Sat 15 October 2005
HARARE - Zimbabwe opposition Movement for Democratic Change (MDC)
party leader Morgan Tsvangirai on Friday wrote to the country's electoral
commission formally informing it that the party will not contest next month's
Upping the stakes in a bitter wrangle within the MDC over whether the
party should contest the November 26 Senate election, Tsvangirai told the
Zimbabwe Electoral Commission (ZEC) that anyone from the opposition party
standing in the poll would be doing so in their individual capacity.
In a two-pronged approach Tsvangirai, who on Wednesday overruled his
party's decision-making national council which had narrowly voted to contest
the poll, has summoned the council to an emergency meeting in Harare today
to once more order it to stay away from the Senate election.
"Tsvangirai acting in his capacity as MDC president today wrote to the
ZEC telling the commission that the party is not contesting the Senate
election," said a source very close to the MDC leader. ZEC chairman George
Chiweshe could not be reached last night for comment on the matter while
Tsvangirai's mobile phone went unanswered. His spokesman William Bango, who
said his boss was tied in a meeting, refused to discuss the matter.
According to the source, Tsvangirai had to write to the commission
after deputy party secretary general Gift Chimanikire, wrote to the MDC's 12
provincial executives instructing them to select candidates for the senate
Chimanikire is part of a faction that is allegedly led by secretary
general Welshman Ncube that is pushing for the MDC to contest the election.
Chimanikire signed the letter to the provinces citing himself as
acting secretary general apparently because Ncube refused to sign the letter
saying he could not be seen to be going against Tsvangirai, the source said.
Ncube has on several occasions publicly denied that he leads a faction in
the MDC plotting to topple Tsvangirai.
Our source said: "In addition to writing to the ZEC, Tsvangirai has
also summoned the national council to a meeting tomorrow (today) at which he
will make it clear that the party is out of the Senate election."
Tsvangirai - a fiery trade unionist during his stint at the Zimbabwe
Congress of Trade Unions - has vehemently opposed the Senate election saying
it will be rigged by ZANU PF and that in any event it is of no value to a
country that should be better directing meagre resources to fighting
starvation threatening a quarter of its 12 million people.
He is backed in his position by the party's key youth and women's
wings. But several other top leaders of the MDC say the party should not
surrender political space to Mugabe and ZANU PF by boycotting the Senate
Tensions over the issue that had simmered over the last few months
boiled over during last Wednesday's national council meeting when the party
could not reach a consensus and a vote had to be called.
According to Tsvangirai, the vote came out 50:50 and he had to use his
casting vote in favour of a boycott of the poll. But no sooner had
Tsvangirai announced that the MDC was boycotting the election than party
spokesman Paul Themba Nyathi issued a statement claiming exactly the
Nyathi said the council had voted 33:31 in favour of contesting the
election and that the MDC would be in the running as the wrangle over the
Senate election brought to the fore deep fractures in the six-year old
party, which has been the most potent threat ever to Mugabe's 25-year
stranglehold on power.
Officials from the feuding camps however say the party will survive
the crisis, its major one to date even though by Friday there were no signs
of an immediate solution to the crisis despite Tsvangirai's maneuvres.
On Wednesday, Tsvangirai suggested that his party had been infiltrated
by ZANU PF agents to blunt an opposition campaign to oust Mugabe over a
deepening economic and political crisis many blame on controversial
ZANU PF voted in parliament to create the Senate with the two-thirds
majority it enjoys since elections last March, which the MDC and Western
governments say were unfair. - ZimOnline
By David Sanderson
The government is being forced to reassess its policy on deportation to
Zimbabwe after a failed asylum seeker won his appeal.
The Asylum and Immigration Tribunal ruled that the man, who cannot be named,
would be at risk of harm if returned to Robert Mugabe's regime.
Tribunal chairman Mark Ockleton criticised the government's lack of research
into conditions for those deported to the southern African country, and said
that although the unnamed man had lied to immigration officials, he would be
at risk if returned home.
In the ruling he said: "The fact that the appellant made a false claim, so
generating the risk which would otherwise not have existed, does not alter
the fact that the real risk of serious harm exists now. He has a
well-founded fear of persecution."
Refugee groups welcomed the ruling and said the 140-plus failed asylum
seekers from Zimbabwe the government was trying to deport could now feel
The Home Office said it was disappointed, and would be considering whether
forcible deportations to Zimbabwe, which it halted pending today's ruling,
could be continued.
