welshman Ncube to speedily resolve the issue but the
problem persisted. Cabinet ministers said Ncube on Tuesday gave a detailed
update report on the Essar deal so far.

He indicated that Essar was given mineral rights to mine the Buchwa and
Ripple Creek claims. Buchwa has about 15 million tonnes of iron ore, but the
mineral is believed to be so deep that it cannot be mined unless new
technology is introduced.

By the time Ziscosteel ceased operations, Bimco had already stopped mining
the claims. The Ripple Creek claim in Kwekwe has about 30 million tonnes,
but the iron ore is of a low grade with 54% iron ore content instead of the
recommended content of between 64% and 74%.

Besides that, the iron ore at Ripple Creek would be exhausted in five years
at the level of mining which Essar wants to operate, and the Indian company
has been arguing that by then it would not have recouped its investment.
This made the Mwanezi claims critical to the deal.

“Ncube presented a report and it was debated afterwards. Then a consensus
was reached.
“Mpofu and Ncube later met to iron out issues before they could inform Essar
of the decision,” one minister said.

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Govt ministries fail to account for US$40m

Thursday, 24 May 2012 12:28

Wongai Zhangazha

A REPORT by the Comptroller and Auditor-General has cited financial
irregularities in several government ministries including the Defence
ministry which failed to account for about US$18 million for the financial
year-ended December 31 2010.

Comptroller and Auditor-General Mildred Chiri rapped the ministry’s
accounting records as unreliable and incomplete, saying it was difficult to
reconcile expenditure figures. The ministry’s total expenditure as per the
Appropriation Account amounted to US$176 478 621 while the Public Finance
Management Systems (PFMS) report recorded a balance of US$158 562 920,
leaving an unreconciled difference of US$17 915 701.

“Proper and reliable accounting records should be maintained at all the
times. The two different expenditure figures should be reconciled to ensure
completeness and accuracy of information,” Chiri recommended.

The report also unearthed fraudulent activities where US$197 043 was paid to
six companies which did not provide any goods or services to the ministry.
Only US$22 174 was recovered after an internal audit.

Chiri said no steps were taken against the officers who committed the fraud
and no mechanisms had been put in place to prevent such lapses in internal
“Total losses will occur if the fraud is not investigated to its logical
conclusion. Failure to take appropriate measures against those found to be
negligent will send wrong signals.”

Chiri warned the ministry against circumventing government systems in making
payments for institutional provisions, saying audit trails were lost,
resulting in public funds being misused.

The report also exposed the Ministry of Agriculture Mechanisation and
Irrigation Development for failing to reconcile three different figures it
submitted. The Appropriation Account reflected US$215 511 694, the Public
Finance Systems’ consumed budget had a figure of US$112 730 411, while the
Sub Paymasters-General’s bank statement showed an amount of US$205 876 312.

Chiri said the submission of three figures suggested that the ministry’s
total expenditure might include fraudulently processed vouchers. She also
found that the Agriculture ministry had failed to do monthly payroll

“Therefore I could not ascertain the correctness of the wage bill. (The
chances of) Ghost workers having been paid could not be ruled out,” said
Chiri. The ministry had also not paid about US$3,7 million it borrowed for
agricultural inputs from various seed companies during the 2008 financial

“The ministry did not produce the list of beneficiaries of the seed for the
audit and the examination could not, therefore, confirm whether the inputs
were distributed to deserving farmers,” said Chiri.

Her report noted the Local Government ministry had issued 27 Mitsubishi L200
pick-up vehicles to chiefs  without any form of regularisation.
She said loans for the purchase of 161 vehicles issued to traditional
leaders were written off without approval by treasury. The audit revealed
the Department of State Land was not following procedures in land

Chiri said the Ministry of Home Affairs had no cash book records. There was
also misappropriation of about US$960 000 at immigration between May and
June 2010.
The Ministry of Women’s Affairs had an unreconciled balance of close to US$4

She said six vehicles purchased by the Housing ministry for US$100 362 had
not yet been delivered.

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Byo officials ‘incompetent’

Thursday, 24 May 2012 12:27

Brian Chitemba

BULAWAYO town clerk Middleton Nyoni, housing director Isaiah Magagula and
his finance director Kempton Ndimande have been branded incompetent by the
council and blamed for deteriorating service delivery and the city’s
ballooning debt totalling over US$56 million.

According to a confidential council report compiled in April, the three
officials had failed to explain why the city was in such a precarious
position. Council is riddled with a crippling debt as a result of bank loans
totalling US$8,2 million, salary creditors US$26 552 374, and a Zesa bill of
US$19 079 906 while other creditors are owed US$2 652 420.

Council took bank loans for financial working capital and purchase of
top-of-the-range vehicles for senior managers, but councillors have charged
that the local authority was losing thousands of dollars through corruption
in the financial and housing departments.

It was also losing money through properties that are not on the council
records being leased by corrupt officials. “Council did not follow-up the
request for a comprehensive report of council properties,” reads the report.
“Council is under-collecting monthly revenue due to incompetence and as
such, dead wood must be removed from the system.”

The report also noted that council was hiring new staff in violation of a
motion to suspend recruitment to contain the huge wage bill. Ndimande
presented a report detailing how council was intensifying water
disconnections to recover money owed to it by residents. As a result of
these disconnections, about US$2,1 million was being collected a week, but
it’s still below council’s target of US$6 million.

He said council was set to engage debt collectors in an effort to collect
more revenue but councilors rejected his plans to attach ratepayers’
property saying such a move would plunge the council’s name into disrepute.

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Youths blast PM, Zuma

Thursday, 24 May 2012 12:25

PRIME Minister Morgan Tsvangirai and South African President Jacob Zuma
yesterday came under attack at the World Federation of Democratic Youth
General Council Meeting being hosted by the Zanu PF Youth League in Harare.
While Zuma was not mentioned by name, ANC Youth League deputy president
Ronald Lamola accused the ANC leadership of suppressing the league’s fight
against imperialism.

The ANC Youth League has been at loggerheads with the mother body following
the expulsion of its president Julius Malema, suspension of
secretary-general Sindiso Magaqa and spokesperson Floyd Shivambu for
bringing the party into disrepute.

Lamola said the youth league was facing difficult challenges in South
Africa. “We have condemned Africom (US-Africa Command) in Botswana and the
ANC Youth League has been charged for that position,” said Lamola.

“The youths from South Africa remain determined to fight imperialism,”
Lamola said. “We are unshaken. Views of the young people are being
suppressed by these elders but we are going to continue with the struggle.
We are inspired by the indigenisation programme of Zanu PF because it
benefits people in Zimbabwe.

Lamola added: “This kind of programme must be exported to South Africa,
Mozambique, Angola and all our countries. We can’t have a situation where
one white person remains rich while millions of black people remain poor. We
will never accept dying poor in our own land. We must defend African

Tsvangirai and his MDC-T party were branded “puppets” of the West by Zanu PF
national chairman Simon Khaya Moyo who told the youths to defend their
country against “pseudo- democracy” being promoted by Western countries
through “these puppets”.

–– Staff Writer.

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Transfer power –– Chissano

Thursday, 24 May 2012 12:24

Faith Zaba

FORMER Mozambican president Joaquim Chissano (pictured) yesterday called on
former liberation war heroes like President Robert Mugabe to consider
transferring power to a new generation of leaders.

Chissano said this in response to a question on leaders like Mugabe, who
manipulate the liberation struggle and use it as an emotional blackmail to
stay in power, during a discussion on The Good, the Bad and the Ugly: How
elections in Africa confirm and confound what we know about inequality at
the Open Forum 2012 conference in Cape Town.

“I think that if there are any who are doing that, it is because what they
should do is to educate the new generation on the values of the liberation
struggle which they want attained,” said Chissano.

“In my country, this may not apply because if you go to the cabinet of the
present government, you will find three people who fought in the liberation
struggle. All the other ministers and their deputy ministers didn’t fight in
the liberation struggle.”

Chissano said his country had managed to produce well educated and bright
Mozambicans capable of running the country since the country’s independence
in 1975.
“Imagine the type of brains that we now have. So the ability of liberation
movements to transfer the values to the new generation is very important.
This is empowering the citizens who come from different places. Things have
evolved over the years; we now have cellphones, microphones, iPads, etc ––
all these things have made us all evolve. We cannot act on reference of how
we acted 10 years ago. You also have to take into consideration the changes
in the world,” Chissano said.

Chissano was a founding member of the Front for the Liberation of Mozambique
(FRELIMO) and became president after the tragic death of founding president
Samora Machel in 1986. He voluntarily stepped down in 2004.

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Zim not ready for elections

Thursday, 24 May 2012 12:18

Paidamoyo Muzulu

CIVIL society organisations have warned the country is not ready to hold
credible, free and fair elections until reforms have been implemented and
electoral conditions improved.

Below are eight issues they highlighted in a seven-page dossier handed to
Pillay, in Harare on Tuesday.

    Operating environment — that the government of Zimbabwe take immediate
and time bound steps to honour its commitment to ratify and domesticate the
UN Convention against Torture and other international human rights

    Elections — it is apparent that elections in Zimbabwe are critical in
order to bring to finality the political impasse. However, in the absence of
credible electoral (legislative, institutional and political) reforms,
elections are likely to result in gross human rights violations.

    Economic, social and cultural rights — food assistance to poor
communities should not be politicised, the government should improve health,
especially access to ARVs and safe water to avoid recurrence of cholera and
typhoid in urban areas.

    Natural resources — there should be transparency and accountability in
the generation and expenditure of funds from the exploitation of natural
resources such as diamonds and proper relocation of displaced families in
areas with health and educational facilities.

    Media — that the government should open up the broadcasting industry to
more independent players and repeal laws such as Posa and Aippa.

    Women — that the government should take adequate steps to protect women
from abuse during political processes such as elections time where numerous
cases of rape, assaults, intimidation, arrests and unlawful detentions are
being reported.

    Vulnerable and marginalised groups — that the government should
adequately protect the rights of children, the disabled and gays and
lesbians, especially that the government is leading a constitution review

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Pillay faces toughest human rights test

Thursday, 24 May 2012 12:16

Tendai Marima

UNITED Nations (UN) Human Rights Commissioner Navanethem Pillay’s visit to
Zimbabwe has raised uproar, with government and civil society groups
clashing on issues ranging from her itinerary to the content of their
briefings which have shown they are worlds apart on the state of human
rights in the country.

The situation, including polarisation of opinion and growing tensions across
the political divide, puts Pillay in dilemma as she faces one of the
toughest tests of her diplomatic savvy and skills.

Zimbabwe has a long record of grisly human rights abuses but Pillay has been
confronted with different dossiers of information and accounts – ranging
from efforts to whitewash the situation to horror stories.

Since her arrival on Sunday, the Zanu PF section of the coalition
government, through Justice minister Patrick Chinamasa, has been trying to
keep a tight leash on  her to ensure she “hears, sees and speaks no evil”.

President Robert Mugabe’s officials and supporters have also been
desperately trying to hijack Pillay’s mission and put a spin on her visit
and the situation on the ground.  The state media have been roped into the
propaganda campaign to mislead the world about Zimbabwe’s human rights

The state-controlled daily Herald, which together with other state media
outlets operate as government and Zanu PF’s mouthpieces, yesterday for
instance, had three front page stories, an editorial and a letter to the
editor about human rights, in a clear  agenda-setting move.

