FinGaz November 15, 2007
Njabulo Ncube Political Editor
Pressure mounts on embattled Gula-Ndebele to quit
PRESSURE is mounting on embattled Attorney-General (A-G) Sobusa Gula-Ndebele
to quit following his sensational arrest last week on allegations of abusing
his office, The Financial Gazette can reveal.
Gula-Ndebele, appointed A-G in 2004, is accused of meeting former NMBZ
deputy managing director James Mushore at a time when police had a warrant
out for the banker's arrest.
The episode has created further tension in the volatile Ministry of Justice,
Legal and Parliamentary Affairs, and has sparked renewed conflict in the
fractious ZANU PF party, where the A-G and Mushore have been linked to a
powerful faction jostling to succeed President Robert Mugabe.
There is also unease within government and the ruling party about
Gula-Ndebele's choice of Welshman Ncube, the secretary general of the Arthur
Mutambara faction of the Movement for Democratic Change (MDC) as his defence
Ncube is a sharp constitutional law expert and his inclusion in
Gula-Ndebele's defence team suggests that the crux of the A-G's case is on
its constitutionality more than anything else.
Gula-Ndebele, who signed a warned and cautioned statement after his arrest
last Tuesday, is alleged to have met and promised Mushore, who fled to the
United Kingdom in 2004 after being accused of contravening foreign currency
regulations, that he would not be arrested.
Sources said this week that Gula-Ndebele, an ex-combatant, is now under
pressure to throw in the towel, with ZANU PF insiders noting that President
Mugabe, who has the prerogative of appointing attorney-generals, would have
authorised his arrest.
"This speaks volumes about the presidency's view of the A-G's office," said
Johannes Tomana, the deputy chairman of the Anti-Corruption Commission is
tipped to succeed Gula-Ndebele should those pushing for his ouster succeed.
Constitutional law experts say President Mugabe should have ordered an
inquiry into the Attorney-General's conduct, instead of allowing the police
to arrest him.
"Whether his conduct constituted corruption, is neither here nor there. But
this arrest has brought the office of the A-G into disrepute," said a
source, speaking strictly on condition of anonymity. "We are aware some
people want him to quit, but he has indicated he will stay put until proven
guilty by the courts."
A ZANU PF source added: "A chain of people should be arrested (too). The
first person should be the first immigration officer who stamped his
(Mushore's) passport at the airport when he entered. Why Gula-Ndebele? What
about the police that cleared him."
Zimbabwe's first ever arrest of an attorney-general has created a crisis in
the judiciary system, where subordinates opposed to Gula-Ndebele's "military
style" of running the office were relieved when his impending departure
However, staff were shocked when Gula-Ndebele reported for duty a day after
his arrest.The Financial Gazette reported earlier this year how relations
between Justice Minister Patrick Chinamasa and Gula-Ndebele had become icy.
It is reported things were so bad, at some point, that the two officials had
stopped talking to each other, obliging President Mugabe to intervene.
The President is said to be angry with the A-G over the embarrassing
collapse of the state's case against 50 opposition activists arrested in
March on allegations that they were waging a terror campaign.
Plans had been afoot for the Justice Ministry to reduce the
Attorney-General's powers and bring key functions of his department under
the direct control of Chinamasa. But Gula-Ndebele resisted the changes,
advocating even more independence for his office.
The Minister and the Attorney-General had clashed earlier after Gula-Ndebele
approved Chinamasa's prosecution last year on charges of attempting to
defeat the course of justice.
There is general consensus in the corridors of power that the corruption
charges against Gula-Ndebele are meant to dent his integrity as the
government's top lawyer, said sources.
Chinamasa, accused by certain quarters in ZANU PF of complicity in the
arrest of his top officers, is understood to have told Gula-Ndebele after
his arrest that he had nothing to do with his ordeal at the hands of the
The two officials are to come face to face again at a hearing of the
portfolio committee on justice today.
Innocent Gonese, Movement for Democratic Change (MDC) legal spokesman, said
his party condemned Gula-Ndebele's arrest, saying it showed ZANU PF did not
understand the concept of the separation of powers and the independence of
the A-G's office.
"We hold no brief for Gula-Ndebele and we express no opinion on the
correctness or otherwise of the decision he is alleged to have made in
relation to Mr Mushore. Our concern as the MDC is that the behaviour of the
police undermines the remaining vestiges of the public's confidence in the
justice delivery system."
Gonese noted that the arrest came in the wake of the acquittal of Levison
Chikafu, the Manicaland area prosecutor who has attempted to prosecute
senior government officials, including Chinamasa.
"We have noted that the A-G Office Bill, which went through its first
reading and received a non-adverse report from the Parliamentary Legal
Committee, has not seen the light of day and is gathering dust in some
office somewhere and one wonders whether there is a link between the latest
incidents and the Bill," Gonese said.
The Bill proposes greater autonomy for the Attorney-General's Office.
Gula-Ndebele is one of the top government and ZANU PF officials to be
arrested in recent years.
In April 2004 former finance minister Christopher Kuruneri became the first
high-profile figure to be arrested on allegations of externalising foreign
Other notable officials to be netted include Bright Matonga, the Deputy
Information Minister, James Makamba, former ZANU PF legislator and Philip
Chiyangwa, former ZANU PF chairman (Mashonaland West).
FinGaz November 15, 2007
Clemence Manyukwe Clemence Manyukwe
FREE fund holders under the Direct Fuel Import system risk losing US$18
million worth of fuel if the National Oil Company of Zimbabwe (NOCZIM) fails
to replace 18 million litres of diesel believed to be contaminated.
Companies and individuals are using their free funds for NOCZIM to procure
fuel on their behalf.
But a batch of fuel imported by the parastatal is contaminated, sources
said, and NOCZIM has undertaken to replace the lot with fuel held in
However, an official at the company told The Financial Gazette that there
was a problem with an 18 million-litre consignment of fuel.
"The diesel is not contaminated. It only has what is called low flash point
(meaning It ignites faster than other fuels). That is why people are
refusing to take it. It does not do any damage to vehicles," the official
However, a businessman who uses the facility expressed fears that customers
may not be compensated because the oil company had taken too long to address
"The incident brings into question NOCZIM's capacity to bring in fuel on
behalf of free funds holders. How would a free fund holder ask NOCZIM to
import when it fails to secure the commodity?" an affected individual said.
The fuel crisis has recently forced the government to resort to the
supernatural in the hope of finding a solution.
Nomatter Tagarira, the n'anga at the centre of an embarrassing scandal, is
in remand prison following her arrest for allegedly swindling the government
of $5 billion and a farm on the strength of her claims that diesel could be
obtained from a rock.
According to court documents, in June this year, state media reported that
the ZANU PF Politburo had been shown "video footage of the visit by a
ministerial committee . The video showed the liquid gushing out of a rock at
the summit of a hill near Chinhoyi caves and Makuti."
Zimbabwe is in the throes of a fuel crisis blamed on the shortage of foreign
Government had to relax fuel importation arrangements by allowing direct
fuel importers to use free funds in order to ease the fuel crisis.
Of late NOCZIM has started flexing its muscles by creating a facility that
would give back the parastatal monopoly in the sourcing of the scarce
NOCZIM chief executive Zvinechimwe Churu was unavailable for comment at the
time of going to print. Zvikomborero Sibanda, NOCZIM spokesperson, declined
immediate comment, referring questions to marketing manager Crispen
Mashange, who said he was on leave. Acting marketing manager Lovemore
Mandugu also refused to comment.
FinGaz November 15, 2007
Clemence Manyukwe Staff Reporter
A PARLIAMENTARY committee has asked that Industry and International Trade
Minister Obert Mpofu's contempt case be concluded expeditiously after it
became apparent the matter was unlikely to be tabled this year, raising
suspicions of a cover-up.
Mpofu was convicted in May by a six-member privileges committee chaired by
Defence Minister Sydney Sekeramayi, of charges of lying under oath. But
Parliament is yet to vote on whether or not to uphold the conviction.
Proceedings against Mpofu were initiated by the portfolio committee on
Foreign Affairs, Industry and International Trade, which accused him of
giving false testimony under oath during a probe pertaining to a management
contract between state-controlled steel maker Ziscosteel and Indian investor
Global Steel Holdings Limited.
The same committee is now urging Parliament to conclude the case.
If the House of Assembly is dissolved ahead of next year's polls before the
finalisation of the matter, it would automatically fall away. In terms of
the law, the case cannot be resuscitated thereafter.
"We note that there is an attempt to sweep the matter under the carpet. We
are going to ask that justice be done, and be seen being done," a member of
the committee told The Financial Gazette this week.