Campaigners have long claimed that people returned from the UK by the
government are regarded as "spies" and "traitors" by the Mugabe regime.
The tribunal criticised the Home Secretary for his department's research
into conditions in Zimbabwe for those it deported, and for the lack of
evidence uncovered by a fact-finding delegation sent by the Government in
Mr Ockleton said that the Home Secretary "ceased to have any very clear
interest in what happened" once individuals had been returned to the
Zimbabwean authorities, a situation he described as "alarming". He said:
"Despite the facilities available to the investigation and the level at
which it was conducted, it reveals nothing of the actual process which
returned asylum-seekers go through on their arrival at Harare Airport."
He added that it was "exceedingly surprising" the Home Secretary failed to
trace individuals who had already been returned.
The tribunal acknowledged that the appellant, who can only be identified as
AA, had "become a refugee entitled to all the benefit that that status
carries by making a false claim to be a refugee".
AA had falsely claimed to officials that he was a member of the opposition
party MDC, but was unable to name senior members of the party or even say
what the initials stood for.
But Mr Ockleton said the case did not rest on his original eligibility for
asylum, but on the dangers he would face if returned.
He added: "We fear that our decision, based as it is firmly on the evidence
we have heard and legal principles that are binding on us, will seem to
demonstrate our concern that refugee law is inherently prone to abuse."
Tim Finch of the Refugee Council welcomed the ruling. He said: "(The
tribunal) made some devastating comments about the cavalier way in which the
Government treat failed asylum seekers by putting them on the plane,
withholding their documents and not really caring what happens to them at
the other end.
"The outcome is that failed asylum seekers from Zimbabwe end up being
questioned by Mugabe's security forces, who are deeply nasty people."
The government has refused to reveal how many Zimbabweans in this country
are facing deportation. During the summer around 140 failed asylum seekers
being held in detention centres took part in a hunger strike to force the
government to stop the deportations.
The Home Secretary was then asked by Mr Justice Collins to postpone the
deportations until evidence of abuse being meted out to those returned had
been investigated. This prompted the government's fact-finding mission to
Zimbabwe - which was criticised by the tribunal.
Outside the court today failed asylum seeker Noble Sibanda, 29, who was
forced to flee his home in Zimbabwe, said he hoped the ruling meant Britain
would become a "safe haven".
He added: "All we're asking for is sanctuary and time to regroup so that we
can take care of the mess in our country. We hope Britain will now offer
that support and that this will be an example to other countries around the
world where our fellow Zimbabweans have sought asylum."
David Davis, the Shadow Home Secretary, said the tribunal's decision had
been necessary given the "abject failure" of the government's Zimbabwe
policy. He said: "We have always maintained that, until we have a rigorous
method of monitoring the continuing safety of those returned to Zimbabwe,
there should be a temporary moratorium on deportations."
A spokesman for the Home Office said: "We are disappointed with today's
determination. The tribunal has decided that, unlike claimants from every
other country, the individual merits of Zimbabwean asylum claims do not
count when assessing whether it would be safe for them to return to
"Our view remains that only on the basis of such individual consideration
can we be confident that the correct decisions are taken - whether that
decision is to grant asylum or to refuse it."
Fri Oct 14, 2005 3:51 PM BST
By Cris Chinaka
HARARE (Reuters) - Zimbabwe's government defended its decision to briefly
detain the U.S. ambassador, saying on Friday the envoy was lucky to be alive
after straying into a secure zone near President Robert Mugabe's residence.
Zimbabwe state television reported on Thursday that U.S. ambassador
Christopher Dell was held by the Presidential Guard on Monday after entering
a restricted area at the National Botanic Gardens near Mugabe's official
"The ambassador must consider himself very lucky that he is dealing with a
professional army that the Zimbabwe National Army is," Mugabe's spokesman
George Charamba said in a statement published by state media on Friday.
"Elsewhere, and definitely in America, he would have been a dead man. His
adventure is really dangerous."
The Zimbabwe government said it sent a letter of protest to the U.S. embassy
over what it called "a calculated disregard of the rules governing relations
between states ... clearly intended to provoke an unwarranted diplomatic
Dell was not available for comment but the U.S. embassy said in a statement
he had been held for over an hour.
"During an October 10 recreational visit to National Botanical Gardens in
Harare Ambassador Chris Dell inadvertently wandered into a poorly marked
military area located in the middle of the park," it said.
