12 Nov 2005
12:21:34 GMT
Source: Reuters
By MacDonald
Dzirutwe
HARARE, Nov 12 (Reuters) - Zimbabwe's infrastructure is fast
decaying,
worsening sanitary conditions and threatening the health of a
population
already burdened by a six-year economic recession.
"Our
budgets are failing to cope with the demand for services but our hands
are
tied because we can only increase rates with government approval, which
usually is not forthcoming," Japhet Ndabeni-Ncube, mayor of the second city
of Bulawayo, told Reuters on Saturday.
"The threat of a serious
health crisis is there, but we try to manage with
the few resources we
have," he added.
State media has reported more than 200 people have been
diagnosed with
dysentery in Harare and Chitungwiza town, 30 km (19 miles)
southwest of the
capital where there are water shortages and a broken sewage
system.
On Saturday, the official Herald newspaper reported diarrhoeal
infections
had killed 14 minors in the capital Harare since September as a
result of
contaminated food.
Zimbabwe's economic crisis, the worst
since the end of British rule in 1980,
has paralyzed the country with rising
unemployment, and shortages of fuel
and food. It has also produced a foreign
currency crunch that has hit
imports, including of key treatment
chemicals.
Service delivery has nearly collapsed in the country's cities
and towns as
local authorities battle to provide residents with water,
garbage collection
and repairs to a creeking infrastructure.
Critics
say President Robert Mugabe inherited a thriving economy at
independence in
1980, but that years of mismanagement has turned the
southern African nation
into a near failed state.
Mugabe blames the country's economic woes on
sanctions and economic
isolation imposed by Western nations led by former
colonial power Britain.
Built in colonial Rhodesia, most of Zimbabwe's
infrastructure was meant to
cater for a small black urban working class but
a surge in the population
and years of neglect has seen most cities and
towns failing to cope. State
television has often shown graphic images of
some residents in Chitungwiza
fetching water from open wells, often near
streams of human waste. Some
residents in Harare and small towns around the
country face the same
problem.
Erratic water supplies are blamed on a
combination of drought and the
shortage of treatment materials.
Chris
Tapfumaneyi, the medical superintendant at the state-run Harare
Central
Hospital, said the deadly cases of diarrhoeal infections were
reported in
the black townships Mbare, Highfield, Mabvuku and Mufakose,
which have been
the most hit by a collapse in services.
"What is alarming is that it
seems the disease keeps attacking more under-5
children and at the moment we
have a number of cases we are dealing with,"
Chris Tapfumaneyi, the medical
superitenant at state hospital Harare Central
Hospital told the Herald.
Mail and Guardian
Harare, Zimbabwe
12 November 2005
09:30
Fourteen children have died from food poisoning in the
Zimbabwean capital, Harare, in recent weeks, an official newspaper reported
on Saturday, a day after reports of an outbreak of dysentery in Harare and
its satellite town of Chitungwiza.
The children, all
under the age of five, are suspected to have
contracted a virulent form of
food poisoning -- salmonella -- from chicken
or eggs sold in unhygienic food
stalls that are common in poorer quarters of
Harare.
"We
saw that there was an outbreak of this disease in children
from areas such
as Mbare, Highfield, Mabvuku, Waterfalls and Mufakose
[low-income Harare
suburbs]," Harare Central hospital medical superintendent
Chris Tapfumaneyi
told the Herald.
He said patients brought to the hospital had
initially been
treated for typhoid. Laboratory tests later revealed an
outbreak of
salmonella.
"What is alarming is that it
seems the disease keeps attacking
more under-five children, and at the
moment we have a number of cases we are
dealing with and seem to be able to
control," said Tapfumaneyi.
On Friday, reports here said more
than 200 people in Harare and
Chitungwiza had been hospitalised for
dysentery. The highly infectious
diarrhoeal disease was blamed on unhygienic
water supplies.