Legislators have drawn parallels between Mpofu's case and an earlier one
involving former Movement for Democratic Change Member of Parliament (MP)
Roy Bennett, who was sent to jail a day after a privileges committee found
him guilty of assaulting Justice, Legal and Parliamentary Affairs Minister
and leader of the House of Assembly, Patrick Chinamasa during a fracas in
Mpofu's troubles began after he spearheaded a deal with Global Steel that
would have given the Indian company control of Zisco for 20 years, on
condition that the firm invested US$400 million into the company.
The Industry and International Trade committee, chaired by ZANU PF Chipinge
South MP Enock Porusingazi, said Mpofu flouted guidelines on external
investment, the Procurement Act, as well as others set by the Ministry of
Finance in 2004 on public-private sector partnerships.
He was also accused of rendering the Zisco board redundant.
FinGaz November 15, 2007
ZIMBABWE has accrued a US$5 billion trade deficit over the past five years
due to the destabilisation of agriculture, a parliamentary committee has
The Lands and Agriculture committee, in its first report on preparations for
the 2007/08 farming season, cited the deficit after gathering evidence from
the ministries of Agriculture and Agricultural Mechanisation as well as
farmers' unions, seed houses, and Agribank.
"Your committee was informed that the country was under-producing by US$650
million of agricultural exports, and importing goods worth US$350 million to
cover mainly food deficits annually. As a result of low agricultural
productivity, your committee was told that the country has incurred a
deficit of US$5 billion for the last five years," the report says.
The committee, headed by Chief George Chimombe of Manicaland, gives a bleak
forecast for the new season, officially dubbed "the mother of all
agricultural seasons". Input supply would remain unreliable, the committee
said, dashing hopes of a recovery.
Representatives of fertiliser manufacturers told the committee that they
were not able to meet national requirements due to a combination of factors,
the main one being a pricing system that makes their businesses
unprofitable, a worsening scarcity of foreign currency, power outages and
erratic coal supplies.
"Your committee noted with concern that even if all the requirements for the
fertiliser industry were met today, it would not be possible to produce
adequate fertiliser between now and December."
Fertiliser prices were last reviewed in April, forcing companies to absorb
increased costs without passing them on to consumers.
As of September 10, seed companies said of the 50 000 tonnes of maize seed
required, there was a deficit of 21 000 tonnes because of unviable pricing.
The committee was told that growers were holding onto their seed in
anticipation of a price review, with Agriculture Minister Rugare Gumbo
having told the committee that he had recommended a review of the price to
the National Incomes and Pricing Commission.
"At the time your committee conducted its inquiry, the permanent secretary
for the Ministry of Agriculture confirmed an acute shortage of fuel. He said
only six million litres against a national requirement of 119 million litres
had been sourced, and that this was being distributed at 1 000 litres per
farmer, which stakeholders felt was a drop in the ocean if set targets for
the summer crop were to be met."
FinGaz November 15, 2007
Charles Rukuni Bureau Chief
BULAWAYO - A former member of the ZANU-PF central committee has called on
ZAPU members in the party leadership to revisit the unity accord because
they do not seem to be making any meaningful input into the running of the
Norman Mabhena, who was in the central committee until 1999 and was deputy
secretary for foreign affairs in ZAPU, said the former ZAPU members in
ZANU-PF should go back to the drawing board and examine critically their
continued marriage with ZANU-PF or else they would become irrelevant as they
were not doing anything for the region and the nation at large.
ZANU-PF and ZAPU merged into ZANU-PF in 1987 ending bitter internal strife
that saw more than 20 000 people mainly from Matabeleland and the Midlands
provinces being massacred.
The accord has, however, been shaky since the death in 1999 of former ZAPU
leader Joshua Nkomo who signed the accord, which was strongly opposed by
most of his lieutenants including those in the leadership of the current
Mabhena, who said he did not represent any political formation but was
speaking as an elder statesman, said he had decided to speak out because he
could not stand by and watch the country he had fought for sink deeper and
deeper into a "political and economic quagmire".
"This country, in my view, is now being run like a personal fiefdom by an
exclusive club of people who seem to be afraid of their own shadows, people
who have parcelled out national resources among themselves, drivers of the
parallel market, leaders who are at the forefront of oppressing the people
they claim to have liberated, revolutionaries that have finished eating
their own children and are now beginning to eat their fathers," Mabhena
He said he did not see any reason why the unity accord could not be revised
because the country's constitution, for example, had already been amended 18
Mabhena claimed he had raised these concerns with the provincial leadership
of Bulawayo because it was apparent to everyone that the people of
Matabeleland were being marginalised. They were being denied water, top jobs
in parastatals and loans under the Agricultural Sector Productivity
He said the former ZAPU leaders were playing second fiddle in the new
ZANU-PF as no one seemed to be listening to them.
"How could someone, for example, tell the people of Bulawayo to get water
from Khami Dam when one knows that bodies of people killed during
Gukurahundi were dumped into that dam. Isn't that an insult?" he asked.
FinGaz November 15, 2007
Stanley Kwenda Staff Reporter
"THE government and the President believe in African culture, we believe in
spirit mediums. She said the diesel was coming from our ancestors, so we had
to pursue it. The second reason is the current fuel problems. If we had not
pursued it, she was going to blame the government."
These words were uttered by Mashonaland West governor Nelson Samkange while
answering questions on why the government put so much faith in claims by a
Chinhoyi spirit medium that she could produce fuel out of a rock.
The government's preparedness to invest considerable amounts of money in
pursuit of such unscientific claims was a big surprise to many people,
because nowhere in the world had refined diesel ever been squeezed out of a
Had this claim proved true, it would have been the first such miracle in the
Pictures of bare-footed government officials attending rituals in connection
with the diesel have been published in the press, raising questions about
the ruling ZANU PF party's ability to steer the country out of the political
and economic quagmire it is in.
The seriousness with which the officials embraced and believed the
proceedings are enough to leave even a primary school pupil with an
elementary grasp of science worried about the future.
Even if the claims had been true, what would have happened when the trusted
spirit medium died?
The pictures of the bare-footed officials doing the bidding of the n'anga
were hilarious. But behind the mirth lies desperation, which calls for
serious introspection into how the country is being governed.
It is not far-fetched to imagine that at this time when many Zimbabweans are
unable to make ends meet, one can wake up one day and convince the gullible
ZANU PF government of having discovered a rock where United States dollars,
British pounds and South African rands can be extracted.
At this level of suggestibility, any such claims can apparently be taken
seriously. Why not, when the government showered the "diesel" spirit medium
with $5 billion. Prosecutors are now questioning her sanity. But what about
those who were prepared to be taken for a ride?
Two government taskforces, comprising no less than six cabinet ministers,
were set up to investigate the existence of the diesel that was supposed to
have fallen like manna from heaven.
Serious questions must be asked. Is it through spirit mediums, or through
proper political processes, that a country should be governed?
"The problem is that the government justifies everything that it does by
referring to the liberation struggle, which it claims to have been led by
spirit mediums. But this spirit notion does not apply today. It's either you
discover oil, or you don't. From a scientific point of view, you have to
discover it and not try to find it through some strange prayer," said
political analyst Takura Zhangazha.
But State Security Minister Didymus Mutasa, the government's front man in
the diesel saga, said he believed the spirit medium's claims because of the
role traditional fortune-tellers played during the liberation struggle.
Spirit mediums offered guidance to freedom fighters, he told The Standard,
and "could manage miracles and strange happenings, anyone who was or claims
to be part of this country's liberation will tell you of the very important
roles performed by our spirit mediums."
So is it now official policy to govern on the basis of the advice of spirit
"It is very unfortunate, but it only shows the level of desperation of the
government. If a government goes to this extent, then it would have run out
of ideas. The diesel story is the clearest evidence of that so far," said a
political analyst who requested anonymity.
"It has something to do with the reported succession issue. These people
thought that by discovering diesel, they would make themselves legitimate
successors to the President."
University of Zimbabwe political analyst, Eldred Masunungure, said this was
the latest sign of the levels of desperation within government.
"I am not surprised by the government's behaviour. It simply shows that the
leadership is stranded and hopeless. They are now trying to invest their
faith in miracles as a solution. They are hoping for some kind of divine
intervention," said Masunungure.
He suspects the diesel story is only a tip of the iceberg saying "there
might be other cases of n'angas that are yet to be put into the public
ZANU PF took its traditional beliefs a gear up when it "Africanised"
parliament by erecting a granite chair in the House of Assembly for use by
President Robert Mugabe.