Dell had accepted apologies from two senior Zimbabwean foreign affairs
officials over his brief detention, including an explanation that the guards
who had held him did not know how to deal with issues involving diplomats,
the statement said.
The ambassador was surprised that Harare had written a protest note and gone
to the media with the issue days after the incident, it said, adding: "We
consider the incident closed."
"LACK OF RESPECT"
Relations between the United States and Zimbabwe have soured in recent years
with Washington accusing Mugabe's government of human rights abuses and of
rigging elections since 2000.
Last month a senior U.S. official said President George W. Bush's
administration planned to impose sanctions barring Mugabe, members of his
government and their extended families from travelling to the United States.
U.S. Assistant Secretary of State for African Affairs Jendayi Frazer, who is
visiting neighbouring South Africa, said she did not have details of the
Dell incident but that it would be an extraordinary move by Zimbabwe.
"It would be extraordinary for a government to arrest an ambassador to their
country, so if that has happened it certainly speaks to a lack of respect
both for diplomatic norms as well as for the relationship the United States
is trying to build to the people and country of Zimbabwe," she said.
Mugabe, 81 and Zimbabwe's sole ruler since the southern African country's
independence from Britain in 1980, says the U.S. and other Western powers
are punishing him for his seizures of white-owned farms for redistribution
(Additional reporting by Gordon Bell in Cape Town)
[ This report does not necessarily reflect the views of the United Nations]
JOHANNESBURG, 14 Oct 2005 (IRIN) - The Zimbabwe government on Friday
condemned a ruling by a British tribunal accepting that failed asylum
seekers face persecution at home.
Justice minister Patrick Chinamasa said the ruling by Britain's Asylum and
Immigration Tribunal in a test case was as fraudulent as the unnamed failed
asylum seeker's claim that he would be at risk if he were deported.
"This was a disastrous public relations attempt - its only purpose was to
dirty Zimbabwe's name. Anyone who really comes from Zimbabwe knows that the
so-called possibility of persecution, on which the judgment was based, does
not exist," Chinamasa told IRIN.
"The British government was intent on using the hearing as a way of sending
out more invitations to future false asylum claimants in Zimbabwe, so that
it can revive and uphold its tired assertion that the government here is
starving, killing or persecuting its own people for political ends,"
The British government, which has come under domestic attack for lifting its
ban on deportations to Zimbabwe, argued that asylum cases should be decided
on their individual merit.
The BBC quoted Britain's immigration minister, Tony McNulty, as saying the
tribunal's decision threw the government's asylum policy into question, and
"leaves the entire system open to abuse".
Chinamasa insisted that hundreds of failed asylum seekers had been returned
from Britain in recent years, and none had been arrested or persecuted.
A senior official of Zimbabwe Lawyers for Human Rights told IRIN that he was
not aware of examples of the detention of returnees from Britain.
"In a few cases people were questioned by the security services on arrival
at the airport - I am not aware of anyone who was detained or brought before
the courts for attempting to seek asylum," said the official, who declined
to be named.
He said most of the people who claimed political asylum were highly educated
economic refugees with no political links. He also noted that violence
against members of the opposition had fallen since presidential elections in
"The political crisis has been well-documented, but it would be unfair and
untrue of all those who leave the country to claim political asylum on the
grounds of persecution," the human rights lawyer commented.
"There are hundreds of Zimbabwean activists inside the country who continue
to demonstrate against the government and get arrested by the police.
Nothing beyond the ordinary has happened to them and they are still here,"
International human rights groups have been sharply critical of the
government's track record, pointing to the use of the security forces to
curb political dissent and the introduction of strict laws limiting freedom
of assembly, association, and independence of the media.
A two-year-old ban on deportations from Britain was lifted last November.
Zimbabwean asylum seekers have been vocal on the policy change, and staged
hunger strikes and public protests at immigration centres in the UK earlier
Britain is now home to an estimated 12,000 Zimbabwean asylum seekers.
Business Day (Johannesburg)
October 14, 2005
Posted to the web October 14, 2005
A SENIOR International Monetary Fund (IMF) official warned yesterday that
the Zimbabwean economy was fast approaching a point where "the economy will
grind to a halt" and "endure long-term damage to recovery prospects".
Michael Nowak, deputy head of the IMF's Africa department, said the fund
expected Zimbabwe's economy to contract 7% this year, after last year's 4%
He said the fund had forecast a decline of 5% for the economy next year, but
unless the government took recovery measures, "it was anyone's guess" where
things might be headed.
