The ZIMBABWE Situation
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KP monitor returns to Harare

http://www.zimonline.co.za/

by Tobias Manyuchi Friday 10 September 2010

HARARE -- Kimberley Process (KP) monitor Abbey Chikane arrived in Zimbabwe
on Thursday evening on a mission to authorise the export of diamonds from
the country's controversial Marange mines.

A senior government official said Chikane, appointed by the KP last November
to ensure mining of diamonds at Marange complied with the world diamond
industry regulator's standards, is expected to be in Zimbabwe until Monday.

"We have made provision that he can be here until Monday or Tuesday," said
the official.

The planned diamond auction will be the second since July when the KP lifted
a ban it had imposed on exports of the Marange stones following reports of
gross human rights abuses and other illegal activities allegedly committed
by soldiers guarding the mines.

The ban was lifted after President Robert Mugabe's ZANU-PF party and Prime
Minister Morgan Tsvangirai's MDC put up a united front urging the West to
drop its opposition to the auctioning of the gemstones at a World Diamond
Council meeting in July.

Zimbabwe sold its first stockpile of diamonds from Marange last month, when
it was allowed to auction 900,000 carats by the KP.

The government, which earned US$30 million from the last sale, has
previously said it was holding more than 5 million carats from Marange,
where it runs two joint venture mining operations, Mbada Diamonds and
Canadile Miners, with some private investors.

Meanwhile, secretary for mines Thankful Musukutwa said in line with
international standards governing marketing of the precious stones, Zimbabwe
will no longer be announcing the sale outcome or the number of stones that
will have gone under the hammer.

"We are the only country in the world that announces what we have and what
we are going to sale," Musukutwa said. "Besides, there is also the issue of
security that has to be taken into account. The security of the monitor has
to be addressed."

Revenue from diamond sells could go a long way to providing much needed cash
for the Harare government that has failed to attract meaningful financial
support from Western governments and international financial institutions.

But questions still remain on whether all proceeds from the diamond sales
would be accounted for by the Treasury after Finance Minister Tendai Biti in
July charged that $30 million from previous diamond sales was missing.

The two firms mining diamonds at Marange -- Mbada and Canadile -- are joint
ventures between the government's Zimbabwe Mining Development Corporation
and some little known South African private companies.

Critics say the diamond firms are fronting powerful political and military
elites close to Mugabe. - ZimOnline.


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Analysts see Mugabe life presidency

http://www.zimonline.co.za/

by Edward Jones Friday 10 September 2010

HARARE - Zimbabweans need to get used to the reality of President Robert
Mugabe remaining in office as life president, analysts have said following
comments by the veteran leader that he still has the stomach for more
political fight.

In a thinly veiled signal that he could run for office at the next election,
the 86-year old Mugabe told international news agency Reuters yesterday that
he was still fit enough to fend off Western sanctions imposed on him and his
top allies - and to knockout political opponents.

The octogenarian Mugabe has been in office since Zimbabwe's independence
from Britain in 1980 and critics say he has clung to power through vote
rigging and violence against opponents.

"My time will come, but for now, 'no'. I am still fit enough to fight the
sanctions and knock out (my opponents)," Mugabe said in the interview.

The Zimbabwean leader blames former United States President George W. Bush
and British Prime Minister Tony Blair, his staunchest critics, for slapping
a financial freeze and travel embargo on members of his ZANU PF party.

Zimbabwe is due to hold its next elections after a referendum on a new
constitution, which is expected next year.

Although Mugabe and his rival Prime Minister Morgan Tsvangirai have
indicated that elections will be held next year, analysts say the next vote
will likely come in 2012, when Mugabe will be 88 years.

Analysts say ZANU PF is too fractured to agree on Mugabe's successor, which
would leave him to represent the former liberation movement at the
presidential polls unopposed.

"Zimbabweans need to look seriously and prepare themselves on the prospect
of Mugabe becoming life president and its clear from his latest remarks that
he is not about to give up," Eldred Masunungure, a leading political analyst
said.

"His thinking maybe that as a founding leader and given his age, he may as
well go with it until he dies. After all this is what happened to his
contemporaries (late vice presidents) Joshua Nkomo and (Simon) Muzenda."

Mugabe appeared defiant in the interview and mocked Bush and former British
leader Blair - who said in his new book that he had considered invading
Zimbabwe - saying he had outlasted them and that he was not worried about
their successors.

"It is Bush who is out, Blair out, and the others are persons of no
consequence any more. They are inheritors of a situation," he said in an
interview in which he called for improved relations between Zimbabwe and
Western powers.

"These (Bush and Blair) were the major arch enemies, they are the ones who
brought this on us."

Mugabe dismissed rumours that he was unwell and that he could have suffered
a stroke recently after some pictures emerged of him being helped down some
stairs by aides during a trip to China.

There have also been reports that the veteran leader was battling with
cancer.

Mugabe expressed surprise to the speculation over his health, saying this
had become a perennial issue and he hardly paid any serious attention to it.

Although there have been reports over the last 10 years on Mugabe's health,
he has no publicly known serious ailment.

"I don't know how many times I die but nobody has ever talked about my
resurrection," he said at the end of an hour-long interview.

Mugabe did not say whether he planned to stand in the next presidential
ballot after his disputed re-election in 2008.

But the suggestion that he has the energy to stay on in the political boxing
ring and earlier comments  - ZimOnline.

 


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Critics Worry Zimbabwe's Constitution Revision Will Not Produce Desired Changes

http://www.voanews.com/

The National Constitutional Assembly says it plans to step up a campaign
against the new constitution when the outreach process ends in the coming
weeks

Tatenda Gumbo & Patience Rusere | Washington 09 September 2010

The Crisis in Zimbabwe Coalition says it is drafting a list of grievances on
the ongoing constitution revision and will present a dossier to the select
committee leading the process in the next few days.

The organization said Thursday it was concerned the results of the outreach
may not reflect popular views of members in various communities, as many
speakers at the outreach meetings appear to have been coached on what to
say.

Under the Voice up Constitutional campaign, the coalition is rolling out
civic education to communities on the constitution revision, calling on
people to participate in large numbers.

Coalition information officer Maria Mache said the group's intention in
holding its own meetings is to afford members of the public a chance to
freely voice their views.

Critics of the constitution revision meanwhile, argue that the many problems
bedevilling the outreach clearly suggest that the resulting draft will not
be different from the current constitution.

National Constitutional Assembly Chairman Lovemore Madhuku said Zimbabweans
have been forced to express views of favoring political parties, especially
ZANU-PF.

Madhuku told VOA Studio 7 reporter Patience Rusere that his group will step
up its "Take Charge" campaign against the new constitution when the outreach
process ends in a few weeks.


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AIDS Activists Hail Zimbabwe Government's Male Circumcision Drive

http://www.voanews.com/

The Health Ministry is working with organizations including the Population
Services International to circumcise at least 80 percent of males between
the ages of 15 and 49.

Marvellous Mhlanga-Nyahuye | Washington 09 September 2010

HIV/AIDS activists in Zimbabwe are hailing the inclusive government for
ramping up its male circumcision drive targeting about 1,2 million children
and adults with the aim of lowering their chances of contracting the virus
that causes the pandemic.

The campaign got a major boost Wednesday when the United States Agency for
International Development and the John Snow International jointly donated
US$1,5 million worth of medical equipment to facilitate 28 000 procedures.

The equipment was availed through the United States government-run
President's Emergency Plan for AIDS Relief.

"We are proud to support the Zimbabwe Ministry of Health in its efforts to
support and promote widespread use of male circumcision in the fight against
HIV/AIDS," said USAID Health Development Officer Peter Halpert.

The Health Ministry is working with organizations including the Population
Services International to circumcise at least 80 percent of males between
the ages of 15 and 49.

Male circumcision has been proven by the World Health Organization to cut
chances of contracting HIV by 60 percent.

Government says only 10 percent of Zimbabwe's men are circumcised.

Coordinator Tapuwanashe Kujinga of the Pan African Treatment Access
Movement, assisting those infected with the virus said he was pleased at the
government's efforts, but said more awareness is needed.