Many suburbs in Harare and Chitungwiza are
experiencing erratic
water supplies. Some suburbs go without running water
for several weeks,
resulting in people drawing water from unprotected wells
and streams. --
Sapa-DPA
Dear Family and Friends,
Wearing a little red paper poppy on my shirt this
second week of November
has been something I've done ever since I can
remember. I was disappointed
this Friday to see just a dozen or so scrappy
paper poppies lying in the
bottom of the cardboard box two days before
Armistice Sunday. At first I
thought that this international day of
remembrance must have become the
latest casualty in Zimbabwe's determination
to cut itself off from the
rest of the world. I was wrong. The reason there
are no poppies this year
is because 20 000 little red paper flowers sent from
the UK have been
impounded by Zimbabwe's department of customs. Apparently
even scraps of
red paper used for charitable purposes and to remember the end
of World
War One, are not exempt from our government's desperate attempts to
raise
money. Customs want 53 million dollars to release the poppies and
so,
those of us lucky enough to find them, are wearing crumpled poppies
left
over from last year and I wear my tatty one with outrage but also
with
pride.
It has been altogether a very shocking week in Zimbabwe
and trying to keep
track of the events has been very difficult due to almost
no coverage by
state media. ZBC TV, whose motto is "When it happens we will
be there",
have obviously been in other places this week but even so, bit by
bit, one
way or another, the real news does eventually get out. This week the
MDC
Mayor of Chitungwiza was detained by police. Six University of
Zimbabwe
student leaders were arrested for trying to embark on a
demonstration
about deplorable conditions on campus. Tuesday's country
wide
demonstrations by the Zimbabwe Congress of Trade Unions and the
National
Constitutional Assembly left all their combined leaders arrested
and
between 120 and 200 others who had been brave enough to take to
the
streets with them.
Also this week came the shocking news that
airfares have been increased by
1600% and for anyone planning on visiting
their families in South Africa
this Christmas, a return ticket will cost 34
million dollars. Each return
ticket to the UK now costs 140 million dollars
and this is crushing news
for hundreds of thousands of Zimbabwean families
which are split up across
continents. With an average teacher taking home
less than 10 million
dollars a month, there is no hope at all that even
professionals will be
able to be united with their families this
year.
I will end this week with the good and the bad news. The good news
is that
the rains have started and in Marondera we have had 104 mm (4 inches)
in
five days. The bad news is that what little wheat there is this year
is
sitting out there in the fields getting wet. The wheat is not
being
harvested because of chronic diesel shortages that have persisted
since
the March elections. I came across these shocking figures this week
which
say it all for Zimbabwe's so called agricultural revolution in the
last
five years. In 2001 Zimbabwe produced 360 000 tons of wheat; in 2002
we
produced 280 000 tons; in 2003 the figure dropped to 150 000 tons and
in
2004 a paltry 80 000 tons was grown . And this years figure ......its
not
in yet because its still sitting out there in the rain. And this
one
simple little agricultural blunder joins the others to explain why we
are
hungry, tired, broke and away from our families Until next week,
love
cathy. Copyright cathy buckle 12 November 2005
http://africantears.netfirms.com
News24
12/11/2005 20:20 -
(SA)
Harare - The Zimbabwe government is to "take action" against the
Zimbabwe
Congress of Trade Unions (ZCTU) which this week held a series of
anti-poverty demonstrations across the country, the state-controlled Herald
newspaper reported on Saturday.
The paper said there had been
allegations of embezzlement and corruption
levelled against senior officials
in the main labour body. The labour
ministry is to decide what action to
take, it added.
"The director of Labour Administration in the Ministry of
Public Service,
Labour and Social Welfare, Mr Paul Dzviti, said the ministry
was expected to
come up with a decision on what course of action to take
against the labour
body next week," the Herald said.
More than 150
people were arrested in the cities of Harare, Bulawayo and
Mutare during
anti-poverty protests organised by the ZCTU on Tuesday.
The ZCTU's
president Lovemore Matombo and secretary-general Wellington
Chibebe were
among those detained.
Dzviti says he has been given "inside details of
the problems rocking the
umbrella labour body", the Herald
says.
President Robert Mugabe's government accuses the ZCTU leadership of
being
closely linked to Morgan Tsvangirai, the leader of the opposition
Movement
for Democratic Change (MDC).
Tsvangirai is facing a party
revolt over his refusal to allow MDC candidates
to take part in this month's
senate polls.
State newspapers have speculated that Tsvangirai, himself a
former secretary
general of the ZCTU, may try to co-opt some ZCTU leaders
into the leadership
of the opposition party if it
splits.
Tsvangirai's spokesperson denies this. - Sapa-dpa
New York Times
By MICHAEL WINES
Published: November 13,
2005
BULAWAYO, Zimbabwe - President Robert G. Mugabe has one word for reports
that Operation Drive Out Trash, the urban-demolition campaign aimed at slum
dwellers that his government describes as a civic beautification program,
has rendered thousands of his impoverished citizens
homeless.
