Geldof calls on Africa to throw out
Mugabe
From Anthony Mitchell in Addis
Ababa
BOB GELDOF launched a bitter attack on President Mugabe of Zimbabwe last
night as he flew into Africa 20 years after launching
Live Aid.
The Irish pop star called on African leaders to challenge despots if they
wanted the rest of the world to take them
seriously.
"He (Mr Mugabe) is engaging in state-sponsored terror and famine and that
cannot be allowed," Geldof said. "He is a shame on the face
of Africa."
Geldof, on his first official trip to Ethiopia since the days of Live Aid in
1985, added: "You people should be demanding that Mugabe steps down. I don't
care where he goes. He can join Idi Amin in Saudi Arabia, he can join the
ghetto of tyrants, but get him out of
there."
Geldof, whose trip is timed as a "wake-up call" to the G8 summit of world
leaders in Evian, France, early next month, also came face to face with the
horror of
Aids.
He met Meseret Tadesse, a ten-year-old Aids orphan who is one of three
million people in Ethiopia infected with the
virus.
"This is a disgrace," he said at the start of his five-day visit to the
impoverished country - the third-poorest country in the world, with the
world's third-largest Aids population. "I am a father and have a ten-year-old
daughter. This girl wants to be a doctor when she grows up. Instead she will
die within a
year."
The pair held hands in a tiny mud shack in a shantytown on the outskirts of
the capital, Addis Ababa. Families are too poor to buy drugs to combat the
virus.
The former Boomtown Rats singer also attacked the European Union. "Their
grotesque inability to respond in a full, adequate manner is responsible for
the food shortages here," he said. Some 14 million people, or one in five of
the population, are facing starvation in the country and t he aid bill is
estimated at more than £500
million.
The singer is a hero in Ethiopia for his fight against the 1984 famine, which
culminated in the Live Aid concerts in Britain and America. Geldof now wants
Western governments to each pledge 0.16 per cent of gross domestic product to
helping
Africa.
President Bush signed into law yesterday a $15 billion (£9.2 billion) plan to
help to fund the fight against Aids in Africa and the Caribbean and
challenged Europe to follow America's "generous" lead without delay. Mr Bush,
in trebling US spending on Aids over the next five years, said that he would
"challenge our partners and our friends to follow
our lead".
Herald Reporters The shortage of bank notes worsened
in Harare yesterday with some banks turning away clients after running out of
the notes.
This prompted the Zimbabwe National Chamber of Commerce to
call on bankers to introduce incentives to attract cash deposits and
encourage the use of bank cheques and electronic transactions.
Long
and winding queues were the order of the day in banking halls and
at automated teller machines.
Most people who were supposed to receive
their salaries went back home empty-handed and disappointed.
A woman
said a building society in the city centre told people in the queue to
disperse saying it no longer had any bank notes.
The situation has been
worsened by a strike at Stanbic Bank and Zimbank. There were also reports
that security guards who provide the cash-in-transit service and deposit
money in bulk downed tools demanding a salary rise.
At least 105 striking
Stanbic bank workers were yesterday arrested in Harare by the police after
they allegedly tried to mobilise other workers to join the strike in
Harare.
Some Zimbank workers who went on strike last week could be seen
milling outside the bank's branch along First Street.
They are
demanding the reinstatement of three non-managerial representatives on the
Finserve board who were suspended for allegedly leaking information to the
media.
Some banks reduced withdrawal limits to clients while others
referred clients to branches in the northern suburbs.
Most were only
allowing withdrawals of between $15 000 and $20 000.
"This is so
embarrassing and disappointing. I want my money but I can't withdraw it,"
complained an account holder with CABS who declined to be named.
Last
month, people struggled to access their money soon after the three-day job
stayaway organised by the Zimbabwe Congress of Trade Unions.
ZNCC
president Mr Jim Sanders yesterday said he would engage the
Bankers Association of Zimbabwe and urge it to consider introducing measures
that would contribute to alleviating the shortage.
He called on the
Reserve Bank of Zimbabwe to be flexible in its response to inflation and
redouble its efforts to make notes available for use "in cash transactions
that have grown in size and in volume".
Mr Sanders said to alleviate the
shortages, banks should introduce measures such as replacing charges on cash
deposits with commissions paid to cash depositors, suspending charges on
electronic or direct debit transactions, suspending charges on issuance of
bank cheques and expediting special clearances of cheques to within eight
hours and reducing the charges.
The ZNCC is also proposing telephone
clearance on cheques at the request of account holders for minimal
fee.
Mr Sanders called on retailers to make arrangements with banks and
security companies for the early deposit of cash.
He said the RBZ
should increase and maintain confidence in the banking sector by making
sufficient cash available for transactions.
At Stanbic Bank, police
spokesman Superintendent Oliver Mandipaka said the employees started
gathering at the bank's Samora Machel branch in the morning, demanding salary
increments from management.
"They wanted to demonstrate against
management over salary increments," he said.
After failing to get an
audience with the management, the workers then allegedly went to other
branches forcing others to join the strike.
Supt Mandipaka said the
police then intervened and arrested the group at the bank's Nelson Mandela
Avenue branch.
"They were taken to Harare Central and we are charging
them for contravening Section 7b of the Miscellaneous Offences Act because
their conduct was likely to provoke a breach of peace," he said.
By
late evening some of the workers had been released after paying fines of $5
000 each.
Exiled
Zimbabweans in South Africa say they will hold prolonged but
peaceful demonstrations in front of shops and hotels in South Africa which
play host to President Robert Mugabe, his wife and their cronies.
They
are also all for a boycott of these shops and hotels because they would be
conniving in receiving money "stolen" from the Zimbabwean people.
The
Zimbabweans threatened to call for the boycott after being angered by
a weekend report that Mugabe's wife Grace had spent about R100 000 in
four days on her latest visit to South Africa.
Mrs Mugabe has resorted
to Johannesburg for her shopping sprees after European and American sanctions
slapped on her and the president deprived her of her favourite shopping
destinations.
The Johannesburg Sunday Times said it had VAT refund
documents which showed that Mrs Mugabe had spent the money on clothes, food,
pharmaceuticals and hardware.
The Concerned Zimbabweans Abroad (CZA),
a group representing exiled Zimbabweans, which has convened successful and
well-attended protests against the Zimbabwean government in South Africa,
described her alleged spending as "grotesquely obscene".
CZA president
Jay Jay Sibanda said his group would hold peaceful but persistent
demonstrations in front of all hotels which hosted Mrs Mugabe
in future.
"We will also call on all South Africans who sympathise
with the Zimbabwean struggle to boycott any of these shops and hotels until
the struggle for freedom in Zimbabwe is won," said Sibanda. - Independent
Foreign Service
MDC will not be part of government if Mugabe
resigns
May 28, 2003,
07:45
Zimbabwe's main opposition party says it will not take part in a transitional
government should President Robert Mugabe give up
power.
Morgan Tsvangirai, the MDC leader, says the arrangement should follow
Zimbabwe's constitution. This provides for an acting president to
be appointed and elections to be held within three months. Tsvangirai
was speaking to Harare-based diplomats from the G8 industrialised
countries.
Speculation that the 79-year-old Mugabe might leave office before his current
term expires in 2008 was fanned last week when Mugabe urged his party
supporters to openly debate his succession.
'Condemn Mugabe on
Nigeria junket', Prescott urged
The Tories have challenged
Deputy Prime Minister John Prescott to confront Robert Mugabe over his
regime's human rights abuses.
Mr Prescott and the Zimbabwean President
are both due to attend tomorrow's inauguration of Nigeria's President
Olusegun Obasanjo in that country's capital Abuja.
Britain welcomed
the outcome of April's elections in Nigeria, which returned President
Obasanjo to power for a second term, as a welcome advance
for democracy.
But shadow foreign secretary Michael Ancram argued that
Mr Prescott should use the occasion to make clear Britain's attitude to
Mugabe's regime.
Mr Ancram said: "The British people are sick of John
Prescott's junkets. It is difficult to see how this visit will help those who
are suffering in southern Africa.
"It would be completely
inappropriate for the Deputy Prime Minister to appear alongside a tyrant such
as Robert Mugabe at President Obasanjo's inauguration."
A spokesman
for Mr Prescott said the Deputy Prime Minister had no plans to meet Mr Mugabe
at the inauguration.
The spokesman added: "It is right that Britain
should be represented at the highest level at this event. The elections were
the first
civilian-conducted elections in Nigeria for 20
years.
"They represent a landmark in the advancement of African
democracy.
"Mugabe's presence should not prevent us attending. Why should
Nigeria or Africa suffer for one man's failings?"