The "cultural reforms" only made Parliament look like a safari lodge. A
stuffed leopard and two antelope heads hang on the walls, and a leopard skin
and two elephant tusks adorn the chair used by the President.
Aeneas Chigwedere, the Minister of Education, Sports and Culture, who was
responsible for spearheading the reforms in the House last year, said the
paraphernalia were in line with traditional beliefs.
He said: "In our traditional society, the Mutapa or Mambo or Nkosi was the
head of the legislature, executive and judiciary. In this context, the
speaker of parliament and president of the senate simply represent the jinda
or induna (headman) of the State President. The chair or seat he occupies is
therefore, in essence, the State President's chair."
He said the chair represents a lion, which in turn symbolises power and
authority in line with African culture.
FinGaz November 15, 2007
Rangarirai Mberi News Editor
THE planned mega-merger between Kingdom Financial Holdings and Meikles
Africa is now in serious jeopardy after Old Mutual, one of the shareholders
in Meikles, said it would not back the deal.
This has forced Meikles to push for the postponement of meetings scheduled
for today where shareholders in Meikles, Tanganda and Kingdom, the listed
parties in the transaction, were to vote the deal through.
Meikles said it believed a vote could no longer be taken, as further
discussion was necessary.
"The board of Meikles Africa continues to support the business case for the
merger in its entirety, and is of the view that unless all resolutions are
considered at the same meeting, the business objectives of the merger will
not be met," Meikles said yesterday.
Kingdom chief executive officer Nigel Chanakira said a meeting of his bank's
shareholders would go ahead as planned regardless.
"We maintain confidence in our business model and in our partners. We are
clear in terms of our willingness to proceed with this transaction. We will
continue with our plans to further consolidate our position on the market;
we are not perturbed by valuation issues raised by a single shareholder (of
Meikles)", Chanakira said.
The Financial Gazette can report that the dispute centres on the market
value of Kingdom as at July 31, the date of the first release of a joint
statement on the deal.
Old Mutual Asset Managers (OMAM), the fund management arm of Old Mutual, has
written a note sharply critical of the valuation given for Kingdom by deal
Old Mutual says Kingdom is worth only half of the value placed on it.
According to Old Mutual, relative to its banking peers, Kingdom has been
Last week, Sean Gammon of sponsoring brokers Imara, acknowledging how
"complicated" valuation had been, said weighted Zimbabwe Stock Exchange
(ZSE) share prices over a 60-day period up to July 31 had been considered in
reaching valuations, taking into account "contemporary and more medium term
The terms of the deal are such that Meikles would issue up to 78.1 million
of its stock to existing Kingdom, Tanganda and Cotton Printers shareholders.
The offer is stock-or-cash; a swap of 17.67 new Meikles shares for every 100
Kingdom shares held, or cash of $32 318 per each Kingdom share.
To do this, Meikles needs the backing of 50 percent of its shareholders at
its extraordinary general meeting (EGM).
But the ZSE has ruled that the major shareholders in Meikles - ACM
Investments, APWM Investments, ASH Investments, JRTM Investments and FPS
Investments - who collectively hold 55.5 percent of Meikles, cannot vote at
the Meikles EGM, as they are related parties.
This means the fate of the deal is in the hands of minorities, giving Old
Mutual, which holds 10.9 percent of Meikles, the leverage to block the
Analysts were split yesterday on the standoff. One said Meikles itself -
unchanged at $2.8 million yesterday - has always been undervalued, as the
price does not appear to fully reflect its assets, such as the Cape Grace, a
one percent share of Mvelaphanda, and its US$52.3 million cash pile, half of
which is held at the central bank. OMAM also raises these issues.
As at Tuesday, Kingdom was trading at a price-to-earnings (PE) ratio of
413.18 times, much higher than the 277x sector PE average. PE measures how
expensive a stock is.
Kingdom is the ZSE's biggest riser, up a massive one million percent since
January at yesterday's closing bell.
The fact that the second biggest gain is TA Holdings' 499 000 percent -
growth half of Kingdom's - has inevitably attracted scrutiny for Kingdom.
But a fund manager said "valuations are never an exact science", and that he
believed both Kingdom's current share price and its deal valuation were
fair, citing the bank's performance over the past year.
"Dividends have been coming and the bank has been gaining market share.
There will always be questions over valuation, especially in deals of this
size," he said.
The fund manager noted that OMAM, one of the ZSE's biggest investors, has
always kept a somewhat downbeat rating on Kingdom, and that it has in fact
been paring its interest on the counter over the past three years.
Old Mutual already has significant banking interests of its own. It holds 20
percent of NMBZ, and also controls MBCA Bank and CABS, the country's biggest
mortgager. Under the current terms of the transaction, Old Mutual would hold
10.4 percent of KMAL.
FinGaz November 15, 2007
Kumbirai Mafunda Senior Business Reporter
THIS time last year, department stores and several retailers in Zimbabwe had
already stocked shelves with Christmas merchandise and in some cases setting
up Christmas trees and holiday lighting.
Other shop owners had already kicked off the Yuletide mood in late September
or early October by putting out Christmas ornaments, gift wrap, cards and
According to economists at the University of Pennsylvania's Wharton School
in the United States this placing of a selective sampling of Christmas items
into stores early in the season is a phenomenon called "Christmas creep."
By extending their all-important holiday shopping season retailers hope to
catch early shoppers. Decorating shops for Christmas in late October is also
all about the psychology of spending. Retailers hope consumers will get
swept up in the spirit of things and spend, spend and spend.
This period of time primarily from Thanksgiving to Christmas has become
evermore commercialised and intense as more people have been afforded the
opportunity to purchase a wider variety of goods.
In today's consumption-based economy Christmas continues to be a vital
economic engine where spending grows rapidly. The impact on the greater
economy is likewise significant as a good shopping season will be reflected
in the Gross Domestic Product figures while a bad one will drag it down.
In short, Christmas is the lifeblood for many retailers and an important
aspect driving a country. It's quite remarkable how much a simple
religiously significant date has morphed into an economic driving force.
At this time every year shop owners certainly owe a debt of gratitude to
Jesus Christ and sometimes break into song thanking Jesus Christ "for
lending his birthday for customers to spend themselves crazy."
But sadly Zimbabwean retailers are not joining in that chorus to praise
Jesus Christ for lending his birthday to them.
With just a month away from Christmas it is a different story this year as
retailers are grappling to replenish their shelves, which were emptied by a
government crackdown on manufacturers and retailers after the latter accused
enterprises of frequently hiking prices to foment anger against President
Robert Mugabe's government, a charge business denies.
With only some few weeks left before Christmas there is no evidence of the
upcoming holiday season in Zimbabwe as happened in the past six years when
retailers broke sales records.
Retailers and retail analysts warn that that shoppers will spend less than
ever in the run-up to Christmas because of squeezed incomes, which are being
eroded by out of control inflation of close to 8 000 percent and shortages
of commodities to splash their savings on.
Foreign currency shortages and the government's decision to charge import
duty in foreign currency is hindering most department stores from importing
goods as they normally do in the past years.
"A lot of that product has traditionally been imported but now it has been
difficult because of the new rules to pay import duty in foreign currency,"
says Dave Mills, the retail director at Meikles Africa, which owns a
department store and TM Supermarket, one of the country's largest retail
Retailers say depleted stocks have resulted in a weak Christmas for shop
"It (Christmas trading period) is going to be much more subdued," says
The first proof that retailers are struggling during the crucial run up to
the Christmas period emerged yesterday when one of the country's leading
chains OK Zimbabwe gave some insight into the impact the price blitz has had
on the operations of retailers.
OK reported running into a loss of $502 billion because of the controversial
price cuts introduced in June ostensibly to stem rampaging inflation now
topping 8 000 percent and the highest in the world.
Subsequently OK suffered a $143 billion operating loss in the six months to
Furniture retailer Pelhams admitted last week that the price blitz had the
more devastating effect of killing off product supply to the extent that the
10 percent volume growth experienced in the first quarter was reduced to 2
percent for the half year to September.
Pelhams said no meaningful quantities of product is forthcoming from the
factories because of the absence of pricing models for manufacturers.
In September, clothing retailer Edgars called off at the last minute a
briefing for media and retail analysts for its interims, the starkest
evidence of how bleak sentiment in retail has turned.
Edgars said the company will only be able to restock fully by April next
year if the government halts the price blitz.
However, OK Zimbabwe chairman Eric Kahari said there had been noticeable
improvement in product supply in the month of October following the
intervention of the Reserve Bank of Zimbabwe (RBZ) with cheaper Basic
Commodities Supply Intervention Facility (BACOSSI).