"Nonsense," he told ABC News in an interview broadcast on Nov.
3. "Thousands
and thousands and thousands and thousands. Where are the
thousands? You go
there now and see whether those thousands are there. Where
are they? A
figment of their imagination."
Clearly, Mr. Mugabe has not
been to Bulawayo.
Just three miles west of the center of Bulawayo,
Zimbabwe's second-largest
city, Robson Tembo and his wife, Ticole, live in
the open air in a small
pen, 12 feet by 12 feet, built of deadwood and
scrap. Rows of plastic
grocery sacks hold the collected assets of their 72
years.
Five miles north, Nokuthula Dube, 22, her two daughters and two
orphaned
relatives are squatting in an unfinished two-room house of cinder
blocks.
During a reporter's recent visit, an unidentified woman lay curled
up on the
concrete floor of the house's only closet, sleeping.
On the
other side of town, Gertrude Moyo, 28, lives with her four children
and
seven other families in tents, pitched in the bush.
More than simple
homelessness binds the three families. Until a few months
ago, they all
lived in Killarney, a shanytown with an improbable name that
had housed
Bulawayo's less fortunate citizens since the early 1980's.
Today,
Killarney is a moonscape of sunbaked dirt, scrub and burned-out
rubble. Last
May and June, police officers reduced its huts to wreckage,
burned their
remains and routed the area's more than 800 residents as part
of Operation
Drive Out Trash.
"They had iron bars as long as this," Mr. Tembo said of
the police,
stretching his arms wide. "They demolished part of every hut,
and then they
told us to destroy the rest."
Mr. Tembo said he
refused, and so the police finished the job, leveling his
two-room home
built of wooden poles and metal walls.
More than five months after the
demolitions began, Zimbabwe's government
continues to insist that the
destruction of 133,000 households, by its own
count, was a long-overdue
slum-clearance effort that has caused its citizens
only temporary
inconvenience.
The government contends that the vast bulk of those made
homeless have been
relocated to the rural villages where they lived before
migrating to the
cities, mostly to look for work. Others, it says, will be
placed in
thousands of new homes being built to replace the illegal huts
that have
been razed.
Mr. Mugabe has rejected the United Nations'
attempt to raise $30 million to
aid the victims of Operation Drive Out Trash
on the ground that Zimbabwe has
no crisis. Despite a public appeal by
Secretary General Kofi Annan on Oct.
31, the government so far has rejected
any assistance that implies that its
evicted citizens are in
distress.
Yet many are in great distress. Relying on the estimates of
Zimbabwe's
government, the United Nations says 700,000 persons were
displaced by the
May and June demolitions and a later campaign, Operation
Going Forward, No
Turning Back, in which police officers routed those who
tried to return to
the cities and rebuild.
An August survey of more
than 23,000 Zimbabwe households by the South
Africa-based advocacy group
ActionAid International places the number of
those made homeless as high as
1.2 million - more than 1 in 10 Zimbabweans.
Where many have gone is a
mystery. The government carted thousands to
holding camps that were later
disbanded, and transported thousands more by
trucks into the countryside and
left them there, ostensibly near their rural
homes. Those people are
registered with local officials, but almost
certainly, they are but a
fraction of the total.
In the Nkayi district, a vast expanse of bush
terrain north of Bulawayo with
110,000 people, fewer than 700 families are
known to have been relocated,
according to church officials involved in
assisting them.
Similarly, the government's home-building plan has fallen
far short of its
promises and of the demand. Mr. Mugabe pledged three
trillion Zimbabwe
dollars for construction in July - about $30 million in
American dollars,
and dropping steadily given Zimbabwe's 400 percent
inflation rate. But the
national treasury is all but bare, and in Bulawayo,
where 1,000 homes were
promised in short order, fewer than 100 are being
built.
So where are the homeless?
"This remains what I'd call an
invisible humanitarian crisis - invisible to
international eyes, the reason
being that those who were displaced have been
dispersed," said David
Mwaniki, who oversees ActionAid's work in Zimbabwe.
Many are probably
with relatives; a few have fled the country. Others are in
the bush,
surviving off the kindness of neighbors. Many more have vanished
into hovels
and tents and half-built houses.