Chinamasa led the campaign of deception and was supported by Zanu PF groups
and supporters, including the state-run media. “There is no state-sponsored
violence, these are all lies....there are no torture chambers in Zimbabwe,”
he said after emerging from a meeting with Pillay on Monday. Chinamasa also
said there were “torture chambers” in Zimbabwe.

However, Chinamasa’s assertion contradicts well-documented evidence of human
rights abuses in Zimabbwe stretching from the 1980s to date. Pillay’s
five-day visit was expected to include a trip to Marange where the notorious
military-controlled diamond base is situated, but instead her itinerary
indicated she would pay two courtesy calls on President Robert Mugabe and
possibly meet with the Joint Monitoring and Implementation Committee (Jomic)
chairperson, and deliver a public lecture.

Pillay on Tuesday called on Zimbabwe to take steps to prevent a repeat of
2008  political violence in elections that are due next year after meeting
Prime Minister Morgan Tsvangirai.

Pillay told reporters after the hour-long meeting she had asked Tsvangirai
what progress Zimbabwe had made in establishing a human rights commission,
which she said should start functioning ahead of the poll.

“I was able to raise many areas of concern from a human rights point of
view, such as non-recurrence of violence that occurred in last elections and
what steps are being taken to protect ordinary people from such violence,”
Pillay said, showing she had rejected deception.

“The Prime Minister was very firm, forthright and convinced me of his
commitment towards protecting human rights. His goal also is to have
successful elections.”
Efforts to restrict access to an audience with Pillay angered civil society
groups. A last minute venue change on Tuesday riled the groups and prompted
them to boycott her meeting held at parliament.

In a joint statement issued by the Zimbabwe Lawyers for Human Rights (ZLHR),
36 civil society organisations and NGOs said they would not participate in a
“stage-managed” event that gives a “superficial picture of the human rights
situation in our country”.

However, Pillay later held a closed-door meeting with over  45 civil society
representatives  Dewa Mavhinga, a human rights lawyer and activist, said
their briefing helped to counter attempts by government to distort the

‘We were very clear as civil society leaders that the position by government
was obviously false. We do have serious human rights challenges continuing
in Zimbabwe,” he said.

“We had detailed presentations from various civil society groups focusing on
what is happening, including political violence, violence against women, the
non-implementation of a number of international human rights treaties that
Zimbabwe has ratified.

“We still face challenges in the deregulation of NGO’s, food distribution on
a partisan line and extreme polarisation of the Zimbabwe environment,
particularly the militarisation of state institutions as we draw closer to
an election.”

Deputy Justice minister Obert Gutu said Chinamasa’s briefing to Pillay “was
littered with inaccuracies”. “He came up with a sugar-coated presentation
that sought to portray Zimbabwe as a country that observes human rights, but
the situation on the ground tells a different story,” he said.

Chinamsa last year in October and in March vigorously defended Zimbabwe’s
human rights record the UN’s Universal Periodic Review sessions in Geneva,
However, human rights abuses, spanning Gukurahundi massacres in the 1980s to
2008 lections killings, featured prominently during discussions of his

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Arda herd decimated

Thursday, 24 May 2012 12:10

Paidamoyo Muzulu

THE Agriculture and Rural Development Authority (Arda) decimated its beef
herd  from an all time high of 36 000 head in 1998 to a paltry 1 062 in 2012
through forced sales to newly resettled A2 farmers when some of its ranches
were parcelled out under the land reform programme, parliament has heard.

Arda acting general manager William Mbona revealed the sorry state of the
ailing authority’s herd when he appeared before the portfolio committee on
Agriculture on Tuesday.

“We sold most of the 36 000 cattle on our farms after some of the estates
were allocated to new farmers,” said Mbona. “Transau Estates, one of our
biggest ranches, was used for resettlement of people from Marange diamond

Of the 36 000 cattle, Sesembe had 16 000, Transau 12 000 and Battlefields 6
000. The rest were scattered across other estates countrywide. Mbona added
that revenue realised was insignificant in monetary value since this forced
destocking was carried out during the hyperinflationary Zimbabwe dollar era.

“We did not get a lot of money from either the private and auction sales of
the cattle during (the) destocking exercise since we sold in the valueless
Zimdollars at the height of hyperinflation,” he said.

Arda has been in the spotlight for its involvement in the controversial
Green Fuels project in partnership with Billy Rautenbach in Chisumbanje, as
well as the suspected looting of tractors from Iran by senior officials.

The audit into the tractors is still to be made public six years since it
was instituted. Mbona told the committee that the authority could only be
saved by creating partnerships with other companies to work on its vast

“The way forward for Arda is smart partnerships, joint ventures and contract
management with private investors. This is the only way if the shareholder
(government) cannot recapitalise the authority,” Mbona said.

Arda is one of the 78 struggling state-owned enterprises which, among
others, include Air Zimbabwe, NetOne, TelOne, the Cold Storage Company,
Agribank and the National Railways of Zimbabwe.

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Biti slams military interference in mining

Thursday, 24 May 2012 12:07

Tendai Marima

FINANCE minister Tendai Biti has strongly criticised the military for its
involvement in mineral extraction in the country.  Biti questioned the
military’s role in Anjin Investments, a shadowy network of Chinese
businessmen and Zimbabwe’s  military chiefs, saying their deals were not
transparent and lacked accountability.

“I have got a big bone to chew with all the mines, but particularly with
Anjin,” said Biti. “We are not getting anything from Anjin. I am not that
much worried about the other companies like Mbada and Marange because those
are partly owned by Zimbabwe Mining Development Corporation (ZMDC)  and so
we are getting something from them,” Biti said.

Speaking at the Centre for Research and Development workshop on diamond
mining in Harare on Tuesday, Biti queried Anjin’s shareholding and said
instead of the Chinese firm partnering with the ZMDC, the military was
embedded in its operations.

Since its set up, Anjin has been under scrutiny because it has not remitted
anything to the ZMDC despite generating more than US$72 million in sales
from the beginning of the year.

“I think it is totally unacceptable that Anjin does not remit. I am also
very angry with Anjin because they are by far the biggest mine there. Anjin
has seven shafts combined, that means they have seven mines in one area,”
said Biti.

To prevent further exploitation of Zimbabwe, Biti has proposed a Diamond
Act, which will create a diamond oversight board to administer the receipt
of diamond revenue, regulate mining standards and prevent smuggling.

Biti said this would help ensure that there was more transparency in the
diamond sector. The Minerals Marketing Corporation of Zimbabwe currently
oversees the marketing, processing and selling of all the country’s
minerals, including diamonds.

Careful management of a resource valued at US$800 billion could reportedly
help grow Zimbabwe’s economy by more than 15% in the next decade and raise
the nation’s per capita income from an average US$250 to more than US$300,
which is above international poverty thresholds.

Due consideration of communities displaced by the discovery of alluvial
diamonds in 2006 was emphasised, but only 600 out of an estimated 4 700
displaced families have been resettled on Arda Transau Farm in Odzi, a move
described as inadequate compensation for the loss of livelihood and valuable

“Chiadzwa is in a dry area full of baobab trees and the communities there
practiced conscious preservation of the trees, but the Chinese are making
baobab soup. When I went there I had some and enjoyed, but the Chinese are
eating the baobabs,” said Biti.

Militarisation of mining in Chiadzwa has also been accompanied by gross
human rights violations with rights groups saying people’s homes are
surrounded by armed security personnel who randomly beat up people and
sometimes set their dogs on them.

While the Diamond Act is still being formulated, diamond mining is currently
regulated by the Precious Stones Trade Act. The non-remittances by companies
like Anjin and under-invoicing by other firms has heavily prejudiced
treasury of its rightful revenue and created resentment between local
communities and mining firms.

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‘Bar Shumba at Zanu PF’s peril’

Thursday, 24 May 2012 12:05

Elias Mambo

ZANU PF officials in Masvingo have said the party was shooting itself in the
foot by barring former provincial chairman Daniel Shumba (pictured) from
contesting in primary elections.

Shumba was suspended eight years ago together with Manicaland provincial
chairperson Mark Madiroand five other chairmen, among other officials, for
their role in the Tsholotsho debacle which President Robert Mugabe said was
an attempted “palace coup”.

Shumba’s suspension was lifted in 2010 and he was readmitted to the party as
an ordinary member, but it is the politburo’s decision to bar him from
contesting the polls that has puzzled Masvingo party officials.

“Zanu PF is shooting itself in the foot and lacks strategic vision because
it is stopping people like Shumba who have got support from contesting and
retake seats lost to the MDC in 2008,” said a politburo member.

“It is at this time that we need people like him who can pose a threat to
the MDC and we urge the authorities not to be blindfolded by internal feuds
within the provinces if we are to win the elections.”

Zanu PF lost Masvingo province to the MDC-T in the 2008 elections and
officials were hoping to rope in Shumba to mobilise and reclaim the
province, but  factionalism seems to have scuttled their plans.

Following an explosive politburo meeting held to address factionalism in the
party last week, Zanu PF spokesperson Rugare Gumbo said the politburo had
reaffirmed its position Shumba follows laid down procedures before

However, contrary to Gumbo’s statement, Shumba said he was cleared in 2010
after following all the procedures for nominations to hold office. “All I
know is that procedures to readmit me and all the others who were under
suspension were followed,” said Shumba. “We are ready to win the elections.”

In a letter to Masvingo provincial chairman Lovemore Matuke dated November
24 2010, the party’s secretary for administration Didymus Mutasa said Shumba
had been accepted back into the party as an ordinary member.

“Thank you for your letter dated 15 September 2010. The recommendation was
considered in terms of Article 3, Section 14, sub-section 2 of the party
constitution and has been accepted,” the letter reads.

But Gumbo yesterday said Mutasa made a mistake by unilaterally re-admitting
Shumba without consulting the politburo.

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Voter education still a mirage

Thursday, 24 May 2012 12:02

Wongai Zhangazha

WHEN Zimbabweans went to the polls in 2008, Tawana Mabwe was only 17 years
old and could not vote. Now she is 21, has enrolled at university and has
gained political consciousness. The problem now is she is not a registered

It is not that Mabwe does not want to register to vote, but she simply does
not know how to go about it and she is not alone in this dilemma. Thousands
of other Zimbabwean youths and even mature voters are facing the same

The political landscape is currently dominated by debates on the
constitution-making process, election dates and how political parties are
likely to fare, among other things, but very few people have paused to think
about voter education and registration.

About a year ago, Zambia made its own history by recording over a million
first time voters in an election that brought the 20 years of Movement for
Multiparty Democracy (MMD)’s rule to an end. The MMD’s dominance had
followed 27 years of founding leader Kenneth Kaunda and his Unip’s reign.

The million first-time voter milestone was no fluke but a result of the
concerted efforts of the Zambian government, civil society and political
parties to mobilise people to register to vote.