Mills said improvement in the retail sector would hinge on access to some
concessionary funding unveiled by the RBZ last month to allow manufacturers
to access working capital funding at concessional lending rates of 25
percent per annum and the enhancement of the supply of products to feed on
"A lot depends on our ability to access the BACOSSI. That will help quite
substantially in replenishing the working capital. One of the impediments
could be what is in the supply chain," said Mills.
The BACOSSI facility, which has a nine-month window renewable through 90-day
instruments, is aimed at restoring capacity utilisation to levels before
June 18 when a government price crackdown started.
Considering the lengthy period that retailers would need to fully replenish
their stocks after an experiment that backfired with painful repercursions,
the government might be forced to intervene and decree an extension of the
Christmas holiday from December to April next year so as to allow consumers
to partake in the festivities associated with Christmas.
FinGaz November 15, 2007
Clemence Manyukwe Staff Reporter
ALLEGED coup mastermind Albert Matapo has told the High Court that Foreign
Affairs Minister Simbarashe Mumbengegwi can vouch for the fact that his stay
in the United Kingdom (UK) was for the purpose of promoting national
Matapo said this while giving testimony on his frequent trips abroad,
especially to the UK, and his activities there. At the time when he lived
there, Mumbengegwi was Zimbabwe's High Commissioner in London.
President Robert Mugabe has previously claimed the British government was
behind the coup plot.
However, Matapo said after travelling to the UK in 2002 to see his sick
brother, he ended up working at a manufacturing company and doing other odd
He later founded a charity organisation, the Zimbabwe Community in the UK,
that supported Zimbabweans based there during bereavement or weddings.
Matapo claimed that when Reserve Bank of Zimbabwe governor Gideon Gono
arrived in the UK to launch the Homelink programme, his organisation was
asked by the then High Commissioner to mobilise Zimbabweans to attend
meetings with Gono.
He was also given Homelink materials to distribute at no personal gain,
The meetings culminated in Matapo being labelled "a Mugabe henchman" by the
BBC, which went on to allege he was facilitating the illegal entry of
Zimbabweans into the UK.
He refuted these allegations saying even after the publication of the BBC
report, British police made no move to arrest him.
"You can confirm this with Dr Mumbengegwi," Matapo told the court.
He alleges that a rival charity organisation, Zimbabwe Association, led by
Partson Muzuva, which he says is linked to the Movement for Democratic
Change, framed him.
An intelligence operative based at the Zimbabwean embassy told Matapo that
the chairperson of that group was used by the BBC in a sting operation
The state alleges that when he went to the UK in 2002 and returned to
Zimbabwe in 2004, he used an emergency travel document, and only used his
original passport to travel through Zambia, en route to London.
According to the state, this created the impression that he was still in
Zimbabwe, when in fact he was in the UK.
However, Matapo said he used the emergency travel document in 2002 after
misplacing his passport and when he found it in 2004, he used it to travel
to Zambia for business.
FinGaz November 15, 2007
OCTOBER inflation data, expected out today, could show a figure above the 10
000 percent for the first time, economists said.
A Financial Gazette poll of five leading economists and analysts returned an
average forecast of 10 210 percent, which would be another record for
Zimbabwe's inflation, already the highest in the world.
The forecast is in fact tempered by a single conservative forecast of 9 201
percent, a sign most see as the biggest yet jump in annual figures.
Inflation rose 1 389.3 percentage points year-on-year in September to 7
982.1 percent, underlining the failure of a damaging state crackdown on
business intended to slow inflation.
On a monthly basis, inflation surged 26.9 percentage points to 38.7 percent,
reversing a slowdown recorded in August to 11.8 percent. But economists see
month-on-month inflation rising back above the key 50 percent level, the
point at which hyperinflation is confirmed.
The Reserve Bank is unlikely to react too radically if the forecasts are
Last week, central bank governor Gideon Gono told journalists that a planned
currency change had been put on ice as the bank concentrates on
recapitalising companies devastated by the price crackdown.
Earlier, he raised interest rates, but gave a drab forecast for inflation in
the short to medium term, saying he saw a continued rise on an expected
surge in government spending due to elections next March and spending on a
range of new farm and business subsidies meant to end food shortages.
FinGaz November 15, 2007
Njabulo Ncube Political Editor
ZANU PF national chairman and Speaker of Parliament, John Nkomo, has been
accused of using his influence to secure an amended offer from State
Security Minister Didymus Mutasa, who is in charge of land resettlement, for
a disputed wildlife-rich ranch in Matabeleland North.
Nkomo has, for the past three years, been involved in a dispute with
businessman Langton Masunda over Lugo Ranch in the Gwayi Conservancy in
Nkomo instituted fresh legal proceedings to evict Masunda despite the latter
obtaining a court order barring Nkomo from interfering with his operations
specifically at Jijima Lodge, which is located within Lugo Ranch.
In new affidavits lodged with the Bulawayo High Court, Nkomo claims he is
the rightful holder of Lugo Ranch, including Jijima Lodge, as he has been
issued with an amended offer letter by Mutasa.
The Financial Gazette is in possession of the amended offer letter from
Nkomo says he was duly offered Lugo Ranch by the then responsible minister,
Joseph Made, but "unfortunately" lost or misplaced the original offer letter
dated September 3, 2003.
"I have since been issued with a duplicate of my offer letter signed by the
Honourable DNE Mutasa, the minister. The issuing by the Hon. Minister of an
offer letter dated 22nd September, I must state at this stage that the land
allocated to me was erroneously described as subdivision 1 of Lugo Ranch yet
I was offered the whole of Lugo Ranch. However, the minister has since
corrected the anomaly," reads part of Nkomo's affidavit.
Masunda says Nkomo is abusing the courts by seeking to have him evicted on
the strength of the amended letter from Mutasa.
He said the allocation of the whole of Lugo Ranch to Nkomo was recent, as
evidenced by Mutasa's amended offer letter dated September 20, 2007.
"He (Nkomo) is trifling with the court and is clearly on a fishing
expedition. I believe this is an attempt at judge shopping," he said.
Masunda says Nkomo's claim must stand or fall on summons and not on
amendments made after the issuing of the summons.
"I entered an appearance to defend and filed a plea after applicant issued
summons of eviction against me. Under Case Number HC1896/05 applicant
(Nkomo) applied for summary judgment, which was dismissed by Justice Bere.
Applicant withdrew case Number HC1632/05 and tendered costs. In case Number
HC818/07 applicant has sued for the same relief he sued for in case Number
HC1632/05 and in this application applicant sought the same relief the court
denied him in case Number HC1896/05."
Masunda says if Nkomo was dissatisfied with Bere's ruling, the proper course
would have been for him to appeal, but he did not. "It is an abuse of the
processes of the courts to, as it were, seek a second bite of the cherry. As
I said, this is clearly a fishing expedition."
Says Masunda: "The ministry cannot by the stroke of the pen make an
amendment to deprive me of rights to Iand I acquired. It cannot be that
simple. This is a clear case of bullying and abuse of the process of the
FinGaz November 15, 2007
INFORMATION Minister Sikhanyiso Ndlovu has honoured
his pledge to ask Media and Information Commission (MIC) chairperson
Tafataona Mahoso and board member Pascal Mukondiwa to recuse themselves from
hearing an application by The Daily News to be licensed.
Ndlovu yesterday confirmed that he has now asked
Mahoso and Mukondiwa to excuse themselves when the issue comes to the MIC
board for deliberation. But he has not set a timetable for the board to
consider the Daily News case.
"They will certainly deal with it when it comes to
them," he said.
Ndlovu appointed a new MIC board at the end of last
month, retaining Mahoso and Mukondiwa from the previous board. But in
response to protests by media watchdogs over his decision to keep Mahoso, he
told The Financial Gazette at the time that the MIC chairman might be asked
to step aside when the Associated Newspapers of Zimbabwe (ANZ), publishers
of The Daily News, approach the commission for a license.
The five new members of the MIC board are
Chinondidyachii Mararike, Charity Sally Moyo, Edward Dube, Tendai Chari and
Ngugi wa Mirii.
Mahoso and Mukondiwa are part of a previous board,
who according to several court judgments, could no longer be trusted to
handle an application by the ANZ for the registration of its two banned
titles, The Daily News and The Daily News on Sunday.