The United Nations says 32,000 of
Bulawayo's 675,000 residents lost their
homes and were ordered to leave the
city during the demolition campaign;
city officials put the number at
45,000. Torden Moyo, who directs an
alliance of local civic groups called
Bulawayo Agenda, says there is no
doubt where they have
gone.
"Ninety-five percent are now back," he said. "They're still
struggling,
still homeless, still penniless, still shelterless. They've been
made
refugees in their own country."
Killarney is proof of that.
Before the demolitions, it was dirt-poor but
thriving, subdivided into three
villages with stores and services. All that
has been razed and burned.
Northeast of town, not far off the road to
Bulawayo's airport, Nokuthula
Dube, her own children and an orphaned niece
and nephew share the two rooms
of a half-finished home. Ten stunted
cornstalks and some greens grow in a
makeshift plot outside, but the five
live on donated cornmeal from a nearby
church.
Ms. Dube returned from her niece's school in June to find her
home in
Killarney's Village One wrecked and on fire. Homeless and pregnant,
she lost
her housecleaning job in a nearby suburb. Her husband, Nomen Moyo,
had to
move away to keep his job as a gardener. Ms. Dube said she and the
children
walked for a week, sleeping by the road, before finding the shell
where they
now live.
In September, Ms. Dube had a daughter,
Mtokhozisi. She left her 3-year-old
daughter, Nomathembe, and the two
orphans - 10-year-old Pentronella and
14-year-old Kevin - alone while she
gave birth in a local hospital. She
walked home from the hospital with her
newborn. "I left in the morning," she
said, "and arrived around 3."
A
few weeks ago, a man who said he was the house's owner appeared. "He wants
us to leave," she said. "He's claiming that this is his house."
Asked
where they would go, she said, "Only God knows."
Across town, Gertrude
Moyo, who lived in Killarney for 23 years before being
driven out on June
11, lives in a 10 foot by 15 foot tent with her four
children. Her husband
died a year ago. She said the police first took the
family to a transit camp
for the homeless, then to the tent. Mrs. Moyo said
she was told to wait for
a new home.
In fact, the government is building a row of houses next to
her tent, and
says they are for victims of the demolitions. But Ms. Moyo
said the police
had told her that her family was going not to a new home,
but to a plot of
farmland north of town.
Robson Tembo and his wife
drifted from one church to a second, then to a
succession of relatives'
homes before finally returning in late September to
Killarney's Village
Three. They built their scrap-metal enclosure not far
from the two-room home
in which they once lived, and which the police had
razed in May.
Once
a miner, Mr. Tembo is now too infirm to walk very far, much less work.
A son
who cleans houses gives the couple maize; a second sometimes brings
money.
Mr. Tembo's great worry, he said, is that the police, who
cruise up and down
Killarney's main dirt road, will evict the couple again.
"I'm from Malawi,"
he said. "But if they tear down this hut of mine, I will
stay here, because
I have nowhere to go in Malawi."
Local church
workers, who have assumed much of the burden of finding and
caring for the
homeless here, say that about 240 of Killarney's residents
have returned,
many living in the sort of scrap-metal lean-to's that the
Tembos cobbled
together.
Down a dirt path, past the charred remains of huts in what was
once
Killarney Village Two, Mhulupheki Tshuma, 29, his wife, Ncadisani, and
their
20-month-old son survive by scavenging plastic containers and
collecting
white pebbles, which Mr. Tshuma sells as decorations for graves.
Two other
children have been sent to live with relatives elsewhere in
town.
Mr. Tshuma was born here, and his parents died here. The family
lived in a
two-room mud hut when the police arrived in early June and burned
it down.
"The only thing I took out," Ms. Tshuma said, "was the
children."
After wandering for three months, they returned on Sept. 4 and
built a
hovel. The police demolished it on Sept. 29. Now they live in the
open air,
their living space bounded by knee-high mud walls and pieces of
rubbish.
Mr. Tshuma said the police returned early this month and beat
him roundly,
telling him he had to leave. But that is impossible. "We came
here," he
said, "because we didn't have anywhere else to go."
Angola Press
Nairobi, Kenya, 11/12 - The African Regional Organization of
the
International Confederation of Free Trade Unions (COSATU-AFRO) has
written
Zimbabwean President Robert Mugabe, protesting the arrest of more
than 300
workers and trade union leaders.
The confederation`s African
Regional Office in Nairobi on Thursday said it
was shocked and dismayed on
learning of the arrests.
