'Zim's economic outlook uncertain, 70 percent need food aid'

http://www.zimonline.co.za

by Charles Tembo Monday 04 May 2009

HARARE - More than 70 percent of Zimbabweans are in need of food aid
as the country's economic outlook looks uncertain, the International
Monetary Fund (IMF) has said ahead of board meeting today to discuss the
situation in the southern African country.

IMF documents dated April 20 and titled "Zimbabwe - Staff Report for
the 2009 Article IV Consultation" obtained by ZimOnline, that are scheduled
to be discussed today, say Zimbabwe's "short-term macroeconomic outlook is
uncertain".

"Poverty and unemployment have risen to catastrophic levels, with 70
percent of the population in need of food assistance and a cholera epidemic
is ravaging the country. These disastrous outcomes have resulted from poor
policies and weak governance," an IMF public information notice scheduled to
be released after the board's meeting says.

A cholera outbreak, that the WHO says is the worst outbreak of the
disease in Africa in 15 years, has claimed more than 4 000 lives and
infected about 91 000 people in the southern African country since the
epidemic began in August last year.

The IMF cut balance-of-payments support to Zimbabwe in 1999 following
differences with President Robert Mugabe over fiscal policy and other
governance issues.

But Zimbabwe is under a new power-sharing government formed in
February between Mugabe and former opposition leader Morgan Tsvangirai, who
has promised to restore relations with the IMF and other international
institutions.

The power sharing government has appealed for international support
and unveiled an economic recovery blueprint - Short Term Emergency Recovery
Programme (STERP) - which highlights priorities in terms of improving food
security, tackling disease and strengthening health systems, reviving
industry, addressing water and sanitation problems and improving capacity to
provide basic services to the people of Zimbabwe.

The IMF said political disagreements are likely to threaten the
viability of the power-sharing government already the country's three
principal political leaders have failed to resolve a host of outstanding
issues - the appointment of provincial governors, permanent secretaries and
diplomats, the rehiring of Reserve Bank Governor Gideon Gono and the
appointment of Johannes Tomana as Attorney General by Mugabe in January.

"Political disagreements among coalition partners may emerge,
potentially resulting in policy reversals. Budget revenue and foreign
financing shortfalls could lead to a large compression in expenditure,
which, in turn, may trigger social unrest," the IMF said.

The public notice is an extract of a report by an IMF mission led by
Vitaliy Kramarenko that was in Zimbabwe on routine Article IV consultations
from March 9-24 this year.

The IMF said Zimbabwe requires at least US$200 million in budgetary
support, and between US$200 - US$300 million for humanitarian assistance in
the areas of food relief, health and education.

"Strong policies, better governance, and donor support are critical
for a successful reconstruction of the country's repayment capacity," said
the IMF.

The fund said Zimbabwe's external debt had ballooned to US$5.1 billion
as at December 2008.

The IMF which last week said it saw a window of opportunity in
Zimbabwe worthy of assisting, has made it clear that for the time being help
to the country would be limited to technical areas including offering advice
on policy matters.

Once a model African economy Zimbabwe has suffered a severe economic
and humanitarian crisis that is marked by record unemployment, deepening
poverty and disease, while the country has avoided mass starvation only
because relief agencies were quick to chip in with food aid.

Winning IMF backing for its economic recovery programme is critical
for Harare's new government to convince skeptical Western governments to
provide much needed financial assistance and other support.

Western nations led by the United States (US) and Britain - Zimbabwe's
two biggest donors - have said they want the new government in Harare to
implement genuine and comprehensive political and economic reforms before
they provide financial support and lift visa and financial sanctions on
Mugabe and his inner circle. - ZimOnline

Zimbabwe targets $1 bln credit from Africa -FT

http://www.reuters.com

Sun May 3, 2009 7:49pm EDT

LONDON, May 3 (Reuters) - Zimbabwe's bankrupt unity government is targeting
$1 billion in credit lines from Africa, Elton Mangoma, the country's
minister for economic planning and investment promotion told the Financial
Times on Monday.

Last Thursday Zimbabwe's Finance Minister Tendai Biti told Reuters the
country was receiving $400 million in credit lines from African states to
revive its ailing industries, the first major financial package since the
government was formed.

Although funds from African states may help, Zimbabwe is in dire need of aid
from Western donors, who have demanded broad economic and political reforms,
including ending a new wave of farm invasions aimed at the few remaining
white farmers.

The government, formed in February by rivals President Robert Mugabe and
Prime Minister Morgan Tsvangirai, has appealed for billions of dollars from
the West.

Latest official figures showed consumer inflation at -3 percent
month-on-month in March compared with -3.1 percent in February. Previous
figures showed inflation at 231 million percent in July. (Reporting by
Louise Ireland)

Gono's borrowings illegal, scandalous

http://www.thezimbabwetimes.com/?p=16166

May 4, 2009

By a Special Correspondent

FOLLOWING attempts by Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono to
explain himself regarding the illegal and scandalous borrowings by him on
behalf of the Zimbabwe government, particular focus must now be given to the
statutes attendant to these quasi-fiscal activities.In his spurious response
through the Zanu-PF - controlled Sunday Mail, after revelations that Finance
Minister, Tendai Biti,  had moved a Cabinet motion to investigate Gono for
allegedly overstepping his mandate by borrowing more than US$1 billion
(which is in fact more than US$5 billion), less focus has been directed at
the actual provisions legally, which we seek to address below.

Although Cabinet has not passed the motion, it had been agreed by the
ministerial economic committee.

Presumably the committee consists of all economic-related ministries. It is
not known whether the matter received formal consideration by the Prime
Minister Morgan Tsvangirai-chaired Council of Ministers.

In the statement, Gono admitted borrowing US$5, 25 billion since June 2004
and the Sunday Mail did a terrible public relations job of simply publishing
Gono's badly written story which was planted by his public affairs or legal
departments.

Legal Mandate

Borrowing by government is a responsibility of the Finance Ministry's
Division of Domestic and International Finance. This is governed by the
State Loans and Guarantees (SLG) Act (Chapter 22:13). This Act should have
been replaced together with the Audit and Exchequer Act (Chapter 22:03) by
the Public Finance Management Bill of 2006.