A 2005 Supreme Court ruling said the MIC could not
hear the newspaper's case because of Mahoso's perceived bias against the
ANZ. And in a further judgment delivered in May this year, High Court judge
Justice Anne-Marie Gowora specifically said Mahoso could not preside over
The judge said she found it surprising that despite
the 2005 ruling by the Supreme Court that remarks by Mahoso, prior to the
hearing of the application, could have created apprehension in the minds of
any reasonable person that justice would not be served, no effort had been
made on the part of the Minister of Information to put in place a separate
legal structure that would allow the application to be heard and determined
by an impartial body.
FinGaz November 15, 2007
Mavis Makuni Own Correspondent
The controversy over the presence of President Robert Mugabe at the
Europe/Africa summit to be held in Lisbon on December 8 and 9 seems set to
rage on right up to the day of the conference.
The row, which was sparked by new British prime minister, Gordon Brown's
threat to boycott the summit if the Zimbabwean head of state was invited,
has taken many turns during which threats and counter-threats to boycott the
event have been made by the different blocs. In response to Brown's threat,
both African Union (AU) and Southern African Development Community (SADC)
leaders threatened to stay away from Lisbon unless their Zimbabwean
counterpart was invited.
European and African ministers met in Accra, Ghana, towards the end of last
month to decide whether to risk sparking a diplomatic storm by insisting
that the Zimbabwean leader should be invited. In the end the meeting, which
was attended by Portugal's foreign minister, Luis Amado, decided that
President Mugabe should be invited to attend the summit. Portugal has
insisted that a bilateral dispute between Zimbabwe and its former colonizer
should not be allowed to derail next month's summit. The last Europe/Africa
summit was held in Cairo in 2000. The next one, which was scheduled to be
held in 2003 was cancelled because of disagreements over the Zimbabwean
Member countries of the European Union have adopted different positions with
regard to President Mugabe's presence in Lisbon . Some Nordic countries
including Sweden have opposed the President's participation but indicated
they would not boycott the summit if he attended. Germany's Chancellor
Angela Merkel insisted from the outset that the Zimbabwean leader should be
allowed to attend so that his peers could engage him openly over the
persistent allegations of undemocratic governance and human rights abuses
levelled against his government. "Criticism of Mr Mugabe can be levelled at
him when he is there", she said in a press interview last month. Merkel said
Africa was too important for her country to boycott the summit because of
squabbling over Zimbabwe's presence.
A headline in yesterday's issue of the state daily, The Herald, which
announced in bold letters; "Zimbabwe prepared for showdown" proved the
diplomatic row was far from over. The headline was over a story in which
government officials accuse Britain and some Nordic countries of plotting to
have Zimbabwe placed on the agenda of the Lisbon summit and stress that
President Mugabe's government is "prepared for any showdown." In the report,
the Swedish Ambassador to Zimbabwe, Sten Rylander is accused of spearheading
a "plot" with other Nordic diplomats to "build up" allegations that the
government perpetrates violence against its opponents .The press story says
the plot also involves reviving calls for the prosecution by international
courts of those responsible for atrocities in the 1980s when 20 000
civilians are believed to have been killed in Matabeleland and the Midlands.
Rylander is accused of having embarked on an anti-Zimbabwe campaign while on
holiday in Europe in July and to have continued his onslaught at a meeting
of the Zimbabwe United Nations Development Assistance Fund in Nyanga last
month.The Swedish envoy is slammed for making political allegations against
the government at a development forum. "For him to throw his salvo at the
government of Zimbabwe in a development forum is not only discourteous but
also undiplomatic," the Secretary to the President and Cabinet, Misheck
Sibanda, is quoted as saying.
Another government official is quoted as saying Zimbabwe was not afraid to
defend its sovereignty and reputation and would not shy away from a fight,
especially where it is right. "If they dare play Britain's cat pawl, they
are likely to get one outcome, namely a repeat of the 2002 Johannesburg
World Earth Summit". This is where the Zimbabwean leader told then British
prime minister Tony Blair to " keep your Britain and I will keep my
Zimbabwe." The irony of this continuing war of words is that it could prove
Brown's fears that Zimbabwe's presence in Lisbon could turn the
Europe/Africa summit into a media circus and detract from the main agenda to
be valid after all.
Zimbabwe's combative mood and its dark warning about a repeat of the
spectacle in South Africa in 2002 when President Mugabe was joined by former
Namibian president Sam Nujoma in blasting and ridiculing Blair from the
podium cannot be re-assuring to the organizers of the Lisbon summit. The
vitriolic tirades against Rylander show that Zimbabwe is spoiling for a
fight. Observers will have noted that Zimbabwe is threatening to fight so as
to avoid defending its governance and human rights record, and ensuring that
these issues are off limits during the summit. Why?
Questions will be asked why, if it has nothing to hide, the Zimbabwean
government is not keen to seize the opportunity afforded by the summit to
prove convincingly once and for all that the allegations of human rights
abuses and repressive governance persistently levelled against it are
baseless.This is the ideal platform from which to prove Rylander, his
alleged co-conspirators and any other detractors wrong. It would be a
contradiction for Zimbabwe, which has fought so relentlessly to assert its
right to go to Lisbon as an equal partner , to then flinch at the prospect
of facing scrutiny and criticism from its peers. It is Zimbabwe's insistence
on attending international gatherings only to defend its sovereignty and
blast other countries while insisting that discussion of its own
shortcomings is taboo that has won the country notoriety as a rabble-rouser.
Surely, if the Zimbabwean government is prepared to use international
gatherings to defend its sovereignty and to attack the leaders of other
countries, it should be willing to face criticism of its track record at the
same fora. After all, according to an EU-Africa Strategic Partnership
document titled "From Cairo to Lisbon", democratic governance is expected to
be one of the issues on the agenda. The others are climate change, energy,
migration, mobility and employment. The African Union Executive is reported
to have insisted that the agenda of the summit should take into account
"Africa's development needs including agriculture and food security."
The first EU-Africa summit held in Cairo in 2000 resulted in the formulation
of the Declaration of Cairo and a joint EU-Africa Cairo Plan of Action. Both
address political and peace building issues, debt, conflict prevention and
FinGaz November 15, 2007
Personal Glimpses with Mavis Makuni
THE Harare City Council is not doing a very good job of adhering to its own
A few weeks ago, the local authority was fined an undisclosed sum for not
collecting garbage from the streets.
In its November 10 issue, the state daily, The Herald, carried a report
about the municipality incurring another fine. This time the Environmental
Management Agency fined the council $158 million for failing to have fire
prevention measures around a dump site in Pomona. This information emerged
only after the Member of Parliament for Harare North, Trudy Stevenson, had
asked if the Ministry was aware of the polluted smoke being spewed from the
It was only then that the Minister of Environment and Tourism, Francis
Nhema, disclosed that the local authority had been fined for violating the
Environmental Management Act and had been ordered to come up with
sustainable management practices to enable residents in the vicinity of the
dump to breathe clean air.
Nhema lamented that attempts by firemen to fight the inferno by lighting
more fires had exacerbated the situation. Attempts to counter-burn the dump
fire failed due to "the combustion of hydrocarbons, particularly methane
that has been continuously accumulated at the dump,"he said.
Nhema said: "In this regard, we took action against the Harare City Council.
Several charges have been levelled against the council. More importantly,
the council is being charged with operating a waste disposal facility
without a valid licence from the Environmental Management Agency. The
council is further being charged with failing to put in place fire
prevention and mitigating measures as there are no fireguards around their
waste disposal facility."
The list of violations committed by the city council seems endless and Nhema
summed everything up by saying the local authority had been ordered to
"prepare a holistic and comprehensive management plan for the waste disposal
It is noteworthy that in his long and detailed response Nhema failed to
respond to Stevenson's most important question, i.e. why the ministry
allowed such things to happen in the first place. In essence, the legislator
wanted to know, as all residents of Harare wish to know, why the
Environmental Management Agency is happy to sit back and play a reactive
rather than a proactive role. It does not help residents in any way to have
bodies and agencies with high sounding names when such organisations'
existence does not enhance their chances of living in a safer and cleaner
environment. Regulations are of no use if they cannot be enforced and events
have repeatedly shown the Environmental Management Agency being caught flat-
As an example, the agency only stirred into action with regard to the
environmental degradation caused by gold panners when the damage had already
been done. Some time in 2005, the permanent secretary in the ministry,
accompanied by Sekesai Makwavarara, who then chaired the Commission running
the affairs of Harare, descended on Mbare Musika for a clean-up and sprucing
up exercise that caused considerable disruptions and losses for traders and
vendors. One wondered then as one does now what the officers manning the
agency spend most of their time doing if they only become aware of the
flouting of environmental regulations through disasters such as the Pomona
fire or the eyesore that the Mbare market had become.