Nowak said: "We are rapidly approaching a situation, if there is no policy
action, that will lead to a permanently low level of activity."
This, he said, may mean, "the economy will never really be able to recover
to where it was before".
The IMF had been surprised, said Nowak, about the resilience of the economy,
but with hyperinflation, a large government budget deficit, and critical
shortages, it was entering a new phase of decline, Nowak suggested.
While Zimbabwe "did not help" perceptions of the region, neither was there
evidence from business surveys that it was actively hurting them either,
In view of the fact that the decline in the Zimbabwean economy had continued
for seven years, it was also not the case that the further contraction was
having much of an effect, he said. However, he did say that one negative
spillover was currently the large number of economic refugees from Zimbabwe
in neighbouring countries.
The IMF board will again consider in March next year whether to expel
Zimbabwe over its failure to pay its arrears in full. Ahead of the board's
meeting, an IMF team is to investigate the sources of funds Zimbabwe's
central bank used to repay $135m of its arrears.
Reserve Bank governor Gideon Gono has insisted these were from exports
receipts and nothing was received from external sources.
Some Zimbabwean businesses have over the past few months complained of
pressure from the authorities to make deposits in their foreign currency
accounts available to the central bank.
Zimbabwe owes the IMF $160m and could still face expulsion.
UN Integrated Regional Information Networks
October 14, 2005
Posted to the web October 14, 2005
Teachers in Zimbabwe have urged the government to provide free AIDS
treatment after a survey revealed the profession was struggling with the
highest infection rates in the country.
According to a report by the Progressive Teachers Union of Zimbabwe (PTUZ),
the country lost 566 teachers to AIDS-related illnesses last year. In the
first six months of 2005, the death toll had already hit 362.
"We have lost more than 1,000 teachers across the country in the last 18
months. Many more are infected or affected and are suffering in silence. It
is estimated that 25 percent of teachers are living with AIDS. The majority
of schools in Zimbabwe have lost at least one teacher to the disease and at
least two to three teachers are on AIDS-related sick leave," said the
What has made life for educators living with the virus all the more
difficult is the overall cost of antiretroviral therapy (ART), and the
limited access to government-subsidised drugs.
The government's ART programme costs each patient around US $2 a month.
Although that is a huge saving compared with an average $50 a month for
private treatment, there are still many extra costs such as laboratory
exams, the price of drugs for opportunistic diseases, and more basic outlays
such as transport fees and proper nutrition.
The state-run treatment programme is available at only two sites: the main
public hospital in the capital, Harare, and in the second city, Bulawayo.
Teachers working in the provinces have no access to treatment.
Teachers are among the lowest paid workers in Zimbabwe, battling to make
ends meet in an economy haunted by a 360 percent inflation rate and
shortages of basic household items. A junior teacher earns US $80, the most
senior pockets US $160, while the cost of a monthly consumer basket is
estimated at US $396.
"The increasing levels of poverty among teachers have contributed to the
high level of attrition. It is unfortunate that whilst teachers are the
engine room for social behavioural change, the National AIDS Council (NAC)
and the ministry of education continue to sideline us in the battle against
HIV/AIDS," said the PTUZ report.
The Zimbabwe Teachers Association (Zimta) has echoed those concerns,
stressing that it was disturbed by the absence of government-initiated AIDS
programmes specifically targeting teachers.
"We are equally worried about the continuous death of educators due to AIDS,
and it's high time the government took a bold step towards addressing this.
The least it can do is to afford us heavily subsidised ARVs, or just free
drugs - that would help," ZIMTA secretary-general Dennis Sinyolo told IRIN.
Education Minister Aeneas Chigwedere said his ministry was doing its best to
help teachers, but warned that, like all other Zimbabweans, it was the
responsibility of educators to protect themselves against infection.
Zimbabwe, which has an adult HIV rate of around 20 percent, declared an AIDS
state of emergency in 2002, allowing the purchase and local manufacture of
cheaper generic drugs. However, foreign exchange shortages have limited the
importation of raw materials, dealing a blow to the programme.
According to government figures, about 5,000 people die of AIDS-related
illnesses each week.
[ This report does not necessarily reflect the views of the United Nations ]
By Tererai Karimakwenda
14 October 2005
Last Friday a meeting about community radio stations, organized by the
Media Institute of Southern Africa (MISA), was banned by a ZANU-PF councilor
in Dete, 40 kilometres from Hwange in Matabeleland North Province.