In a complaint Mugabe, the organization
secretary-general, Andrew Kailembo,
demanded the immediate and unconditional
release of all those arrested.
According to the organisation, the workers
trade unionists and activists
were arrested in Harare and other parts of the
country as they held peaceful
demonstrations protesting the high cost of
living in Zimbabwe.
Kailembo urged Mugabe to prevail upon the armed forces to
respect the rights
of workers and uphold their dignity.
"We urge you to
ensure that trade unions are allowed to do their work
without government
interference whatsoever," Kailembo said in a statement
released here
Friday.
He said 120 workers, including civil servants, were arrested in
Harare on 8
November and over 200 others nabbed in other parts of the
country as they
participated in the demonstration organised by the Zimbabwe
Congress of
Trade Unions (ZCTU).
"Those arrested included the entire
leadership of ZCTU and activists from
affiliated unions and some civic
organizations," said the confederation.
He said the demonstrations in Harare
were in protests against high taxation,
high cost of living, transport
problems, cash shortages and violation of
human rights.
The confederation
said it fully supports the ZCTU in its campaign to impress
the Zimbabwean on
the seriousness of the situation.
`Kailembo said the facts are that official
inflation in Zimbabwe is
currently 360 percent, while unemployment is pegged
at 80 percent.
He said 8-percent of the population live in abject poverty and
mist
households can no longer afford a decent meal a day.
He urged the
Zimbabwean authorities to listen and respond positively to the
workers views
and demands.
"The government of Zimbabwe must take full responsibility for
this and
reverse its disastrous polices," he said in strongly- worded
statement.
Islamic Republic News Agency
Tehran, Nov 13, IRNA
At a ceremony attended by Iran's
ambassador to Harare and Zimbabwean
minister of Public Cooperation and a
number of academic personalities of
Zimbabwe, hundreds of books on history
and Iranian and Islamic civilization
were donated to the Zimbabwe University
.
According to the Foreign Ministry Media Department, the ambassador of
Iran
referred to the importance of cultural ties in developing relations
between
the two countries and said, "Expanding cultural ties with Zimbabwe
along
with economic cooperation has a special position in Iran's foreign
policy."
At the ceremony, the Chancellor of Zimbabwe University appreciated
Iran's
embassy book donation and called this measure very valuable and
called for
more connection and cooperation with Iran's universities.
Sunday Mail
Sunday Mail Reporter
THE monthly cost of importing electricity
into Zimbabwe has shot up from $5
billion to a whopping $500 billion,
prompting the Zimbabwe Electricity
Regulatory Commission (ZERC) to award the
Zimbabwe Electricity Supply
Authority (Zesa) a cost-reflective tariff
increase.
In an interview yesterday, ZERC commissioner-general Dr Mavis
Chidzonga said
regional electricity import costs had risen this month
because the power
utility is now accessing foreign currency at prevailing
market rates.
Previously, the Reserve Bank of Zimbabwe provided a
concessionary window
through which Zesa could obtain foreign currency for
power imports at lower
rates.
However, the liberalisation of the
foreign exchange regime announced in
October means Zesa must now import
electricity at prevailing market rates
instead of the previous
concesssionary rates.
Zimbabwe imports a cumulative 300 megawatts (35
percent of total
requirements) monthly from Eskom (South Africa), SNEL
(Democratic Republic
of Congo) and EDM (Mozambique).
Dr Chidzonga
said new electricity tariffs would be announced this week in a
move expected
to help Zesa stay afloat in the face of viability challenges.
"The
monthly cost of importing power has with effect from this month
increased
since the Reserve Bank of Zimbabwe is no longer subsiding the
company.
Following this increase, the cost attribute had to be factored into
the new
electricity tariff structure," said Dr Chidzonga.
According to the ZERC
commissioner-general, the commission was over the past
few weeks carrying
out a "due diligence" exercise under which it assessed
proposals for a
tariff increase that the power utility submitted a few
months
ago.
The last increase of 100 percent, effected in August this year, was
only an
interim measure meant to cushion the company from crippling
operational
costs while the commission worked on cost- reflective
tariffs.
Before the interim tariff was announced, Zesa
had gone
for almost two years without reviewing its charges, a situation
that the
company said was compromising service delivery.
The interim relief,
therefore, only addressed part of the company's
challenges and was expected
to push the firm through to such a time ZERC
came up with cost-reflective
tariffs.