The people of Zimbabwe have no idea what became of the Bill.

Under the SLG Act, written express authority should be given by the Finance
Minister and not the Secretary of Finance, Willard Manungo, who in this
instance purportedly merely copied his letters to the then Finance Ministers
Herbert Murerwa and Samuel Mumbengegwi.

Gono's public statement is therefore false.

The RBZ Act is a subsidiary law to the SLG Act and, therefore, the Secretary
of Finance cannot have derived his alleged authority by using an Act that
does not apply to him.

Gono claims to have received the authority from the Minister, yet his
statement shows that he received letters from Manungo.

Even if what the Secretary of Finance did was legal, he used a wrong and
enabling Act to appoint Gono as an agent to borrow. Section 7(1)(n) of the
RBZ Act states that the RBZ shall "make arrangements or enter into
agreements, subject to the consent of the (Finance) Minister, with any
banking institution or other financial institution in a foreign country, to
borrow, in such manner, at such rates of interest and upon such other terms
and conditions as it may see fit, any foreign currency which it may consider
expedient to acquire."

Therefore, the RBZ can only raise its own funds by borrowing from a banking
or financial institution.

The section of the RBZ Act applies to RBZ loans only not Government loans.
This means Gono requires express ministerial authority to borrow funds for
use by the RBZ and not to fund government operations. Gono was borrowing on
behalf of central government, allied departments and public entities. In
doing so, he created a government debt in a willy-nilly fashion.

And supposing it was Manungo, the Secretary of Finance, how can one man be
allowed to mortgage the country and future generations with such monstrous,
and dubious debts - in cahoots with Gono - without being called to account
for his actions?

Section 3(2) of the SLG Act categorically states that the "aggregate of the
amounts that may be borrowed in any financial year by way of loans raised
within Zimbabwe shall not exceed thirty per centum of the general revenues
of Zimbabwe in the previous financial year provided that the limit fixed may
be exceeded in any financial year if the Minister obtains the authority by a
resolution of the House of Assembly to do so."

Therefore, Gono cannot claim or want to play victim of political
machinations, and above all, clamour for immunity or clemency, when the
nation does not even know the full extent of his illegal borrowings "on
behalf of the Government".

To the extent that the country was not under any trade embargo - except in
the case of certain rogue Zanu-PF elements, Gono must not be allowed to
"plead innocence" and get away with murder with such impunity. He displayed
no commitment to the rule of law or checks and balances as enshrined in the
laws of the land.

For the record, any funding requirements for central government and line
ministries, departments and other public entities are done through Treasury,
and which office funds such activities with the approval of Parliament or in
retrospect.

According to Section 22(b) of the SLG Act, only the Minister of Finance (and
not the Secretary of Finance, whose mere job is to run the day-to-day
affairs of the ministry and account for public monies) can appoint agents or
any other persons necessary for such fund-raising activities, which include
issuing, management and repayment of State loans.

And as a so-called central banker, Gono should know better. Listed below is
an array of activities, needs and situations under which Government debt is
created.

Purposes for which the minister can borrow money

Section 4 of the SLG Act says the Minister may borrow money for the
following purposes only:

(a) to refinance a maturing debt or a loan paid before the redemption date;

(b) to finance national budget deficits;

(c) to obtain foreign currency;

(d) to maintain credit balances on a bank account of the Consolidated
Revenue Fund (CRF);

(e) to regulate internal monetary conditions should the necessity arise; or

(f) any other purpose approved by Parliament by special resolution.

In lieu of the foregoing, we do not know the purpose for which Gono borrowed
these funds.

Manner of raising State loans

According to the SLG Act section 4(1), the Finance Minister shall borrow
money upon such conditions as he may fix. Section 53(2) of the Public
Finance Management Bill says, prior to borrowing a loan, the Minister shall:

(a) ensure that it is in the public interest to do so;

(b) ensure that it is consistent with Government economic and fiscal policy;

(c) satisfy himself that the Government has or is likely to have on current
projections the financial ability to meet all the obligations under the loan
including future loan payments; and

(d) consult with the Attorney-General and obtain in writing from the
Attorney-General, an opinion approving the legal aspects of the loan
agreement.

The SLG Act section 4(3) directs that without derogation (an exemption from
or relaxation of a rule or law) from the generality, the Minister may borrow
by way of:

(a) the issue of bonds or stock; or

(b) the issue of Treasury bills;  or

(c) an advance or bank overdraft.

Also, going by this statement, people do not know the manner or method used
by Gono to borrow money on behalf of the people of Zimbabwe.

Proceeds of Government loans

More importantly, Section 6 of the SLG Act states that "proceeds of all
State loans shall be brought into the CRF or if the minister so directs, in
the National Development Fund (NDF) established in terms of Section 30 of
the Audit and Exchequer Act (Chapter 22:03), which is managed by the
Accountant General in the finance ministry."

Consequences on unauthorized transactions

Section 65 of the Public Finance Management Bill declares that a person who
lends money to an institution bounded by this law or a purported transaction
with such an institution is entered into for any future financial
commitment, the State or that institution shall not be bound by the lending
contract or the guarantee, indemnity, security or other transaction.

The same requirement as applied with Section 64, further clarifies the
specific restrictions on government borrowing, guarantees and other
commitments.

On the other hand, Gono went on a borrowing spree without self or statutory
control.

Fiscal role

For those in doubt, it is clear from his public statement that the RBZ was a
fiscal agent that had usurped the role of the finance ministry. While Gono
had made himself the Minister Manungo had become his Secretary.

Since Gono is claiming that he was an agent of the Finance Ministry, he
should have handed over to the principal the money so raised in accordance
with the law, procedure and not for him to disburse willy-nilly. The term
used by Gono in his public statement for the disbursements to various
ministries, departments and public entities is "gave" so much to this and
that institution.

Every statement he has been making vindicates those who previously said he
was running a parallel government structure. How can he justify the size of
his workforce, which stands at 16 - 24 percent (4 000 - 6 000) of the total
civil service estimated to be 25 000?