MISA-Zimbabwe's advocacy officer Takura Zhangazha told us that Thembinkosi
Sibanda, the ZANU-PF councillor, sent them to the police for permission
after he had seen the pamphlets they were distributing which showed
journalists who had been arrested or harassed.
Zhangazha said people had already gathered at the venue when he and
other MISA officials arrived. Apparently they had been giving the ZANU-PF
councillor Sibanda a hard time about operation Murambatsvina because many of
them had been displaced by the disastrous demolition exercise carried out by
the government. Sibanda was allegedly upset by this and he ordered the crowd
Sibanda also accompanied the MISA officials to the police station
where his presence intimidated the junior officers who were not in a
position to give a green light for the meeting to proceed. Subsequently,
Zhangazha's crew was forced to abort their mission.
Zhangazha said this sort of thing happens whenever they attempt to
bring their community radio programmes to remote rural areas. He said radio
talks about developmental issues and this makes government officials
SW Radio Africa Zimbabwe news
October 14 2005 at 10:32AM
By Cris Chinaka
Harare - A faction of Zimbabwe's Movement for Democratic Change began
considering candidates on Friday to stand in the November 26 Senate poll
that has fractured the primary opposition group challenging President Robert
The MDC has split down the middle since an announcement by its leader
Morgan Tsvangirai on Wednesday that it would boycott voting for the new
Senate, which critics say would be loaded with Mugabe supporters and
solidify his ruling Zanu-PF's power.
MDC spokesperson Paul Themba-Nyathi contradicted that announcement,
insisting that the party leadership in fact voted 33 to 31 for participation
in the poll.
On Friday Themba-Nyathi said some of the party's grassroots structures
had started the process of selecting candidates.
"Although obviously we will try to reconcile the president's position
and that of the national council, at the moment the binding resolution is
that we will be participating," he told reporters.
"In line with that resolution, some provinces and districts have
naturally started preparations for the elections, and those preparations
include looking at possible candidates," he said.
Tsvangirai and his spokesperson William Bango have not been available
since Wednesday to comment on the deepening rift.
Tsvangirai has said he used his casting vote to sway a boycott
decision after Wednesday's national council meeting was stalemated 50:50
over the issue.
Sat 15 October 2005
HARARE - Zimbabwe urgently needs to import 30 000 tonnes of seed
without which the country would yet again fail to produce enough food even
if it received good rains in the next farming season barely a week away.
At a meeting held in Harare earlier this month, seed and fertilizer
companies told Reserve Bank of Zimbabwe (RBZ) officials to quicken up the
importation of seed to save this year's farming season.
The RBZ is said to have assured the farmers' organisations and seed
companies during the meeting that it had already set aside US$5 million for
seed imports from South Africa, Zambia and Malawi.
"The seed imports have been secured and were expected to start
arriving in the country in October over a period of a month," a senior
executive with a leading seed firm who attended the meeting with the RBZ
told ZimOnline on Thursday
But the executive, who did not want to be named, said even if the seed
arrived in the country "tomorrow" it would be a logistical nightmare for the
authorities to distribute it across the country given an acute shortage of
fuel that has almost paralysed Zimbabwe's transport network.
Both RBZ governor Gideon Gono and Agriculture Minister Joseph Made
could not be reached to establish when exactly they expected the seed
supplies to arrive in the country which according to state metrological
officials should receive its first rains of the season in less than seven
Zimbabwe Seed Traders Association chairman Temba Nkatazo confirmed
that there was a shortage of seed saying there were a few seed stockists in
the country holding just "a bit" of the commodity but added that some
imported seed had started trickling into the country.
He said: "We have a bit of seed in stock but more will be imported.
Seed has been coming in especially in the last three weeks."
The seizure of mostly white-owned seed producing firms by the
government has hit hard production because the new black farm owners lack
resources and skills to grow seed. Zimbabwe has also failed to import enough
seed due to foreign currency shortages.
Fertilizer and chemicals are also in critical short supply due to the
shortage of foreign currency to import raw materials.
Once a net food exporter, Zimbabwe has grappled with severe food
shortages for the past four years after President Robert Mugabe seized
white-owned farms for redistribution to landless blacks.