However, Zimbabwe’s situation is far different. Nothing much is happening in
terms of voter-registration, despite the intensifying hype about elections.
Only two million people voted in the 2008 elections out of the six million
registered voters. Limited resources and lack of confidence in the system
were some of the factors which increased voter apathy, but there is no doubt
lack of knowledge and preparedness were some of the major contributing

Last week there were allegations people in Mashonaland West underwent a
forced voter-registration exercise with Zanu PF teams moving around taking
down people’s names and national identification numbers under the guise they
were going to register them as voters.

Such incidents highlight the fact that most people are not well-informed on
the voter registration processes. Armed with the correct information, they
would not be coerced into divulging personal information, but would instead
register to vote by themselves.

The Election Resource Centre (ERC) recently released a report indicating an
increasing number of challenges facing those who want to register as voters.
The ERC said its findings showed a “very disturbing pattern in the voter
registration process”, especially given some political actors have insisted
on holding elections this year.

Their findings were based on visits to some registration centres in Harare’s
suburbs of Mount Pleasant, Kuwadzana, Mabvuku-Tafara, Hatfield and
Highfields in Harare. Irregularities the ERC recorded include closed
registration centres, limited time for registration, registration by
coercion and partisan registration.
But where is the Zimbabwe Electoral Commission (ZEC) in all this?

The Electoral Amendment Bill is clear on voter education and states: “Apart
from the commission (ZEC), political parties or persons authorised to assist
the commission…satisfying the criteria…will be entitled to provide voter
education in Zimbabwe”.

However, ZEC is mandated to take a leading role in the entire
voter-education exercise.
Zimbabwe Election Support Network director Rindai Chipfunde-Vava expressed
disappointment at the silence of the ZEC on voter education and registration
as the country prepares for a referendum and elections. She said with less
than a year before the next elections, this was the right time to start
voter-education and registration.

“Actually, for first-time voters, the process should have begun, not only in
reference to elections, but to the referendum,” Chipfunde-Vava said. “There
have been complaints of lack of resources, time and so forth to assist in
voter-education but this is the time to publicise the process through
adverts on television, radio and in newspapers,” she said.

Chipfunde-Vava said the main issue would be to urge peaceful election
campaigns, and this is the central role of ZEC. She said voter-education was
important, particularly in rural areas where a lot of people were

There have been calls for the adoption of a biometric voter-registration
system which is more efficient and reduces chances of vote rigging.
While the debate rages on, Tabwe and others like her risk being
disenfranchised and hence manipulation or distortion of the election

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Africa Day: A lot still needs to be done

Thursday, 24 May 2012 11:57

Herbert Moyo

GODFREY Madanhire left his teaching job in Zimbabwe in 2000, at a time  when
the country was in the economic doldrums, to pursue a better life in the
proverbial greener pastures of South Africa.

As the continent celebrates Africa Day tomorrow, Madanhire, now the Chief
Executive of Dreamworld Promotions, reflects on his journey from his home
country due to political and economic failure, to neighbouring South Africa
where he met with harsh realities of life before soldiering on towards

Madanhire says life in South Africa was not easy in the beginning. “When
people realise that you are a foreigner they treat you on the basis of their
assumptions, which may even include fears that you are a carjacker,” he

After doing menial jobs and struggling with life, Madanhire worked for a
marketing company where he  proved his mettle enough to become a regional
manager entrusted with supervising 11 branches at the time of his
resignation in 2006.

While Madanhire believes prejudice and stereotypes are real problems
confronting foreigners in South Africa and the diaspora, he says foreigners
have an important role to play in normalising relations with their hosts
through compromise and integration.

“Yes we need to be tolerant of each other as Africans and people in general,
but it is also important for us foreigners to  compromise, adjust and
integrate into the societies we find ourselves in,” Madanhire told the
Zimbabwe Independent in an interview.

He said while locals, in his case South Africans, could be hostile and
xenophobic in some situations, foreigners also complicated matters by
isolating themselves and engaging in activities that fuel suspicion and

Madanhire worked hard to overcome his initial challenges, ending up founding
Dreamworld Promotions which focuses on motivational programmes for companies
as well as individuals. He says the company now employs 300 people and
produces  motivational compact discs (CDs), selling 40 000 units per month.

Madanhire believes his company has “helped individuals grow, families unite
and organisations prosper through his seminars, workshops and presentations”,
thus contributing to the pan-Africanist  vision  the founding fathers  had
when they launched the Organisation of African Unity (OAU) in Addis Ababa in
1963. The OAU was re-launched in Durban, South Africa, and became the
African Union (AU) in 2002.

As the continent celebrates Africa Day tomorrow,  analysts  agree that a lot
has been achieved in political and economic terms even though some of the
achievements may not have been planned.

“I don’t think there is a deliberate agenda to democratise the African
continent being pushed by the AU.  On the contrary, there are glaring
deficiencies in the AU,” says political analyst Charles Mangongera.

Mangongera said Africa was no longer a dark continent but its much-touted
economic development has been realised on the back of a boom of commodity
prices on the world market and “to attribute that growth to the AU’s
conscious planning the same way we would when talking about the European
Union would be taking things too far”.
“South Africa and Nigeria have achieved massive growth because they have
become global players pursuing narrow national rather than pan-African
interests,” says Mangongera. “In fact, South Africa is a global player in
Brics (Brazil, Russia India, China and South Africa) rather than in
partnership with other African countries.”
In the AU’s half-century of existence, Africa has seen positive political
developments, including freeing the entire continent from colonial rule, and
also trying to integrate the continent economically.

Political pluralism has also steadily replaced the dark era of one party
states, dictatorships and life presidents which dogged the continent for
many years.
Notable countries which shook off the shackles of dictatorship and one-party
rule include Zambia, Malawi, the DRC (formerly Zaire), Kenya, Central
African Republic and many others. Even apartheid came to an end in
neighbouring South Africa. More recently, the “Arab Spring” in North Africa
heralded a new wave of democratisation and the collapse of notorious regimes
of Zine Abidine Ben Ali in Tunisia, Hosni Mubarak in Egypt and Muammar
Gaddafi in Libya although long-serving leaders remain in many states,
including an absolute monarch King Mswati in Swaziland.

Many African countries now hold elections and increasingly transfer power
smoothly, as in the case of Ghana, Zambia and most recently Senegal. This
shows democratic progress and consolidation are growing, although Africa's
problems remain.

Troubles like those seen in Kenya, DRC and Zimbabwe where elections are
disputed and countries plunged into violence are still common. The recent
military coup in countries like Guinea, Mali and Guinea Bissau show Africa
still has a long way to go. Besides, Africa is still reeling from poverty,
suffering, disease and human rights abuses.

However, there is promise. Many African countries such as Angola and
Mozambique emerged from civil wars and are now recording economic growth and
social recovery. This makes it easier for people like Madanhire to prosper.

However, the AU has been generally under fire for failing to deal with
dictators and repression on the continent, while it has also been attacked
for being unable to stand up to Western intervention and bullying.

Political commentator Tafataona Mahoso has attacked the AU and the present
generation of African leaders for “sleeping on the job” as the West tries to
“re-colonise” the continent.

“The change from OAU to AU was misguided in the sense that it is an
imitation of the EU which is imploding,” Mahoso said on state television on
Monday. He described the recent South African High Court ruling paving the
way for the prosecution of government officials for human rights violations
as “the kind of wars that Africans are facing from imperialists,” saying
they also demonstrated how much  African leaders are sleeping on the job”.

State media and authorities this week raised the idea of Africa setting up
its own international court, citing perceived bias by the International
Criminal Court  following the conviction of former Liberian president and
warlord Charles Taylor for crimes against humanity.

Commentator Blessing Vava argues AU has largely failed because it is a
“toothless bulldog”. This is a view widely shared on the continent. Most
Africans believe people like Madanhire have been failed by their governments
and leaders, although they are now playing a progressive role due to forced
circumstances. Millions however are still languishing in  poverty and
disease on the African continent due to a combination of internal and
exogenous factors.

The state of Africa, as the continent celebrates Africa Day tomorrow, is
being intensely debated all over.

On Tuesday Wits University in Johannesburg, South Africa, held a discussion
to mark Africa Day with a debate on the topic: State of the African Union at
10: Prospects and Challenges, which featured prominent scholars, including
Zimbabwe’s Professor Tawana Khupe, Dean of the Faculty of Humanities, who
was the moderator.

While intellectuals debate the subject, people like Madanhire and millions
of Africans now living across borders are working hard practically to
achieve some of the OAU/AU objectives, including unity, social and economic
integration and progress. But there is still a lot to be done before Africa
achieves integration and prosperity.

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GNU reforms key to credible elections — UK Ambassador

Thursday, 24 May 2012 11:43

ZIMBABWE’S relations with the United Kingdom have been strained since
Britain refused to fund the government’s chaotic land reform programme from
2000 which saw thousands of white commercial farmers being displaced and the
country’s agricultural output plummeting.

The relations have also been tense due to London’s forceful condemnation of
Harare over political repression, human rights abuses and disputed election
results which led to the imposition of sanctions by the European Union.
Zimbabwe Independent senior reporter Owen Gagare (OG) spoke to the British
Ambassador to Zimbabwe Deborah Bronnert (DB) about Zimbabwe-UK relations,
the current political situation in the country and elections, among other
issues. Excerpts:

OG: You arrived at a time (last year) when relations between Zimbabwe and
Britain were strained. What have you done to normalise the situation?
DB: Britain has a very strong commitment to Zimbabwe and our development
programme (which stood at US$140 million last year) is part of that
evidence. There are clearly problems at the political level, although this
isn’t just a UK-Zimbabwe issue but goes much wider, and our views are shared
by many. 
Part of my job is to try and ensure there is good communication between both
sides. I want to ensure the UK has an up-to-date view of Zimbabwe.  For
example, when I was in London (recently) I spoke to a number of audiences in
the British parliament, business and civil society about what is happening
in Zimbabwe now.

OG: What is your assessment of the country’s political situation? Is
Zimbabwe on the right path? What is your country’s view on the
implementation of the Global Political Agreement (GPA)?
DB: I have heard lots of frustration about the lack of progress on full
implementation of the GPA, but I think the inclusive government remains the
most credible means of taking forward reforms and transforming Zimbabwe’s
prospects until the next elections. The inclusive government has a lot to be
proud of — the economy has grown, inflation is stable and basic education
and health services have been pulled back from the brink of collapse. There
has also been some political reform and reports of human rights abuses seem
to have fallen. Of course, we hope that reforms which have started will be
seen through.

OG: What is your assessment of Sadc and South African President Jacob Zuma’s
mediation efforts in Zimbabwe?
DB: We very much welcome his personal leadership and the work to produce an
election roadmap and we fully support him and Sadc in their efforts to
create the conditions for credible and properly monitored elections in

OG: How do you relate with Zimbabwe’s political players across the divide?
DB: I talk to everybody and I’ve generally found that ministers from across
the political divide have been very happy to talk to me and exchange
views. We obviously don’t always agree but all exchanges have been

OG: Most European countries have been sceptical about Zimbabwe’s
indigenisation programme; what is Britain’s position?
DB: I’d start of by saying it’s really important ordinary people in Zimbabwe
benefit from investment and economic growth. So the idea of sustainable and
inclusive economic growth has to be right and has to be particularly
important in the context such as Zimbabwe’s. I’m concerned, and I have said
this to the relevant ministers, about the way the indigenisation policy is
being implemented and reports that I’ve heard from business that it’s
undermining the business confidence and deterring investment that the
country clearly needs.