Kujinga told VOA Studio 7 reporter, Marvellous Mhlanga-Nyahuye that men who
go under the knife should still use protective methods to avoid getting
infected.


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Reserve Bank debt tears govt apart

http://www.theindependent.co.zw/

Thursday, 09 September 2010 19:03

FINANCE minister Tendai Biti says government was divided on how to handle
the Reserve Bank of Zimbabwe (RBZ) debt, adding he was demanding
accountability before a settlement plan is executed.
Speaking at the inaugural Independent Dialogue ­- an initiative of the
Zimbabwe Independent - on Wednesday, Biti said some ministers were
opposed to his push for an inquiry into the central bank debt.
He said the proposed RBZ debt settlement plan had torn cabinet apart, with
some ministers against efforts to account for how the debt was accumulated.
Biti said the ministers differed on a modus operandi for repaying past debts
incurred by the financially beleaguered central bank.
The RBZ accumulated a massive debt when it engaged in quasi-fiscal
activities before the formation of the coalition government.
Central bank governor Gideon Gono in July this year said the apex bank
contributed US$1,2 billion of the country's US$6,4 billion external debt and
payment arrears.
Biti said: "The issue of RBZ debt has been seriously politicised in cabinet.
What I proposed as Minister of Finance is that let us create a special
purpose vehicle in respect of which we will transfer all the debts of the
RBZ. But this special purpose vehicle should be able to take all the debt
and also to its credit take the quasi-fiscal assets of the bank - the assets
and so forth."
He said politics had prevailed over reason on the matter.
"The politicisation has been that there are some who feel that government
should take over this debt without asking any questions. But more
importantly, this is where there will be a fight and it's a matter of
principle for me that no one can force me to change."
He said government should follow due process that quantifies the amount of
debt and requires another "legal instrument" to legitimise the central bank
debt.
"Some people think that we want to investigate the Reserve Bank. I have got
those powers in terms of the Reserve Bank Act. If I wanted to do it I would
have done it last year. My mindset is that let us be forward-looking," he
said.
Gono in April last year published a 20-page newspaper supplement that showed
the apex bank's controversial engagement in quasi-fiscal activities on
behalf of government.
The supra-ministerial interventions which included bailing out perennial
loss-making parastatals, availing farming equipment to new farmers and
funding political processes such as elections, resulted in individuals, NGOs
and business losing millions of United States dollars to the central bank.
Biti said government should appoint an administrator who can "prove and
approve" claims made by central bank debtors for government to inject funds
into this vehicle.
The debtors, Biti said, will be rated accordingly.
"I would reckon that class A would be your sovereign creditors like Afrexim
Bank, PTA Bank. Class B could be domestic creditors - people who woke up in
the morning and found their monies gone. Class C could be risk-takers -
those who took  a risk with the bank and took quasi-fiscal activities, not
having read the provisions of the Reserve Bank Act," said Biti.
Some of the central bank's debtors are platinum mining giant Zimplats (US$34
million), the Commercial Farmers Union (US$20 million) and other mining
companies that are yet to benefit from an underfunded special bond set up in
April to settle the debt.
The central bank has in recent months been under increasing pressure from
debtors, some of whom have attached the bank's properties.
Following the relentless pursuit by debtors of the central bank, President
Robert Mugabe in June invoked a statutory instrument that made the bank
immune from any court action that could result in the sale of its assets to
pay off debtors.

Bernard Mpofu


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Zanu PF chefs to grab farming implements

http://www.theindependent.co.zw/

Thursday, 09 September 2010 18:57

TOP Zanu PF officials in Matabeleland have agreed to share amongst
themselves Reserve Bank of Zimbabwe farming implements stored in Bulawayo
and meant for farmers.
The decision, viewed as asset grabbing, was taken at a meeting held this
week at Davies Hall, the Zanu PF Bulawayo headquarters.
Zanu PF Matabeleland provincial coordinating committee members, including
politburo secretary for education Sikhanyiso Ndlovu,  politburo member
Eunice Sandi, central committee members Godfrey Malaba, Raphael Baleni,
Dennis Ndlovu and David Ndlovu, a former Bulawayo mayor, met on Sunday and
decided they should take the equipment.
Ndlovu on Wednesday confirmed the development, adding that President Robert
Mugabe had ordered that the equipment should be shared amongst members
before the rainy season.
"President Mugabe was seriously concerned about the idle implements and
ordered the RBZ to authorise the release of the implements to those who
deserve them," said Ndlovu, a former Information and Publicity minister.
"But that doesn't mean that the leadership will not benefit," he said.
Ndlovu said the equipment will be divided among Zanu PF supporters in
Bulawayo, Matabeleland North and Matabeleland South.
The equipment - hundreds of planters, cultivators, harrows, scotch carts and
ploughs bought by the central bank under an ill-fated farm mechanisation
programme to capacitate under-resourced resettled farmers - has been lying
idle at a National Railways storage yard in Bulawayo.
Party insiders said provincial chairman Isaac Dakamela has been directed to
engage Bulawayo governor Cain Mathema to expedite the disposal of the
equipment, sources who attended the meeting said. Mathema however, said he
was unaware of plans to share the implements.
"I didn't attend the weekend meeting and Dakamela hasn't come to see me," he
said.
Efforts to get a comment from the RBZ were unsuccessful as the central bank
was yet to respond to questions e-mailed on Wednesday.
The farm implements were supposed to be auctioned in April this year by a
company that supplied the materials and was not paid by the RBZ, but Mugabe
invoked the Presidential Powers (Temporary Measures) Act to stop legal
action aimed at attaching and auctioning the assets. Mugabe invoked the
Presidential Powers Act to amend the Reserve Bank Act to allow the central
bank's debts to be turned into state liability.
After Mugabe's intervention, an auction of RBZ farming implements was
stopped at the eleventh hour on the instructions of the Deputy Sheriff of
Harare.
The countrywide farm mechanisation programme, initiated in 2007 as part of
the now abandoned central bank quasi-fiscal activities, benefited Mugabe's
supporters and security chiefs, some of whom were not farmers. Most of the
equipment distributed under this programme has been lying idle at
underutilised farms. Equipment such as tractors could be seen parked outside
houses in Bulawayo because recipients were only politically connected city
dwellers and not farmers.
Some farmers have complained that the farm mechanisation programme led by
Gono mostly benefited the Zanu PF elite. Some of the tractors distributed
during the programme were used as public transport in rural areas.
A close Mugabe ally, Gono spearheaded the farm mechanisation programme in
the run- up to the March 2008 elections as Zanu PF tried to buy votes.

Brian Chitemba


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Bread price increase unjustified: Biti