The chaotic and often violent land seizures slashed food production by
about 60 percent resulting in Zimbabweans depending on food handouts from
aid groups for survival. - ZimOnline
Sat 15 October 2005
SIAKOBVU - Maidei Chamboko, a frail-looking forty-two year old mother
of five, instinctively jumps from her seat to confront the police officer.
In what appeared to be a purely reflex action to protect her
interests, Chamboko without any shred of fear of Zimbabwe's police officers
who are notorious for their ruthlessness in dealing with civilians, pleads
with the officer to let her pass with her bucket of maize.
"My children are starving at home. Please, let me pass with just this
bucket of maize," she says.
But the police officer, with a menacing frown on his face, is having
none of it.
The officer who is manning the roadblock here in Siakobvu, 450km
north-west of Harare in Mashonaland West province, says he is under strict
instructions from his superiors to seize maize from villagers and stop the
movement of grain from one district to the other.
Here in Siakobvu, Zimbabwe's proverbial "ends of the earth," villagers
are facing a serious food crisis of unimaginable proportions.
Villagers in the dry Siakobvu area say they are on the verge of
starvation despite government assurances that no one will starve as a result
of the food shortages gripping the country.
Zimbabwe is facing severe food shortages blamed on President Robert
Mugabe's disruption of the key agricultural sector through his violent
seizure of white-owned farms for redistribution to landless blacks five
Mugabe denies his land reforms caused the food shortages blaming
prolonged drought for the crisis. The farm seizures have slashed food
production by 60 percent resulting in Zimbabwe depending on food handouts
In a bid to mop up the little grain available, the Zimbabwe government
has also banned the movement of large quantities of grain between districts.
Only the state-controlled Grain Marketing Board is allowed to distribute
grain in the country.
With hunger wreaking havoc in this district, villagers here are
accusing Mugabe's government of dereliction of duty after it failed to
deliver desperately needed maize to the area.
To make matters worse, Mugabe late last year banned non-governmental
organisations from distributing food aid to villagers telling them Zimbabwe
had harvested enough food to feed itself.
The Zimbabwean leader only admitted that the country was facing a food
crisis days before a crucial parliamentary election last March. But he
insisted that no Zimbabwean would starve.
"After banning the NGOs last year, why is the government failing to
deliver food aid to us as they promised? We voted for this government. Why
are we being made to suffer like this? " asks Chamboko.
The villagers say they sometimes go for days without a proper meal due
to the shortage of maize.
Another villager, Misheck Danai said the situation was pretty dire.
"My family is now surviving on manyanya, a local edible root similar
to sweet potatoes."
But in remarks at the United Nations last September that critics said
showed Mugabe was hopelessly out of touch with reality, the Zimbabwean
leader stunned the world when he suggested that Zimbabweans were not hungry
as they have other foods besides maize such as potatoes. - ZimOnline
Reacting to today's Asylum & Immigration Tribunal decision that it is unsafe
to return an unnnamed asylum seeker to Zimbabwe, Amnesty International said:
"Amnesty welcomes today's decision because we know the human rights
situation in Zimbabwe is now catastrophic -hundreds of thousands of people
have been made homeless by the government's evictions programme, and there
is systematic persecution of all government critics."
"The Tribunal recognized that Zimbabweans who seek asylum in the UK are at
special risk. This is correct. These people are presumed to be supporters of
"regime change" for Zimbabwe.
"Amnesty hopes the Home Office will recognize today's judgement when making
future decisions about the claims of Zimbabwean asylum seekers."
by STAFF EDITORS (10/14/2005)
BUSINESS Monitor International (BMI) has raised concern over the high-level
of political interference in the operations of the Reserve Bank of Zimbabwe,
saying this has made it one of the most disorganised central banks in the
In its fourth quarter forecast report, titled The Zimbabwe Business Forecast
Report, the London-based BMI said although the RBZ was doing its best to
regulate the financial sector, its task was being made difficult by
government polices which undermine its operations.
"Largely because of political interference, the monetary policy structure
remains one of the most disorganised and complex in the world," the BMI
"The Reserve Bank of Zimbabwe does its best to manage domestic liquidity,
regulate the banking system, and control inflation, but it faces a near
impossible task because of government policies and the regime's habit of
using the central bank as its first resort for deficit financing, which it
funds from the banking system."
The BMI said many private financial institutions worry about being
over-exposed to the state, but have very limited bankable propositions.