OG: Would you say the policy has stopped British investment from flowing to
the Zimbabwean economy and to what extent?
DB: It’s up to individual companies to make their own decisions, but recent
figures (from the United Nations Conference on Trade and Development World
Investment Report 2011) suggest the Sadc region (excluding Angola) attracted
some US$10 billion in foreign direct investment in 2010. Some neighbouring
countries apparently received nearly US$1 billion each compared to just over
US$100 million in Zimbabwe. This may be an indication that the Zimbabwean
government needs to work harder to improve the business climate, including
implementation of its indigenisation policy.

OG: There have been reports that Britain and the EU are desperate to
re-engage Zimbabwe so that they benefit from its rich resources which
include diamonds, in the face of massive movement by the Chinese, hence the
removal of travel restrictions on Zanu PF ministers who are part of the
re-engagement team. Is this the case?
DB: No. The UK and the rest of the EU want to see a stable and prosperous
Zimbabwe. Of course, we’d like the political relationship to improve. On
China, we welcome investment from China in the UK and China is playing an
important role in the growth and development of Africa. Like China, we see
trade as vital in helping African economies grow and exit poverty. But for
countries to grow and develop, they require not just infrastructure but
skills, improved health and better governance and institutions.

OG: Zimbabwe is likely to hold elections by the end of next year. Given what
is going on in the country, do you think the country is ready?
DB: This is really for Zimbabweans to decide, but clearly in terms of what
the rest of the world thinks, we would be looking at implementation of the
GPA, and clearly the prospects for credible elections will be greater if
sufficient time is allowed for important reforms.

OG: Does Britain see itself playing any role in these elections?
DB: We are ready to assist in monitoring efforts in Zimbabwe, including
through multilateral partners such as the Commonwealth, but the UK will only
come at the invitation of the government of Zimbabwe. I should just say in
the UK when we have national elections we have a lot of international
observers and the reason we do that is that we think it’s a good part of the
democratic process. It’s important for countries to demonstrate both
to their own systems and to the rest of the world that they are open and are
proud of their democratic process and, therefore, they are comfortable with
other people looking at what they are doing.

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New NSSA irregularities unearthed

Thursday, 24 May 2012 12:08

Herbert Moyo

MORE gross irregularities were unearthed in the operations of the National
Social Security Authority (NSSA), including lack of a comprehensive risk
assessment, unapproved organisational structure, unsanctioned board fees,
unauthorised rollover of investment deals and failure to adhere to good
corporate governance. These practices have potentially harmful implications
on the operations of the pension fund.

The findings are contained in a report compiled by Comptroller and
Auditor-General Mildred Chiri. The report warns NSSA’s related-party
dealings with institutions such as Africom, FBC Bank and stockbroking firm
MMC in the absence of a policy document governing related party dealings
risked compromising transparency and accountability.
“There is also risk that a significant volume of finance may be channelled
towards entities that are only related to the authority even if the
transaction is not profitable,” Chiri says in the report.

NSSA has 20% shareholdings in both Africom and FBC, and uses Africom as its
telecommunication services and FBC as its banker. Efforts to get comment
from the mentioned companies were fruitless.

MMC was involved in the purchase of Star Africa shares, raising the
possibility of conflict of interest as one of the managers is related to
NSSA investments’ settlement supervisor.

Chiri also found that NSSA management had access to 50% of approved loans
and in the absence of an appropriate policy, there was a high risk of
transferring “undocumented resources and services and even obligations
between parties”.

She also said NSSA was operating without an approved organisational
structure where “positions below executive directors were not formally
approved by the board”.
“I further observed that staff complement for some departments were not
reviewed despite increase in the level of activities while in other
departments, the reporting structures were not clear, for instance, the
accountants reporting to the finance director instead of finance manager,”
she says.

Unauthorised transactions, including the payment of board fees, were also
made without the approval of Labour and Social Services minister Paurina
Mpariwa as stipulated in Section 14 of the NSSA Act.

Management was also found to have acted improperly by disposing of vehicles
to themselves without the approval of the board. A report by National
Economic Conduct Inspectorate (NECI) has shown that NSSA, which holds sway
across the Zimbabwean economy in terms of investments in equities, the money
market, and property portfolios, is a haven for corruption.

The report by NECI, which probes white-collar crimes, showed NSSA is rotten
to the core due to an extended period of corruption and fraudulent
activities. The corruption unearthed by NECI spans a wide range of areas,
including tender processes, real estate projects that include housing and
hotel projects, structured finance in all sorts of areas, even buying wheat,
investing in shares, banking, including the money market, among various
sectors of the economy.

NSSA directors and management also splashed money in buying mansions and
luxury cars for themselves, while contributors struggle to lead decent lives
after retirement.

NSSA management has promised to implement Chiri’s recommendations but
ignored the NECI report.

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Of Boom and Bust: Zim’s economic growth in danger

Thursday, 24 May 2012 11:04

By Jimmy Girdlestone

THE country’s enjoyment of three consecutive years of positive growth since
the adoption of  a multiple foreign currency regime at the beginning of 2009
is in danger of coming to an end . That, reading between the lines, is the
essence of the message contained in the ‘State of the Economy Report’
released by the Minister of Finance, Tendai Biti, last week. It is likely to
have come as a rather rude awakening for all those who have become firmly
convinced that all our troubles are now behind us.

The authorities themselves must take their fair share of the blame for
lulling the country into a false sense of complacency. Not many months back,
strong growth of 9,4% was officially predicted for 2012 based upon
anticipated vigorous expansion in local mining, agriculture and tourism.
This was notwithstanding that even then tell-tale signs of deep-seated
weaknesses were already manifest both within the domestic and, particularly,
in the international, economies. Now, it seems, failure to meet diamond
revenue targets will frustrate our attempts to resolve our external debt and
arrears problems and lead to a budget crisis.

Insofar as the international issues are concerned, failure to appreciate the
full extent of their threat to the world economic situation may owe its
origins to overexposure rather than underexposure to the flood of media
world news. Most human beings are capable of absorbing only a finite amount
of fact or information before becoming saturated or intellectually
constipated by it, particularly if it is served at speed in highly large

The constantly repetitious nature of most media presentations also tends to
promote resistance to assimilating the full meaning and import of the
continuous flow of information or appreciation of the significance of each
turn of events as they occur. Presentation of the so called ‘Euro Crisis’
has been with us long enough now to have generated a sense of weariness or
‘déjà vu’, as a result of which our senses have become dulled to the real
problem and our urge to do something positive to understand, if we can, its
adverse  effects upon ourselves has been undermined. We have simply become
mesmerised by the apparently endless succession of heads of state,
government, finance ministers and other representatives of the 27 countries’
meetings, which never seem to achieve any lasting progress, still less avert
the necessity for further meetings.

The key issue for the EuroZone, as was pointed out on the adoption of the
single currency in the 1990s, is, and remains, a political one. It is
whether each of the 27 governments is also prepared to adopt the unitary
fiscal policy in framing its budgets and setting borrowing and inflationary
targets as well as interest rates. More lately, major differences have also
arisen over common welfare objectives. Unless the European Union moves much
closer to a political union more like that of the United States of America,
stresses and strains between members will be an interminable source of

As bad luck would have it, virtually the entire developed world, not
excluding the power centres of the USA, the Far East and Europe, is
currently afflicted by a major downturn in the business, or trade cycle.
That much is blindingly obvious from recent external events. What is not at
all clear is what kind of business cycle we now have to contend with.

Economists identify four broadly different kinds of cycles according to
their length, or duration, ranging from the short, or Kitchen cycle of 3-5
years, to the very long, or Kondratiev wave or cycle of 45-60 years or more.
But the subject is one of great controversy, not least because of the
difficulties in identifying when cycles begin and when they end, points
which in many cases only become apparent a considerable number of years

When, or if they think about the subject at all, most run-of-the mill
economists probably have in mind the Juglar, or 7-11 year cycle. But more
illustrious men obviously have greater ideas. Paul Samuelson of MIT fame, a
very clever man and Nobel Economics prize winner who predicted that the
business cycle was doomed because of government’s spending powers, is said
to have, rather unkindly, referred to Joseph Schumpeter’s (a long standing
Harvard professor of economics)  description in his 1939 book of the very
long trade cycle as nothing more than ‘Pythagorean Moonshine’.

Gordon Brown, as Chancellor of the Exchequer, went one better  in boasting
that he intended to free Britain from the old cycle of ‘boom and bust’.
History records that when he was subsequently leader of the Government, Mr
Brown had to suffer the indignity of presiding over a full blown recession
and  ‘the worst housing slump in living memory, if not ever.’ Such things
make lesser mortals more than a little wary of predicting ‘busts’ if not
‘booms’. Nevertheless, the omens for Zimbabwe’s economy for the next year or
so may be fairly confidently described as far from promising, given the
conjunction of uncertain prospects at home and the momentous adversities

What can a small, pretty insignificant would- be independent country in
Southern Africa do in such circumstances? Probably first take on board
Winston Churchill’s famous promise to the British people at the start of the
Second World War to the effect that: ‘I offer you nothing but blood sweat
and tears’. At least with that to begin with there is no risk of feeling let
down whatever might subsequently happen.

Second, the plan should be, surely, to stop digging ourselves ever further
into self-imposed trouble and debt. We need to mend fences with our friends,
especially those who are able to offer us concrete assistance and support.
In this hostile environment we do not need any more enemies.

Third, we need to take a long hard honest look at ourselves, acknowledge
where things have gone wrong, and why, and take every possible step that we
can to put things to right as far as others are concerned . In this way we
will get credit for our positive attitude and the physical and financial
assistance to follow it up. Finally, we should demonstrate that we are
prepared to accept advice and guidance on the best way forward not greeting
every suggestion we don’t like with accusations of base motives and bad
faith. Countries, like people, can be favourably surprised by the effects on
others of a signal change in attitude. Should we feel that this is all too
much to ask, we could sit down quietly and  consider whether there is really
any viable alternative on offer.

Jimmy Girdlestone is a consultant economist with the Tetrad Group and writes
in his personal capacity.

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Biti’s utterances malicious: Kuwaza

Thursday, 24 May 2012 11:02

Staff Writer

STATE Procurement Board (SPB) Executive Chairman, Charles Kuwaza, has
dismissed allegations of corruption and incompetence levelled against the
procurement body by Finance Minister Tendai Biti, labelling the minister’s
utterances as “unwarranted and malicious” and meant to undermine the
functions of the SPB.

Kuwaza revealed to businessdigest that he had written to Biti to register
the board’s concerns over press statements attributed to the minister, which
suggested that the SPB was failing to carry out its mandate.  In the letter,
Kuwaza protested the increasing pitch and regularity of Biti’s attacks.

“We believe that your advisors, some of whom are of questionable morality
and have little experience in the administration of tenders, are
deliberately misleading you for what we see as very clearly ulterior
motives. They want to get control of the State Procurement Board, and  get
rid of the Chairman, (who) is considered a workaholic and too wide-eyed, “
Kuwaza said in the letter to Biti.