http://www.theindependent.co.zw/

Thursday, 09 September 2010 18:50

Finance minister Tendai Biti has described recent bread price increases  as
unjustified, while the Competition and Tariff Commission (CTC) has begun
investigations into possible price fixing by bread industry players.
Bread producers two weeks ago announced at a press conference that they were
increasing prices in response to the decision by Russia - one of the world's
biggest exporter of wheat - to limit exports of the cereal to avert domestic
shortfalls.
The National Bakers Association of Zimbabwe (NBA) agreed to increase bread
prices by 10%, with the price for a loaf increasing to between 90 US cents
and US$1, 10, sparking widespread condemnation.
But government and other players are questioning the producers' decision to
make uniform increases, arguing that this could result in a bread cartel
whose influence could spread to other sectors of the economy if left
unchecked.
"We have traditionally imported wheat from South Africa, which was not in
any way affected by developments in Russia," Biti told the Zimbabwe
Independent.
"If millers and bakers cite this scenario for their price reviews, they are
being dishonest... It is no longer the hyperinflationary era of 2008 where
you just dream of a new price the next day. Shareholders would be happy with
a 8%, 10% or 15% increase not over 70%," Biti said, equating millers and
bakers' behaviour to the black market foreign currency dealings phenomenon
that characterised the economy in 2008.
The CTC, which began investigations last week, said it was taking the matter
seriously.
"The media has been accusing us of doing nothing when in actual fact we are
still carrying out investigations as it is a serious matter. We will take
the approach we did with Zesa (on electricity tariffs)," said the CTC in a
response to inquiries from the Zimbabwe Independent. The National Incomes
and Pricing Commission (NIPC), the country's prices regulator, has said it
has also opened investigations into possible collusion.
Zimbabwean businesses, market observers say, are quick to review prices
upwards whenever there is a movement on the international market, but adopt
a "see no evil, hear no evil standard when the opposite happens".
The behaviour by bread producers had left the misleading impression that
bakers and millers in the country had similar production costs with Russia
and the rest of Europe and North Africa, they said.
"When the situation stabilises in Russia, people will expect the price to go
down and this should apply to all like-minded entrepreneurs," said an
economist who did not want to be named, adding that the move to uniformly
increase bread prices raised fears about the return of industry cartels.
Recently, the CTC ordered state power firm Zesa Holdings to desist from
abusing its monopoly to overcharge consumers after widespread complaints
that Zesa was charging exorbitantly for an erratic service.
Since 1998 when the Competition Act (Chapter 14:28)  came into effect, the
CTC involvement in regulating competition and unfair trade practices was
largely restricted to mergers and takeovers, an area that the ordinary
person had very little interest in.
Analysts say a standard loaf of bread, priced at US$1, 10, will effectively
cost US$2 because most retailers do not have coins to use for change,
forcing consumers to choose between a box of matches, sweets, bubble gums or
candles readily available at tills in lieu of the 90c change.
A cost build up study done by the Consumer Council of Zimbabwe last year
showed that bread was supposed to cost between 85 US cents and 95 US cents
but was priced at US$1 to avert the attendant headaches associated with
small denominations in the economy. Analysts say this makes the US$1,10
currently being charged after the price increases unjustifiable.
In neighbouring South Africa, where the bulk of local players source their
wheat from, a loaf of bread costs between 7-9 rands (an average of 90 US
cents).
In US dollar terms, a standard loaf in Namibia costs 85 US cents, Botswana
90 US cents and Zambia 89 US cents. In Mozambique, fatal bread riots only
ended on Wednesday after the government agreed to scrap a 25% increase that
would have resulted in the price of a bread roll, that country's bread
staple, going up to 20 US cents.
Consumer Council of Zimbabwe CEO Rosemary Siyachitema told the Independent
on Tuesday that her organisation was working with the NIPC on research
regarding the pricing of bread and other basic commodities prices.
"It (research) is a long procedure. We are liaising with NIPC, they are the
ones with a statute that allows them to request invoices and receipts from
retailers and manufacturers," Siyachitema said.
Consumers this week said it seems the deep-seated mistrust between
government, business and consumers has simply been inherited from the old
political and economic dispensation by the new one.
"We are seeing the return of super profits. Companies should not rip us off
but the bread issue shows that producers, who should in fact be competing,
are colluding to increase prices," said Shuwai Makate, an accounts clerk
with a Mutare local clothing retail shop.
Biti in his mid-term fiscal policy in July this year branded sections of the
business community as "economic gangsters" who cling to the profiteering
mentality of old. The minister said this in the wake of price increases
which were beginning to filter through the market and negatively impacting
on the country's efforts to rein in inflation.
Reserve Bank of Zimbabwe Governor Gideon Gono had earlier waded into the
argument, saying that "money illusions and psychological hangovers where
sellers of goods and services are taking time to appreciate the true value
of hard currencies, and hence escalate prices disproportionately" would
affect inflationary pressures.
The NBA and the Grain Millers Association are, however, digging in, telling
the Independent this week that it was wrong for the NIPC to demand a
reduction in prices without looking at the global picture.
"They (NIPC) said they are carrying out their investigations. But it is
common knowledge and there is enough evidence to prove that wheat prices on
the world market went up," the NBA said.

Paul Nyakazeya/Benard Mpofu


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Business must emerge from its shell — Biti

http://www.theindependent.co.zw/

Thursday, 09 September 2010 18:30

ZIMBABWE has suffered decades of economic mismanagement partly because of
business leaders’ failure to directly influence government policies, Finance
minister Tendai Biti has said.
He said resistance by the past government to open debate silenced many
business leaders whose views could have positively contributed to sound
economic policies.
He said this on Wednesday in a wide-ranging discussion at the launch of the
Independent Dialogue, an interactive forum on policy issues affecting the
country.
The Independent Dialogue is an initiative by the Zimbabwe Independent. The
Independent was partnered by accouning firm Ernst & Young to host Biti.
Biti said that failure by business leaders to frankly express views on
government policy had contributed to the country’s ill-advised economic
measures.
“One of the biggest challenges facing our country is lack of serious, honest
and brave dialogue,” he said. “We have suffered from a state that has been
unkind to debate, open discourse and democracy. So we are now beginning to
crawl out of the shells of safety that we have taken refuge in the last 30
years.
“I found that because of a long tradition of a relationship or lack thereof
between government and business, business has not been very keen to interact
with government in a win-win relationship because the precedent that has
been set is of a top-down approach where government is either arresting you
or giving you instructions.”
Biti said past government policies were vindictive against local businessmen
and failed to nurture a “black bourgeoisie”. He cited the closure of
locally-owned financial institutions during the 2004 financial crisis.
“Part of the illiteracy of the post-Independence state is that it doesn’t
understand business, but is suspicious of capital, particularly black
capital,” he said.
Biti told the business leaders who attended the Independent Dialogue that
government was engaged in talks with an unnamed construction company to
build a hydro-electric power unit that could ease current power shortages.
Local industry blames the energy crisis, limited access to external lines of
credit and high interest rates from the local banking sector, among other
factors, for the stifled capacity utilisation estimated to be averaging 40%.
State-owned power utility Zesa is currently generating 1200MW against a
daily peak demand of 2000MW. The financially-beleaguered energy company
blames limited funding and vandalism for its failure to meet demand.
“We are in serious negotiations with a company over the construction of a
Sino-hydro project,” Biti said.
“It will cost us about US$310 to US$360 million to put in two generators and
I’m told by experts that it will increase our electricity generation by 35%.
Governments in Africa are concentrating on power generation, but they do not
have the capacity to invest.”
Governments, Biti said, should establish infrastructural projects through
Public Private Partnerships (PPP) with privately-owned companies.
The PPP concept involves a contract between a public sector authority and a
private party, in which the private party provides a public service or
project and assumes substantial financial, technical and operational risk in
the project.
Construction experts say foreign investors are reluctant to engage
government on PPPs because of an absence of laws that bind the mega
projects.
Biti told delegates that the government expected to finalise the signing of
a Bilateral Investment Promotion and Protection Agreement (Bippa) between
Zimbabwe and Botswana that had been on hold since 2003. Negotiations on this
agreement had stalled because of the past government’s disregard for
property rights.
Talks with Botswana came to a standstill in the midst of the heated period
of the controversial land reform exercise that started in 2000. The agrarian
reforms saw over 3500 white commercial farmers violently evicted from farms
by government agents and civilian militia loyal to President Robert Mugabe
to make way for landless blacks, mostly politically well-connected ones.
“We were in Botswana over the weekend,” Biti said. “They are going to give
us US$70 million but they want the Bippa to be signed. I hope it will be
signed before the end of September”, Biti said.
The minister used the occasion to attack business for its appetite to
profiteer despite low production levels.
“You were making margins of 4000% during the hyperinflationary era and you
still want to make those margins in a dollarised environment. It’s not
possible,” he said. “If you make 8-20%, you have done well and shareholders
should be smiling. If it is anything else, then you are “burning”
(profiteering) and you shouldn’t be in business.”
Government tamed the unprecedented inflation last year when it adopted use
of the US dollar and the South African rand under the multi-currency
payments system. Biti has in the past threatened business with statutory
interventions over huge profit margins.
He said it was “unjustified and unreasonable” for business to effect price
hikes for bread based on Russia’s cut on exports. Russia, one of the leading
exporters of the cereal has reduced exports to avoid domestic shortfalls.
This has resulted in bread prices spiking by 10% in Zimbabwe, whose baking
industry relies heavily on exports because local production has fallen as
the newly resettled farmers lack capacity.
On land tenure, Biti accused unnamed politicians of an “anti-capital
mentality” after opposing his proposed plan to have securitised 99-year
leases or “proper deeds” for land acquired during the land reform exercise.
Zanu PF lawmakers openly jeered at Biti’s proposals during the Mid-Term
Fiscal Policy statement announced in parliament in July.
Meanwhile, government is yet to carry out a land audit for farms acquired
during the land reform exercise amid reports that politicians are throwing
spanners into the land inventory exercise.