"Moreover, lending to the government is zero-risk-weighted in terms of
capital required to back the advances, which greatly enhances their
profitability. During late-2004, aided by a brief and rare period of fiscal
restraint, the RBZ was able to bring inflation down to around 100%," the BMI
"But prices resumed their upward path shortly thereafter, fuelled by
shortages, hikes in government-administered prices and renewed steep
currency depreciation. By July, inflation had reached 254,8% year-on-year
and will probably continue upwards."
On Tuesday, year-on-year shot to 359,8% from 265,1%.
Zimbabwe's political situation has over the past five years been classified
as unstable, something which has greatly undermined investor confidence.
The country has been battling to service its ballooning debt which has
raised questions about the prospects of the country's economic recovery.
The BMI also said predicting interest rates in Zimbabwe was difficult
because of the arbitrary nature in which they are set.
"Earlier this year, the RBZ signalled that it wished to see interest rates
lower to provide a measure of stimulus to the real economy. But given the
developments on the inflation front, it has had to abandon that goal," the
"In July, the RBZ raised its benchmark overnight rate to 180% from a low of
95% in February and scrapped a scheme where exporters could borrow from it
at a ludicrous 5% (and which was largely funded by raising the non-interest
bearing statutory reserve requirements on banks to record levels)."
BMI core scenario:
* The country has abundant natural resources;
* Once stabilised, there could be substantial inflows of FDI, particularly
from South Africa.
* The economy has effectively been de-industrialised and the crucial
agriculture sector is in chaos;
* Many skilled workers and professionals have emigrated and an HIV/Aids
infection rate estimated at 34% is further reducing skills endowment;
* Most state companies are bankrupt and will require large capital
injections to become viable.
Source: The Independent
The Herald (Harare)
October 14, 2005
Posted to the web October 14, 2005
POSTAL services utility, Zimpost (Private) Limited, could lose well over $43
billion worth of property to about 839 workers it dismissed last year for
embarking on collective job action.
The dismissed workers indicated that they are planning to attach their
employer's property, as Zimpost has not responded to correspondence lodged
with it three weeks ago.
Zimpost lost the labour dispute to the workers in the case presided over by
an independent Labour Court arbitrator but the postal utility is contesting
the determination in the High Court.
The Labour Court ordered that the workers be paid a prescribed package or be
reinstated without loss of pay or benefits.
The workers' representative union - the Communications and Allied Services
Workers' Union (CASWUZ) - is said to have made a formal written plea over
two weeks ago for Zimpost to comply with the Labour Court order but the
employer is said to have remained mum.
Although Zimpost is contesting the order in the High Court, the workers
maintained that the postal utility's appeal does not nullify the Labour
As such, the workers have already secured a writ of execution from the High
Court (for case number HC 3200/05) and are contemplating impounding their
employer's assets in lieu of their benefits.
"You are required and directed to attach and take to into execution the
movable goods of Zimbabwe Post (Private) Limited, the above-mentioned
"And of the same cause to be realised is the sum of $43 425 737 822 together
with interest thereupon at the prescribed date from the 7th of June 2005, to
date of final payment to Communications and Allied Services Workers' Union
of Zimbabwe," reads an excerpt of the writ of execution. Mr Ronald
Musiwokuwaya, CASWUZ acting secretary-general, said the workers had written
to Zimpost in mid-September, soon after the arbitral award but got no
response leaving them with no option but to execute the writ.
"All we need to do now is instruct the office of the sheriff to go and
attach Zimpost's (movable) property.
"As soon as we pay (the office of the sheriff) they would proceed to effect
the execution," said Mr Musiwokuwaya.
He pointed out that the money owed to the dismissed workers was now in
excess of $43 billion taking into account the 50 percent cost of living
adjustment awarded to other workers for the six-month period July to
When contacted for comment, Zimpost public relations manager Ms Loveness
Chikozho said the company was in constant dialogue with CASWUZ and had fully
briefed it on its position.
"It is true that Zimpost appealed to the High Court against the Labour Court
"The matter is therefore at the moment under consideration at the High
Court, and we are waiting for the High Court's decision on the matter.
"The Zimpost human recourses department is in constant communication with
the workers' union on the matter.
"Communication between the union and Zimpost is ongoing, and at the moment
Zimpost has advised the union about its position on the matter, and we await
outcome of the appeal.
"Pending outcome of the matter before the High Court, the organisation has
agreed with the workers' union to pay cash in lieu of leave days, which were
due at the time of dismissal," said Ms Chikozho.