Presenting his March 2012 state of the economy report last week, Biti
alleged that the government’s procurement arm was causing huge project
delays which were costing the government a lot of money.

Biti said the SPB was inordinately delaying the approval process for tenders
and in some cases approving incompetent companies that did not have the
necessary capacity to carry out work on government projects.

Earlier this year the Minister said the SPB was awarding tenders to
undeserving bidders, some of whom were blacklisted by government, a charge
that Kuwaza also dismissed. The minister accused the board of awarding a
tender for the supply, delivery and installation of eight passenger lifts at
Kaguvi Building to Eleco Elevator Company, an entity which he said had been
blacklisted by government.

In a letter to Biti dated February  12 2012, Kuwaza asserts that at no time
did the board consider barring or blacklisting Eleco Elevators, challenging
the person(s) making the claims to adduce evidence of such blacklisting.

The SPB chairman also queried why it had taken over two years for anybody
to raise a complaint or appeal about the execution of the contract. He said
SPB had on more than three occasions offered to meet with the Minister since
last year to discuss any real issues.

“We were accused of sitting on water projects which turned out to be false.
We were once again accused of slowing down national projects, including the
lifts at Kaguvi Building, which again was false”, Kuwaza said.

He said the delays in implementing government projects were instead due
mainly to funding problems and a lack of other resources. The SPB was also
aware that hundreds of projects, some more than 14 years old, including the
building of central registry offices in the districts and elsewhere, had not
been completed due to lack of resources. Many building projects were at
window level and deteriorating very fast. The Harare-Masvingo and
Harare-Norton dualisation projects were some of the major projects that
Kuwaza gave as examples of having been stunted by lack of funding.

“We have advised the Ministry of Finance and other high offices to limit the
number of projects to a figure that can be afforded at any point in time,”
Kuwaza pointed out.

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Govt to revise down economic targets

Thursday, 24 May 2012 10:44

Clive Mphambela/Gamma Mudarikiri.

GOVERNMENT has no choice but to revise its ambitious budget projections,
following  a cumulative revenue collection deficit of US$98,6 million, or
12,8%  target in the first  quarter, Finance Minister Tendai Biti has

This development will see most of government’s targeted projects failing to
secure funding. Economists and analysts say government’s revenue performance
threw into question its ability to accurately forecast performance,
introducing huge planning risks across the economy. According  to Biti’s
March 2012 state of the economy update, revenue in the  first quarter
totalled US$771,1 million against a  target of  US$869,7 million.

The cumulative US$98,6 million deficit in  revenue  collection in  the
period was against the backdrop of huge  government  expenditure  in
salaries, which gobbled up 70%  of  revenue. The  average  monthly
employment  cost outlay  between  January and  March  totalled US$191
million against a  target  monthly expenditure  of  US$178,4 million,
meaning only US$231,3 out of the collected US$771  million could be
channelled  to key developmental projects.

Biti blamed the under-performance of revenue collection to a let-down by
diamond mining firms, which only remitted US$30,4 million  against a target
of  US$122,5 million. If this trend of diamond revenue persisted, it would
result in the need to revise targets for 2012.

“The 75% deficit  in  diamond  revenue  contribution  leaves  government
with  no  choice  but  to  review  downwards the projected  economic targets
for  2012,” Biti said.
Diamonds were expected to contribute US$600 million to this year’s
US$4billion budget, a forecast analysts say will not be achieved this year
given slow remittances from the sector.

Biti said there was no transparency in the remittance of proceeds from
diamond   mining companies. Whilst agriculture was projected   to grow by
11,6% , maize output was now anticipated to decline by 33% to 968 041 metric
tonnes  this  year, down  from 1,451,629 metric tonnes last  year. The
underperformance  of  the  agriculture  sector  is  expected  to  exert
more  pressure  on food inflation.

The resultant general decline in maize production would have an adverse
impact on overall agriculture output and this year’s GDP projection, Biti
The decline in maize production would also worsen the trade deficit,
currently at US$900 million, in the first quarter of the year. Imports by
end of March totalled US$1,8 billion against exports of US$900 million in
the same period.

Government, however, has not  taken any  significant  measures  against  the
rising  import  bill. Worryingly, the trade gap, which continues  to  grow,
is  being  financed  by  banks which are already  facing  liquidity

The  economy faces downside  risks  owing  to  failure  to realise  budget
revenue  targets  and  moreso, demand  for  the  country’s export
commodities continues to decline. Coupled with  rising imported inflation
against  the  background  of rising global prices, this will have a negative
bearing on the overall GDP growth this  year.

Key  indicators of  the  economy show  a  negative  growth,  which  brings
into  question  the   achievability of the  government’s Medium Term Plan
(MTP) target. Statistics  from the  Ministry of  Finance  show that
inflation  is  expected  to  rise  to 4,3%  in  April and  reach an average
of 5% by  year end.

According to economics professor Tony Hawkins, the government’s targets for
2012 are extremely optimistic. “Obviously one cannot forecast agricultural
production before planting. Government’s idea of forecasting is taking last
year’s numbers and increasing them, and this will always be unrealistic.
This creates an upward bias, particularly in the revenue predictions that
leads to such scenarios as we have now,” Hawkins said, highlighting
Government’s poor forecasting record.

He said that it was still a bit too early to judge the performance of
diamond revenues because they do not come evenly during the year.
“Presumably the minister’s forecasts were based on estimates provided by the
Ministry of Mines”, he said.

Hawkins identified several downward risk factors that resonated with those
identified by Biti. “In my view, the main risk to the economy remains the
politics, instability and uncertainty created by the unclear implementation
of indigenisation laws. The economy cannot grow under such uncertain
conditions,” he said.

Militating against growth were electricity supply challenges, where the
country was now producing a quarter less electrical power than it did three
years ago. Coupled with liquidity challenges, these two forces were
combining to lower local productivity. The gap was being filled by imports
whilst the country was not exporting much. This explained the ballooning
balance of payments position.

It was not clear how the BOP deficit was being funded but this was clearly
not sustainable and would implode any time, the professor warned. It was the
negative balance of payments position that was a drain on domestic

While Finance minister Biti thought local banks might  be funding the BOP,
Hawkins believed that it was diaspora remittances and “mattress” money being
recycled outside the banking sector that was partially funding the BOP.

“In theory, the accumulating external debt arrears are also funding the BOP,
as last year we borrowed perhaps US$1 billion and accummulated a further
$650 million in arrears,” he said.

Bulawayo-based economic analyst Eric Bloch believed GDP growth rates
projected for this year were possible. “Growth in the economy is coming from
a low base, making the 9,4% achievable in my view. However the other targets
are unrealistically high,” Bloch said.

He said expecting US$600 million from diamonds was unrealistic as the mines
were still under development and there was still a lot of investment that
needed to go into these mines so that they could reach full production. He
also argued that diamond markets were depressed at the moment, given huge
economic problems in major markets such as Europe.

“I would say Biti will be lucky to get US$300 million in 2012,” Bloch said.
Turning to the major downside risks facing the economy, Bloch identified the
major risk as the inability to attract investment due to the way the
indigenisation laws were being implemented.

“I have always said that we need indigenisation, but it needs to be managed
in a way that attracts investment. At the moment we are only getting limited
investment mainly from the Chinese, whom we are giving special concessions,”
Bloch said.

He said the other important risks to Biti’s budget and MTP were that
Zimbabwe would need recourse to substantially increased food imports due to
poor rains this year.
“We will be lucky to harvest 500 000 metric tonnes when we need 1,8 million
tonnes to feed our people. The increase in imports will worsen the trade
balance, increase the cost of food and increase inflation pressures,” he

Bloch also said the rapid decline in utility services was negatively
impacting on industry. Limited electricity supplies to industry was reducing
industrial production and increasing the costs to industry, also leading to
higher inflation, whilst iIliquidity of the financial sector would result in
further output declines as the country experienced company closures across
the economy.

“There is need to accelerate the privatisation of state enterprises and to
rein in government spending for the targets to be remotely achievable, Bloch

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Muckracker: Herald’s attempt to deceive gets no takers

Thursday, 24 May 2012 11:33

POOR old Tourism and Hospitality Industry minister Walter Mzembi.  He was
“overcome by emotion” when presented with a portrait of the president at a
ceremony to mark the official opening of the Africa Travel Association
Congress at the Victoria Falls last weekend.

The tears cascaded down his cheeks as he held aloft the full-size portrait
of President Mugabe in earlier times.The portrait was inscribed “Man of the
“I was overcome by emotion,” Mzembi confessed. “I did not expect this. It is
monumental. At times I fail to explain to the ordinary person how it feels
to serve under a first republican president. That is why I could not hold
back my tears.”
How truly pathetic!  Here is a minister who every day sits in his office
beneath a portrait of the president but bursts into tears when presented
with a similar picture.  It was presented by an outfit called Friends of
Joshua Trust, whatever that is.
Vice-President Joice Mujuru who presided at the ceremony received a portrait
of Mbuya Nehanda. It is not known if she was tearful.  But she still appears
to be labouring under the impression that Nehanda was hanged at the
so-called hanging tree in Tongogara Ave. In fact that is a well-worn myth.
Nehanda was executed at the Market Square jail.
But never mind. We won’t let the facts, in this case at least, get in the
way of a good story.

Another minister choosing to perform patriotic stunts recently was Mines and
Mining Development minister Obert Mpofu who has urged government to release
all jailed illegal gold panners and declare them national heroes in honour
of their “immense contribution to the national economy”. This episode
provides a good example of the routine misgovernance that Zimbabweans have
to deal with.
Mpofu, NewsDay reports, made these remarks in the presence of President
Mugabe at Colleen Bawn mine last week.
“The term makorokoza (illegal gold panners) should be banished because they
contribute gold to the country. They are actually national heroes,” Mpofu
This is noteworthy. The illegal gold panners are responsible for the
systematic degradation of the environment. That includes the pollution of
major rivers, siltation of dams, and widespread use of poisons such as
cyanide. And here is a minister presiding over this irreversible destruction
in the presence of the president.
Mpofu is responsible for administering the Mines and Mining Development Act.
He recently hiked fees for all manner of things in the mining sector.
But the gold panners operate without licences causing extensive damage to
the environment and depriving the government of revenue. So how do we
explain this dereliction of duty? Very simply. It is election-related.
We reported a few months ago on the destruction of wetlands in the vicinity
of the Chinese-built national sports stadium where a hotel complex –– also
Chinese-built –– is going up. Visiting heads of state had been encouraged to
adopt a tree in the area in earlier times. That legacy is rapidly vanishing.