Bernard Mpofu

 


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Corrupt officials ‘cleansed’ by the passage of time

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:55

"HE that steals an egg will steal an ox,” goes a Czech saying which should
ring alarm bells to Zimbabwe as politicians and influential individuals
convicted of corruption years ago make a comeback after being cleansed by
the passage of time.

These politicians were kicked out and rebuked in broad daylight for their
corrupt tendencies. Many of them have been brought back into public office
and now hold higher posts and influence than the ones they previously
occupied when they were first convicted of corruption.

Major scandals which have sucked in politicians and high ranking
businesspeople include the Willowvale Mazda Motor Industry (WMMI) in 1989,
the VIP Housing Scheme (1995), and War Victims Compensation Fund (1997).

Despite conviction or publicly admitting to wrong-doing, there are
politicians who have literally been recycled and have now been reappointed
to other bodies, raising questions about the integrity of the institutions
they now lead.

The Willowvale scandal, where politicians and politically connected
individuals jumped the queue to buy vehicles at factory prices which they
then resold at inflated prices on the black market, claimed the scalps of
senior politicians after president Robert Mugabe appointed a commission
headed by Supreme Court Judge Wilson Sandura to investigate.

Politicians who were implicated in the scandal but have since been cleansed
by the passage of time include Fredrick Shava (Zimbabwe’s Ambassador to
China), Jacob Mudenda (Zimbabwe Human Rights Commission) and Reuben
Marumahoko (deputy minister Regional Integration).

Mudenda, who was the Matabeleland North governor when the case came to the
fore in 1989, was described by the Sandura Commission as “an unreliable
witness and therefore (the Commission) had no hesitation in rejecting his
story.”

Marumahoko was described by the Sandura commission as “unimpressive as a
witness and it was clear that he was lying to the commission”. But despite
this reprimand he has continued to grow politically and is deputy minister
in the coalition government.

Businesspeople who were also implicated in the investigations include
current Air Zimbabwe chairman Jonathan Kadzura and banker Enock Kamushinda
who have both been involved in the running of state enterprises or
parastatals after the scandal.

Kadzura was accused by the Sandura Commission of taking advantage of his
closeness to the late Maurice Nyagumbo, then Political Affairs senior
minister and Secretary for Administration in Zanu PF to jump the queue and
buy vehicles for resale. Nyagumbo, who committed suicide as a result of the
findings of the Commission, wrote to WMMI indicating that the vehicles were
needed by Zanu PF for party business. Kadzura paid and registered the
vehicles in his name for resale later.

An example is when Kadzura bought a Toyota Cressida vehicle for Z$29 705,50
which was Z$5 000 less than the prevailing market value. He went on to sell
the vehicle to AW Bardwell (a subsidiary of Lonrho), pocketing Z$65 000
which was more than double the factory buying price.

Less than two decades later, Kadzura who was convicted and paid a fine, was
not only chairing Air Zimbabwe board but also sat on the Reserve Bank of
Zimbabwe’s advisory board.

Kamushinda chaired Zimbabwe Newspapers (a company 51% owned by the state)
despite being implicated in the Willovale scandal.

Politicians, senior government officials and security chiefs who
controversially claimed massive disability payouts from the War Victims’
Compensation Fund, set up to help those who had participated in Zimbabwe’s
liberation struggle in 1997, are still holding top government and military
offices.

University of Zimbabwe lecturer in the Department of Political and
Administrative Studies John Makumbe says bringing such people back into
public office taints the institutions they are supposed to lead.

“By recycling people who have behaved in an unethical manner, we are saying
Zimbabwe has run out of people of integrity,” said Makumbe. “People with
shady backgrounds such as Jacob Mudenda should not be appointed to serious
commissions such as the Zimbabwe Human Rights Commission. It is unfortunate
that he has been appointed to such a body despite his history.”

Eldred Masunungure, a political science professor at the University of
Zimbabwe, said politicians “capitalised” on the people’s short memory and
thus would appoint wrong-doers to other posts.

Makumbe said there was need for a new crop of leaders with integrity but
this was going to be difficult.

“The best that can be done is to change the government because there is no
one in Zanu PF who has not been tainted in one way or another,” said
Makumbe. “We need to start afresh.”

Leonard Makombe


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Zim slips down economic ladder

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:44

Berlin, Germany - ZIMBABWE has fallen six places down the global economic
competitiveness ratings to beat only three other economies out of 139 ranked
economies, a report says.

The Global Competitiveness Report 2010-2011 issued by the World Economic
Forum (WEF) was released yesterday in Geneva.
According to the report, although there have been some improvements in
individual areas, Zimbabwe continues to be among the lowest ranked countries
included in the GCI survey.
"The assessment of public institutions, while still weak, has improved
measurably, increasing from 125th last year to 113th this year. Specific
areas of improvement are ethics and corruption (up from 122nd to 103rd),
government inefficiency (up from 124th to 105th), and the security situation
(up from 85th to 66th)" reads part of the report.

However, the report says "major concerns (still) linger with regard to the
protection of property rights and undue influence."
Despite efforts to improve macroeconomic environment - including the
dollarization of its economy in early 2009 which brought down inflation and
interest rates - the situation continues to be bad enough to place Zimbabwe
towards the tail end out of all countries in this pillar (139th), notes the
report.

Weaknesses were noted in the health sector (ranked 135th in the health
sub-pillar), low educational enrolment rates, and official markets that
continue to function with difficulty (particularly with regard to goods and
labour markets, ranked 130th and 129th, respectively).

In sub-Saharan Africa, South Africa is ranked highest at 54th, and Mauritius
(55th) features in the top half of the rankings, followed by second-tier
best regional performers Namibia (74th), Botswana (76th) and Rwanda (80th).

The report corroborates findings by the World Bank/International Finance
Corporation (IFC)'s Doing Business Report which said despite notable
improvement in key indicators, Zimbabwe is still rated unfavourably for
business. The two indices are the world's most widely followed gauges of
economic competitiveness.

The 2010 Doing Business Report ranked Zimbabwe 159 out of the 183 economies
surveyed - one step up from 2009 when the sample was two countries smaller -
citing persistent concerns over institutional barriers related to trade and
investment.

The country is among the world's worst economies in terms of investor
protection and general ease of doing business. The ranks are important
determinants of the global distribution of Foreign Direct Investment.

According to the report, Switzerland tops the overall rankings and the
United States falls two places to fourth position, overtaken by Sweden (2nd)
and Singapore (3rd), after already ceding the top place to Switzerland last
year.

The report's competitiveness ranking is based on the Global Competitiveness
Index (GCI) developed for the WEF by Sala-i-Martin and introduced in 2004.

The GCI is based on 12 pillars of competitiveness, providing a comprehensive
picture of the competitiveness landscape in countries around the world at
all stages of development.

The pillars are: institutions, infrastructure, macroeconomic environment,
health and primary education, higher education and training, goods market
efficiency, labour market efficiency, financial market development,
technological readiness, market size, business sophistication, and
innovation.

The rankings are calculated from both publicly available data and the
Executive Opinion Survey, comprehensive annual surveys conducted by the
World Economic Forum together with its network of Partner Institutes
(leading research institutes and business organisations) in the countries
covered by the study.

This year, over 13 500 business leaders were polled in 139 economies. The
survey is designed to capture a broad range of factors affecting an economy's
business climate.

Nqobile Bhebhe


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The changing face of banking in Zim

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:42

YESTERYEAR, the investment case for venturing into commercial banking was
the prospect of accessing cheaper deposits. Retail deposits come with low
costs as most transactional accounts earn hardly any interest.

Although savings accounts pay interest, the rates tend to be lower than,
say, wholesale deposits. Most of the deposits would be lent to individuals
and companies requiring funding. The net amount arising from the margin
between interest paid and received was, then, the top contributor to
operating revenue for banks. The desire to access cheaper retail deposits
largely explains why many banking institutions that started with lower level
licences such as those for finance houses and merchant banks converted them
to commercial ones.