However, her claims were in sharp contrast with CASWUZ's position as
narrated to Business Herald.
Mr Musiwokuwaya said Zimpost had not bothered to reply to correspondence
sent to the postal authority in September and this was making it difficult
for them to fulfil their side of the bargain as spelt out in the Labour
However, Zimpost is not alone in facing the wrath of dismissed workers. Its
former partners in the disbanded Posts and Telecommunications Corporation -
TelOne and NetOne - have been similarly dragged all the way to the High
Court by their aggrieved workers, and emerged the losers.
NetOne's dispute is currently before the Supreme Court and the odds appear
to be tilted heavily against the mobile telecommunications operator.
In Zimpost's case, legal experts said the chances of the High Court
overturning the tribunal's determination were next to zero.
As the Labour Court was considered the highest court of appeal on labour
disputes, it was extremely rare for the High Court or Supreme Court to
overturn its findings. The best the two courts can do is to order a review
of the judgment reached by the Labour Court.
The Herald (Harare)
October 14, 2005
Posted to the web October 14, 2005
THE recent increase in the bank rate will make borrowing for productive
purposes more expensive in addition to further straining company operations,
analysts have said.
The Reserve Bank of Zimbabwe on Wednesday hiked the overnight accommodation
rate to 415 percent for unsecured lending and 410 percent for secured
lending in response to the latest inflation data.
Year-on-year inflation for September surged 94,7 percentage points on the
August figure to 265 percent, the Central Statistical Office reported on
The accommodation rate is the rate at which the RBZ lends to financial
institutions and these benchmark their rates against those of the central
Zimbabwe National Chamber of Commerce president Mr Luxon Zembe said firms in
the productive sector, already facing a myriad of problems that include
shortage of foreign currency, raw materials and fuel, among others, would
have to borrow at about 420 to 450 percent following the spike in the bank
"What that effectively means is that businesses will borrow working capital
at between 420 and 450 percent and no business can survive at that rate," Mr
Consequently, he said, the resultant high cost of borrowing would be
factored into the price of goods and services and passed on to the
Mr Zembe said businesses that produce basic goods or offer basic services
would continue to borrow at the prohibitive interest rates and consumers
would still buy as they had no choice, but the effect of high prices would
be inflationary to the economy.
On the other hand, said the ZNCC boss, businesses that produce
non-essentials would scale down operations as people would be reluctant to
buy at very high prices, leading the affected firms to close shop.
Against such a background, "the productive sector is the one that is going
to suffer most" from the latest bloat in interest rates, Mr Zembe said.
On the bright side, investment on the money market would improve as interest
on savings would rise.
Such a development would work in RBZ's favour as it would encourage deposit
mobilisation thereby taking excess money from the market, but inflation
remained public enemy number one when the cost of borrowing rises, Mr Zembe
Latest developments present mounting challenges for RBZ as it might be
tempted to reintroduce concessionary funding as was the case under the
Productive Sector Facility (PSF). The central bank introduced the PSF when
borrowing on the open market became unsustainable leading to a slump in
Following the introduction of RBZ's PSF firms' capacity utilisation levels
were reported to have improved to over 60 percent from as low as 30 percent
at the end of 2003.
At the beginning of 2004, borrowing on the open market had become
prohibitive as interest rates shot to as high 400 percent with the inflation
rate running way ahead at around 600 percent.
Presently, due a host of factors, chief among them fuel and hard currency
shortages, capacity utilisation is said to have again dropped to worrisome
As such, in the face of the new cost of borrowing challenges companies are
certainly going to face, stakeholders have reiterated the need for a
holistic approach to solving the distorted economic fundamentals causing the
Calls have been made on numerous occasions and at different forums that the
present economic challenges should be addressed, not only from the monetary
side only, but from the fiscal and political angles as well.
Other economic commentators have called for a harmonisation of the monetary
and fiscal policies.
Addressing the fiscal side of things could, among other measures, entail
trimming the civil service as the current state of the economy cannot
sustain the present numbers.
On the political front, analysts said, there is need for unanimity in the
turnaround programme where stakeholders should pull in the same direction on
issues such as adopting a free market economic system.
Analysts said there apparently were contradictions among politicians with
some calling for a free market-based economy while others continued to
advocate for price controls.
And it was until such economic structural changes were embraced that the
fight against numerous economic ills would begin to bear fruit.