Minister Nhema told Parliament in response to Stevenson's questions that the
Harare City Council had now been ordered to undertake a number of measures
to normalise waste management at the Pomona dump. This implies that all
along, the agency had neither been doing any monitoring nor enforcement of
regulations in Harare or else it would have ensured the municipality had a
comprehensive waste management plan not just for Pomona but with respect to
all its operations.
Nhema's reference to "challenges" that the City of Harare is facing
regarding its waste management systems which had resulted in "rampant
discharge of effluent and illegal dumping of waste into Lake Chivero" is
even more disturbing. Where was the Environmental Management Agency while
the situation deteriorated to such unacceptable levels? His statement that
the Zimbabwe National Water Authority (ZINWA) had compounded the problem by
discharging partially treated water and raw sewage into the waterway is no
consolation. ZINWA has been notorious for its inefficiency and redundancy
since it was imposed to usurp water management functions from local
Zimbabwean taxpayers should not be expected to finance bureaucracies spawned
by the setting up of inert institutions such as the Environmental Management
Agency and ZINWA just to create cushy jobs for people who do nothing to
fulfill their mandates. Recently, ZINWA has sparked outrage by proposing the
drawing of water for consumption by residents of Bulawayo from the
decommissioned and heavily polluted Khami dam. Throughout the duration of
the controversy, Nhema's ministry and the Environmental Management Agency
maintained a thunderous silence.
One would have thought it was at times when such controversies arose that
the Ministry would lead the way in condemning selfish and dangerous notions
such as ZINWA's attempt to reclaim water from a heavily polluted dam for
human consumption. It should be at such times that the voices of experts in
the ministry should be heard advising the government against insensitive
actions exposing consumers to health hazards and defending the rights and
interests of the people. Without the clout to promote and order the
implementation of sound environmental management systems throughout the
country, one is bound to regard the levying of fines from violators only as
a fund-raising ploy by the ministry. The fines will have no impact as long
compliance continues to be optional and as long as the Environmental
Management Agency can only go through the motions without commanding enough
authority and clout to force compliance with its regulations.
FinGaz November 15, 2007
Njabulo Ncube Political Editor
IF the dog-eat-dog succession battles within the ruling ZANU PF party were
premier league football, most punters would, by now, be berating bookmakers
Until the 2004 December congress, it was former ZANU PF Speaker of
Parliament Emmerson Mnangagwa who was tipped to succeed President Robert
Mugabe, who had hinted at a distant departure date.
And then came the eventful ZANU PF congress of 2004, which tipped the
scales. For the past three years, the odds had been on Vice President Joice
Mujuru to be anointed heir to the veteran nationalist, who will turn 84 in
Citing the Mujuru camp's victories, such as the scuttling of the Dinyane
Primary School meeting in 2004, which produced what came to be known as the
"Tsholotsho Declaration", punters would have put all their money on Mujuru.
Her landing of the vice president's post in 2004, a first for a female, left
many with little doubt about the identity of the country's next leader.
President Mugabe also egged her on, hinting on a number of occasions that
the country should prepare itself for a female president.
And then when President Mugabe threw his hat into the ring for the umpteenth
time, it became apparent that the party was yet to agree on the choice of a
But even then, analysts had predicted that those backing Mujuru would pull a
surprise at the ZANU PF extraordinary congress scheduled for December 11-15.
It was therefore, with a degree of disappointment, that last Thursday Mujuru
declared she was not eyeing the high-pressure job.
"If there is a person who wants to contest President Mugabe, it's not me.
The presidium is made up of four people, and I am already in the presidium.
I am not going anywhere," she said, before praising the head of state
"Takabikwa navaMugabe tikakwana. VaMugabe vanogona kuumba munhu akaita
munhu. (We have all been groomed by President Mugabe. He is good at that)
Musandipinze pachigaro ichocho, musandipinze pandisingakwane (Don't force me
into positions where I do not fit). I am only here to help the President,"
Mashonaland Central Governor Ephraim Masawi and ZANU PF Central Committee
member Thomas Rusambo echoed these sentiments, dismissing reports that
Mujuru was eyeing the presidency.
More than anything, Mujuru's retreat shows how disastrous it is for one's
career within ZANU PF to as much as hint that one has such ambitions.
Eddison Zvobgo had foreseen the problem long before now.
"Every teacher aspires to be headmaster some day," the late legal genius
once told an interviewer.
In other words, as far as he was concerned, ambition should not be
Zvobgo's star dimmed, according to analysts, because he made his ambition
known. He became the subject of backbiting by political vultures eyeing the
Mujuru's poignant public renunciation of her alleged ambitions has proved
Zvobgo's experiences provided useful lessons to political heavyweights
within ZANU PF.
Mujuru had never openly declared any ambition to head ZANU PF - but neither
had she ever denied such ambitions before last week.
"Her declaration is based on her reading of the situation within ZANU PF on
the eve of the extraordinary congress," said Eldred Masunungure, a professor
of political science at the University of Zimbabwe. "She has read it well,
and I believe the audience she is targeting is the political leadership of
Takura Zhangazha, Media Institute of Southern Africa Zimbabwe senior
programmes officer said: "Firstly, Mujuru's declaration smacks of a
well-thought out political decision intended not to ruffle feathers in the
central committee, which has announced the items on the agenda of the
But he suspects there could be more to the move.
"There appears to be a tacit agreement in ZANU PF that the battle to succeed
President Mugabe will resume when the elections are out of the way and
possibly at another time when the incumbent announces he is going. There is
no way she can be seen to be openly challenging her superior, hence her much
Mujuru now appears to appreciate that she is no longer President Mugabe's
favourite. Her political fortunes have diminished since 2004, when she was
given the impression she would easily inherit the throne. The "anointer is
no longer willing to anoint her," said Masunungure.
Rivals within ZANU PF could have taken the view that the party needs to win
convincingly in 2008 thus making it imperative to stop all the bickering, at
least for now.
The focus will now shift to what happens after the polls. Should ZANU PF win
with strong majority and in the unlikely event that he decides to step down,
President Mugabe would be able to rely on Parliament to elect a successor of
FinGaz November 15, 2007
THE Finance Ministry is once again on the roll, so we noted, with a new
round of consultations where stakeholders countrywide have started feeding
their ideas into the budget formulation process ahead of the presentation of
the 2008 national budget later in the month or early next month.
At no other time has this process been as critical as now given the poor
state of the country's economy. Living conditions have taken a dramatic turn
for the worse. The civil service and the private sector are at risk of
desertion by skilled staff due to the brain drain that has reduced the
country into a training ground for the region and the developed world.
Incomes, which do not make sense if denominated in United States dollar
terms now lag behind inflation, which hit a record 7 982.1 percent in
It is evident that more than two thirds of the companies operating in
Zimbabwe have become reluctant candidates for bail-out packages and cannot
afford to pay inflation-beating salaries.
Industry is now dependent on a life support system provided partly by the
Reserve Bank after a government directive for companies to slash prices by
50 percent left them on their knees, unable to restock, let alone to borrow
from bank sources.
A disaster looms large. Hospitals are now relying on generators and candles
owing to intermittent electricity cuts, forcing miners to seek authority to
source power directly from regional utilities.
The import of all this has been economic contraction of major proportions
and rising poverty. The country is on the verge of sliding into a state of
paralysis if politics continues to have an overbearing influence over
economics. It is critical therefore, that the on-going budget formulation
process is taken seriously.
In the past, the exercise has been treated as one leading into an event,
which is the budget presentation, and not as part of a process leading into
the revival of the country's battered economy. While successive finance
ministers have tried to be innovative under very difficult circumstances,
the process was premised on overly optimistic assumptions or projections and
in the end, it lost credibility.
It does not help matters to portray a rose-tinted picture of a budget only
to supplement it or worse still violate governing statutes by making
unauthorised expenditures a few months into the new financial term.
Government has been overshooting the tarmac so to speak. Only in September,
it came up with a $31.7 trillion envelope after exhausting the 2007 budget
in the first quarter of the year. While soaring inflation has made the
budgeting process difficult, its outcome should not be far off the mark or
else why embark on it in the first place?
While the 2008 harmonised elections will present another budgetary
challenge, Finance Minister Samuel Mumbengegwi should strike a balance
between the government's revenue needs and expenditure requirements if
inflation, identified as the country's number one enemy, is to recede.
The national budget should avoid stoking the inflation fires or else
government will continue to suffer perennial expenditure overruns. It should
also have practical ways of minimising the burgeoning budget deficit whose
funding from domestic borrowing is not only inflationary but starves the
productive sectors of the economy of resources.