Archbishop Nolbert Kunonga was again in the news last week calling on
President Robert Mugabe to ignore the new constitution currently being
drafted and instead dissolve Cabinet and call for elections.
Speaking at a Press conference held at his church offices, Kunonga said an
election and not a constitutional referendum was necessary.
NewsDay reports that Kunonga also claimed there was “some kind of demon”
that was driving the constitution-making process.
“When you look at parliament, the president has been pruned of all power and
it is the same with all commissions. It is like a political agenda and we do
not want that in our constitution. The powers of the president are eroded
against the wishes of the people,” Kunonga said.
Who are the “we” you are refer ring to Archbishop? Clearly it cannot be the
people of Zimbabwe who have clearly expressed their displeasure at the
unchecked powers of the ruling regime for 32 years. Is it not the same
people who gave Mugabe and Zanu PF a red card in March 2008 before they were
coerced to ensure his “landslide victory”?
Anyway has President Mugabe not made it clear that the clergy should not
interfere in politics? It seems they conveniently make exception to the
likes of Kunonga and “Reverend” Obadiah Msindo.

Shockingly the Ministry of Information had phoned media houses announcing
Kunonga’s press conference.  It seems they busy themselves with organising
Mickey Mouse press conferences while defying directives to institute media
reforms. Media minister Webster Shamu defied a cabinet directive to
regularise the appointment of the Broadcasting Authority of Zimbabwe board.
He also ignored a letter from Prime Minister Morgan Tsvangirai in November
2009 ordering him to dissolve the Mahoso-led board.
Despite such blatant insolence, Shamu was recently threatening that “gloves
may soon be off” against the private media and journalists if they persist
with an “anti-African and anti-Zimbabwe frenzy”.

Last week we ran a story in which the cash-strapped Bulawayo City Council is
proposing to slash workers’ salaries by 20% to service a loan used to
purchase luxury vehicles for senior officials after a local bank threatened
to attach some of its buildings.
A report by the council’s finance committee shows that the council wanted
salaries cut to enable it to repay a US$4,5 million bank loan used to buy 20
top-of-the range vehicles for managers. Among the vehicles purchased were a
Land Rover for town clerk Middleton Nyoni, a Toyota Prado for the housing
director Isaiah Magagula and a Toyota Fortuner for finance director Kempton
This is failure of governance at its worst. How can they demand that rank
and file employees tighten already taut belts for something they were not
even beneficiaries of?
It speaks volumes of the culture of spending and selfishness that has
gripped all sectors of government.  Why buy such expensive cars without the
money to bankroll them?

‘MDC-T threatens to unleash violence,” the Herald told us on its front page
on Monday. It didn’t take a rocket scientist to work that one out. There on
the same page was news of the arrival of UN High Commissioner for Human
Rights, Navanethem Pillay. What is amusing about this is the thought that
the UN Commissioner was likely to fall for the suggestion that it was the
MDC-T that would unleash violence if it won the proposed election. Not
likely is it?
What is the reality? What has been the pattern to date, in 2008 for
instance? What happened to Jestina Mukoko? Or worse still, Tonderai Ndira?
There was much talk of Zimbabwe having “nothing to hide”. Which raises the
obvious question, why then do they attempt to hide so much? Pillay is a
former South African high court judge. South African judges have been
subject to systematic abuse in the Zimbabwe state media in recent weeks,
largely because they have upheld appeals by dispossessed Zimbabwean farmers
seeking compensation.
What Zanu PF doesn’t understand is that the courts in a democracy have a
duty to support applicants the government doesn’t like as well as those they
do. The fate of the Sadc tribunal illustrates this point. A rights-based
culture is one that protects all.

‘When I got off the plane at Harare airport I was pleased to see the
opposite of what I had known. I met very good people, very happy people and
Zimbabwe is very beautiful and attractive.”
You would expect this sort of naivety from a finalist in a beauty contest.
It is called “Giving a hostage to fortune”, and it came from of all people,
the US ambassador, Charles Ray.
“What you see on CNN is not true,” he declared as he prepares  to depart.
This sounds like an epiphany of some sort!
He said he had found Zimbabwe “fascinating”.  “You can do elephant riding if
you are daring”.
So we are glad he found something useful to do! We welcome his successor
Bruce Wharton who will be an experienced observer of the Zimbabwean scene
having been stationed here in the early-2000s. He should “sail through”, as
we say in Zimbabwe, his senate hearings.  Not likely to be any naivety
there. And no need for the bullet-proof limos he was obliged to use in

So what was said at that now famous meeting at Bulawayo Airport last
We have what was reported in the Standard from Enos Nkala about Mugabe being
tired and wanting to retire. But Nkala appears to have thought better of
that statement and told Business Day a different story.
“From what we discussed, Mr Mugabe said he was tired and wants to retire but
he cannot do so now because Zanu PF would die,” Nkala was reported as
saying. “He cannot leave when the party is in such a state. What is holding
him now is managing and containing Zanu PF to prevent it from
Realising the potential damage of that statement and anxious not to blot his
copybook with the president just as they were about to mend fences, Nkala
told Business Day: “Mr Mugabe wanted me to tell him how to win back
Matabeleland because Zanu PF has done badly in Matabeleland in the past
Business Day reported that highly placed sources told the newspaper that
Mugabe had sought to enlist help from the veteran nationalist on how to claw
his way back into the three Matabeleland provinces. It is also entirely
plausible that Mugabe confessed to being tired but unable to go. This is not
the first report of that nature.
Nkala is a bit of a maverick and would relish the role of being recognised
as co-founder of Zanu after the role he played in the August 1963 coup.
But it must be said, the last thing the people of Matabeleland want is
having Enos Nkala foisted upon them. It would be entirely
counter-productive. How many people can recall, we wonder, the treatment he
got at his brother’s funeral many years ago?

We were amused by the MDC-99’s vociferous denial of any association with
Aaron Muzungu, their former spokesman who was arrested on allegations that
he stole a brand new Ford Ranger T6 vehicle that was on display at the
Harare Sports Club.
The Herald states that Muzungu allegedly gate-crashed the launch event
hosted by Croco Motors started the engine and drove for more than 1 300km
over the next eight days before the police caught up with him.
The MDC99 had expelled him for “bringing the name of the party into
disrepute”, we were told.
“We urge the public to ignore any statements issued by Muzungu on behalf of
the party,” they said. “We do not associate ourselves with fraudulent
If we may digress, what happened to the promised 66-day hunger strike the
MDC-99  had threatened to conduct “until Mugabe is gone”? They all got
hungry it seems.

Finally it seems that it is not only President Robert Mugabe and Ugandan
dictator Idi Amin with the propensity for outrageously long titles. Of
course Amin takes the cake for his self-given title: “His Excellency
President for Life, Field Marshal Al Hadji Doctor Idi Amin, VC, DSO, MC,
Lord of All the Beasts of the Earth and Fishes of the Sea, and Conqueror of
the British Empire in Africa in General and Uganda in Particular.”
Malawian President, Joyce Banda, has joined the fray with an equally lengthy
title. She has come up with a mouthful: “Her Excellency the State President
and Commander in-Chief of the Malawi Defence Force and Malawi Police
Service, Minister responsible for the Public Service, Statutory
Corporations, Civil Service Administration, National Relief and Disaster
Management and Nutrition and HIV/ Aids.”
And this after only a few months in office!

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Dimaf a specious ploy

Thursday, 24 May 2012 11:29

IT is eight  months since the Minister of Industry and Commerce Professor
Welshman Ncube first stated that, as a matter of urgency, a fund would be
set up to aid the recovery of ailing industries in Bulawayo.  He noted that
87 companies had ceased operations in the past few years. Some companies had
relocated to Harare while others had markedly downsized their operations.

The economic consequences on Zimbabwe, in general, Bulawayo in particular
and the entirety of the Matabeleland provinces were immense. Thousands of
people were no longer gainfully employed, swelling the numbers of the
distressingly impoverished.

Approximately a month later, the Minister of Finance, Tendai Biti, was in
Bulawayo in pursuit of his nationwide consultations ahead of the national
budget.  Concurrently, he announced the launch of the fund for the
distressed industries nationwide, but with special focus on those in
Bulawayo.  The fund would be known as the Distressed Industries and
Marginalised Areas Fund (Dimaf), and would have  US$40 million dollars, of
which half would be provided by government, and the balance by Old Mutual.
Administration of Dimaf and the provision of funds to distressed enterprises
would be done by CABS, transparently and independent of political

Within weeks thereafter, President Robert Mugabe expressed very supportive
comments on Dimaf, and how it would bring positive transformation to
Bulawayo’s ailing industries, as well as elsewhere in Zimbabwe. These
sentiments were echoed by Prime Minister Morgan Tsvangirai, and several
others in Zimbabwe’s political hierarchy.  Despite the declared funding
intended for Dimaf being very little, in pronounced distinction to the more
than one billion dollars essentially required for a significant industrial
upturn, an atmosphere of hope and expectation rapidly developed within the
decimated manufacturing sector.

As the months have passed by, industry’s expectations have been
progressively quashed, and the hopes of imminent recovery totally destroyed.
Despite the grandiose talk by government, there has been virtually no
assistance to industry from Dimaf.  Admittedly, government has yet to
provide the US$20 million it pledged to the fund, despite recurrent
statements by ministers that the release of the funds was imminent.  That
fund timeously received the money committed to it by Old Mutual, and yet
allocations to industry have been so miniscule as to be of any significance.
Diverse press reports and comments from industrial representative bodies say
that since the “launch” of the fund in October 2011, only two industrial
enterprises have received  funds, and the aggregate so received is
apparently less than US$3 million.

Apparently the actual or intending funders of Dimaf (being government and
Old Mutual) have prescribed, amongst other conditions, that:

    No company under judicial management or provisional liquidation is to be
a beneficiary of Dimaf funding.  That inevitably poses the question as to
how any enterprises can be considered to be distressed to a greater extent
than such companies.  The allocation criteria should be whether the
provision of the funding would  reverse  the distressed circumstances.

    The maximum duration of any Dimaf loan to any industry would be 12
months.  Very few distressed enterprises can realistically service loan
repayment within such a short time.  Once they are in receipt of the loan
funding they must solicit orders from customers, which would rarely be
forthcoming over-night.  Then they have to order, and await delivery of the
required manufacturing inputs.  Once such inputs have been received,
manufacture must commence, whereafter the manufactured products must be
despatched to the customers, and then payment received from the customers,
generally 60 to 90 days after delivery.  Meanwhile, further manufacturing
inputs must be purchased to enable execution of the next slot of customers’
orders, and so the cycle continues. Outstanding debts with suppliers must
progressively be settled and in many instances, plant and machinery
refurbishment, rehabilitation or replacement need to be funded.  Thus, as a
general rule, meaningful industrial recovery requires a minimum of
three-year funding, with no capital repayments in the first year, and
progressive capital repayments over the following two years, failing which
the enterprise will again become distressed, and will probably collapse.
Thus, the entire intent of Dimaf would fail to be achieved.

    Indications have also been forthcoming, from Dimaf’s administration,
that funding will only be provided against collateral security of first
mortgage bonds over immovable property.  In so prescribing, there is
evidently complete disregard of the fact that many industrialists operate
from rented premises, and therefore are not possessed of land and buildings
to provide as collateral.  Insofar as some are possessed of land and
buildings, most had already secured commercial loans by such collateral.
Dimaf necessarily must have greater flexibility as to the nature of
collateral to be provided.

With the total of present, and intended  funding for Dimaf being inadequate,
and with such unrealistic loan conditions, Dimaf will not be a success. If
Dimaf is not realistically restructured, substantially funded, and the funds
expeditiously released to industry, it is doomed to fail.