Consensus on Zimbabwe's Commonwealth
suspension
May 28, 2003,
20:30
There was consensus among most of the Commonwealth members that Zimbabwe's
suspension from the body should be sustained until December, Don McKinnon,
the Commonwealth secretary general
said.
McKinnon is attending a three-day meeting of Commonwealth youth ministers in
Botswana.
He said: "Now, that didn't meet everyone's best wish, but this is a case of
what is the best we can get from this situation because no leader wanted to
see the country nor the Commonwealth divided on the issue of
Zimbabwe."
Zimbabwe has been suspended from the ministerial councils of the Commonwealth
since March last
year.
Last week Australia, which has been pushing for tougher sanctions against
Zimbabwe, issued a damning report to the Commonwealth on human rights abuses
in the southern African country. - Sapa
HARARE, May 28 - Zimbabwe riot police arrested three
women among a crowd holding prayers on Wednesday ahead of planned opposition
protests against President Robert Mugabe next week, the party
said. Movement for Democratic Change
(MDC) leader Morgan Tsvangirai told a rally on Sunday his supporters would
embark on week-long demonstrations from June 2 to try to force Mugabe from
power and urged people to pray every day in
preparation. In a statement the MDC said
police armed with batons and tear gas ploughed into the lunchtime crowd in
Harare and assaulted people to break up the service, which was led by a
clergyman. ''They also threw tear gas
into the crowd (and) chased people in all directions injuring at least 20
people...At least three women were arrested,'' it
said. A police spokesman could not
confirm the report. Tough new security
legislation which Mugabe signed into law last year outlaws public gatherings
without police clearance. Mugabe, who
has ruled Zimbabwe since independence from Britain in 1980, hinted last
Thursday for the second time in two months that he may be ready to hand over
to a successor amid a deepening political and economic crisis many blame him
for. But he vowed the MDC, which he
calls a puppet of the West, would only rule ''over our dead
bodies.'' The MDC and labour unions each
called strikes earlier this year, which were among the biggest protests
against Mugabe since his controversial re-election in March 2002 polls that
both the opposition and several Western countries said were
rigged. Mugabe, 79, denies mismanaging
the economy, saying it has been sabotaged by the West in retaliation for his
seizure of white-owned farms for redistribution to landless
blacks.
A shortage
of blood and its by-products has hit Zimbabwe, the country's blood bank said
on Wednesday.
The lack of the vital health product has been precipitated
by mass strike actions and scarce fuel and foreign exchange, the National
Blood Transfusion Services (NBTS) said.
Blood, essential in surgical
operations, for haemophiliacs and for transfusions after major accidents, is
the latest product to join the list of shortages in the southern African
country.
Among the basics in short supply so far has been petroleum-based
fuels, electricity and bank notes.
Zimbabwe's opposition blames the
shortages on economic mismanagement, while President Robert Mugabe says they
are a result of a Western plot to topple him.
The NBTS said persistent
fuel shortages had adversely affected its blood collection activities, as
have the nationwide anti-government work stoppages staged in recent
months.
NBTS mobile units normally move to schools, factories and
commercial offices collecting blood from donors, but the lack of fuel and
work boycotts have impacted negatively on the collection.
The
combination of shortages and strikes "has led to shortages and intermittent
supply of blood and blood components to hospitals nationwide", the NBTS said
in a statement on Wednesday.
"The foreign currency shortage has put
severe and enormous pressure on NBTS, as the import of essential plasma
derivatives is no longer possible," it said.
Plasma is essential for
transfusion to haemophiliacs and is imported because the country does not
have the technology to extract it from donated blood.
A spokesperson for
the NBTS said everything that is imported, including test kits and anti-D,
administered to Rhesus-negative mothers shortly after giving birth, were in
short supply.
The blood bank said donors were also feeling compromised
because the traditional "donor comforts" or refreshments given to them after
donating blood were not readily available. -
Sapa-AFP
Zimbabwe
Opposition Tries to Force Mugabe to Negotiating Table Tendai
Maphosa Harare 28 May 2003, 17:23 UTC
Zimbabwe's main opposition
party, the Movement for Democratic Change, has called for mass protests
starting June 2.
There have been differing interpretations of the mass
action in various media, but the secretary-general of the Movement for
Democratic Change, Welshman Ncube, said ousting President Mugabe is not on
the agenda.
"It has never been the removal of Mugabe from office, the
objective is always a re-run of the presidential election as far as we are
concerned, that election was conducted unlawfully and illegally and the
objective of the mass action is to return to legitimacy," he explained. "The
MDC has never wanted to walk to State House, the MDC has never wanted
the installation of its candidate as president; we want the president to
be properly elected."
The government has warned that it is going to be
tough on anybody who participates in the demonstrations. For the past few
weeks there have been police roadblocks on roads around the capital, but Mr.
Ncube says his party has no choice but to protest.
"We are painfully
aware of the risks that are involved; we are dealing with a regime, which is
known for its brutality and for its lack of respect for human life," he said.
"But unfortunately there is no freedom which comes without a price, if Mugabe
wants to shoot peaceful people; unarmed, all they will be carrying are
placards and he wants to live with that in his conscience, let it
be."
The MDC called for a two-day general strike in March. That action
was widely observed, and the party threatened to follow it up with more
action if the government did not seriously start to address the political and
economic issues facing the country. The government dismissed the MDC's
demands, but the stakes are much higher now as the economy continues to
deteriorate.
Mr. Ncube says he is aware that next week's demonstrations
might not force Mr. Mugabe to the negotiating table, but he adds that his
party is prepared to keep on looking for other ways to keep pressure on the
president.
Wednesday, May 28,
2003 According to every measure, Zimbabwe should rank as one of Africa's
most prosperous nations. Its 14 million people live in a land blessed
with plentiful fresh water, fertile farmland and a variety of valuable
mineral resources. The country also has a literacy rate close to 90%, a
politically engaged population and (until recently) an active
press.
But Robert Mugabe, Zimbabwe's long-time President, is putting all
this potential to ruin -- and might even be driving the country toward the
sort of humanitarian tragedy currently on display in places like Sierra Leone
and Ethiopia. Last week, during a ministerial-level meeting of the
Commonwealth, Australia presented a report documenting the damage done to
Zimbabwe in recent years by Mr. Mugabe. It damns the man as an erratic
dictator willing to drive his country into chaos so he can retain
power.
Thanks to Mr. Mugabe's demagogic campaign to wipe out Zimbabwe's
white farming class, the country -- once Africa's breadbasket -- cannot
feed itself. Displaced whites say Zimbabwe's annual corn production has
fallen 80%. Three-quarters of Zimbabwe's commercial farms lie abandoned: The
thugs deployed by Mr. Mugabe's ruling ZANU-PF Party to force whites off
their property haven't the slightest idea how to cultivate crops. Nor do
the landless black peasants brought in by Mr. Mugabe. Lacking capital
and expertise, many have abandoned their new properties to the elements,
and have joined the 7.5-million Zimbabweans who face starvation.
The
Australian dossier also exposes Mr. Mugabe's murderous efforts to suppress
political dissent. Over the past 18 months, the President's goons have
arrested and tortured nearly 50 members of the nation's largest opposition
group, the Movement for Democratic Change.
As Australian Foreign Minister
Alexander Downer sees it, Mr. Mugabe's regime will end in one of two ways.
One scenario is for the President to be violently overthrown in a
"bloodbath." The other is for the senior members of the "ZANU-PF to go and
tap President Mugabe on the shoulder and say: 'Time is up. You are off.' " In
December, the 54-member Commonwealth will meet in Nigeria; the question of
how to encourage the second option is already scheduled for
discussion.
Zimbabwe has already been suspended from all Commonwealth
councils. And Australia has made it clear that it will use the December
summit to press for the Commonwealth to slap Mr. Mugabe's government with
economic sanctions as well. We hope Canada will lend assistance to Australia
with all the necessary diplomatic spadework in this regard. The Aussies will
need our help, as many of the Commonwealth's African members -- especially
South Africa -- will likely side with Mr. Mugabe in a misguided attempt
to demonstrate pan-African solidarity.
Last year, Jean Chrétien
flinched on the Zimbabwe file. During a Commonwealth meeting in March,
Britain and Australia sought to sanction Mr. Mugabe's government. But the
Canadian PM undermined the initiative by siding with the African delegates,
who were reluctant to ostracize the Zimbawean President. This was an error on
our PM's part. We expect he will not repeat it in
December.
Harare - Zimbabweans this week turned to the black market to buy
the local currency as a two-month-old cash crunch deepened.
The demand
for cash shot up even further in recent days coincide with month-end pay time
and the threat of a nationwide anti-government strike expected next
week.
Queues of thousands of people form daily at banks and stretching
outside the banking halls and automated teller machines (ATMs).
Many
start queueing outside the banks early in the morning, hours before they
open, to secure first positions as the banks are limiting the
maximum withdrawals as little as $12.50.