Yet Mumbengegwi must also ensure government lives within its means and keep
a watchful eye on recurrent expenditure, which chews up a large chunk of the
Privatisation, which has been on the backburner for a very long time, is one
viable way through which government can be encouraged to generate additional
revenue without recourse to the embattled taxpayer while also plugging the
losses suffered by the fiscus through bankrolling loss-making and sometimes
The country's failure to invest in infrastructure, which is in bad shape, is
another aspect stakeholders should lobby for. Infrastructure has always been
an attractive incentive to foreign investors, but this might cease if
nothing is done to halt its deterioration. It is time government was
encouraged to move with speed in implementing the Build Operate Transfer
arrangements, which can take the burden off its shoulders and shift it to
the private sector.
The taxable base has also shrunk due to the economic recession epitomised by
retrenchments, company closures and the decline in capacity utilisation. The
various constituencies feeding into the budgeting process should find ways
of generating additional revenue without necessarily overburdening the
truncated tax base.
At the same time the situation in the education and health sectors is
deplorable. Staff retention has become absolutely essential. Critical
ministries have been starved of funding and have had to forego some
essentials in order to make it to the end of the year.
The challenge facing the country is an onerous one but not insurmountable.
It calls for the powers-that-be to think outside the box and to resist the
temptation towards pampering their selfish egos by ignoring what comes out
of the various interest groups and push for an election budget.
Zimbabwe requires a realistic budget, which dovetails into the overall
economic revival strategy.
FinGaz November 15, 2007
Synodia Bhasera Own Correspondent
HARARE and Ruwa have run out of land for housing development and now pin
their hopes on new administrative boundaries that would be drawn up by the
electoral commission, a senior government official said.
David Karimanzira, Governor and Resident Minister of the Harare metropolitan
province made the revelation in response to enquiries from members of the
Zimbabwe Building Contractors Association (ZBCA), who are scouting for land
for housing development.
ZBCA has formed a consortium - Sarantel Investments - to spearhead
construction projects in and around the capital city. Its effort might come
to naught if it fails to secure land for the projects.
The association, which got the endorsement for the project from about 300
members, has set the target of 1 million housing units in the medium to
"Land has been on demand for residential purposes. However, of the four
local authorities that make up Harare province, Ruwa and Harare have
completely run out of land.
"Land under private hands has also run out. We are waiting for the electoral
commission to demarcate new boundaries and we look forward to getting more
land for expansion," said Karimanzira.
The shortage of land in Harare is forcing most people to seek accommodation
in smaller towns such as Norton and Ruwa.
Others have moved into areas such as Domboshava, Seke and Goromonzi.
Government had planned to end the housing problem facing the country by the
year 2000. The plan, which assumed 163,000 units were to be constructed
every year, failed due to lack of funding.
The housing backlog in most cities and towns has remained high, exerting
huge demand on the few available properties and, as a result, a sharp spike
in rentals has poured cold water on government's efforts to fight inflation.
Only 15,000 to 20,000 housing units are being built yearly and the figure
includes projects by private sector participants.
Speaking at a breakfast meeting in Harare last week, Edzai Kufandarerwa,
ZBCA Harare region chairman said Sarantel Investments would complement
government's efforts in the provision of decent accommodation.
He said the consortium would also help stabilise the property sector, which
has witnessed unprecedented price increases in the past.
Kufandarerwa said ZBCA needs at least 25 farms within and around Harare for
He said: "In this endeavor, we wish to appeal to our government for the
provision of 10 farms in Harare, five farms in Chitungwiza, five farms in
Epworth and five farms in Ruwa to kick start our venture."
FinGaz November 15, 2007
COMESA was established in December 1994 as a successor of the Preferential
Trade Area for Eastern and Southern Africa (PTA).
Current member states are Angola, Burundi, Comoros, the DRC, Djibouti,
Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius,
Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
COMESA achieved FTA status in October 2000 when nine of the member states -
Djibouti, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe
eliminated their tariffs on COMESA originating products. It is expected to
launch a Customs Union in 2008.
COMESA Attractive Aspects for Zimbabwe
COMESA attractive aspects for Zimbabwe are:
lCOMESA is a larger and developing market
lCOMESA member states' economies and trade capacities are more balanced
lZimbabwe has a potential competitive advantage over its COMESA regional
lThe pace of regional integration is faster in COMESA than in SADC
A major attractiveness of COMESA to Zimbabwe is that it is a much larger
market than SADC. With a population of over 374 million, distributed in 20
member states, COMESA provides an attractive market for Zimbabwe,
particularly its agricultural and manufacturing sectors which are relatively
developed in comparison to those of its regional partners in COMESA. What is
more attractive for Zimbabwe is that the COMESA market is growing at a much
faster rate than that of SADC. For instance, the construction industry in
countries emerging from war (DRC, Angola, Rwanda, Burundi) is bound to
expand rapidly in the near future and Zimbabwe is likely to benefit from
Zimbabwe is attracted to COMESA because economies and trade capacities in
the RECs are more balanced and exporters compete on a level playing field.
This is not the case in SADC where South Africa is by far the dominating
member. For instance, South Africa is attributable to more that 73 percent
of Zimbabwe's trade. In Zimbabwe's view, such a situation is not sustainable
since the country and the region are vulnerable to the performance of the
South African economy.
South Africa's dominating role in SADC is more worrying for Zimbabwe
considering that in trade terms, South Africa is regarded as a developed
country. Therefore, its needs and interests cannot be exactly the same as
those of Zimbabwe. For instance, supply and demand side constraints, which
are prevalent in Zimbabwe, are minimal in South Africa. South Africa enjoys
relatively developed and efficient transport and communication systems,
which give it competitive advantages over Zimbabwe. Therefore, if companies
in South Africa and those in Zimbabwe are allowed to compete on equal terms,
Zimbabwean companies will lose out, leading to possible closures and job
Zimbabwe would also prefer a COMESA Customs Union over that of SADC because
it feels that it has better chances of attracting Foreign Direct Investment
(FDI) in COMESA. This is not the case with SADC, where South Africa is
likely to attract most FDI due to its developed infrastructure and
sophisticated support services.
Although Zimbabwe lost significant competitiveness in the last seven years,
it has the prerequisites to regain equal or higher competitiveness than its
regional partners in COMESA if the economic situation stabilizes. The
prerequisites include relatively developed infrastructure (road networks,
railways, communication systems, trade finance, insurance etc.), highly
educated and skilled manpower and a diversified economy. These factors also
make Zimbabwe an attractive area for both domestic and FDI if the economy
stabilises. Further, there is likelihood of trade creation in favour of
Zimbabwe if it joins the COMESA Customs Union.
While Zimbabwe hopes to have a competitive advantage over its regional
partners in COMESA, this is not the case in SADC. The country will certainly
face stiff competition from South Africa, the dominating economy in the REC.
Another factor that makes COMESA attractive to Zimbabwe is that regional
integration progress in COMESA is faster than in SADC. In the past decade,
COMESA managed to achieve its key targets (with some problems though),
including establishing FTA in 2000. The planned customs union in 2008 is
also on schedule and there are realistic chances that it will be achieved as
planned. Zimbabwe is actually enthusiastically spearheading progress in
COMESA. For instance, it is one of the first nine member states to implement
a FTA in October 2000 when it, along with Djibouti, Kenya, Madagascar,
Malawi, Mauritius, Sudan and Zambia agreed to eliminate tariffs on COMESA
originating products. Zimbabwe is also part of the COMESA Common Tariff
Nomenclature and a Common External Tariff by the member States. Further,
Zimbabwe has also adopted the single form for use as a customs declaration
in COMESA (the COMESA Customs Document). It is also part of the COMESA
Regional Bond Guarantee and ASYCUDA - the Automated System for Customs Data.
Progress in SADC on the other hand is slow, with planned targets being
missed or postponed. Although member states signed the SADC Trade Protocol,
which aims to establish a Free Trade Area by 2008, implementation of the
protocol is still dogged by numerous problems. These include various
non-tariff barriers with Zimbabwe being one of the member states having such
There is a general feeling in Zimbabwe that SADC does not provide the best
competency for regional economic integration because this was not its
original objective. In Zimbabwe's view, SADC's mandate and competency lie in
development co-operation. Regional economic integration should be left to
COMESA, which has a clearer mandate and is more competent to do so. As if to
support this argument, Zimbabwe chose to negotiate Economic Partnership
Agreements (EPAs) with the EU under the configuration of Eastern and
Southern Africa (ESA). ESA is an institution created by COMESA for the sole
purpose of negotiating an EPA with the EU. This decision carries significant
weight and provides the clearest indication by Zimbabwe that it prefers
COMESA Customs Union over that of SADC.