Therefore the inevitable conclusion must be that the conceptualisation of
Dimaf, and the concerns to restore industrial well-being, are devoid of
credence, and are naught but a ploy to try to procure votes, from the
economically afflicted populace, in the elections to be held later this
year, or in the first half of 2013.  It appears that the Dimaf
conceptualisation is, in reality, only an attempt at capturing the votes of
the electorate and, therefore, that the future of industry is bleak.

By Eric Bloch

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A reflection of public administration crisis

Thursday, 24 May 2012 11:24

Clive Mphambela/Herbert Moyo

HUGE inter-parastatal debts which have accumulated over the years are
impeding the recovery and restructuring of state enterprises making it
difficult to attract investment.

Zimbabwe has about 78 state enterprises with a capacity to contribute 40% to
the gross domestic product, which stands between US$8 billion and US$9
billion, but excessive debts, rampant mismanagement and corruption have
instead seen them bleeding the economy.

University of Zimbabwe Graduate School of Management lecturer Professor Tony
Hawkins said the huge inter-parastatal debt was a reflection of
inefficiencies, both within and outside these institutions.

“For example, it is quite sad that Zesa cannot even run an effective billing
system, and ultimately it is difficult to rely on what they tell us about
the figures that they are owed by different people,” said Hawkins.

Hawkins said the whole issue eventually boiled down to poor governance, and
ultimately the politics of the country. At the individual business level,
Hawkins said the debts resulted in poor provision of services by the
affected companies, while at national level the inefficiencies resulted in
dead weight loss.

Strong calls have been made for government to dispose of state entities, but
very few takers have been forthcoming given crippling nature of these debts.
Zimbabwe has failed to come up with a viable commercialisation or
privatisation strategy.

In Russia, for instance, the state paid off most bills by selling
state-owned oil companies to the oligarchs while South American countries
sold off state water companies, metal mines and fruit plantations to reduce
their obligations.

However, in Zimbabwe the government has been reluctant to follow that path,
arguing privatising state companies would be tantamount to surrendering the
backbone of the country’s economy to foreigners.

Although Zimbabwean state enterprises have drastically lost their markets to
new businesses after deregulation of the economy coupled with the decline of
the overall industrial production, they still continue to enjoy privileged
access to public financial resources and other forms of government

State Enterprises and Parastatals minister, Gorden Moyo, said state entities
were in serious debt, warning unless an urgent inter-parastatal debt
strategy was developed to resolve the problem, they would continue to bleed
the fiscus.

Moyo said inter-parastatal debt amounted to US$600 million but the
cumulative figure could easily exceed US$1 billion if other debts were
included. Finance minister Tendai Biti said recently government also owed
state enterprises huge amounts –– US$72 million to Zesa and US$22 million to

Moyo said the inter-parastatal debt had become a major destabiliser to the
economy because the situation where parastatals owed each other large
amounts was affecting overall service delivery.

He said because of these debts strategic partners were shunning these
entities. He cited national carrier Air Zimbabwe as an example of such
entities with a huge inter-parastatal debt, saying it owed Zimra close to
US$34 million, the Civil Aviation Authority US$15 million and TelOne US$500
000 bringing its total inter-parastatal debt to US$51 million.

An unnamed potential investor held talks with government last year over
entering into a possible strategic partnership with Air Zimbabwe, but the
talks collapsed because of a myriad of challenges facing the national
flagship carrier.

The carrier’s ageing fleet and huge debt overhang owed to various creditors
has been cited by economists as the reason the potential investor pulled
out. Air Zimbabwe’s fleet comprised ageing Boeing 737-200 planes which
pilots wanted retired saying they are too old and obsolete.

The government decided to disband Air Zimbabwe Holdings and constitute Air
Zimbabwe (Pvt) Ltd to start operations on a clean slate with the hope of
attracting investors, but to date there have been no takers since the
government would remain the majority shareholder in the “new” airline.

The handling of the Essar deal in which the Indian company agreed to buy
defunct steel-making giant Ziscosteel for about US$750 million, including
inheriting its debts, further shows government’s inability to be a viable
business partner.

The ministries of Industry and Commerce and Mines have been blaming each
other for the near collapse of the deal just over a year since the
government announced that it had been signed and sealed.

Moyo said the inter-parastatal debt had also generated negative spill-over
effects into the whole economy since the contagion was far-reaching. The
debt also means the enterprises cannot provide basic services they were set
up to cater for the public.

The decline of the National Railways of Zimbabwe, for instance, has not only
affected the parastatal itself and the transport sector in general, but the
economies of Bulawayo, Hwange, Gweru, Kwekwe and surrounding areas, which
depended on the rail carrier and associated activities.

Bulawayo industries depended on NRZ’s cheap transportation costs for the
mainly steel products used in the city’s heavy duty industries from
Ziscosteel in Redcliff as well as Zimasco in Kwekwe.

Coal from Hwange was also cheaply ferried to Bulawayo’s coal-fired thermal
power station, which reduced the city’s power dependence on Zesa. But the
thermal power station now stands quiet together with the city’s industrial
hub of Belmont which has now been reduced to a mere ghost town.

As a result of the decline of NRZ, the country’s major roads have been
damaged since this has now become the preferred mode of transportation. Moyo
says his ministry will come up with a state enterprises and restructuring
manual which will give detail on the processes of commercialisation and
privatisation after a summit that will bring in international experts to
help unlock all the bottlenecks impeding the restructuring process next

However, observers questioned whether summits would solve the problems
bedevilling parastatals saying only the country’s policies held the key to
unlocking their potential.

Economic analyst Eric Bloch said the government has to urgently deal with
the inter-parastatal debt together with the entire national debt question.
“The reality is that first and foremost, government must privatise these
institutions,” said Bloch. “They need to first assume the entire parastatal
debts and come up with a settlement programme for the debts that parastatals
owe each other,” he said.

The debts have resulted in the inability of paratsatals to attract
investment and debt funding and the longer term solution should be to
completely privatise the parastatals so that they have some independent

“One of the major problems has been operational inefficiencies emanating
from poor ownership structures. New shareholders will demand that the
management be restructured to avoid recurrence,” Bloch said.

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Time for EU to reconsider targeted sanctions stance

Thursday, 24 May 2012 11:17

By Qhubani Moyo

NO one can dispute that at the time of the imposition of targeted sanctions
on President Robert Mugabe, his cronies and selected entities by the
European Union (EU) and the United States, Zimbabweans were under siege from
rogue elements in government who were abusing their power and authority to
suppress dissent. The country had become a pariah state and internal
democratic processes to try to change the government were thwarted with
brute force using the state security apparatus. Instead of being used to
protect the citizens, the security machinery was used to bludgeon the

The record of human right abuses from the time of Independence to the time
of imposition of sanctions in 2002 is diabolic to say the least. The
sanctions — which were triggered by the refusal to accredit EU observers for
the 2002 presidential election — were therefore probably a necessary measure
and part of the global efforts to contain the rogue regime.

In fact, it was a necessary tool and measure to try and protect the people
of Zimbabwe from the monster that was prepared to swallow any one just to
stay in power. The effects of the sanctions were there for all to see, they
hit below the belt but the regime survived due to all sorts of machinations,
especially the questionable methods of the Governor of the Reserve Bank who
used all unorthodox means to become master of the casino economy.

The crippling of the whole economy did not deter the regime as it ignored
everyone’s well-being and concentrated on its own survival. If the situation
had continued everything would have closed down but the regime would still
have refused to go. They remain very afraid of what might happen to them
given that the world is now more eager than before to deal with those that
criminally abuse their citizens’ rights.

But the critical question that begs for an urgent answer is whether the
sanctions remain relevant given the amount of positive developments in the
country as a result of the inclusive government. It is time the European
Union (EU) reconsiders its stance on sanctions.

The resumption of talks between the EUand the Zimbabwean government mark yet
another milestone for the Government of National Unity (GNU) because the
issue of sanctions has remained a big hindrance to attainment of some of the
key things that the GNU set out to achieve. The resumption of talks has seen
the government delegation consisting of ministers Priscilla
Misihairabwi-Mushonga, Patrick Chinamasa and Elton Mangoma go to Brussels
for talks with the European Commission leadership.

The continuation of the talks is important for both the EU and Zimbabwe
because the sanctions, or restrictive measures as some would like to call
them, have outlived their usefulness and are not in any way assisting the
country move forward. Equally, maintaining sanctions does not add value to
the foreign policy interests of EU as a regional block or EU countries as
individual member states. If anything the interests of those countries are
best served with no restrictions in trade, investment and other economic
partnerships in relationship to Zimbabwe.

There is doubt that there are many EU individual member states who badly
want to do business with Zimbabwe. It is also my contention that a number of
them never wanted the imposition of sanctions in the first place while
others want them removed as of yesterday. But it is obviously the solidarity
with those who feel strongly about the sanctions that some of the countries
continue endorsing the continuation of the embargo.

However, what the EU is not realising is that the sanctions issue has
remained the only tangible and sensible argument that Zanu PF continues to
have to justify refusal to adopt reforms, while scuttling some of the key
Global Political Agreement (GPA) issues.

If the sanctions are removed, Zanu PF will be at sixes and sevens in terms
of which way to go because sanctions is now their main argument to justify
blocking change. There are many within Zanu PF ranks who would rather have
the sanctions continue as that assures them of political capital and a
viable campaign platform. Removing sanctions would be like pulling the rug
under their feet. In fact, it will scuttle their election strategy.

Also one of the key deliverables of the GPA, which is important for
democratisation of the political playing field, is a sound revival of the
economy.  In the absence of a sound economy those who have monopolised
resources will continue to use them for political expedience. It is
important to ensure macro-economic stability and sustained economic recovery
and that is where the removal of sanctions becomes critical as it would
unlock lines of credit for the traditional bilateral and multilateral
lenders, including global financial institutions such as the IMF, World
Bank, European Bank for Reconstruction and Development and the Paris Club,
to come back.

While arguments can be raised that Zimbabwe’s failure to pay its debts with
these financiers made it difficult for them to continue lending, the truth
of the matter is that there is also an intrinsic link between the sanctions
and Zimbabwe’s failure to access lines of credit. The situation has been
made worse by the decision by the US to impose sanctions as well.

State entities working with companies expected to contribute US$600 million
to support this year’s US$4 billion are under sanctions. Unfortunately this
has led to the justification of dubious means of diamond trade in which
leakages and looting are rampant. Sanctions are being used to justify theft
and raiding of diamond revenues by corrupt individuals pursuing

Even the calls to transform the country into a developmental state by
allowing it to be at the forefront of the diamond mining cannot work given
that a number of companies that provide ancillary services to the diamond
sector are embargoed from trade with Europe. The net effect is that
ironically the sanctions are propping up Zanu PF, instead of hurting it.
They have allowed the party to regroup, reorganise and justify financing
themselves from the national wealth in the name of fighting sanctions.

Given all these and many other compelling reasons, it is clearly time for
the EU to start considering a policy shift and comprehensive lifting of the
The other point is those who were targets of sanctions caused the problem
but at the same time they are part of the solution, hence the GNU. The GNU
has shown significant willingness by the three parties in government to
engage seriously to resolve problems facing the country and thus it means
collective and holistic action in tackling Zimbabwe’s problems is critical.