Dr Chidzonga said the commission recently completed assessing
the relevant
cost build-up factors and had now approved a new electricity
tariff regime.
In coming up with the tariffs, ZERC considered factors
such as the exchange
and inflation rates, as well as energy costs, which had
continued to
increase over the past few months.
Although she could
not be drawn to reveal the new charges, Dr Chidzonga
indicated that the
tariffs sought to ensure Zesa's viability while making
sure they are
affordable to the customer.
She said domestic charges would largely
depend on one's consumption pattern,
emphasising that the commission had
also considered the different salary
scales prevailing in the
country.
Industry, on the other hand, had even advocated tariff increases
in order to
ensure Zesa provides efficient services, as it had, in some
instances,
disrupted their operations.
"The tariffs that were being
charged for some time were actually
comparatively cheaper than the cost of
other goods and services. Electricity
charges cannot continue to be
subsidised hence the need to come up with a
new tariff
structure.
"However, in considering the charges, the commission looked at
vulnerable
groups, cognisant of the social disparities in the country. I
cannot reveal
the tariffs at the moment but it is expected that they are
going to be
announced next week (this week).
"Despite the approval of
the new tariffs, the foreign currency challenges
that the country is facing
are, however, likely to continue to affect the
company," she said.
In
recent months, some customers have been complaining about Zesa's poor
service delivery, which includes frequent power interruptions, load shedding
and the company's failure to timeously respond to electricity
problems.
The company has attributed the inefficiency to viability
constraints.
It often argued that cost-reflective tariffs would help
improve its
services, a development which is expected in light of the new
tariff
structure that is set to be announced.
Dr Chidzonga said ZERC
officials would this week visit power stations in
different parts of the
country with a view to establishing the "quality of
machinery and the
reliability of power being supplied".
She added that the commission had
also pinpointed specific areas where Zesa
could implement measures to cut
costs.
Richard Wachman reports on
how the giant diamond producer has become a
partner in social
change
Sunday November 13, 2005
The Observer
The winds of
change are blowing across South Africa - 11 years after the
apartheid regime
was dismantled - and nowhere more so than at De Beers, the
world largest
diamond producer.
Nicky Oppenheimer, Harrow-educated chairman of the group,
has agreed with
the government to sell 26 per cent of his company to a black
empowerment
group. He must do so under new legislation, passed by the ruling
African
National Congress, designed to give Africans more power in a country
where
much of the wealth is still held by whites.
Oppenheimer, who
studied philosophy at Oxford, is a realist and says: 'De
Beers is here to
make a profit, but we must benefit the people and
communities where we
operate.'
But with a raft of new legislation either on the statute books
or being
looked at by the ANC, there are worries that De Beers - part of the
mining
empire set up by Cecil Rhodes at the turn of the 19th century - might
lose
its grip on an industry it has dominated for 100 years.
De Beers
is not alone in having to comply with black economic empowerment
(BEE)
legislation, which forms part of a broad push by the ANC to rebalance
the
country's racially skewed economy. If only it was that simple. Critics
have
dubbed BEE 'black economic enrichment', complaining that the programme
has
mostly benefited a tiny black elite which has political ties to the
ANC.
That picture is not altogether accurate. For the first time, there
is a
thriving black middle class and property prices have rocketed. Yet, few
would deny that some individuals have done particularly well under BEE. In
the early days, former ANC luminaries such as Cyril Ramaphosa, Tokyo Sexwale
and Saki Macozoma became multi-millionaires.
Elsewhere in South
Africa, poverty and mass unemployment are still
alarmingly high, although
Alec Hogg, editor-in-chief of South African media
group Moneyweb Holdings,
believes that South Africans should be given the
benefit of the doubt: 'You
have to remember where we were a decade ago. The
country has made great
strides.'
But immediately after Oppenheimer's announcement, opposition
politicians
attacked the De Beers deal for not doing enough for the black
majority.
Pierre Rabie, shadow trade and industry spokesman for the
Democratic
Alliance said: 'We support broad-based empowerment which benefits
the
majority of South Africans - but not empowerment aimed at enriching a
small
ANC circle.'
Those comments will irritate Oppenheimer because
the deal was structured in
a way designed to avoid such criticism. Under the
terms of the package, 50
per cent of the R3.8 billion (£324 million) stake
being sold to the BEE
group, called Ponahalo Investment Holdings, will go to
De Beers employees
and pensioners.