At some banks near stampedes
have been witnessed as clients are locked outside due to the chronic
shortages.
Commercial banks and other organisation desperate for cash
have reportedly resorted to buying money from retailers and individuals who
are known to have cash.
Banks have reportedly been approaching
companies and individuals who are not their clients to buy cash from them at
commission rates of up to five percent.
Commercial banks say the daily
average maximum allocation of cash they are receiving from the central bank
has slashed from $112.5m to $37.5m.
Economists are warning that if the
situation is not contained it could send people onto the streets to coincide
with the opposition protest called over the country's crises.
The cash
shortages have been caused by runaway inflation, lack of confidence in the
political situation and shortages of foreign exchange to buy paper and ink to
print the notes, economists say.
Zimvbabwe's official inflation rate
stood at 269% last month and is expected to continue on the upward
trend.
Inflation has eroded the value of money such that people need to
carry much more cash to go buy groceries than previously.
"The value
of our money has gone down dramatically over the past two months and it
required that the Reserve Bank print more money but the supply has not been
able to match demand," said James Jowah, chief economist of the Zimbabwe
National Chamber of Commerce (ZNCC).
The central bank does not have
foreign exchange to import a special ink and paper to print notes. Media
reports say it cost the central bank between Z$700 and Z$800 to print a
$500-note, the highest demonination of the Zimbabwe currency.
The
central bank has not commented on the cash shortage.
Economists also
blame the "hostile political environment" for cash shortages.
The
country has since the beginning of the year seen two national strikes called
by the opposition and labour movement lasting for several days.
"Let the
politics of it be resolved and we will have the confidence coming back and
restored in the system because right now people are hoarding money, they are
keeping their cash under the pillow rather than take it to the bank," said
Jowah.
Economists warned that people's patience has been running out with
some having to queue for days to cash their pay cheques.
"People are
going to turn impatient and it might push everyone to the streets, people are
angry, people are going hungry not because they don't have money but because
they cannot get cash from the banks," warnbed Jowah. -
Sapa-AFP
'Africa Reaps What the World Sows - With a
Vengeance'
United Nations (New York)
DOCUMENT May 28,
2003 Posted to the web May 28, 2003
Stephen Lewis Washington,
DC
Speech by Stephen Lewis, UN Special Envoy for HIV/AIDS in Africa, to
the Global Health Council's Annual Conference, Washington, Wednesday, May
28, 2003
I sometimes think that the continent I love, and the
continent to which my UN role is devoted - Africa - is under some kind of
other-worldly curse. So many factors conspire against it that one could
imagine inexplicable forces at work, except that we know, we emphatically
know, that every factor haunting Africa has a quite straightforward
explanation.
It's the relationship amongst the factors that we sometimes
fail to understand. What I therefore want to do in this speech is to make
the connections and attempt to demonstrate that Africa reaps what the
world sows, and with a vengeance.
In January of this year, along with
James Morris, Executive Director of the World Food Program, and a number of
UN agency experts, I made a trip to four countries in Southern Africa on the
verge of famine: Lesotho, Zimbabwe, Malawi and Zambia. The reason was to
explore the link between food shortages and HIV/AIDS. Morris had been there
in September of last year and was palpably stunned by the carnage exacted by
AIDS. I was there in December of last year, and I was equally aghast at the
way in which AIDS was deepening hunger and hunger was deepening
AIDS.
The assumption, shared by many, was that drought and erratic
rainfall were the primary culprits leading to the food shortages, and that
poor agricultural policies and poor planning had made a bad situation
desperate. We came to a different conclusion. While there's no question that
weather played a powerfully destructive role, there's equally no question
that HIV/AIDS was the heart of the matter. We said so. Let me quote from
our report: "It has taken the loud emergency of a severe food shortage
affecting 15.1 million people to demonstrate . the insidious potential of
HIV/AIDS to undermine entire societies and nations . HIV/AIDS is the most
fundamental underlying cause of the Southern African crisis . the link
between food security and HIV/AIDS must be fully recognized".
The
shredding of the agricultural economy, driven by AIDS, has even spawned a
persuasive academic construct called the "New Variant Famine". It's based on
an analysis that argues that the presence of AIDS changes everything,
and that nothing is as it was before.
In previous episodes of hunger
and famine, the toll was taken on the very young and the very old. In this
age of AIDS and food insecurity, it is the productive age group in its
twenties, thirties and forties who are paying the ultimate price. In previous
episodes of hunger and famine, there was always a huge quotient of resilience
which allowed beleaguered communities to bounce back. In the present
circumstance, even where sound policies are in place, the coping strategies
of communities and families are so mangled and eroded by AIDS that full
recovery simply isn't possible. In previous episodes of hunger and famine,
there was still time for the parents, especially the agricultural workers,
the mothers, to teach the children about alternative agricultural techniques
and foraging for food. Now the parents are so often sick or dead that the
transfer of knowledge between generations cannot take place. Inevitably, the
theory of the New Variant Famine has its detractors. That always occurs with
the pandemic: denial is Pavlovian. But I must admit that I have little
patience for it.
You need no more than empirical evidence, your own
eyesight, your own commonsense to understand what is happening. When one
travels through those rural villages and hinterlands, as I have done for the
last two years, the human toll is desolating. The immune systems of huge
numbers of women farmers are desperately weak; seven million agricultural
workers have died of AIDS since 1985, FAO estimates that another sixteen
million may die by 2020; the household assets have been exhausted by
attending to parental illness; children have been pulled out of school to
care for sick and dying parents, losing, in the process, the one meal a day
that might have been available from a school feeding program; malnutrition is
everywhere evident; fields are left untended; crops aren't grown; food isn't
taken to market, and if it is, no one has money to pay for it . what we're
talking about here is the way in which this virus - the cause of the most
appalling communicable disease in human history - attacks the fabric of every
sector, making the interplay of health and agriculture but one more shortcut
to carnage.
When the body has no food to consume, the virus consumes
the body. That's the essential meaning of the New Variant Famine. For
millions of Africans already infected by HIV, the onset of full-blown AIDS,
and the rapid descent to death is the inescapable finale of a shortage of
food. And the shortage of food, in its turn, opens up new pathways for the
virus to spread.
To say that, however, is only part of the story. The
other part is indeed the destructive weather patterns which I referred to
earlier on. This is where the plot thickens.
The weather cycles for
large swathes of Southern Africa are decidedly unfriendly. Even while our
mission was traveling, we witnessed violent extremes in individual countries
. intolerable heat and drought in one region, massive downpours and flooding
in another. There was something eerily primordial about it: climate
ricocheting like some biblical pox. In Lesotho, the government even told us
of hailstones and frost at a time of year when hailstones and frost had never
gone before. There were whispered mutterings of the El Nino effect.
Predictably, in combination with HIV/AIDS, and agriculture in crisis, the
weather became a bizarre roiling feature. I'm surprised that no one has yet
coined the term "New Variant Weather".
What we're dealing with in
southern Africa, entwined with everything else, make no mistake about it, is
the most ominous environmental threat on the planet: climate
change.
What's happening should come as no surprise. Back in June of
1988, I found myself chairing, in Canada, what became known as the first
International Conference on Climate Change. It consisted of visceral
exchanges between scientists and politicians, with the scientists ultimately
prevailing. The conference statement began with one of the starkest
pronouncements yet uttered about global warming; a pronouncement with which
many would now agree: "Humanity is conducting an unintended, uncontrolled,
globally pervasive experiment whose ultimate consequences could be second
only to a global nuclear war". The statement then went on to identify a
number of damaging consequences of climate change, amongst which two stand
out: the direct peril to human health, and the diminution of food security,
as a result of uncertainties in agricultural production, particularly
in vulnerable regions.
Let it be understood that the findings of that
original conference have since been confirmed time and again by the
Intergovernmental Panel on Climate Change, a multilateral consortium of
several thousand scientists whose words, carefully chosen, are seen - except
by professional apologists for corporate and political interests - as
definitive positions on global warming.
The 2001 "agreed statement" of
the IPCC, in a section specifically devoted to Africa, raises the following
concerns: Quote: "Adaptive capacity of human systems in Africa is low due to
lack of economic resources and technology, and vulnerability high as a result
of reliance on rainfed agriculture, frequent droughts and floods, and
poverty". Quote: "Grain yields are projected to decrease for many (climate)
scenarios, diminishing food security .". Quote: "extension of ranges of
infectious disease vectors would adversely affect human health in Africa".
Quote: Increase in droughts, floods and other extreme events would add stress
on water resources, food security, human health . and would constrain
development in Africa".
On the one hand, then, you have the poisonous
interaction of hunger and AIDS, and on the other you have the debilitating
interaction of agriculture and weather. It is my contention that everything
is related; it's a cyclical pattern of Western neglect and self-centredness,
juxtaposed with African disasters and death.