Even now, a commercial banking licence in this country is still deemed the
ultimate prize in the financial sector. Unlike in the past, the cheaper
deposits are not seen as a source of net interest income anymore, because
lending is no longer considered the lifeline of banking. More revenue has
been coming from non-interest sources like trading, currency dealing,
revaluations on properties and equities, as well as fee and commission
income. Before dollarisation, fair value adjustments on property and equity
investments constituted the bulk of the non-funded revenue.

Hyperinflation forced banks, through their investment vehicles, to hold real
assets to preserve value. As inflation worsened, assets repriced swiftly and
in the end banks would book colossal amounts in the comprehensive statement
of income as revaluation gains. Paper money, it could be said, but all the
same it boosted the financial position of the banks.

Non-interest income still contributes the bigger share of bank revenue -
69,7% - for the 13 commercial banks that have reported June 2010 interim
results, so far, post dollarisation. The difference though is that fair
value gains vanished with the end of inflation. Fee and commission income
now make up the bulk of the non-funded revenue. Using the statistics on the
12 commercial banks that have published their interims out of the 15 active
banks, fee and commission income was 74,6% of non-interest income. The three
banks yet to publish results are Interfin, TN and ZABG.

For the big four banks in terms of assets, namely CBZ, Standard Chartered,
Stanbic and Barclays, fee and commission contributions to non-interest
revenue were  64,5%, 86,9%, 71,7% and 50,4% in that order. For Barclays, the
ratio will be 83,5% if the US$6,5million special support received from the
parent company is removed. The money was used to cover retrenchment costs.
For the second tier banks such as Agribank, FBC, Metropolitan, NMB and ZB
the ratios were 96,7% to 102,5%, implying that fees and commissions
constituted all the non-funded income.

What constitutes fee and commission income? It is generated from overdrafts,
account service, fund management, loan arrangement, advisory services,
custodial services and sales of third party financial products such as
insurance. Whereas commercial banks are allowed to offer almost all of these
products, the merchant banks are largely precluded from doing so. Merchant
banks are not allowed to collect account service charges and overdraft fees
just to name but two. Incidentally, these are some of the most profitable
sources of income for commercial banks. Fees are by and large pure profit
and very lucrative to banks although they tend to be cyclical in nature.
Other non-interest income primarily bank charges is reasonably defensive. As
long as a bank has a stable and large deposit base, it can expect to
continue earning revenue from service charges. June financial results
clearly show that all commercial banks benefited immensely from fees and
commissions.

The growth of fees and commissions ahead of interest income appears to
validate the widespread claim that banks could be overcharging their
customers. Among the believers in this view is the Reserve Bank, which, in
one of their Monetary Policy Statements demonstrated in detail that local
banks were charging more than their peers in the region. Naturally the
banks, through the Bankers' Association of Zimbabwe, refuted this claim
saying their charges were competitive. All that aside, charges should be set
at levels which not only make the business of banking viable but also foster
the confidence of depositors in their banks. High charges can be a big
disincentive to saving.

There is evidence that the banking model in this country has changed.
Unfortunately, the regulations have not been adjusted in line with the
changing times. For instance, the banking act still segregates financial
institutions into different licenses yet the business environment has pushed
categories such as finance and discount houses to extinction.  The revenue
and profitability trends post dollarisation are indicative of the fact that
even the merchant banks could soon be joining the departed duo.

What is needed is a universal banking licence allowing every institution to
offer a broader range of products. There is  much talk
about it, but when will it come?

Own Correspondent


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TIMB to hold mop-up sales this month

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:40

THE Tobacco Industry and Marketing Board (TIMB) will hold mop-up sales this
month after the 2010 tobacco selling season saw a total of 119,8 million kgs
of the golden leaf valued at US$347,8 million going under the hammer.

The figure was more than double the 58 million kgs sold last year. This year's
crop was sold at an average price of US$2,90 per kg compared to last year's
US$2,98.

TIMB however said contractors have been allowed to sell until all deliveries
were exhausted. "Mop-up sales to dispose of any tobacco remaining on the
farms will be held on September 28," said TIMB.

The rejection rate ended at 8,23% of the total seasonal offerings.
Tobacco deliveries have been declining since 2000 due to a combination of
farm invasions, shortage of loans and inputs, bad weather and inexperienced
farmers.

In 2000 a total of 236 130 million kgs was produced at a time when the
country was the world's second-largest exporter after Brazil.

Last year, Zimbabwe was ranked behind Brazil, India, the US, Argentina and
Tanzania, according to Universal, the world's biggest tobacco leaf merchant.

In 2001 -  a total of 202 540 million kgs was produced, 2002 - (165 842
million kgs), 2003 - (81 812 million kgs), 2004 - (69 112 million kgs),
2005 - (73 392 million kg).

In 2006, 55, 5 million kg was sold, in 2007 - (73 500 million kgs), 2008 -
35 000 million kg and 56 million kgs in 2009.

Last year tobacco was voted the best paying crop. Government hopes that
internally generated sources of funding like tobacco, diamonds and other
metal sales will play a critical role in improving market liquidity and
stabilising interest rates.

Paul Nyakazeya


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Zim could lose AfDB aid

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:39

GOVERNMENT has turned its capital-raising hopes to a pre-Independence
overdraft facility with South Africa amid indications that the African
Development Bank (AfDB) could cut future financial aid to Zimbabwe over
non-payment of debt, Finance minister Tendai Biti has said.

The treasury chief on Wednesday told business leaders in the capital during
the inaugural Zimbabwe Independent-Ernst & Young dialogue that failure by
the state to settle an estimated US$400 million debt owed to the regional
lender would make the country ineligible for lines of credit from the Ivory
Coast-headquartered AfDB.

Biti said Zimbabwe could lose significant aid from the regional bank which
recently made a commitment to increase lending in the coming five years.

He, however, said treasury would next Tuesday present a "hybrid" debt
clearing plan following a growing external debt that was triggered by a
decade-long economic recession charecterised by hyperinflation and foreign
currency shortages.
Government has a US$7 billion debt owed to international financiers that
include the World Bank, the International Monetary Fund, the Paris Club and
the AfDB.

"Debt is one of the things that this economy has to deal with if we are to
go through the transformative stage of the economy," Biti said. "The danger
about what we owe to IFC is that they are a precondition to accessing cheap
financial capital."
He said government could lose "lots" of post global economic crisis funds
due to the growing debt.

"I was very much disturbed..the African Development Bank in the last year
alone gave grants and loans of US$9 billion. In the next five years it is
going to give loans and grants of US$30 billion and we will not be in  the
party because we haven't cleared (the debt). We just heard of a general
capital increase of 200% at the AfDB but we are not benefiting", he said.

Biti said government has taken its begging bowl to neighbouring South Africa
in a desperate effort to source funding required to resuscitate the economy.
This comes after Western governments refused to extend lines of credit,
demanding more democratic reforms from the inclusive government. Zimbabwe
requires US$29,8 billion to finance requirements in the three years up to
2012.

"There are two facilities that we are negotiating - one is a line of credit
of R500 million and the other is the revival of an old overdraft facility of
R2,7 billion that used to exist between Salisbury (now Harare) and
 Pretoria," Biti said.

He said following the recent ratification of a Bilateral Investment
Promotion and Protection Agreement (Bippa) between Zimbabwe and South Africa
by South Africa's parliament, the former expected more lending from the
latter.

Countries with outstanding obligations to AfDB cannot get loan facilities
but can get support under the bank's Fragile States Facility (FSF) geared
towards assisting fragile states to consolidate peace, stabilise economies
and lay the foundation for sustainable poverty-reduction and long-term
economic growth.

The FSF support to eligible regional member countries is via three pillars:
the supplemental support window for funding infrastructure, state capacity
building and accountability; the arrears clearance window; and the technical
assistance and capacity building window.

Bernard Mpofu


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Diamonds fail to stimulate ZSE

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:36

DIAMOND sales last month failed to tickle the market despite government
promises that the controversial alluvial gems would be an Eldorado to the
staggering economy.