Important institutions like the EU should be part of the solution and not
the problem. While it is true that there are still strong attitudes by
hardliners resisting change, the EU can outmanoeuvre them by removing
sanctions and becoming part of the solution.

Moyo  is the former Organising Secretary and now Director of Policy and
Research Coordination in the MDC led by Professor Welshman Ncube. He is also
a lecturer at Nust.

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Diamond revenues: We need answers

Thursday, 24 May 2012 11:53

FINANCE minister Tendai Biti last week raised fresh fears that diamond
revenues are being looted — possibly by senior government officials and
military officers involved in the shady Marange mining activities.

Biti said on Thursday, while presenting a state of the economy update,
diamond proceeds have remained a trickle and that was now affecting his US$4
billion national budget which partly depends on a US$600 million
contribution from the gems income.

The minister has often complained about diamond revenues, which people
suspect are being siphoned off by government officials, in collaboration
with those mining in Chiadzwa, including private companies, state entities
and security forces.

Biti last week disclosed that Chinese firm Anjin, which mines diamonds in
Chiadzwa, has not submitted any revenue to Treasury despite the company
being the largest mining entity in the diamond-rich area.

Biti, who has for years now complained about the lack of transparency and
accountability at Marange, on Tusesday further stepped up the pressure on
President Robert Mugabe, Zanu PF ministers, particularly Mines minister
Obert Mpofu, and companies involved there, to explain what is going on.

Speaking at a Centre for Research and Development workshop on Zimbabwe’s
diamonds and the Kimberley Process, Biti said so far this year mining
companies had exported US$241 million worth of diamonds.

However, Treasury had only received US$34 million, none of which came from
Anjin Investments, the main defaulter. Anjin has a shady shareholding
structure (controlled by the Chinese and security forces) which does not
include the state-owned Zimbabwe Mining Development Corporation (ZMDC), the
official partner in other deals. ZMDC now operates on its own through its
subsidiary, Marange Resources, the successor to Canadile which was a joint
venture between the state and Core Mining. The Canadile deal collapsed over
allegations of corruption, looting and brazen theft.

“I have got a big bone to chew with all the mines, but particularly with
Anjin,” Biti said. “We are not getting anything from Anjin. I am not that
much worried about the other companies like Mbada and Marange because those
are partly owned by ZMDC and so at least we are getting something from
 them,” Biti said.

He said unlike other firms mining in Chiadzwa, Anjin was partnered by the
military, a situation which he said raises eyebrows. “Anjin is not
partnering ZMDC, someone says the army is its partner, but I have raised
this with President Mugabe. I am saying what does mining have to do with the

“Do we have a parallel government? I think it is totally unacceptable that
Anjin does not remit. I am also very angry with Anjin because they are by
far the biggest mining company there. Anjin has seven shafts combined, that
means they have seven mines in one area,” he said.

There is “opaqueness and unaccountability surrounding our diamonds”. Last
year, Biti also raised serious issues with diamond revenues which were not
properly accounted for and had a fierce row with Mpofu over the matter which
was discussed in cabinet several times. Prime Minister Morgan Tsvangirai has
also been raising the issues, together with ministers mainly from the MDC
parties. Zanu PF ministers are also equally concerned although they can’t
voice their worries.

Addressing a parliamentary committee on Monday, Mbada chairperson, Robert
Mhlanga, said his company had remitted about US$300 million to government
since 2009.
“In total, we have paid a total of US$293,5 million to government and this
constitutes nearly 50% of the gross we generate with 26% going to working
capital while 24% went to the other shareholder (New Reclamation),” he said.

Now, whichever way you look at it, there is a serious issue here. Compared
to what the private companies, which in the first place came through dubious
routes, and their shadowy controllers are making, government — and by
extension the people — are getting peanuts. It is clear that the country’s
diamond revenues are being looted.

If that was not the case, why are responsible authorities unable or
unwilling to provide clear answers? Why are they tongue-tied if what they
are doing is right? Who is stealing the country’s diamond revenues? Some
people, surely, are siphoning and possibly salting away the money to
offshore bank accounts. We need answers.

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Zim’s ballooning trade deficit a ticking time bomb

Thursday, 24 May 2012 11:49

ZIMBABWE’S ballooning trade deficit is a ticking time bomb, a disaster
waiting to happen. It is odd our policy makers are only mentioning it in
passing. They make fleeting references to it when they are talking about
more serious economic issues.  We think it is not really getting the
attention it deserves.

There are several problems associated with Zimbabwe’s seriously negative
balance of trade (BOT). The first is the sheer size of the deficit in that
it represents the largest share of the overall balance of payments (BOP).

Last year, the trade deficit was a massive US$3 billion. In the first three
months of 2012, Finance minister Tendai Biti said we exported US$900 million
worth of goods and services whilst imports have gobbled US$1,8 billion. This
suggests US$900 million worth of “official” imports have been funded from
other sources. Projecting the trend so far to year-end easily gives us a
trade deficit of US$5 billion this year.

Clearly, we should not be worried about just the sheer magnitude of the
trade gap, but also need to be informed about the more serious issues. For
instance, are we sure how the trade deficit is being financed? And what are
the economic implications of such funding?

As a country, we also need to worry about what is being imported. Are we
allocating the scarce foreign currency efficiently? If our policy makers
start looking at some of these questions, an ominous picture will quickly

Biti innocently suggested last week that the local banking sector is funding
the BOT and this simple assertion does ring true. The banks are indeed
mobilising foreign lines of credit and most of this money is funding imports
of one thing or another.

Recently, Sakunda Energy got US$23 million from the PTA Bank to fund imports
of petroleum products. CBZ similarly obtained US$60 million to support the
SME sector; and we all know what the major business activity of our SME
sector is? You guessed right!, it is commodity broking, ie, importing goods
in small quantities that the big guys can’t be bothered to import
themselves. And, of course, quite a chunk of this goes to importing motor

If this is true, then we are all watching a national crisis unfold. Why?
Zimbabwe has become a net importer across virtually all economic sectors.
With the exception of the mining sector, which remains the country’s net
foreign currency earner, all others including agriculture are net importers
at the moment. Mining is a particularly interesting in the sense that heavy
investment into capacity is required today to generate exports in future,
and the machinery and equipment is all imported; consumables such as fuel,
explosives, oils and energy are also imported.

However, the mining sector has also been accused of importing banking
services, shipping out all export revenues to offshore accounts and only
localising the little they need to pay local taxes and other expenses.
Agriculture is a net importer when one tries to balance agricultural exports
against the fertiliser and agro-chemical imports.  It’s a gloomy picture if
we add food and power imports to the agriculture equation.

How are our imports being funded? Is it transfer payments from the diaspora
and “other offshore sources” of funds. Therein lies a real possibility for
the country’s import sector to be exposed to money laundering syndicates.
Should the authorities not request importers to declare their source of
funding? Should we not at least attempt to curb unnecessary imports?

One shudders to think how much of the US$2,5 billion in the banking sector
loans are funding consumptive imports.

Clive Mphambela

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GNU: Zanu PF govt by another name

Thursday, 24 May 2012 11:47

I FIND space travel infinitely fascinating. The news is that Mae Jemison,
best known as the first black female astronaut to travel to space, will lead
an audacious US project that will within 100 years result in a spaceship
that will take humans to the stars.

Now to the present,  recently the reclusive North Korean dictatorship was
severely embarrassed when an attempt to prove it had mastered the
complexities of spacecraft came to an inauspicious end: the rocket
disintegrated into pieces a mere 90 seconds into its flight, in full view of
invited foreign journalists! For poverty-stricken North Korea to try to send
a rocket into space smacks of warped priorities, but dictators’ penchant for
vainglory is legendary; the launch was meant to coincide with the centenary
of the birth of North Korea’s founding leader, the late “eternal chairman”
Kim Il-Sung.

The Global Political Agreement, precursor to the unity government, hardly
reads like rocket science. In its preamble, the signatories recognise “the
historical obligation and need to reach a solution that will allow us to put
Zimbabwe first and give the people a genuine chance of reconstructing their

Sadly, this is an ideal that has failed to launch — so to speak — the
exception being the oft-cited stabilisation of the economy and decline in
political violence.  Government remains stuck with a grave implementation
deficit as promised reforms remain mere GPA statements of intent. While the
inclusive government masquerades as a “unity government”, it is increasingly
a Zanu PF regime in disguise — old wine in new bottles.

Whenever there is a clash of interest or on interpretation of the GPA, it is
the Zanu PF interest that prevails.  And major decisions and policies are
rarely official unless the Zanu PF element of the GNU political amalgam has
had its say, as Prime Minister Morgan Tsvangirai and deputy premier Arthur
Mutambara have found out to their regular chagrin.

So it was with the issue of the extension of the service chiefs’ contracts.
In February Tsvangirai and Mutambara insisted at a press conference that the
Zanu-PF aligned service chiefs were in office in an acting capacity, only
for Mugabe to announce 48 hours later that he had extended their contracts
to 2014.

In May Mutambara, in his colourful style, condemned the proliferation of
roadblocks saying they were not necessary since Zimbabwe is not a police
state. “There is no need for all those roadblocks. We do not want corruption
whereby the police use these as fundraising methods,” he  told parliament
saying cabinet had tasked Home Affairs co-minister Kembo Mohadi to
investigate the matter with the aim of reducing the number of roadblocks.

Alas, this week Mutambara had the rug pulled from under his feet when none
other than Home secretary Melusi Matshiya told a Parliamentary Portfolio
Committee that “roadblocks are a necessity because it is part of policing
and you cannot remove that element from the police ...”.

That echoes sentiments of Police Commissioner-General Augustine Chihuri, an
avowed Zanu PF supporter. And it is Chihuri’s cops that even decide whether
or not the MDC can hold a political rally, but the same police can stand
akimbo while rowdy Zanu PF supporters disrupt a public hearing on the Human
Rights Bill after assaulting legislators and journalists inside parliament,
as was the case last year.

Zanu PF holds the politically strategic posts in cabinet. Of course the
MDC-T’s Tendai Biti is Finance minister, a key post, but then again
government is broke. This week he was lamenting budget revenue targets were
slipping away, while also bemoaning he was not receiving anticipated diamond
revenue. What’s more, he has proved to be a convenient scapegoat for
problems ranging from non-remittance of war vets’ pensions and other
benefits, to underfunding of agriculture.

Add the army’s recent menacing declaration that “as soldiers we will never
be apologetic for supporting Zanu PF ”, and the party’s vice-grip on the
state media, and the picture becomes that much clearer.

Maybe the most profound acknowledgement that the GNU is a Zanu PF government
came from (MDC-T) Nelson Chamisa who hailed President Mugabe as a leader who
was in the “cockpit” while leading a team of ministers who are passengers in
Zimbabwe’s development plane. Chamisa said “Mugabe’s wisdom makes sure the
plane does not crash”.

Many would argue that this plane is not flying, but grounded on the runway.
The reality? Thirty-two years of Zanu PF rule, and counting.

By Stewart Chabwinja

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