These problems must be
seen as global, in every sense of the word. So must the solutions be
global.
Just yesterday at the White House, there was a celebratory
signing of the President's laudable initiative to provide $15 billion over
five years to fund the fight against HIV/AIDS. It is no caviling on my part
to point out that only $200 million of that large sum is guaranteed, per
year, to the Global Fund on AIDS, Tuberculosis and Malaria. The Global Fund
is the best new international financial instrument in the last many years to
confront these annihilating communicable diseases, AIDS in particular. It
was fashioned by experts with a worldwide overview of this vast pandemic, and
a clear understanding of how to address it in a coordinated way. The
Global Fund has already programmed over $1.5 billion for 150 projects in
92 countries, and it's been programmed in response to proposals submitted
by the countries themselves, reflecting a government/public consensus on
the priorities within those countries.
And now the Global Fund is
virtually out of money. According to the GAO, the Government Accounting
Office here in the United States, the Fund needs at least $5 billion for 2003
and 2004 alone, and that money is nowhere in sight. A third round of
proposals for the Fund is to be held this October, but you can't approve
proposals without the dollars to make them real. The G8 meets in three days'
time. There is not a single G8 country which has even pledged, let alone
delivered, an equitable amount to the Fund. Will that change next week? I
very much doubt it, and even if it marginally does, it will leave the Fund
limping into next year, unable to deliver on its promises, and on the huge
human expectations which hang in the balance.
It's not possible to rescue
the vulnerable countries in southern Africa without the resources. The United
Nations can appeal for and distribute food aid to stave off starvation, and
it has magnificently done so, but everything is stop-gap, everything is ad
hoc, unless the pandemic itself is turned around. What is so intolerable
about the continued funding crisis - UNAIDS estimates that we will need,
globally, $15 billion a year by 2007 for AIDS alone - is not just the
staggering loss of life, so much of it completely unnecessary, but it's what
it says about us, the donor nations, and our lamentable, incomprehensible
behaviour. Is it that the price tag is simply too high for the world to bear?
I think not. This week's Economist gives us a clue to our priorities: the
global perfumes industry is worth $15 billion - per year.
And that's
what I mean about the cycle and the self-centredness. Our collective refusal,
thus far, to significantly reduce our dependence on fossil fuels, and as a
result of that refusal, to continue to blight the planet with carbon dioxide
emissions, plays itself out, yet again, at the expense of Africa. We're
responsible for climate change. We're responsible for the extremes of
weather. It's our greed which serves to compromise, in significant part, food
security in Africa, and stokes the pandemic in the process. Even the Kyoto
accord promises little relief, so ambiguous is
its implementation.
When you're dealing with AIDS, every major
international public policy has an impact, and so far those policies are a
nightmare for Africa. Official Development Assistance has fallen to abysmal
levels. Environmental legislation is hostage to the insatiable lust for
resources. North American and European agricultural subsidies doom African
agricultural trade. Debt relief for developing nations is a profound
disappointment. Despite what was thought to be a breakthrough at Doha, access
to pharmaceuticals remains suffocated by patents and intellectual property
rights.
We know what we're doing, and we do it anyway. It's as though we
have chosen to pursue and protect our own prosperity and comfort at all
costs, and then have dehumanized Africa so that we can live with ourselves.
It's as though the communities, families, women, children, orphans are
figments, illusions, abstractions. We're not barbarians; we don't choose
willfully to kill and to maim. But in watching and neglecting and allowing
and, incredibly enough, abetting the cumulative loss of life in Africa, which
we know we could bring to an end, we have become the latterday King Leopolds
of the continent.
Sunsleey Chamunorwa
Editor-In-Chief 5/29/03 11:07:49 AM (GMT
+2)
THE Zimbabwe Electricity Supply
Authority (ZESA)'s intentions to borrow a staggering US$270 ($222.5 billion
at the official exchange rate) from Aiwana Manage International Funds
(Labuan) PTE Ltd (Amil Bank) of Malaysia to finance the huge capital burden
of its projects, have come unstuck after the board of directors flatly
refused to give the nod to the power utility's request to
borrow.
The request to borrow offshore
loomed large on the agenda during last Wednesday's special board meeting. It
was however immediately shot down by the board, which felt that the cost of
the funds, which were scheduled to be repaid over a 10-year period, were
prohibitive.
Instead, some board members
said, it was suggested that ZESA should look elsewhere for funds. The board
members suggested that the power utility could tap into a facility put in
place by an Indian company, Water and Power Consultancy Services
(WAPCOS).
Well placed sources said the
ZESA board would meet Energy and Power Development Minister Amos Midzi today
to appraise him on why they refused to sanction the Malaysian deal as well as
discuss its position "on other issues pertaining to the electricity sector
reform".
The Marketforce Business
Solutions (MBS) issue, which was rejected by the board when it was suggested
that they be appointed consultants for the power sector reform, is understood
to have been sneaked onto the agenda for today's meeting with the minister
even though the board felt that this was already water under the
bridge.
ZESA executive chairman Sydney
Gata, who yesterday played down the failure of the proposal, could only say
"the board made some recommendations and we will meet the minister tomorrow
(today) over the issue."
The board members
sought to meet Midzi following an emergency meeting convened on Tuesday this
week to grill them on the leakage of the deliberations of last week's special
meeting to the Financial Gazette as well as sniff out the suspected
mole.
At Tuesday's emergency meeting, some
officials at ZESA wanted the board to issue a statement in the press to among
other things, deny the Fingaz story and state that they had approved the
appointment of MBS of Australia to provide consultancy services on the
electricity sector reform programme, which is not however true. By last night
board members were still huddling over the contents of the statement meant to
deny our story.
This was despite the fact
that Gata himself had early this week said: "At first we thought that the
story could have been leaked to you by secretaries and the drivers who
normally deliver papers to board members. But then secretaries do not attend
board meetings and the papers were this time given to board members during
the board meeting. This one could only have been leaked to you by some one
who attended the meeting because it was based on our deliberations. I have
tried to suppress the need for an inquiry but I am under pressure and I
suspect that the story was given to you by one board member who refused to
have lunch with us on the pretext that he was going for a funeral although we
later discovered that there was no funeral at all. That is why the committee
tasked with drafting the press statement on your article asked him to sign.
This was done for a particular reason," said Gata, in his tacit admission
that indeed our story captured the essence of the board's
deliberations.
Although Gata would not
give details as to the recommendations of the board after it rejected ZESA's
request to borrow from Malaysia, the Indian facility, some board members
said, attracted less interest charges than the Malaysian facility. Among
other things, the Malaysian facility would attract a four percent management
fee, funding processing fees of four percent and Amil Bank's two percent
intermediaries fees. Collaterals for the facility included a Prime Bank
guarantee with a face value of twice the average annual repayment amount of
US$54 million.
The funds ZESA sought to
borrow could have been the first of a US$1.718 billion tranche arranged by
Metropolitan Bank of Zimbabwe between ZESA and Amil Bank. It could not
however be immediately ascertained whether ZESA had been, as required by law,
granted approval to borrow by the Ministry of Energy and Power Development.
This ministerial approval is also required for purposes of application to the
Reserve Bank of Zimbabwe's External Loans Coordinating Committee for final
approval.
In fact, on May 13 2003, Jaison
Mapillar, Metropolitan Bank's manager for corporate finance and Gerald
Chihota, the bank's assistant general manger for legal services, wrote to
Gata advising that there was need for both ministry and board approval for
the facility.
ZESA's request was only
tabled at last week's special board meeting held at the Electricity Centre in
Harare. The request by ZESA, which comes just about a year after it waded
into local capital markets to tap into its usual Zimbabwe dollar investor
base, where it passed the hat around to raise $5 billion, follows a recent
visit to Malaysia by Gata.
Gata who last
week suffered a bruising setback when the ZESA board rejected his proposal to
appoint an Australian firm to provide the Ministry of Energy and Power
Development with consultancy services with regards to the electricity sector
reform, went to Malaysia in February this
year.
During his visit, documents in our
possession show, Amil Bank expressed interest in financing some of the
projects under ZESA's Power Sector Development Plan. The Malaysian bank was
particularly interested in the field of generation expansion, the
reinforcement and expansion of transmission and distribution systems to
provide adequate grid capacity and grid access for rural development and
expanded irrigation schemes.
This
development comes at a time when the nation remains transfixed by the
prospects of a return to normal power supplies amid intermittent power cuts
that have continued to further tighten the screws on the previously robust
economy which is now suffering ill health.