Following official announcements that the stockpiled alluvial diamonds from
Chiadzwa diamond fields would be auctioned, punters hoped the stock market
would go on a bull run.

Market watchers expected a one-off sale of the precious mineral to generate
a whopping US$2,7 billion.

 The August 4 auction coincidentally saw daily turnover on the bourse
spiking to just over US$1 million from US$500 000.
The ZSE industrial index went up marginally 1,19% during the month to end at
132,48 points from an opening of 130, 92 points. The mining index, however,
traded in the negative, down 3,34% in the month under review to close at
130,36 points from an opening of 134,87 points.

The market capitalisation for the ZSE improved slightly to about US$3,63
billion from an estimated US$3,61 billion, translating to a US$2 million
gain for ZSE investors during the same  month.

ZSE daily turnover increased 22% in august to US$34, 87 million from US$28,
65 million transacted in July.
Analysts attributed the surge in turnover to investor confidence in blue
chip counters such as Econet, Delta, Innscor and Seedco rather than funds
raised from the diamond sales.

A fund manager with a listed company said volumes surged in August "partly"
due to selling pressure from institutional investors currently liquidating
their stocks to meet retrenchment obligations.

"That most companies are currently downsizing is now in the public domain.
Notwithstanding the anticipated diamond sales - which many of us thought
would stimulate the market, volumes during this period partly rose after
companies disposed shares to meet their retrenchment obligations," said the
analyst who requested anonymity.

Independent economic analyst John Robertson, however, said the mid-month
surge in ZSE volumes could have been speculative.

 "I think some investors were only expecting demand for the shares to
increase in the short-term because some expected companies to declare
dividends. It's pretty much difficult to prove that the rise in volumes
resulted from the diamond sales unless one can really follow the money",
Robertson said.

Finance minister Tendai Biti last week admitted that the diamond sales had
failed to stimulate economic activity despite an earlier hullabaloo on their
projected input to the fiscus. He said proceeds from the sale removed the
Eldorado tag on the controversial gems.

Government estimated the six million carats stockpile of diamonds to be
worth US$2,7 billion, raising hope that it would mark an end to the
liquidity crunch on the capital market. That was not the case.

The state, according to Mines minister Obert Mpofu, received US$30 million
raised from the US$56,4 million auction of one million carats of gemstones.

Bernard Mpofu

 


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Attending indabas one thing, investing quite another

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:20

AT a mining indaba last year, President Robert Mugabe promised investors
that Zimbabwe would "respect the sanctity of property rights".

He smiled and waved goodbye to the men and women whose capital could lift
the fortunes of the country's mining sector and the economy. All seemed to
have gone well. To a great extent, Mugabe had calmed apprehensive investors.

But a few months later, his government gazetted economic empowerment
regulations compelling foreigners to dispose of controlling stakes in
businesses valued at US$500 000.  Analysts see this as typical of Mugabe's
government -- saying one thing and doing the exact opposite.

The regulations have left shares depressed and investors in a wait and see
mode.
But investors have not entirely lost hope and will once again meet later
this month at another indaba. For investors, analysts say, attending such
indabas is one thing while investing is another. This year, according to a
representative of the indaba's facilitators, Washington Mehlomakulu, 1 000
delegates will be attending the meeting.

Economist Brains Muchemwa says general country perception has changed
significantly but other factors such as elections and the possible return of
the Zimbabwe dollar could hurt the sector.

He said: "The general perception issues about Zimbabwe being unstable and
very volatile have definitely improved, and indeed the fundamentals have
improved, but the key issues regarding the return of the Zimbabwe dollar,
the elections in the coming few years put a lot of long-term investments
such as mining into uncomfortable positions considering that some
fundamental changes in any of these could influence policy change. And
considering the huge initial capital investments needed in mining, few
investors would be interested in taking chances, the reason why there has
been a lot of talk about our many lucrative minerals but very few tangible
developments have happened on the ground."

Economist David Mupamhadzi said the major challenge was long-term for
investors while worries over the return of the Zimbabwe dollar would hurt
the economy more than the indigenisation regulations.

He said: "If it is to return, what exchange rate will be used? As long as
such issues are not clear it would be difficult to convince someone to come
and invest in Zimbabwe."

But this year's mining indaba will evolve around matchmaking and providing
a platform for investors to network and share ideas on ways to grow the
local mining industry.

The conference will run under the theme, "Building a Sustainable Mining
Industry in Zimbabwe: prospects and challenges."It is scheduled for
September 15-17.

"The first mining indaba (held last year) was a good launch pad as it gave
investors a clearer idea of issues, such as indigenisation, the application
of prospecting and mining rights, and mining tax. It also served as a
communication medium between investors and government," said the Mines
ministry.

"The focus this year is on assisting matchmaking between foreign investors
and local entities, including building a database of local opportunities
vetted by the ministry of Mining Development and culminating in optional
site visits to mining areas on the third day of the Indaba," the ministry
said.

As of Tuesday a total of 400 foreign investors had confirmed their
participation. All in all, 1 000 delegates are expected to attend.

Mehlomakulu says while the inaugural conference focused on reassuring
investors of the sound investment climate in the country, the second
conference will provide a platform for investors to network and share ideas
on ways to grow the local mining industry.

But analysts say the investment climate has not changed in anyway. If
anything, they say the investment climate has taken a turn for the worst,
worsened by the empowerment regulations and continued farm seizures.

"I can confirm that a total of 1000 delegates have so far confirmed their
participation at the prestigious conference and this year a lot of attention
will be on minerals such as chrome, coal and diamonds," said Mehlomakulu.
Attention will be on investment in the diamond industry which is anticipated
to account for over 25% of the global diamond supply.

After the formation of the unity government last year it was widely believed
that the sector will record positive growth powered by more investments into
the country.

This was against a background of the global financial crisis coming to an
end and most investors eager to broaden horizons into countries with mineral
resources such as Zimbabwe after being cautious over political instability
before the formation of the unity government.

However, Finance minister Tendai Biti during his mid-term fiscal policy
announced in July revised growth projections downwards.
"In mining, productivity in the sector continues to be hamstrung by erratic
power supply.  This has meant that mining houses have not been able to
sustain increased production, even in cases where they have had limited
access to lines of credit in support of recapitalisation," he said.

Biti said most of the growth in the sector this year was underpinned by
continued bullish mineral and metal prices.
"As a result, realised output during the first half of 2010 has prompted
downwards revision to overall mining sector growth from 40% to 31% in 2010,"
Biti said.

Analysts said the major deterrent to investment in Zimbabwe's mining
industry was the indigenisation legislation that is currently being
implemented.

The Indigenisation Act aims to put a 51% share of any investment valued at
over $500 000 in the hands of Zimbabwe nationals, but the implementation of
this law has been slow, as political factions debate its effects.

The Zimbabwe Chamber of Mines is petitioning government to reduce to 15% the
shareholding that foreign-owned mining companies must cede to black
Zimbabweans.

The chamber wants mining companies that have invested heavily in building
schools, roads, clinics and other facilities to earn empowerment credits for
these investments.

According to the Ministry of Mines, the second annual Zimbabwe Mining Indaba
will focus more on the business operating environment in the country, rather
than the country's political atmosphere.

Paul Nyakazeya

 


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‘Tariff Commission no toothless bulldog’

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:20

What role does the Competition and Tariff Commission (CTC) play in the
economy? Has the CTC scored any success since inception? Our reporter
Leonard Makombe (LM) talked to CTC director, Alexander Kububa (AK), on these
issues.

LM: What is the mandate of the Competition and Tariff Commission and which
Act of Parliament or any other piece of legislation operationalises this
body?

AK: The Competition and Tariff Commission is a statutory body established
under the Competition Act [Chapter 14:28] to regulate competition and to
give advisory opinions on trade tariffs matters.  It is a product of the
merger in 2001 of the former Industry and Trade Competition Commission
(ITCC), which had come into operation in 1998 under the Competition Act,
1996 (No7 of 1996), and the Tariff Commission (TC), which also came into
operation in 1998 under the Tariff Commission Act [Chapter 14:29].

LM: Where does CTC get its funding? Is it enough? What other avenues are you
looking at for funding?