As he abused the trust and naivety of his principals, Gono cannot hide
behind the facade of sanctions to justify his patently wayward actions.

For instance, how does he explain the funding of many non-state institutions
such as the Affirmative Action Group, Confederation of Zimbabwe Industries
and so forth under the guise of "capacity-building" and then want to claim
credibility?

While some of these organisations were lavished with money, motor vehicles
and other material resources, they are now at the centre or forefront of
defending his questionable actions.

With the comfort of a seasoned and astute lawyer, Tendai Biti, as the
custodian of the country's financial purse, Zimbabwe hopes the full extent
and nature of Gono's operations are exposed to scrutiny.

On April 27, 2009 he published a public notice of "The Redemption of Foreign
Currency Debt owed by Government, through the RBZ to Tobacco and Wheat
Farmers for the 2007/08 Agricultural Season." These so-called government
debts do not comply with the SLG Act and that list and the source are not
credible. There could be fictitious people or claims.

Gono may engage in unprecedented propaganda and misleading statements in
trying to defend himself over a very opaque system over the past five years,
but the truth is slowly coming out and Zimbabweans will not fall to the
gullibility of his media lackeys. In the meantime, he is unwittingly
flooding the market with highly self-incriminating information.

This calls for an independent inquiry to settle the matter once and for all.

The statements made by Gono so far raise more questions than answers. By his
own simple admission of having illegally borrowed on behalf of government
when there was a legitimate and functional Finance Ministry, he should be
honourable enough to resign, face the consequences of the full wrath of law
after an independent investigation.

The excuse of sanctions busting could have been acceptable only if there was
no government, if there was no functioning Finance Ministry or ministers.
Further, his actions would have been justified if we had been under a State
of Emergency that suspended both the Constitution and the laws of the land.

On 29 January 2009, the then Acting Minister of Finance, Patrick Chinamasa
said (in paragraphs 152-155), "I would want us to know that such
expenditures which have been incurred over the period 1 December 2003
through to 31 December 2008 have been settled in full from the Reserve Bank's
receipts from internal investments.

"Hence, as at 31 December 2008, the Reserve Bank was able to remove all
these expenditures from the Bank's books through a Sinking Fund which had
been set up to cover these expenditures.

"Mr Speaker Sir, it therefore follows that such expenditures which amounted
to $1 111 quintillion, and were going to be a first charge on the fiscus and
thus a burden on taxpayers, have been liquidated. I am sure that Honourable
Members will join me in extending our gratitude to the Reserve Bank for
this.

"The Bank's balance sheet is now free of these quasi-fiscal expenditures and
the Reserve Bank will now concentrate on its major mandate of assuring the
stability of prices and the financial sector."

This is gross misrepresentation.

Rescue programme failing to improve life

http://www.busrep.co.za

May 4, 2009

By Cris Chinaka

A Zimbabwean state plan to rescue the shattered economy has not made life
easier for many people who are losing patience with no western aid in sight.

The credibility of the unity government between President Robert Mugabe and
Prime Minister Morgan Tsvangirai depends on its ability to persuade western
donors and foreign investors to pour billions of dollars into the country.

That could take years, because donors first want serious political and
economic reforms before making any commitments. So the new leadership will
come under mounting pressure to ease widespread hardships in the meantime.

Recovery plan

The unity government has launched a short-term recovery plan to raise
industrial output and remove government controls over the economy. The
recovery plan also involves political reforms.

Shops are full, bank queues have disappeared and a decision to allow the use
of multiple foreign currencies has provided some relief for Zimbabweans, who
have been battered by the world's highest inflation rate.

The availability of more goods has opened opportunities to generate cash.
But the real test is whether Mugabe and Tsvangirai can create jobs, with
unemployment at 90 percent.

Japhet Ndoro earned a living by repairing watches and selling cheap
jewellery at a busy Harare street corner. Ndoro can now offer cigarettes,
vegetables and biscuits as well.

His life remains a struggle, nevertheless.

"It's not easy making ends meet in this town, and I have had to hawk some
foodstuffs here because many people can only afford essentials now," he
said, pointing at vegetable bundles spread on a plastic mat next to his
wooden watch repair stall.

There are still concerns in the country that old rivals Mugabe and
Tsvangirai may not be able to make the government work after decades of
animosity, although political tensions have eased.

"People are suffering and that's a reality," Tendai Biti, the Minister of
Finance, told the BBC's Radio 4.

"When you have 95 percent of the population living below the poverty line,
surviving on less than 20c a day, that's a disaster. So I think our people
need help."

Bankrupt

At first people like Jeminosi Gumbo cheered a new monthly flat US$100 (about
R841) wage the practically bankrupt government started paying to all civil
servants - from the head of every ministry to an office cleaner.

But daily costs are still crippling and the money does not go very far to
cover transport, food and school fees.

On average, a civil servant spends half his wages on rent.

"It's very tough, and I think it's going to stay like this for a while,"
said Gumbo, a senior accounts clerk in a government department.

The 56-year-old father of five is still overwhelmed, despite being able to
earn an extra $200 by hawking used clothes at a flea market.

"The government just has to put more effort to ease our plight," he added.

Money is even tighter in rural areas. Villagers in some districts are forced
to barter to access some services.

Hospital fees are paid with beans, peanuts and chickens. Repairing many
dilapidated medical facilities may not be possible without enough foreign
aid.

Zimbabwe had secured $400m in credit lines from African states to revive the
country's ailing industries, state media reported last Wednesday, in the
first major financial package since a unity government was formed.

That will not come in time for thousands of disgruntled teachers, who are
threatening to strike again before the new school term this week if wages
are not raised.

The country's vital industrial sectors are operating at below 20 percent of
capacity, and the new government, even with support from some UN agencies,
is struggling to meet the current wage bill.

"The government is in a difficult situation to deliver quickly, but both
industry and ordinary people are desperate and will be pressing," said John
Robertson, a Zimbabwean private economic consultant.

Zimbabwe's economic crisis has driven about a quarter of the 12 million
population abroad, many to South Africa, to scratch a living. Many are
waiting to see if the new government can deliver before they consider
returning.

Those who stayed may have been encouraged by the power sharing deal.