Although Zimbabwe has just welcomed a sprinkling of better corporate results
from those companies with a half year end of March 31, most companies are
already beginning to feel the profit pinch resulting from load shedding and
biting fuel shortages. This will mostly be underlined by a weak showing at
the interim stage especially by those companies whose half year end is on
June 30.
ZESA has been forced to implement
load shedding, which has since played its part in weighing down the already
stricken economy because it does not have the foreign exchange to service
electricity import requirements.
As a
temporary relief option, board members who refused to be named yesterday said
ZESA last Wednesday requested for board approval to borrow US$20 million from
Standard Corporate and Merchant Bank of South Africa to service electricity
import requirements.
This facility, which
would be payable over 18 months in six equal quarterly instalments of US$3.3
million, would be secured against the proceeds of ZESA's exporting customers
being billed in foreign currency. The exporting customers will pay their
bills into ZESA's Offshore Escrow Account with Standard Bank Mauritius. The
account whose number is 0111 040061314 is administered by Stanbic Bank of
Zimbabwe.
The Minister of Finance and
Economic Development, Herbert Murerwa, on April 24 2003 wrote to Stanbic Bank
managing director Pindi Nyandoro confirming that the Exchange Control
Department at the Reserve Bank of Zimbabwe and his ministry had approved the
offshore Escrow Account.
ZESA has been
having serious problems settling its power import bills due to the severe
shortages of foreign currency. This has resulted in the curtailment of power
supplies from Hidroelectrica de Cahora Bassa (HCB) of Mozambique to the
magnitude of 300MW and serious threats of similar action by other regional
utilities such as ESKOM of South Africa and Societe Nationale d'Electricity
(SNEL) of the Democratic Republic of the
Congo.
To find a way round this crisis,
the government has among other things, proposed the privatisation of some of
the ZESA assets to allow for the expansion of the country's electricity
generating capacity. Those that are immediately earmarked for a sell-off are
Hwange and Kariba South electricity generating assets in which government is
prepared to dispose of 50 percent.
ZESA
is understood to be already casting around for possible strategic partners in
the Hwange and Kariba assets. However, although these are some of the state
assets that could easily be disposed of at an attractive price, whatever the
market conditions, ZESA could be compromised by the fact that it is an
anxious seller, which is not the easiest bargaining position to start
from.
Hama Saburi Deputy
Editor-in-Chief 5/29/03 10:59:24 AM (GMT
+2)
THE Grain Marketing Board (GMB), moved
in swiftly to avert the collapse of the baking industry by importing 62 000
tonnes of wheat at an estimated cost of $15 billion (US$18.9
million).
The wheat, which has saved about
10 000 jobs that could have gone under, landed through Mozambique last
week.
GMB officials are, however, still
ironing out a few logistical issues to get the wheat to major milling
companies before the end of this week.
State-run GMB still require at least 140 000 tonnes of wheat to offset the
yawning deficit between now and the next harvest, which is expected
in October.
Acting GMB chief executive,
Samuel Muvuti, was not available
for comment.
A senior GMB official told
The Financial Gazette that the parastatal would deliver imported wheat
directly to millers without going through its depot to ensure it gets to the
market on time.
The official said: "Our
major problem at the moment is transport and the unavailability of fuel as
well."
A tonne of wheat costs between
US$240 and US$300 in major wheat producing countries such as South Africa,
Canada, the United States of America, Argentina and
Australia.
The baking industry has been
hit by a shortage of wheat blamed on the controversial land
reform.
Disturbances in the commercial
farming sector, which produces 90 percent of Zimbabwe's wheat, have made it
difficult for 60 percent of large-scale producers to plant their crop this
year.
Major bakeries are currently
allocated about 6 000 tonnes of wheat a week, which is not enough to maintain
full production.
Armitage Chikwavire,
Bakers Association of Zimbabwe chairman, said GMB had assured millers and
bakers that the supply of wheat will improve
soon.
A major confrontation is already
looming between bakeries and government after the former took an unofficial
stand to increase the price of bread to $350 against the gazetted price of
$250.
Chikwavire, said production costs
had gone up significantly, overtaking the government-gazetted
price.
The association would be handing a
letter to the Minister of Industry and International Trade, Samuel
Mumbengegwi, requesting an increase in the price of bread from $225 to
$350.
Bakers are importing diesel at $1
500 a litre against the pump price of $200, while flour is being sourced from
millers at $147 000 a tonne against the gazetted price of $102
000.
Zim MPs excluded
from C'wealth/WTO S Africa
meeting
5/29/03 11:00:55 AM
(GMT +2)
LOCAL Members of Parliament (MPs)
were the only legislators from the 54-membrer Commonwealth grouping excluded
from attending the club's joint meeting with the World Trade Organisation
held in South Africa last week.
Sources
who attended the meeting said some MPs who questioned Zimbabwe 's exclusion
were told that it was a result of the southern African country' s suspension
from the Commonwealth.
Zimbabwe was
suspended from the grouping in April last year for alleged human rights
abuses.
The grouping upheld Zimbabwe's
suspension early last month until the Commonwealth heads of government
meeting scheduled for December.
Bernard
Kuiten, the External Relations Division officer for WTO could not be drawn to
comment on the issue.
The meeting was
jointly organised by the Commonwealth Parliamentary Association and WTO to
come up with a common position ahead of the Mexico ministerial meeting to be
held in September this year.
Zimbabwe's
suspension has threatened to split the grouping along geographical lines,
with most African countries saying the country has no case to
answer.
At the meeting, Botswana's
Ambassador to Geneva, Charles Ntwaagae, noted that there was a general lack
of coherence in WTO discussion, among southern African
countries.
Since the 2001 Qatar, Doha,
there has been a number of outstanding issues important to the
region.
They include specific issues on
agriculture, trade in services and public
health.
To date, only fairly modest
progress has been made on the Doha negotiations, but of major concern has
been slippages on various deadlines, which were set at the then Qatar
ministerial conference.
High Court shifts
ruling on privilege certificate
validity
Cyril Zenda Senior
Reporter 5/29/03 11:02:44 AM (GMT
+2)
THE High Court yesterday postponed to
today the ruling on the validity of a certificate of privilege blocking a key
witness in the treason trial of three MDC leaders from divulging information
on covet operations of the local spy
agency.
Judge President Justice Paddington
Garwe, who is presiding over the trial, did not give reasons for postponing
ruling on the matter.
The certificate
issued last week by State Security Minister, Nicholas Goche, is meant to gag
Central Intelligence Organisation (CIO) director-general Happyton Bonyongwe,
from disclosing to the court activities of the
agency.
Bonyongwe is the State's key
witness in the treason trial of MDC president, Morgan Tsvangirai, the party's
secretary-general, Welshman Ncube and its agriculture secretary, Renson
Gasela.
If convicted, the MDC officials
face a possible death penalty.
In issuing
the certificate, Goche argued that devaluging information on CIO's operations
compromises the country's security.
The
defense team is interested in documents such as invoices, letters and
receipts, which were exchanged between the government and Dickens
and Madson.
It is also keen on knowing
the services Zimbabwe got from the Canadian-based political consultancy firm,
for which it was to be paid over US$1
million.
Bonyongwe refused to give a break
down of the services and the money paid to the consulting
firm.
He said some of it was used to pay
CIO's covet operations adding that the agency was not legally required to
account for the money.
The defense team,
headed by George Bizos is adamant that in the absence of full information on
CIO's role, it would argue that the money was paid for Dickens and Madson to
manufacture some 'evidence' and to secure the conviction of MDC
leaders.
At the beginning of the trial in
February this year, Goche issued a similar certificate stopping the key
witness in the trial, Ari Ben-Menashe, from revealing details of his firm's
contract with the government.
Justice
Garwe declared that the certificate, which was used to protect what Goche
called "classified" information was
invalid.
Dickens and Madson, headed by
Ben-Menashe, exposed the alleged plot by the MDC leadership to assassinate
President Mugabe ahead of last year's presidential
poll.
Godfrey
Marawanyika Senior Reporter 5/29/03 11:04:01
AM (GMT +2)
TWO retail banks have stopped
advancing personal loans to reduce their exposure after drastic increases in
minimum lending rates.
Minimum lending
rates firmed across the banking sector a fortnight ago from around 55 percent
to 75 percent, forcing risk-averse institutions to halt loan facilities and
digested the consequences of continued
lending.
No comment could be obtained from
the Bankers Association of Zimbabwe president, Washington Matsaira and his
vice, Jerry Tsodzai.
The deteriorating
macro-economic environment has exposed the banking sector to a number of
risks.
It is becoming difficult for
clients to service debts in view of rapidly declining disposable
incomes.
Zimbabwe's economy continues to
shrink, contracting by an estimated 10 percent last year on the back of
spiraling inflation, chronic foreign currency shortages and declining
savings.
A number of banks have already
collapse in the past few years because of non-performing loan
books.