AK: The Commission is a non-commercial statutory body that gives regulatory
and advisory services on government policies.  As such, its main source of
funding is government.  This source of funding is not adequate for the full
undertaking of the commission’s operations given the financial constraints
being faced by the government.  The Commission however has other sources of
funding, which are specific to operations. These are merger notification
fees, which are specifically for the defrayment of the costs incurred in
examining mergers and acquisitions, and funds raised from the trade
development surcharge, which are used in the promotion of the export trade
of Zimbabwe and which it shares with Zimtrade. The Commission can also give
advisory opinions on specialised competition and trade policy topics, for
which it charges fees, and distributes reports on its investigations and
studies for a fee.

LM: What would you say have been the successes of the CTC?

AK: The commission has been extremely busy since the effective commencement
of its operations in 1998, and has recorded numerous successes in both its
competition and trade tariffs operations. In the area of competition, the
Commission has handled over 1 000 competition cases, of which about 53%
involved restrictive and unfair business practices and 47% were mergers and
acquisitions. Common restrictive and unfair business practices investigated
have included anti-competitive agreements of both horizontal and vertical
nature (ie, collusive and cartel-like behaviour, such as price fixing and
market-sharing arrangements, and bid-rigging, exclusive dealing, and resale
price maintenance), and abuse of dominant or monopoly positions (ie,
excessive pricing, discriminatory distribution, tied and conditional
trading, undue refusal to distribute commodities or services, and predatory
pricing.  Some consumer welfare abuses, such as misleading advertising and
distribution of commodities or services above advertised prices, have also
been investigated.

LM: Who should bring to the attention of CTC an anomaly that could be a
violation of the Competition Act? Is it an individual like me or
institutions?

AK: Anyone, whether a corporate or human can bring any competition or trade
tariff complaint, or any other violations of the Competition Act, to the
attention of the Commission for investigation.  However even though most of
the Commission’s investigations are complaint-driven, the Commission can
initiate such investigations on its own.
LM: Why does it take long for CTC to complete investigations?

AK: The Commission’s investigations into competition and tariff cases have
got to be meticulous since the outcomes have serious implications on the
affected enterprises and the economy as a whole.  For example, in the case
of a typical competition investigation, all the affected stakeholders have
to be consulted and extensive economic analysis has to be undertaken on the
competitive effects of the practices under investigation.  It is therefore
not uncommon worldwide for an investigation into a complicated restrictive
business practice like price fixing or market sharing to take up to two
years. Even though the Zimbabwean competition legislation does not give
specific deadlines on the completion of competition cases, except that the
cases should be looked into as expeditiously as possible, the Commission has
administratively given itself up to three months to examine mergers and
acquisitions.  Some mergers have been examined within a month.  Time spent
on investigating cases involving restrictive and unfair business practices
has ranged from two months to eight months.  The times spent by the
Commission in handling competition cases are amongst the shortest in the
region.

LM: Is it fair to say the current economic environment has had a negative
bearing on competition, for example, you walk into most of the shops and the
products, bread for example, is either a dollar or dollar for two no matter
which shop?

AK: Any adverse economic environment drives enterprises to engage in
restrictive and unfair business practices as they strive to maintain market
share and position in the shrunk economy.  In some cases, competitors agree
not to compete against each other in order to act as a collective monopoly
and earn monopoly profits.  This however does not exempt them from the
application of competition law.  The current situation in Zimbabwe is not an
exception, as evidenced by the increased number of competition cases brought
to the attention of the Commission for investigation.

LM: How do you differentiate between a proper business pricing regime and a
cartel? I have here the problem of say service providers who charge a
uniform price for a service despite issues like competitive advantage or
efficiency. To further elaborate this, why is it that there is a standard
charge for a data line no matter which provider you use?

AK: A competitive pricing regime is when competing firms independently
determine the prices of their goods and services on the basis of their
individual input costs and productive efficiencies.  On the other hand, a
cartelised pricing regime is when competitors sit down and agree on uniform
prices to be charged to their customers.  In competition terms, this is
called price fixing, and is one of the most serious anti-competitive
practices that are per se prohibited in most countries, ie, are prohibited
without considering any defence arguments. In other jurisdictions, however,
price fixing arrangements are considered using the Rule of Reason approach,
ie, where an attempt is made to evaluate the efficiency of pro-competitive
features of a restrictive business practice against its anti-competitive
effects in order to decide whether or not the practice should be prohibited.

In Zimbabwe, while the competition law prohibits cartel-like practices like
price fixing arrangements, such practices can be allowed if they are “bona
fide intended solely to improve standards of quality or service in regard to
the production or distribution of the commodity or service concerned”.
Any complaint or allegations of price fixing arrangements can therefore be
referred to the Commission for investigation in accordance with the
provisions of the Competition Act.

LM: What right do I have as an individual to bring to your attention what I
feel is an anomally, say I pay for a service but do not get the expected
standard despite an assurance by the provider that I will get value for
money?

AK: Any individual has the right to bring to the Commission’s attention any
anomaly or restrictive practice that is prohibited under the Competition
Act.  The term ‘restrictive practice’ is defined in terms of the Act. In
addition, certain consumer welfare abuses are prohibited under the Act as
unfair business practices.  These are: (i) misleading advertising; (ii)
false bargains; and (iii) distribution of commodities or services above
advertised price. While the selling and distribution of sub-standard goods
is an unfair consumer practice, it is not a restrictive business practice
that is specifically prohibited under the Competition Act since it does not
materially restrict competition between competing firms.

LM: Many people say you are a toothless bulldog. What capacity do you have
to enforce your findings or orders?

AK: The Competition Act gives the Commission the necessary teeth to enforce
its orders and decisions.  The Act provides that for enforcement purposes,
the Commission’s orders can be registered with, and recorded as a civil
judgment of, the High Court of Zimbabwe.

LM: Last month saw CTC asking Central African Gold and Newdawn to write a
report on a deal where the latter acquired the former. What has been the
finding so far?

AK: The proposed acquisition of Central African Gold by New Dawn Mining
Corporation was notified to the Commission for the examination of the
transaction’s competitive effects last month.  The examination is currently
at an advanced stakeholder consultations stage

LM: Do you think the indigenisation regulations would see more
investigations?

AK: There are no direct relationships between the Indigenisation Regulations
and the incidence of anti-competitive restrictive business practices, or
unfair trade practices that are investigated by the commission.  The
regulations should therefore not affect the number of cases referred to the
commission for investigation.

LM: What role if any do you foresee CTC playing during the implementation of
the Indigenisation regulations?

AK: The commission however does play a role in the implementation of the
Indigenisation regulations, as it does in the implementation of all other
economic policies of the country.  Specifically in the case of the
Indigenisation Regulations, the relevant enabling Act provides that all
mergers notified to the Commission for examination must meet indigenisation
requirements for approval.
 


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SA deportations to hit the poor hardest

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:56

SOUTH Africa's decision to deport Zimbabweans who fail to regularise their
stay in that country before the end of the year will hit the poor hardest,
analysts and exiles say.