But it is difficult to keep hopes up, especially when western donors remain
sceptical.

"At 31, I should be taking care of myself, but I am having to rely on a
subsidy from a sister, who is in London," complained Josephine Banda, a
teller with a commercial bank. - Reuters

Zuma to get tough on Zim?

http://news.iafrica.com

Article By:
Mon, 04 May 2009 07:32
South Africa's president-in-waiting Jacob Zuma will inherit a
still-simmering crisis in neighbouring Zimbabwe, where analysts said he's
unlikely to tread as softly as his predecessor Thabo Mbeki.

Mbeki brokered the power-sharing deal that brought Zimbabwe's long-time
President Robert Mugabe together with his erstwhile rival Morgan Tsvangirai,
who became prime minister in a unity government in February.

Under the joint administration, Zimbabwe has halted its spectacular economic
collapse, abandoning its worthless currency and easing price controls, which
has brought food back onto store shelves.

But with unemployment at 94 percent and more than half the population
surviving on international food aid, the country remains mired in a
humanitarian crisis that shows few signs of easing.

Squabbling within the unity government is rife, most dramatically between
Finance Minister Tendai Biti, one of Tsvangirai's top aides, and central
bank chief Gideon Gono, who presided over years of world-record
hyperinflation.

"South Africa was instrumental in the negotiations for the power-sharing
government and they will support it" despite the problems, said Joseph
Kurebga, a Harare-based political analyst.

But South Africa's stake in the success of the government goes well beyond
diplomacy.

Up to three million Zimbabweans have fled to South Africa in hopes of
earning a living, while a cholera epidemic that erupted last year quickly
seeped across the border.

Zuma's possible strategy

Mbeki dealt with challenges through his so-called "quiet diplomacy" that
avoided calling out Zimbabwe on its failures. Zuma is unlikely to prove so
gentle, analysts said.

"They are going to maintain this idea of constructive engagement with the
leadership in Zimbabwe, trying to get them to come together around the table
and resolve whatever issue might arise," said Siphamondla Zondi, researcher
at the Institute for Global Dialogue.

"But I don't think that they are going to have patience with the Zimbabwean
players should they not move along as expected."

Zuma has proven himself a capable negotiator, credited with curbing
political attacks between his own African National Congress (ANC) and the
Zulu-dominated Inkatha Freedom Party in the 1990s.

As the crisis unfolded in Zimbabwe last year, Zuma didn't hesitate to speak
out, saying that he believed Zimbabweans were demanding change and that
delays in the violence-plagued elections were "unacceptable".

"What we saw from Mr Mbeki was a kind of silence about the violence in
Zimbabwe," said Isabella Matambanadzo, Zimbabwe programme director for the
Open Society Initiative for Southern Africa.

"Zuma is a very smart political animal," she said. "He may have a few
surprises in store in terms of the leadership style he's going to establish
in the region, and in particular in trying to build a leadership style that
is credible to the people of the region."

But with the unity deal already in place, Zimbabwe is unlikely to dominate
Zuma's concerns when he is faced with a sagging economy and pressing demands
to save jobs and fight poverty at home, analysts said.

Takavafira Zhou, a political scientist at Zimbabwe's Masvingo State
University, said domestic affairs would demand more of Zuma's attention than
the affairs of neighbours.

"Zuma has enough problems on his hands to embark on a robust foreign
policy," Zhou said.

Sapa

Dubai World plans to invest in Zimbabwe game park

http://www.arabianbusiness.com

by Joanna Hartley

Monday, 04 May 2009
Dubai World has announced that it is investing in a game park in Zimbabwe as
part of its on-going expansion plans into Africa, despite confirming the
postponement of future construction developments in the Gulf.

The government-owned entity sees Africa as a prime place for future
investment, and already holds major stakes in three game reserves in South
Africa, according to a report in UAE daily The National.

Zimbabwe has become more attractive to international investors since
February's power-sharing arrangement was set up between Robert Mugabe, the
president, and the former opposition leader Morgan Tsvangirai.

At a hotel conference in Dubai on Sunday, chairman of Dubai World, Sultan
bin Sulayem, said: "The game parks are basically nature reserves. Part of it
is the social responsibility that we feel towards being in a country, but
also part of it is investment,"

We should not be taken for a ride - Biti

http://www.thezimbabwetimes.com/?p=16170

May 4, 2009

TRANSCRIPT of interview conducted by Violet Gonda of SW Radio Africa's Hot
Seat programme with Finance Minister Tendai Biti, at the end of his trip to
Washington and London to canvass for financial support for Zimbabwe's unity
government:

Broadcast on Friday, May 1, 2009

GONDA: My guest on the Hot Seat programme is Finance Minister, Tendai Biti
who stopped over in London recently to meet UK officials on his way back
from a US fundraising trip. This was the first time US and UK government
officials have directly engaged with a Zimbabwean government minister for
some years. I asked him to tell us about the purpose of his visit and
whether his trip was successful.

BITI: The trip was a routine annual meeting of the World Bank and IMF. They
are called the Spring Meeting, so these are routine international meetings
that I attended. And as Finance Minister I am a governor on the IMF board,
so I am obliged to attend. So that was the first aspect - the technical
institutional obligation to attend those meetings. The second level of the
meeting was of course interaction with SADC Ministers of Finance who are
also governors of the IMF. So the issue there was to ensure that we dealt
with our SADC issues, in particular the issue of pledges - in particular the
issue of the resolution of SADC made at Lozitha Palace in Swaziland on 29th
March 2009.

The third aspect of the meeting was re-engagement with the American
government. It's been a very, very long time since a government minister
from Zimbabwe re-engaged with the American government. The American
establishment is basically: there are three parts, first is the State
Department which are the bureaucrats; second is the Presidential office, the
National Security Council and the third is the Hill, congress people and
senators.

Then lastly engagement with the broad international community that was
there - Finance Ministers and Development Ministers from Europe, from South
East Asia, from India and so forth. So those were the different components
of this trip and I am very, very pleased with the work we did at a technical
level with the IMF and the World Bank. I'm very, very pleased with the
understandings we will have on funding with the World Bank and I'm extremely
pleased with the meetings with the administration and the people at the
Hill.