The late Roger Boka's United
Merchant Bank was the first to go under in 1998 followed by Universal
Merchant Bank.
The Zimbabwe Building
Society had to be saved by the Reserve Bank of Zimbabwe and has since turned
around the corner under the leadership of
Ben Chikwanha.
Problems facing the
banking sector have been worsened by the liquidity crunch characterised by
the shortage of bank notes.
An economist
with a local bank, said that the suspension of personal loans by the two
commercial banks was not surprising at
all.
"Due to high interest rates, credit
risk has increased. So by withdrawing loan facilities, banks are trying to
minimise their exposure to defaulters.
"Instead, banks would now be dealing with clients on a personal basis, when
it comes to loans," he said.
Independent
economist, John Robertson, said the banking sector has also run out of money
to on lend.
Robertson said: "The only
explanation is that some of these banks do not have money to start with.
Since interest rates are not encouraging, this leads to people keeping their
money at home. This also saves them the hassle of having to queue for their
money and at times failing to get it."
Before the current increase in interest rates, banks were exposed to the
chaotic land reform, which saw most financial institutions getting saddled
with bad loan books.
A number of banks are
still to recover funds advanced to commercial white farmers who were
displaced during the fast-track land reform.
Hama Saburi Deputy Editor-In-Chief 5/29/03
11:05:26 AM (GMT +2)
INDIGENOUS black
Zimbabweans, previously condemned to the sidelines, are making inroads into
the mainstream mining sector, where they have become major
players.
Crafty indigenous entrepreneurs,
inspired by the achievements of fellow black South Africans in the
capital-intensive sector, have found ways of breaking through barriers that
had kept them on the sidelines.
They have
either teamed up through consortiums in a bid to stiffen their financial
muscles or ventured outside Zimbabwe's borders in search of foreign partners
with both the technical expertise and solid balance
sheets.
Analysts said participation by
indigenous people in the mining sector was minimal because of heavy capital
outlays required for new and
existing projects.
The banking sector,
which was externally controlled before 1990, was tough on collateral, which
not many indigenous people could provide.
Of late, there has been a change of heart in the financial sector on the back
of the proliferation of competing banks.
A
local stockbroker said: "To a greater extent, most big mining houses now have
local interests in their share registers apart from the mere presence of
black faces on board."
The government's
policy of creating economic space in key economic spheres ensured that
foreign capital is augmented with investments from indigenous
groups.
Early in the year, Mwana Africa
acquired a significant stake in Bindura Nickel Corporation, which is listed
on the Zimbabwe Stock Exchange (ZSE).
The consortium, linked to business magnate, Oliver Chidawu, pounced on the
opportunity presented by Anglo American Corporation Zimbabwe (Amzim), when
the South African-based natural resources group pulled out of the nickel
producer.
Another consortium led by astute
banker, Mthuli Ncube of the Barbican Holdings Limited fame, recently wrestled
control of a 30 percent shareholding in Independence Gold
Mine.
Indigenous entrepreneurs will soon
jostle for a 15 percent stake in platinum group metals producer, Zimbabwe
Platinum Mines (Zimplats), following the National Investment Trust's (NIT)
failure to purchase the shareholding.
A
fierce tussle for ownership could also erupt in Unki Platinum Mine near
Gweru, where Amzim is offering a 20 percent interest to
locals.
Substantial shares have also
changed hands on the ZSE with estimates indicating that 20 percent of the
net-worth in listed mining could be in the hands of
blacks.
Chamber of Mines president, Abel
Ntini, said the mining sector was taking a cue from South Africa, where Mzi
Khumalo and other top business people have become major
players.
The South African government
requires blacks to control a minimum stake in all
mines.
Ntini said: "There are various
scenarios through which empowerment can be achieved. The scenarios should
take into account the need to have participants take a long-term view of the
industry by appreciating the high risks involved from exploration, through
mine development, exploitation, processing and beneficiation, and finally
marketing of mineral products."
Other
countries have introduced "flow-through share schemes" to raise funds for new
mining projects. Investors who purchase shares benefit from tax rebates on
money used to buy the stock.
More could be
achieved if indigenous people gain access to
affordable capital.
Mining projects
take long to earn returns since much of the time is spent on exploration and
developing the infrastructure.
Roy
Pitchford, managing director of Zimplats, said production of platinum picked
after the introduction of fiscal
incentives.
The government can easily step
up production and investments in other minerals by extending incentives
offered to platinum producers.
"Investment
incentives such as those granted to the platinum sector are essential in
developing countries in order to attract the large sums of foreign investment
required to develop mines," said the Zimplats
boss.
Mining is a key export earner in
Zimbabwe.
In 2001, the industry
contributed 3.9 percent to the gross domestic product from 4.3 percent in
1995.
The harsh economic environment has
rocked stability in the mining sector.
Inflation, which picked 269.2 percent last month, has progressively increased
production costs resulting in the closure of marginal
producers.
Major producer of inputs fed
into the mining sector have been weighed down also by the shortage of fuel,
power cuts and the shortage of foreign currency resulting in volumes of most
minerals declining sharply in 2001 and last
year.
Zimbabwe has seen a marked
improvement in asbestos, black granite, copper, fireclay, high carbon
ferrochrome, limestone, slate and
vermiculite.
The production of gold,
emeralds, kyanite and quarts rough has gone down, impacting on foreign
currency earnings used to import fuel
and electricity.
Up until 1998,
Zimbabwe was the third largest producer of gold in Africa after South Africa
and Ghana. The entry of Mali and Tanzania into the league of major gold
producers, caused Zimbabwe to slip to number
five.
The Chamber of Mines president said
there should be commitment in the implementation of the new economic revival
plan to rescue the industry
from collapse.
He said foreign currency
should be made available to companies supplying inputs to the industry such
as Wankie Colliery Company (WCC) and Buchwa Mining Company
(BIMCO).
WCC is the sole coal producer,
while BIMCO produces limestone
and phosphate.
"There is need to
restore trust between business and government by ensuring that transactions
are transparent.
"The mining sector has
been erroneously accused of stashing away foreign currency and yet it is the
easiest sector to track since gold is sold at the reserve bank and other
minerals through MMCZ (Minerals Marketing Corporation of
Zimbabwe.
"A recent assertion by ZESA
(Zimbabwe Electricity Supply Authority) that because mines are consuming more
power without necessarily increasing foreign currency inflows, they are
stashing foreign currency abroad fails to recognise the fact that because of
poor grades, mines need to mill higher tonnages to maintain same levels of
production of metal and in the process they consumer more power," he
said
THAT the Zimbabwe Stock
Exchange remains the only seaworthy vessel for local investors is beyond
argument. Everyone has been waxing lyrical about the phenomenal and largely
uninterrupted rally.
Despite the gloom
that has enveloped the economy for a couple of years now, the bourse has
sailed through those years without encountering any banana skins as it were.
In short, the ZSE, arguably one of the best performing emerging markets in
the world, acknowledged even by the International Finance Corporation, has
defied gravity and continues to do so. At least for now, if we might
add!
Even this year, when the economy
seems to have reached the very deep end, the market has been in fine form as
it buzzes with activity on the back of bargain hunting and frenzied
speculation, among other factors. Indeed, it defies logic. Even as the
economy is faced with an uncertain outlook, the bull market is still rampant
and the equities remain broadly higher. There is no telling when the shares
could head south or when the bubble could burst. But that is however
inevitable!
It is true that the short-end
of the market is not as attractive. What with inflation levels of 270 percent
and interests of just about 75 percent. Year-on-year inflation continues to
rise adding to pressure for an interest rate hike. But returns on the money
market have remained largely unattractive despite banks having increased
their minimum lending rates over the past couple of
weeks.
The after-tax returns on the money
market are far less than the inflation figure. Yet, all investors want is to
keep ahead of inflation. Clearly therefore, from an inflationary point of
view, the key industrial index has to keep on going up as investors look for
a reasonable inflation-beating return in the long
term.
But with the stock market being the
only bright spot for investors, the result is that we now have over-valued
stocks in over-hyped counters. There doesn't seem to be astute analysis,
selective acquisition and disposal on the part of investors. Under such
circumstances caution is usually thrown to the wind. We tend to overlook the
need for diversification in our portfolios and concentrate on the stock
market. Although not always a sure-fire recipe for investor success,
diversification to a certain extent cushions against
volatility.
And therein lies the danger
for investors who could be easily left nursing burnt fingers after they
suffer breathtaking losses when the over-due correction on the market finally
happens - separating the real from the fool's
gold.