Zimbabwe's final decision on choosing the appropriate Customs Union does not
only depend on the attractiveness of the various RECs, but also on current
dynamics on the ground. These include:
lSouth Africa's attitude and role in SADC regional integration
lNature of South Africa's bilateral trade agreements with third parties,
including review of SA-EU TDCA
lDecisions by Zimbabwe's key trading partners in COMESA
lThe outcome of EPA negotiations between the EU and SADC/ESA
Zimbabwe is very sensitive to South Africa's decisions and moves,
considering that South Africa is the most significant trading partner for
Zimbabwe in the world. Therefore, whatever South Africa does, will have
major bearing on Zimbabwe's final decision to choose the appropriate Customs
Union. The overriding feeling in Zimbabwe is that its economic and regional
interests should not be undermined or marginalised by those of South Africa.
Zimbabwe hopes to see a South Africa, which complements its development
efforts rather than one which threatens them.
lDr Masiiwa is the Director of Africa Institute for Policy Analysis and
Development and Researcher with the University of Zimbabwe. This is a
summary of a presentation made by Dr Masiiwa at the October 2007 Zimbabwe
Economics Society monthly meeting held at the Cresta Jameson Hotel in Harare
on Tuesday 9th October 2007.
November 15, 2007
Tell the truth, Sekai Holland
EDITOR - We are tempted to write by Sekai Holland's article, which appeared
in several publications including The Financial Gazette (November 1-7 2007):
"Male chauvinism and MDC's Top Six".
In one paragraph Madame Holland said Ms Lucia Matibenga and Nelson Chamisa
had saved Morgan Tsvangirai by mobilising consultative meetings around the
country "... when Tsvangirai was nearly toppled on October 12, 2005 by his
top six colleagues..."
Such an irresponsible statement coming from Madame Holland especially as she
was privy to the developments, which occurred on October 12, 2005, shocks
us. Mrs Holland knows, as much as we do that the October 12, 2005 debacle
was caused by none other than Tsvangirai himself and that there was
absolutely no attempt whatsoever, real or imagined to topple him. It is
people like her who continued to feed Tsvangirai with the false notion that
October 12 was a boardroom coup and have in fact peddled such imaginary
For the purpose of this discourse it may be helpful to revisit a few facts
about what happened thereon. The founding fathers and mothers, daughters and
sons of the MDC had realised that democratic deficits in Africa and Zimbabwe
in particular had been a result of the absence of a culture of democratic
collective leadership. Leaders had been allowed to make unilateral decisions
and to this end they employ violence, tribalism and intimidation as tools
for political organisation.
In an attempt to curb this cancer, the top six of the MDC was charged with
the responsibility to guide the leader in their collective and in their
majority of opinion. This collective spirit of the top six would then form
the basis of action by the president at every turn.
On October 12, the top six were unanimous in their resolution to participate
in the senatorial elections except for Tsvangirai alone who chose to present
a minority view to the National Council. In the spirit of the founding
principle of the MDC, the simple thing for Tsvangirai to do would have been
to recommend the collective decision of the Top Six, which was to
participate in the elections.
He had no choice but alas, he thought otherwise. However, his minority view
to boycott elections was resoundingly defeated 33-31 and then Tsvangirai
stood up and declared ". I don't care if the party breaks into pieces. We
will not participate in the elections."
It is not the intention of this statement to interrogate the wisdom of why
he did that. That matter remains in the domain of another interrogation.
Tsvangirai then walked out and refused to recognise all attempts to
reconcile the decision of the National Council with him. We warned then of
the dangers of politicians succumbing to the whims of a leader who clearly
was lost and was contemptuous of the party's procedures, institutional
structures and the party constitution. We advised against being pliable to a
leader who was showing total disrespect of party's founding values and
principles. Such leaders were reminiscent of Africa's despots.
It would be very interesting for Madam Sekai Holland to demonstrate how the
Top Six had "nearly toppled" Tsvangirai. We suspect that Madam Holland has a
very short memory and poor recollection of events. We note with grave
concern that Mai Holland had been one of those who had chosen to ignore and
had completely discarded the MDC constitution and rules of procedure. We are
therefore not entirely surprised by her remarks.
The Top Six of the MDC comprised of people of high integrity and loyalty to
the party's values and principles and they would not have attempted
unconstitutional means of dealing with problems in the party. These were
deputy president Gibson Sibanda; chairman the late Isaac Matongo, secretary
general Honorable Welshman Ncube, deputy secretary general Gift Chimanikire
and treasurer general Fletcher Dulini. If Holland is now experiencing
problems with Tsvangirai, let her not try to bring in people who had nothing
to do with the behaviour of Tsvangirai. Vakapembedza gona nerinobata mai!
(They celebrated witchcraft, which then implicated their mother!) Please let
us learn to tell the truth. We wish to state categorically that it is not
our intention to be embroiled in the Matibenga saga but we shall continue to
make corrections whenever necessary
Secretary for Information and Publicity, MDC.
Patriotism should be banned as a word
EDITOR - I read with disgust an article in a local daily newspaper about
patriotism and treachery.
Patriotism should never be a word. It does not always work in a democracy.
The moment you think patriotism then democracy is out of the window.
People have freedom of choice, different views, association and opinion, so
if I exercise my democratic rights and do not agree with your policies it
means I am not patriotic.
If I condemn human rights abuses and repressive legislation, then I am not
Surely there are many learned people out there who do not seem to know what
this all means. I think patriotism should be banned as a word in Zimbabwe
until we all learn tolerance.
EDITOR - I find it outrageous that a man as
honourable as Attorney-General Sobusa Gula-Ndebele would be accused of
abusing his office.
If the truth be told, the Ndebele family has over
the years produced dedicated and incorruptible patriots who, despite
numerous insurmountable challenges, have always served their respective
countries diligently. Most notable being former Parliament of Zimbabwe
Speaker, Cyril Ndebele, ex-ZimRights president Dr Nicholas Ndebele, KZN
governor S'bu Ndebele and other noted luminaries in various sectors across
They hear, speak and see no evil
EDITOR - I have always enjoyed your frank, incisive
and polished comments and wonder if your messages are reaching the top
echelons of the ruling ZANU PF party, the government and the Movement for
I just hope that one day we will have a ruling elite
which listens to advice, uses it as its own and improves the livelihoods of
the people, who are suffering every day.
Your comment of November 1-7 2007 helped put the
issue of price controls into its proper perspective. Nowhere in the world
have price controls ever worked.
If anything, they create shortages and cause prices
of the few available products to rise beyond the reach of the average
consumer who is forced to spend long hours looking for the scarce products
on the parallel market. In a country like Zimbabwe, where there is no
foreign currency to import raw materials and fill up the empty shelves, it
would, indeed, be suicidal to go along with what the National Incomes and
Pricing Commission is saying.
There is no way Zimbabwean companies can wait for
ever in order to get foreign currency from the Reserve Bank. The money is
just not there, period.
In order to assist the long-suffering consumer,
companies are sourcing foreign currency on the parallel market. It is not a
secret that government is also sourcing part of its foreign currency from
this thriving market. Godwills Masimirembwa should not try and mystify this
The day Masimirembwa and his team succeed in forcing
companies to produce invoices that are not indexed to the parallel market
exchange rate is the day the consumer will last see any of the few available
products on the shelves. Economics is as simple as all that.
Is Masimirembwa ready to assist companies secure
foreign currency from the official market? We know that is not part of his
brief, but what I am saying is that he should not make life difficult for
those people who are working right round the clock to ensure the situation
reverts back to normal.
It's a weird world
EDITOR - It's a weird world that we are living in. A
journey to and from Zengeza from the city in a ZUPCO bus costs $90 000.
Utete Buses were demanding $300 000. The rest are demanding $200 000, kombis
are demanding $400 000 and others $500 000. This is the price circus that
the President was so mad about in June.
Is that subsidised fuel still available? Was a bill
passed permitting overloading? Relevant ministries should inform the
nation - it is their duty to do so.
Lovemore Andrew Magaso
Parks' illegal fees
EDITOR - In the real world, the Parks and Wildlife
Management Authority would have reduced its illegal charges and published an
apology for overcharging as soon as Mr Nicholas' letter in your issue of
November 8 2007 came to its attention.
Instead, of course, it ignores the complaint about
its illegal profiteering and hopes everybody will forget about it.
Meanwhile, ordinary people throughout the country are being prejudiced.