And lastly as you know I've also passed through the United Kingdom where I
met Lord Malloch-Brown, the Minister for Africa and David Milliband, the
Secretary for International Relations and again the message has been the
same, that they will re-engage and that there will be support for Zimbabwe.
So yes, the meeting and the visit have been extremely successful.

GONDA: Right. I understand that at the IMF it was agreed that a multi-donor
trust fund will be set up. Now can you tell us how this will be set up or
how this will operate and what this is about?

BITI: The IMF has nothing to do with the multi-donor trust fund. The
multi-donor trust fund will be set up between the government of Zimbabwe,
the World Bank, the African Development Corporation and the UNDP. So the
UNDP, the World Bank and African Development Bank will form the trinity that
will receive funds from donor funding into Zimbabwe with us being part of
that, particularly on the demand side - that is the distribution side.

This vehicle is essential because the donor community has not yet
re-established trust with the transitional government. And the loss of that
trust arises primarily from the abuse that it has suffered in the past, in
particular the rape of the economy that was conducted by the Reserve Bank,
the loss of systems and the invasion of accounts that was done by the
Reserve Bank in the economy. So until such time as we have restored trust
and confidence the multi-donor trust fund will be the vehicle in respect of
funding.

As I said, that is going to be set up, hopefully in the next two weeks in
Zimbabwe and it is important that we have the buy-in of the UNDP, of the
African Development Bank and the World Bank. It's all a reflection of the
fact that slowly but surely there is a bright light of confidence into this
economy and into this construction.

GONDA: So how much money are you expecting from this fund?

BITI: The fund is a vehicle; the fund is a vehicle for receiving money.
There are a number of, you need to unpack what will happen. First you've got
donations and pledges from the SADC region, those will not go into the
multi-donor trust fund, those will come directly to the Zimbabwean
government. And in the case of lines of credit, those will go to the
different countries respective their bank, for instance in South Africa, for
instance in Botswana and Mozambique and our industry, our producers, our
banks will then access those funds. Then you've got countries like the OECD
countries, like the United Kingdom, like the United States of America, they
will operate at two levels.

Firstly, is how they've always operated in the past, namely the giving of
funds and assistance to the humanitarian, for humanitarian assistance
through the UNDP. Then you've got what is now known as humanitarian
plus-plus in respect of which, humanitarian assistance is now creatively
redefined and the multi-donor trust fund will receive this money. In
addition they will also provide the funds on the basis of a project matrix,
in other words they will choose a particular project to fund, for instance
let's just take water and chemical treatment, let's just take electricity.
So what will then happen is those monies will come specifically for a
particular institutional or infrastructural project and it will be handled
either at embassy level or at some bi-lateral instrument that we will create
with the particular funder.

Then you have beyond the humanitarian plus-plus you'll have amounts for
specific budgetary assistance which again will be channelled at bi-lateral
level. Then you've got those countries that have expressed an eagerness,
particularly the Nordic countries, to actually help us with a certain
specific aspect of our budget and this is where the multi-donor trust fund
will be important.

You ask me how much money we are expecting in this fund, whatever money we
can get will be important. There are two things - what money have I been
promised and what money do I expect. You need to get this economy to where
it was in 1996, you need about US$45 billion in the next five years and
obviously within the context of the global economic downturn, you're not
going to get that money. The short term emergency recovery programme that we
have launched requires US$10 billion to support it but obviously again those
are huge amounts within the current context.

However, the pledges that we've obtained and the undertakings that we have
obtained we should be OK for 2009. That means that we should not have a
budget deficit in 2009 and I'm in fact hoping that we might actually have a
budget surplus. And for your information, our budget for 2009 is the sum of
US$1 billion.

GONDA: At what particular point do you actually envisage your ministry, or
the government taking complete control of this trust fund for example? When
will they give Zimbabwe direct funds?

BITI: Some governments are going to do that. It's a question of confidence
and trust. There are a number of things we have to do to establish our own
track of credibility, we need to show our own road map of credibility and it
is important that we attend to the toxic issues around the Global Political
Agreement - the unfinished business of the Global Political Agreement in
particular the issue of ambassadors, the issue of permanent secretaries, the
issue of provincial governors, the issue of Gono and the issue of Tomana.
These are not negotiable, they have to be resolved.

Then at institutional level, as Ministry of Finance, we have to reform our
accounting system, our public finance management system. It is important
that we get this on the ground, it is important that we have the correct
software. As you know, our public finance management system had been
vandalised by the use of zeros. No system can take 12 zeros or 24 zeros so
that was the challenge, so reform of the public finance management system is
critical.

The second thing is the reform and credibility of the Reserve Bank. As you
know the Reserve Bank had become a predator in our economy and we have to
rationalise it and make it a decent institution in our economy. The third
thing is of course the Zimbabwe Revenue Authority. Again we have to improve
on our tax administration, we have to improve on our tax structure. In
short, let us show that we are bankable, and I've no doubt that normalcy
will be restored and in my own view I've no doubt that even with these
countries, these western countries that are still so cautious for obvious
reasons, I'm quite sure that by July/August, we will have shown them that
the new dispensation can be trusted and the new dispensation can be worked
with.

And remember, the multi-donor trust fund, we will direct it as the Ministry
of Finance - so that on its own will show a credibility track and I need to
say that even the funds that we are getting from our friends in the region,
they are insisting that they have to be used for a particular purpose
because in the past there has been abuse. There are question marks over the
300 million rand that was given by South Africa to Zimbabwe in November of
last year and you know what happened to the US$7 million that was donated by
the Global Fund last year.

So there's been a lot of atrocities that have been committed in terms of
accounting, in terms of transparency and unfortunately we are victims of
history, we are being judged on past omissions and commissions. We have to
show our own clean slate and our own track record of credibility, our own
regiment of honesty and transparency and I can assure you we will not be
found wanting.