The mystique associated with
investment in shares notwithstanding, it seems to us that the buying of
shares on the ZSE has gone beyond the bounds of rational investment and
becoming something akin to a lottery. Lest we forget, there is, within the
investor crowd, a significant number of first time individual investors who,
unlike the experienced investor, have an emotional attachment to their shares
and could be hurt badly if the fortunes of the market took a turn for the
worse. They might not want to have anything to do with shares again in their
lives. It has happened elsewhere.
We are
not predicting an accelerated downward drift or free fall for the market,
which has thus far maintained its upward momentum against all odds. No! We
just want to underscore the potential for fissures on the market given the
shaky ground on which it stands! Admittedly it has been in fine fettle but it
could easily crater. Indeed for how long will the stock market remain
insulated from the effects of the economic
melt-down?
As surely as the sun rises from
the east and sets in the west, the market will move from this euphoria to
depression. And market gyrations of this nature are distressing to investors'
psyches because they are exceedingly costly to their
portfolios.
It is commonplace in the
capital markets that there is always a very dark and unpleasant side in
runaway stock prices. Experts in equities have since acknowledged that as the
market over-heats, it becomes less tolerant of even the slightest whiff of
bad news. Rumours, no matter how far removed from the truth, could wipe out
millions of dollars of market value. We are not there yet, but there is real
danger that we could be over-heated.
It seems like
every-one who decides to disagree with the present state of things have to
consult war veterans first, otherwise they run the risk of courting untold
"military" consequences from these men and women whom, until recently, we
held in very high esteem.
This is simply
because these war vets took the lead in liberating the country so that every
one of us could enjoy basic fundamentals such as freedom, democracy, human
rights, you name it.
But is there no
problem when the same liberators start denying the same citizens the same
fundamentals that the colonialists denied
them before?
Judging by the behaviour
of these brothers and sisters in recent years, one would naturally wonder
whether they still cherish the same principles they used to wax lyrical about
as they munched away on our grandmothers' chickens during the war of
liberation.
Does freedom, democracy, human
rights and other such chameleon words still mean the same to them today as
they meant during the Smith regime? Or as chameleon words, they have
naturally changed?
As non-militarised
ordinary citizens of this country who should be enjoying freedom to the hilt
resulting from the sacrifices made by our brothers and sisters, we naturally
get worried when we hear and see the same brothers and sisters threatening us
for enjoying the same freedom we should be seen
enjoying.
We have repeatedly seen the
violent behaviour of these war vets and we have been threatened for time with
no end, the latest of which is from Patrick Nyaruwata and company that those
who are not happy with President Robert Mugabe's way of doing things should
not show it.
Their reason? Because they
fought for this country. Simple!
What is
this called? "Democratic" dictatorship of war veterans?
CZ wonders.
The fact that they risked
life and limb to set this country free does not put them in any better stead
to foist every zany and warped idea and demand they might conceive on this
extremely suffering hoi polloi.
Notwithstanding the fact that they continue to be an unnecessary burden to
our ailing economy, these people are now denying us the most minimal of
rights simply because they liberated us. So where is
the liberation?
CZ would maintain that
the gratuities, the pensions and the whole cornucopia of featherbeddings
these people are freeloading from treasury are illegal. They are not entitled
to even a single of these favours.
The
task of unshackling this country from the fetters of the colonialists was a
national duty that every self-respecting Zimbabwean had to voluntarily
perform on behalf of himself, his country and history. The issue of reward
was totally out of the question as it runs counter to patriotic
etiquette.
By demanding and grabbing hefty
gratuities as they did in 1997, these people automatically changed themselves
from being our swashbuckling heroes to just mercenaries and since then their
behaviour and attitude towards the future of this country have never been
different from that of any mercenary.
This
spiel, flimflam and bilge about war veterans being the only people who have
this country at heart is simply shallow posturing - like that of a spawning
toad.
These people are no longer
interested in safeguarding freedom, democracy and human rights, but their
newly acquired status as the new nobility in the present day
Zimbabwe.
It is now very crucial for any
truly patriotic Zimbabwean (patriotic in both word and fact) to stand up and
save this country from the depredations of these
people.
Any self-respecting war veteran
would agree to this.
Visiting
"counterparts"
As a patriotic Zimbabwean,
it's mind-boggling to note that agriculture ministers from "brotherly"
countries that are solidly behind our "very successful" land reform exercise
are being taken on tours to see for themselves how really "successful" our
land reform exercise is.
These
"counterparts" are taken to nearly the same established farms and in one or
two cases, even to farms owned by conglomerates, as if our own A1 and A2
model farmers are not there.
In rare cases
when they are taken to the newly resettled farmers, they are taken either to
Reward Mafuru's farm or to another one owned by someone who is close to
someone who in turn is related to someone whose work address is Munhumutapa
Building.
This is becoming monotonous
because if these "counterparts" ask the other "counterparts" who have already
been here before them, there would be nothing new for them to see as they
would have been exposed to these "lessons"
vicariously.
CZ would be too pleased to
take a day off from his thankless job in order to relieve Cde Dr Made and
take the next visiting minister on a tour in another direction so that they
get the full picture.
What these ministers
have already seen amounts to nothing in toto. We would not want to be cruel
as to mislead these "counterparts" into repeating the same scandal in their
own countries. We have had enough shame as Africans, and this should not be
repeated anywhere on the continent.
For Cde Manyika's attention
As any other
security conscious citizen of this country, CZ is really concerned with the
swelling army of street kids - or are they street-man as some of them have
grown busy beards while still on the street - who are now posing a real
menace to the security of urban dwellers.
Every day we witness scenes of these hooligans snatching expensive take-away
food from hapless girls and women boasting that: "Zvatengwa nababa vedu"
(it's our father who has bought this) and wolfing the food without even a
vestige of compunction.
These
"street-kids"-some of them well over 20 years - harass, embarrass and
brow-beat mainly ladies and school girls into giving them money and other
valuables in broad daylight everyday as if there are no more laws in this
country.
After noisome glue-sniffing
escapades, they freely proceed to violent gambling sessions in full view of
the country's law enforcement agents as if they are some small Somalian type
warlords that are a law unto themselves.
Surely all the government ministries and departments directly or remotely
responsible should take urgent steps to address this worrisome development
which has been left to grow unchecked as ordinary citizens no longer move
around freely. Dr Mahoso would only be too pleased to testify on this
one.
As a suggestion, since these
marauding "street-kids" are youths, they naturally fall within Cde Elliot
Manyika's portfolio, the Ministry of Gender, Youth Development and Employment
Creation, which is running National Youth Training Centres throughout the
country.
We would not mind if Cde Manyika
would bus the whole slew to the Border Gezi Centre in Mount Darwin for
whatever training he can find for them.
Still on lawlessness, who are these people calling themselves rank marshals
and collecting money from commuter bus operators and commuters alike? What do
they collect the money for? To start with, they don't own the ranks.
Secondly, they don't own the commuters and thirdly, they don't own the
commuter omnibuses so for God's sake, what do they collect the hard-earned
money for?
If the government is really
serious about protecting citizens, then it should outlaw this rank marshal
business forthwith. These people are simply criminals who should be in
Chikurubi.
Zimbabweans are a docile people
who tolerate any nonsense for life!
Dumisani Ndlela News Editor 5/29/03 10:47:48
AM (GMT +2)
PLANS by Finance Minister
Herbert Murerwa to take swift moves to review Zimbabwe's exchange rate by the
end of this week are understood to have met stiff resistance from Cabinet
even before proposals had been put before it, sources said this
week.
Murerwa, in a bid to placate a
restive private sector calling for another devaluation four months after the
one made in February this year, is said to have failed to sell the idea to
fellow ministers, crucial in getting President Mugabe's assent on an issue
that cost former minister Simba Makoni his Cabinet post last
year.
Industry sources said Murerwa had
promised two weeks ago that he would undertake an urgent review of the value
of Zimbabwe's embattled currency against major international currencies
before the end of May.
There were reports
from industry that they expected this to be done
by today.
Anthony Mandiwanza, president
of the Confederation of Zimbabwe Industries (CZI), confirmed they had been
given a promise by Murerwa for a review, saying this was part of a
comprehensive economic review package hammered out by key stakeholders in
February.
Despite several calls to
Murerwa's office, the Financial Gazette was unable to get a comment from the
minister.
Although Financial Gazette
sources said Ministry of Finance and Reserve Bank of Zimbabwe (RBZ) officials
had already started working out modalities for a devaluation, a bank
executive said they had been told by RBZ governor Leonard Tsumba that export
receipts had dried up since
the devaluation.
"I therefore don't see
prospects of that (another devaluation) succeeding," the executive
said.
"Tsumba told us bluntly last
Wednesday (May 14) that there were virtually no receipts coming in since the
devaluation. It's now a tricky situation," he
said.
Exporters this week said even though
they had suggested that a devaluation from 55:1 to 824 Zimbabwe dollars to
the US dollar would give their ailing operations a reprieve, conditions that
became attached to the devaluation were
unfavourable.