But Rabie and others point out
that about half a dozen beneficiaries are
individuals with close links to
the ANC including Manne Dipico, chairman of
Ponahalo and a former premier of
the Northern Cape province; Moss Mashishi,
a leading figure behind South
Africa's Olympic committee; and Cheryl
Carolus, the former South African
high commissioner to Britain. Three of
Ponahalo's directors will be co-opted
on to the De Beers board.
Rabie highlights the flaws of the arrangement:
'It is commendable that
18,700 ordinary De Beers employees will benefit to
the tune of R1.4bn, but
Manne Dipico takes a R342 million slice, which sees
him benefit 4,700 times
as much as an ordinary member of staff.'
But
if black empowerment legislation in South Africa is assailed by
politicians,
how is it viewed by the business and investment community?
According to
Oppenheimer: 'What we have now, is better than what went
before.' But he
adds: 'One day we will get past the need for quotas and
targets because the
playing field will simply level out.'
It is this transitional period
which is, perhaps, the most difficult. De
Beers' grip on the South African
diamond industry is now threatened from
another quarter. A bill before
parliament would compel diamond producers to
offer an undefined percentage
of their production to a new state diamond
trader. It would also impose a 15
per cent export duty and require producers
to offer rough stones destined
for export to a central diamond exchange.
Black dealers, gem cutters and
polishers support the bill, but De Beers says
it could make mining in South
Africa less appealing. Once the mainstay of
the company, only 29 per cent of
De Beers global diamond production now
comes from South Africa - and the
company is looking to diversify further.
Free-market economists wonder
whether South Africa will become less
business-friendly in the future. But
the ANC must walk a political tightrope
by making certain the country is
sufficiently capitalistic to attract
foreign investment, while meeting the
expectations of a largely
disenfranchised constituency at home.
De
Beers, like others, has taken account of the changing reality on the
ground
by ring-fencing its South African operations inside a company called
De
Beers Consolidated Mines and moved capital elsewhere.
One mining analyst
in London said: 'There is some political and regulatory
risk for companies
investing in South Africa - look at the relatively poor
share price
performance of Anglo-American [which owns 45 per cent of De
Beers] in
relation to its peers.'
Big companies formerly listed on the Johannesburg
exchange, such as
Anglo-American and financial services company Old Mutual,
have moved their
headquarters and primary listings to London. One analyst
said: 'When was the
last time you heard about a mining company coming to the
market in South
Africa. Exchange controls mean that you risk having your
capital trapped in
South Africa, who wants that?'
For many mining
companies, diversification has been given added impetus by
the strong rand,
which has all but wiped out profits at many gold producers.
Michael
Rawlinson, an analyst at JP Morgan Cazenove, said: 'If the rand is
too high,
it doesn't matter about the your gold reserves. Gold is valuable,
but not at
any price. At some point, it becomes a worthless piece of muck in
the
ground.'
No one believes South Africa will go the way of Zimbabwe, but
there are
questions regarding land rights, export taxes and government
royalties.
There are signs that the country is trying to strike a sensible
balance
between social re-engineering and free market economics. Only last
week,
officials at South Africa's central bank said that exchange controls
may be
abolished. Even with controls, British companies such as Barclays and
Germany's Deutsche Bank have made multi-billion pound investments in the
country.
As long as the South African economy continues to hold its
own, creating
jobs and prosperity, the ANC government could achieve that
balance. But for
previously white-dominated companies which thrived under
apartheid, it is
hardly surprising that life has become less
comfortable.
Diamond life
1800 Geological evidence suggests that
the diamond story began 3.3 billion
years ago, when the first stones were
formed deep under the Earth.
1880 saw the start of protracted battles for
overall control of the South
African diamond fields between Cecil Rhodes and
pedlar-turned-diamond
magnate Barney Barnato.
1896 De Beers
Consolidated Mines was incorporated by Rhodes.
1924 Anglo American
Corporation was admitted to membership of the London
Diamond Syndicate,
dominated by De Beers.
1952 De Beers formed the De Beers Investment Trust
to hold the portfolio of
industrial, gold and agricultural interests the
company had built up to
diversify its income.
1980s A recession
caused De Beers' sales to slump to almost half their 1980
level. In 1982,
the company cut its dividend for the first time since 1944.
2000 De Beers
rethinks its business model to comply with black economic
empowerment
legislation and deal with the impact of globalisation.