GONDA: Tendai, you mentioned the issue about re-engaging with the Americans
again after a very long time, now the State Department issued a rather sad
statement saying they have not seen the reforms that they actually want.
Given the fact that you don't have control as the MDC, you don't have
control of Defence, and only have partial control of the police force and
also considering that you've not fully implemented the GPA as you mentioned
earlier and struggling to get basic things you've agreed on -in terms of the
Global Political Agreement - how does this affect the United States'
perception of your position as an equal partner in government and how does
it relate to the lifting of ZIDERA?

BITI: Well I actually had excellent meetings on both fronts in terms of
re-engagement. The concerns are there and you can't run away from the
concerns and the concerns are simply two-fold. Firstly we have been abused
by this country called Zimbabwe. There's been dictatorship in Zimbabwe and
there's been no playing according to the rules of the international
community. How do we trust and how do we guarantee that the interim
government is a basic ruse to get pressure off a regime that is bent and
intent on proceeding and working on its own terms? How do we ensure that you
are not just junior partners that are being used to sanitise a regime? And
those are genuine questions. You have to understand that.

Secondly there is a genuine concern how do we guarantee that whatever money
we put in goes to prop up the pillars of dictatorship and more importantly
don't reach the intended purposes? Those things are things you can't wash
away and the proof of the pudding is in the eating. You have to demonstrate
that there has been a recalibration of mentality. You have to show that
there's been a fundamental paradigm shift and you can only show there's been
a paradigm shift, by action and performance.

And so it doesn't help dealing with those perception drivers if you are
still invading farms. It doesn't help in dealing with those perception
drivers if Roy Bennett is not being sworn in. It doesn't help in dealing
with those perception issues if Gandhi Mudzingwa and Christopher Dhlamini
are still in prison. It doesn't help in dealing with those re-branding
issues, those devaluing issues if you've not resolved the Global Political
Agreement, outstanding issues in the Global Political Agreement.

So the long and short of it we have to be honest with ourselves. No-one out
there owes us anything. We want re-integration in the international
community but no-one out there owes us anything. We don't have an overdraft
facility with anyone out there so we have to show that we are a bankable
project and some of us we have put our reputation and credibility on the
line here and I hope that other colleagues in this government also have to
re-calibrate their mental mind set and we can take this country out of the
doldrums that it is in.

GONDA: So do you have any idea what the stumbling block is and what the
progress is in terms of the talks and the issues that you have highlighted -
the issues of the permanent secretaries, Roy Bennett and other issues that
were agreed on when the government was formed but have not been implemented
yet?

BITI: Well the honest, the truth of the matter is that there's been no
decent progress to date and we are running out of excuses because this
government is now over two months old and so everyone needs to come to his
senses and let's tell each other the truth. Are we interested in making this
work or not? Some of us are and that's why we are still in it but we should
not be taken for a ride by other people with their own ulterior motives.

So in short, we have to put our foot on the ground and make sure we resolve
these issues once and for all. You cannot have a situation where some of us
are working day in day out to try and undo the legacy of insanity of the
last decade and others are busy rebuilding the foundations of that insanity.
It's not fair to us as individuals and it's not fair to Zimbabweans.

GONDA: Tendai, just going back to the issue of the Zimbabwe Democracy and
Economic . (interrupted)

BITI: Violet on ZIDERA I actually met both Senator Feingold whom you know
was one of the authors of these bills. I also met Congressman Payne who was
also involved in ZIDERA. I also met others like Lugga and Herman - people
who mothered and gave paternity to this ZIDERA and I made it very clear that
it would be very difficult for us to move when ZIDERA is there.

And if you consider for instance the World Bank has right now billions and
billions of dollars that we have to access but we can't access those dollars
unless we have dealt with and normalise our relations with IMF. We cannot
normalise our relations with IMF because of the voting power, it's a
blocking voting power of America and people who represent America on that
board cannot vote differently because of ZIDERA, so it is critical.

I think they listened to us, we made our case and I've no doubt that on
balance they understood that this act has to go but they also made the point
very clearly that you have to strengthen us when we persuade our colleagues
who don't have the information that I've just given them. And strengthening
those people who want to help us in removing ZIDERA we have to deal with the
toxic issues that I've referred to above - the issues of the violence on the
farms, the issues of - all the toxicity issues that I've referred to you
about.

GONDA: That was Finance Minister Tendai Biti speaking to us from Heathrow
Airport on his way back to Zimbabwe. (We will bring you PART 2 as soon as
possible).

Why international donors are avoiding Zimbabwe

http://www.businessday.co.za/

 04 May 2009

Stephan Hofstatter

ZIMBABWE's effort to obtain international aid is based on a simple premise:
after a few hiccups the country's new unity government is running smoothly,
so it's time the world loosened its purse strings.

Most governments with deep enough pockets to matter, notably the US and
European Union (EU) members, have refused to buy into this rubbish.

Since the unity government was formed in February, Barack Obama's
administration, by far the largest donor of humanitarian aid, has refused to
lift sanctions or release reconstruction funds until Zimbabwe shows it is
serious about upholding human rights, the rule of law and economic freedoms.
Similar statements were made by EU member states.

The Southern African Development Community (Sadc) has taken a softer line,
earning praise last week from the state-controlled media in Zimbabwe for its
spirit of "African brotherhood". Two weeks ago, Sadc endorsed a bail-out
package for Zimbabwe that included $2bn in short-term loans and aid to help
revive the economy, and another $6,5bn in long-term reconstruction finance.
SA, the only Sadc state capable of putting real money on the table, has so
far pledged a modest sum and promised to identify bankable projects it can
finance through the Industrial Development Corporation and the Development
Bank of Southern Africa.

But the lion's share of funding will still have to come from international
lenders and investors sceptical about the credibility of the unity
government.

It is easy to dismiss Zimbabwe's power-sharing agreement as a sham not worth
betting a cent on. There's too much wrong with it.

For a start, the Movement for Democratic Change (MDC) remains a junior
partner in the unity government despite winning parliamentary elections last
year heavily rigged in favour of Robert Mugabe's Zanu (PF) party.

Mugabe, whose disastrous policies destroyed Zimbabwe's economy, retains the
executive authority he has enjoyed since independence. He still chairs the
cabinet and has the power to declare martial law, and his party retains the
key land and justice portfolios. He also heads the security council - made
up of the army, police and secret services - which orchestrated a bloody
reign of terror against opposition supporters last year that prevented a
presidential run-off that MDC leader Morgan Tsvangirai would have won.