The government announced
that all export receipts would be held by the RBZ, which would compulsorily
take 50 percent for disbursement to NOCZIM and ZESA for fuel and electricity
imports, respectively.
The other 50
percent would be made available to exporters on application for approved
import requirements or be remitted to the RBZ at a rate of 824 local units to
the greenback.
This move meant that
exporters who used to divert their excess receipts to the parallel market at
better rates were unable to do so.
Export
sector sources said many of them had withheld their foreign receipts as a
result, especially after failing to get the remaining 50 percent because
their requirements were not considered a priority by the RBZ, resulting in
the forfeiture of all their foreign cash to the government and
parastatals.
They said they would press
their leadership to call for a review of that arrangement otherwise there
would be no motivation to liquidate their receipts in the country even if
another devaluation was effected.
The
government devalued the Zimbabwe dollar from 55 units to the benchmark
greenback to 824 units to a US dollar in February at the request of the
private sector which had been threatened by mass closures due to viability
problems.
Under a tripartite deal that
involved the government, labour and business, the state had promised to
review the exchange rate three months after the devaluation on the assumption
that exporters would have liquidated their receipts into the interbank
market.
But the foreign currency situation
had turned worse, as if the respite given industry had triggered a flight of
hard cash rather than attract it, sources
said.
"There is no prospect that the
government will succumb to any fresh de mands for a devaluation," a source
privy to Cabinet deliberations said.
An
RBZ source said even though officials were working on modalities for a
review, "this did not indicate that there is going to be
a devaluation".
Sources said official
foreign exchange inflows had slumped from a weekly high of US$500 million
last year to "weekly trickles". There were suggestions that Zimbabwe could be
receiving just over US$1 million each month in export
receipts.
The situation had forced the
National Oil Company of Zimbabwe (NOCZIM) to fail to meet its international
oil procurement obligations at the same time the Zimbabwe Electricity Supply
Authority (ZESA) was downgraded by its traditional electricity suppliers -
Hidroelectrica de Cahora Bassa of Mozambique, Snell of the Democratic
Republic of Congo and Eskom of South Africa - for failing to pay its import
bill.
NOCZIM has been scouting for the
scarce resource from the parallel market over the past two weeks, triggering
a run on rates from around 1 300 Zimbabwe dollars to a US unit to around 2
200 to the greenback
Zhean Gwaze Staff
Reporter 5/29/03 9:49:51 AM (GMT
+2)
MILK output for this year is expected
to fall by almost 44 percent because of the decline in the national dairy
herd, according to a top industrialist.
Industrial Development Corporation (IDC) chief executive Mike Ndudzo told
participants at a Zimtrade annual exporters conference that this year's milk
output was expected to be around 140 million litres compared to 250 million
litres required to meet national
requirements.
"The national herd is
declining and this has caused milk production levels to decline by about 40
percent since 2000," Ndudzo said.
The
decline in the national dairy herd from 6.5 million two years ago to an
estimated 200 000 this year has been attributed to poor availability and high
prices of stockfeed and shortage of
vaccines.
Most farmers de-stocked owing to
the government's often chaotic land reform programme and lack of good animal
husbandry skills.
The remaining dairy herd
has a capacity to produce 168 million litres per
annum.
The government's land reform in
2001 displaced more than 4 500 commercial farmers, who used to produce 90
percent of the country's dairy needs.
Stock feed prices have gone up by between 24 to 84 percent, worsening the
crisis in the dairy industry at a time the country is battling to rebuild the
national herd.
Producers of stock-feed
have also scaled down output because of severe input shortages and the
state-imposed price controls.
The cattle
industry has also been affected by the persistent outbreaks of foot-and-mouth
disease since 2000 and the government has been battling to fight the disease
but has been overwhelmed by shortages of foreign currency to purchase
vaccines.
The Food and Agriculture
Organisation has since appealed to donors for more than US$295 million to
fight the disease.
Indigenous Commercial
Farmers' Union president Davidson Mugabe said the lack of good animal
husbandry practices by the new farmers also made it difficult to boost the
dairy herd.
"Cross-breeding of local
breeds should be done by people in the research departments of animal
breeding institutions to enhance milk production," Mugabe
said.
He however, confirmed that a scheme
had been launched to resuscitate the dairy herd through funding from a local
organisation.
Dairy cows cost more than
$300 000 each.
Ndudzo said the low
production of milk meant Dairibord Zimbabwe Limited (DZL) would be operating
below capacity as they could not meet demand for processed milk
products.
DZL chief executive, Anthony
Mandiwanza, could not be reached for comment as he was said to be out of the
office until next week.
Last month DZL was
fined $1.5 million by the government for overpricing its products but Ndudzo
said the government should review price controls more regularly to retain
sustainability.
ZIMBABWE'S economic fortunes continue
on their downward trend with two major developments having occurred during
the past week.
The Central Statistical
Office announced that the rate of inflation had risen to 269.2 percent for
the month of April 2003. This means that between April 2002 and April 2003
prices of goods and services in Zimbabwe increased by more than 269 times on
average.
The other related development has
been the shortage of bank notes. Large queues have been forming at banks as
people scramble for scarcely available bank notes. This has been a result of
the printing capacity of the Reserve Bank of Zimbabwe being unable to match
the demand for notes brought about by the deterioration in the value of
money.
These developments are largely a
reflection of the lopsided economic policies being pursued in Zimbabwe and
the resultant confidence loss.
The 2003
national budget, which should form the major thrust of the government's
short-term economic policy framework, contains major weaknesses which are at
the centre of the hyperinflation.
For
instance, the 2003 budget envisages that the government will raise Z$250
billion from the domestic money market. This is however at a time when the
savings level is but only half that amount. This has resulted in
massive liquidity creation as the authorities attempt to fund the deficit.
The result has been uncontrollable
inflation.
As the inflation rate continues
to reach new highs every month, the 96 percent inflation rate by year-end as
projected in the 2003 budget by the government has increasingly become a
mirage.
Another factor compounding the
inflationary tendencies is that the government has followed a self-destruct
monetary policy by maintaining hugely negative real interest rates. This
policy has created an asset price bubble because agents in the economy have
lost confidence in the currency. Firms and individuals have switched into the
purchase of foreign currency, real estate, vehicles and equities. The
stability of banks has thus come under serious threat and the pension fund
sector has been seriously undermined.
As it is the economy is in a Catch-22 situation. On one hand, if credit is
curbed and interest rates raised to restore the real return on savings, the
asset price bubble will burst. Moreover without credit on give-away terms,
the government's land resettlement programme will come under severe strain.
Added to this is the possibility that highly-geared companies and individuals
will default on loans, leading to the collapse of financial
institutions.
On the other hand, if the
government maintains its loose monetary policy the hyperinflation will
intensify, the decline of the dollar will accelerate and the speculative
asset price bubble will grow even
more rapidly.
Therefore on the economic
front there is no exit strategy from the crisis - at least in the short-term
- given that key issues relating to foreign currency shortages, food
scarcity, fuel unavailability, financing constraints and the negative fiscal
and monetary policy environment will be impossible to
address.
Moreover, the New Economic
Revival Programme (NERP) as a short- to medium-term economic recovery
programme lacks coherence.
For instance,
it has no funding mechanism for the implementation of its various programmes
and activities. The programme has also been crippled by the withdrawal of the
Zimbabwe Congress of Trade Unions, and business, as the other social partner,
is increasingly becoming lethargic towards
its implementation.
It is therefore
difficult to see how the economy can survive these challenges under the
prevailing economic and political regimes. There are already massive social,
economic and political pressures on the ground. There is urgent need for a
change in both political and economic direction if the current decline is to
be halted, let alone reversed. It is a relief that President Mugabe has
hinted that he would now allow his party to debate his
succession.
This should mark the beginning
of a process of returning the country to
normalcy.
Nevertheless, for economic
recovery to take place, concerted effort should be made to restore confidence
in business and the economy through the restoration of the rule of law in the
country. In this respect the principle of the rule of law should be observed
- that everyone is equally subject to the law, with no one being above it. In
other words, the law must be upheld under whatever circumstances and should
not be altered willy-nilly otherwise confidence will remain
compromised.
Related to the rule of law is
the observation and protection of private property rights. They form one of
the central pillars of private enterprise development and also ensure
security of tenure and investment in the eyes of both domestic and foreign
investors.
Once the rule of law is in
place again, it should be possible for the country to normalise international
relations. The country should then be in a position to seek for balance of
payments support and an international bailout under the Highly Indebted Poor
Countries initiative.
Tough fiscal and
monetary policies should be put in place but the return to prosperity should
be a long and tedious one.
James Jowa
is a member of the Zimbabwe Economics Society