Mugabe has lost no time putting his stamp on the unity government. Within a
week of its formation he refused to revoke the appointment of Zanu (PF)
hardliners Johannes Tomana as attorney-general and Gideon Gono as governor
of the central bank.

Tomana famously advised the government last year it was legal to detain MDC
supporters without trial. He also reportedly ordered the recent wave of
arrests of commercial farmers disputing the legality of continued land
seizures, and is credited with being behind the Supreme Court's decision
last month to deny bail to three MDC officials facing terrorism charges they
insist are trumped up.

Gono, who reports to Mugabe, is accused of running a parallel government
that raided foreign bank accounts held by businesses and nongovernmental
organisations. He also required companies doing business in foreign
currencies, including exporters, to surrender a percentage of gross earnings
to the central bank, paid for in Zimbabwean dollars at the official exchange
rate and therefore at a fraction of their real value.

This enabled him to become one of the world's most bizarre central bankers,
publicly dishing out tractors, combine harvesters, ploughs and farm inputs
to Mugabe loyalists and supplying officials, MPs and judges with luxury
vehicles and appliances. I'm told the money bought a fleet of hundreds of
unregistered vehicles, some of which were used by security forces for
kidnapping opposition activists. Gono also allegedly allowed party bigwigs
to buy large sums in foreign currency at the official exchange rate, turning
them into instant US dollar millionaires.

It is true that MDC Finance Minister Tendai Biti has already implemented
important reforms that should go some way towards allaying fears that
Zimbabwe remains a bottomless pit unworthy of any financial support.

In his first budget, in March, Biti said the central bank would no longer be
allowed to engage in "quasi-fiscal activities". All expenditure from the
government's consolidated revenue fund would henceforth require
parliamentary approval. He also abolished all surrender requirements,
effectively neutralising Gono's revenue collection powers.

Recent noises about repealing draconian media laws and the first meeting of
a multi-party committee tasked with drafting a new constitution are
promising signs, although civil society groups warned the constitution would
be rejected if MPs continued to limit room for public consultation.

That these developments have so far failed to convince rich countries to
open their wallets is frustrating humanitarian agencies. They want
investment in sanitation and food production to prevent fresh outbreaks of
famine and preventible diseases, such as cholera.

They have a point. The need for humanitarian aid, which has cost donors
$260m in the past six months, will remain inexhaustible until root causes
are addressed. A case could be made for targeted, ring-fenced recovery
loans, which are bound to be more cost effective in the long run than
continued crisis aid.

But as Zimbabwean economist Enoch Moyo pointed out when I visited his Harare
offices recently, reconstruction funds on the scale needed to rebuild
Zimbabwe's shattered economy will never materialise until confidence
returns.

And right now, despite a brave face put up by Tsvangirai, Biti and their
fellow MDC MPs, confidence remains in short supply, including among
Zimbabweans themselves. Moyo points out they still squirrel their forex
savings abroad out of fear their wealth could be confiscated again if Mugabe
experiences a sudden change of heart.

"There is a lingering fear that recent gains could easily be reversed during
this fragile transitional arrangement," he says. "You can't expect the
international community to have faith in the unity government when
Zimbabweans themselves don't."

A recent upsurge in reported farm invasions with the complicity of security
forces, including over the Easter weekend, is worsening these fears.

Moyo, like many others, argues Mugabe's land grabs underpinned Zimbabwe's
economic collapse by turning collateralised property into dead capital.
Solving the festering land issue therefore remains central to unlocking
economic potential and restoring confidence.

But this would require several bold steps for which no one is ready. Large
landholdings must be redistributed again, this time to skilled smallholders
facing chronic shortages of good quality agricultural land in communal
areas. The snag is that a new landed elite dominated by Zanu (PF) party
bosses won't go willingly.

At the same time, plans to compensate former farmers must be urgently
finalised, and some invited to return to help revive commercial
agriculture - something Mugabe will would never allow.

Millions of Zimbabweans who remain on communal land must also be given
secure, tradable property rights so family plots can be turned into
capital - a huge undertaking that a better-resourced SA has failed to
achieve after a decade of trying.

The unpalatable truth is these reforms are unlikely to be carried out by any
transitional government. But until they are, expecting the world to come up
with the kind of capital inflows needed for Zimbabwe's reconstruction
remains wishful thinking.

.. Hofstatter is contributing editor

FULL TEXT: 'The right to speak and be spoken to'

http://www.zimonline.co.za

by James Timba Monday 04 May 2009

PRESENTATION:The right to speak and the right to be spoken to through
any media is a fundamental God-given right which has now been codified in
various international instruments.

No government has the moral authority or right to limit this right
without just cause, and in particular if the limitation is not intended to
protect the rights of others.

Today we celebrate press freedom day when there is so much acrimony
and polarisation in the Zimbabwe media environment. We are celebrating press
freedom day when press freedom itself in a number of ways is limited in our
own country.

Various pieces of legislation enacted by the pre-September 15, 2008
government, which include AIPPA, Broadcasting Services Act, Official Secrets
Act, Interception of Communication Act, Public Order and Security Act and
the Criminal Codification Act have been criticised by citizens, media
practitioners and owners for limiting press freedom and freedom of
expression.

As a country in general and government in particular, we cannot
continue to bury our heads in the sand in order to unhear the cries for
press freedom and freedom of expression.

As minister of the Government of Zimbabwe, I took an oath to uphold
the laws of this country. That I will do, but I did not take an oath to
agree to the said laws.

Instead I took an oath to provide wise counsel to the leaders of this
country i.e . the President and the Prime Minister.

I do not agree with any law that limits freedom of expression to the
extend that it does not violate the rights of others.

Some of the above pieces of legislation were used to close down
newspapers and to deny the opening up of others leading to high levels of
unemployment in our media industry and affecting the lives of many
journalists and those that depend on them.

These laws unfortunately are also still being used to arrest
journalists in the course of conducting their work.

The criminalisation of journalism, ladies and gentlemen, has no place
in a democracy. The recent arrest of journalists from the Chronicle and
others before them for criminal defamation is unfortunate and unacceptable
in a democracy.

We have sufficient civil defamation laws in our statutes to turn to
when aggrieved by scribes. To this end I associate myself with the statement
by Commissioner General (Augustine) Chihuri that journalists should be
allowed to do their work without fear of arrest, that it is the duty of
journalists to hold leaders to account for our actions.

In doing so, and in conducting their work journalists must ensure that
they abide by the ethics of the profession which among other things require
you to be balanced, truthful and protect the innocent including children.

What is it that we should be afraid of as government and leaders in
various spheres of our society by not allowing press freedom and freedom of
expression.  What is it that we would want to hide from fellow citizens.

An uninformed nation is a poor nation. If citizens are not informed or
are misinformed or have limited information they are bound to make
uninformed choices in every aspect of their life from economics to politics
and as a result affect the development of individuals and the country as a
whole.

In this regard the Zimbabwe Union of Journalists local press freedom
day theme of media reforms, reconstruction and responsibility is appropriate
at this juncture in the development of Zimbabwe.

What justification do we have as a country to have the second most
sophisticated infrastructure for training journalists in SADC producing
approximately 1 000 graduates a year and only absorbing 20.

How do we justify the investment of tax payers' dollars in training
Zimbabwean journalists who then move on to other countries because our own
media space is closed.

Ladies and gentlemen, as a member of the new multi-party government, I
cannot justify it. I am not sure that any other right thinking leader in
this government would do so.

We have the most limited or should I say contracted media industry in
the whole of the SADC region.

South Africa for instance has 36 private national newspapers and 110
private community newspapers, four private television channels, three public
television channels, 49 community radio stations and no public print media.

Namibia, a country younger than us has six private newspapers, three
private television channels, two public newspapers and 11 private radio
stations. Malawi, one of the smallest countries in the region has five
private radio stations.

Ladies and gentlemen, we need to face the challenges that confront us
in the media industry honestly once and for all and resolve them because we
cannot wish them away. The responsibility to do so lies on all of us, the
government, the stakeholders and the citizens.

Making right what is wrong in our society is our responsibility. No
one will do it for us for no one anywhere in the world owes us a living. It
is a dishonest and false argument that the people of Zimbabwe in general,
and the media stakeholders in particular are clamouring for freedom of the
press and expression because donors and others are saying so.

We fought for these freedoms before 1980 and we are entitled to them
on the basis of that struggle. Therefore the granting of freedom of
expression and the press to our citizens remains one of the unfinished
business of our liberation struggle.

Lets go to Kariba and fix it. In this regard, the government guided by
the global political agreement (GPA) and STERP has committed itself to two
interrelated actions.

The first one is to open up both the print media and the airwaves
under the existing laws and secondly to review the existing media policy and
laws.

The current laws as amended through the negotiation of the three
political parties will in the interim allow for the registration of new
media houses including foreign media houses by the Media Commission provided
for under Amendment 19 of the Constitution of Zimbabwe.

The Media Commission will be constituted by the Standing Rules and
Orders Committee of Parliament and appointed by the President after agreeing
with the Prime Minister on each of the persons to be appointed to this
constitutional body.

This process, I am advised is now being initiated by the Standing
Rules and Orders Committee of Parliament.

On the broadcasting front, the Board of the Broadcasting Authority of
Zimbabwe once in place shall advertise and invite for applications for the
following licences in terms of the law: national commercial radio licences,
national commercial television licences, local commercial radio licences and
community radio stations.

The constitution of this Board is underway and it involves the
Ministry of Media, the Standing Rules and Orders Committee of Parliament and
the President and the Prime Minister.

The opening up of media space through registration of new media houses
as described above, although necessary is not sufficient to guarantee
freedom of the press and expression.

Beyond the GPA, STERP demands that government frees the media. Freeing
the media means developing policies and laws that frees the industry.

In this regard the government during and post the ministerial retreat
has adopted a new vision for the Ministry of Media, Information and
Publicity which entails the creation of "an environment that allows for
unimpeded supply, flow and consumption of information".

This vision is incorporated and subordinated to the Rights and
Interests Ministerial cluster vision which includes the Ministries of
Justice, Foreign Affairs, Constitutional and Parliamentary Affairs and
Media, Information and Publicity.

The cluster vision envisages "a democratic, independent, peaceful,
sovereign, prosperous and gender sensitive Zimbabwe that is rights driven,
participatory and interactive in the global context and which is in line
with the commitments of the GPA".

As a starting point in moving towards the attainment of the cluster
and ministerial vision, the ministry will be hosting an all stakeholders
media conference in Kariba from the 6th - 9th of May 2009.

The strategic objective of this conference is to review our media
policies and laws guided by our vision.

I am aware that some of you have expressed reservations about some of
the presenters and the topics they intend to present on. I understand and
appreciate the emotional issues associated with certain individuals in the
media industry and our body polity but first may I urge you to be tolerant
and assure you that a presenter or presenters do not talk to themselves but
they talk to delegates.

A presenter or presenters do not determine the outcome or output of a
conference but the delegates do. The delegates have the democratic right to
hear or to unhear a presentation.

What is important is for you to recognise the importance of listening
to divergent views including those that you do not agree with, but at the
end of the day formulate your own opinion and make recommendations to the
conference based on your principles, values and beliefs.

This is the wholemark of freedom of expression that I have no doubt
you subscribe to.

The Ministry is committed to its vision of an unimpeded supply, flow
and consumption of information. If this vision is properly interpreted and
applied, our country will be able to meet the standard set by the African
Commission on Human and People's rights in its declaration on freedom of
expression which states that "freedom of expression and information,
including the right to seek, receive and impart information and ideas,
either orally, in writing or in print, in the form of art or through any
other form of communication, including across frontiers, is a fundamental
and inalienable human right and an indispensable component of democracy".

This is a standard that the government and its leaders should be
judged by. This is a standard that as minister of the government, I have
committed myself to and will make my own contribution towards its attainment
within the constraints of my responsibilities.

I thank you. - ZimOnline

Parade Magazine rates Robert Mugabe as the number one Worlds Worst Dictator