The South African Home Affairs department said legal documents would be
given to those who could show that they have been in that country before May
31, 2010 and can prove that they are gainfully employed, are bona fide
students or are in a legitimate business for which they are registered to
pay tax.
Over three million Zimbabweans, a quarter of the population, fled economic
and political turmoil since 2000 and have settled in neighbouring nations
and overseas countries such as the United Kingdom.
Groups such as the Solidarity Peace Trust estimate that half of these people
are in South Africa, most of them unskilled and likely to become victims of
South Africa's new measures.
Analysts say economic considerations could be behind South Africa's decision
to flush out Zimbabweans. Unemployment worries have heightened as jobs
created before the soccer World Cup vanish.
South Africa created over 130 000 temporary jobs in the run-up to the 2010
Fifa World Cup which ended in July. Zimbabwe's economy, on the other hand,
has failed to grow  and would be unable to accommodate a sudden flood on
unskilled labour, analysts say.
A special dispensation allowing Zimbabweans to live and work in South Africa
without documentation introduced in April last year ends in December and
immigrants have until then to regularise their stay.
Thousands of Zimbabweans doing menial jobs such as farm workers are unlikely
to meet this deadline because of ignorance and the nature of their work,
groups working with immigrants in South Africa say.
The South African government this week sought to downplay the impact of its
new policy on Zimbabwean immigrants by saying no mass deportations would
take place because Zimbabweans living in that country without documentation
would be allowed to regularise their stay by December 31. Those who fail to
do so during this period will however be deported from January next year.
Civic organisations have tried to convince South Africa's Home Affairs
department that the planned deportations are ill-timed as there is slow
economic growth and lack of broad political reforms in Zimbabwe.
Pretoria-based Zimbabwe Exiles Forum (ZEF) met Home Affairs' deputy director
(immigration) Jackie Mackay and chief director in the ministry, Mudiri
Mathews, this week where the officials confirmed that deportations will
start after the December 31 deadline.
Gabriel Shumba, ZEF executive director, told the Zimbabwe Independent after
the meeting:  "We expressed concern over a number of issues, including the
fact that the insinuation given is that the situation in Zimbabwe has
stabilised. We were also concerned that there is very little time, that is
three months, given to Zimbabweans to ensure that they obtain a Zimbabwean
passport and all the other relevant documents before they can legalise their
stay."
He criticised the South African government for setting a deadline before
putting in place the infrastructure to ensure Illegal Zimbabweans regularise
their stay within the set timeframe.
"We are concerned that this decision appears to pander to political
constituencies regardless of the xenophobia that it can trigger," said
Shumba. "There is therefore need to carry out an extensive education
campaign for Zimbabweans, employers and the South African public in
 general," said Shumba, whose organisation is lobbying the South African
government to reconsider the decision and consult more widely.
He described the South African cabinet decision as "callous and arbitrary".
The deportations, analysts say, will give a wrong impression about the
economic conditions in Zimbabwe where the situation is still unstable
despite the formation of the coalition government in February last year.
Crisis in Zimbabwe Coalition (South Africa office) regional coordinator Dewa
Mavhinga argued that even if there was sincerity in the regularisation
procedure, the process could largely depend on the whims of unscrupulous
employers.
"We fear that a resumption of deportations may fuel xenophobic sentiments
and lead to renewed attacks," he said.
"The fact that today under a coalition government Zimbabweans continue to
flock to South Africa in their thousands daily is evidence enough that the
appearance of change is but a mirage. We ask that whatever new policy
measures are tried should be tried in the context of a moratorium on
deportations of Zimbabweans, at least until Zimbabwe holds a credible, free
and fair election whose outcome is acceptable to the people of Zimbabwe and
to the international community."
Movement for Democratic Change SA (MDC SA) chairperson Austin Moyo told
reporters in Johannesburg this week that the ANC-led government should be
compassionate and considerate.
Central Methodist Church Bishop Paul Verryn, who has accommodated thousands
of Zimbabwean migrants at his church in central Johannesburg, said Zimbabwe
could not take care of its migrants.
"But for the vulnerable in the country the situation is still desperate," he
said.
Verryn warned there could be fresh xenophobic attacks as a result of the
special dispensation's cancellation.
Zimbabweans in South Africa have faced persistent threats of violence and in
2008 over 60 people died and 150 000 were displaced in a wave of xenophobic
attacks that swept across South Africa.
Following the formation of the coalition government between Zanu PF's
President Robert Mugabe and MDC-T's Prime Minister Morgan Tsvangirai, the
economy has slowly recovered by 4,7% while capacity utilisation jumped from
10% to 32% last year, according to the Business Council of Zimbabwe.
Economist Witness Chinyama said the job market was poor and could not absorb
hundreds of thousands of vulnerable Zimbabweans from South Africa.
The unskilled Zimbabweans, he said, could be absorbed in the informal market
and help rebuild the economy.
"Manufacturing capacity utilisation is still low and the job market is not
good. It will be difficult for the economy to absorb the huge numbers of
those based in South Africa and elsewhere," said Chinyama.

Brian Chitemba


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Muckraker: For Zanu PF, if it ain’t broke it needs fixing

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:54

CAN you believe the foolishness of Zanu PF leaders who want to interfere
with a successful monetary system and create havoc by adding to it a
currency that is not used locally or internationally?

Vice-President Joice Mujuru, who is not known for her grasp of economic
issues, was speaking to party delegates from Mashonaland West last weekend.
She said it would be logical to include the Chinese yuan in Zimbabwe’s
currency pool given Zimbabwe’s “Look East” policy and growing trade ties.
This would ultimately see the country having a “sovereign national currency”,
she said.
“If it ain’t broke don’t fix it,” the expression goes. Zanu PF has a habit
of grabbing hold of anything that works and making a complete mess of it.
The disaster surrounding commercial agriculture is a prime example. The
state is still busy pretending the land reform policy has been a success
when all the evidence suggests it has witnessed a collapse in output.
A recent FAO/WFP report states that “nationally maize yields decreased to
0,75 tonnes/hectare from 0,82 tonnes/hectare recorded last season.
“Yields decreased in all farming sectors with the exception of commercial
farms which recorded an increase of over 6% over the previous season,” the
report said.
The “Look East” policy may be a bright idea but Zimbabwe’s trade with China
is a fraction of China’s trade with Europe or the US.

This isn’t the only example of looking east that has proved illusory. Does
anybody remember the flirtation with Malaysia and the president’s
south/south exhortations regarding Hwange? What happened to that scheme?
The adoption of the US dollar last year saved Zimbabwe’s economy just as it
was on the ropes. It provided stability and predictability. But immediately
we heard Mugabe suggesting a return to the Zimdollar — something that would
have proved disastrous.
Now Mujuru is saying much the same thing.
The Chinese are showing no inclination to depart from the greenback in terms
of their own currency holdings. Indeed, their trade with the US is booming.
Why should Zimbabwe vitiate a system that has served the country so well on
the grounds of a spurious policy that has so far seen limited returns?
Zanu PF likes to tell us of China’s success story. But it omits to mention
that success operates on a firm basis of trade and investment with the
developed world. You never hear specious economic pronouncements of the Zanu
PF variety in China itself.
Mujuru’s remarks were greeted with “wild applause” by the party faithful, we
are told.
We don’t doubt it. Anything ruinous to the economy is greeted with “wild
applause” by those losers!
By the way, what happened to Kondozi Estate and to the Mazoe plantations?
Surely crude grabs of that sort should have some dividend to show? Instead
ministers just made off with the hardware. Now they are contemplating a
return to the currency they undermined.
The last thing Zimbabwe needs right now is a “sovereign national currency”
administered by Zanu PF. What it needs is stability.

We were amused to note that Zanu PF columnists  are referring to the MDC’s
2008 election victory as a “fluke”.
It’s amazing isn’t it that when even the party’s top brass acknowledges the
extent of their losses the Munhumutapa mind-control department is in denial.
It was all a plot you see!
Can its managers not see the pattern of events in 2000, 2002, and 2008 when
the post-liberation aristocracy went down to defeat like the French chivalry
at Agincourt.
We cannot forget how ZBC attributed Zanu PF’s referendum defeat in 2000 to
whites exercising the vote. It would have been funny were it not so
ridiculous.
Any examination of the electoral outcomes for the period 2000-2008 will show
Zanu PF as a party in decline. In 2000 the MDC won unambiguously in the
urban centres. In 2008 it penetrated many rural centres. The prospects of
Zanu PF winning back any of these seats is between unlikely and zero.
Who would vote for a party that inflicted punishing inflation on the
country; that blamed every facet of misrule on “sanctions”; that abducted
and beat its opponents?
Zanu PF may once have been a party of liberation, but now without any shadow
of doubt it is a party of failure.
That’s a shame because the MDC will need an effective opposition and it
doesn’t look like getting one!

The Business Herald carried a picture on Tuesday of Tourism minister Walter
Mzembi and Environment minister Francis Nhema who, we are told, have formed
a partnership to “raise the profile of the country that has suffered from
negative perception from the West”.
Last week we were told Bulawayo artist Owen Maseko had been prosecuted
because the authorities took exception to his depiction of the Gukurahundi
atrocities. He was charged with “propagating falsehoods” under the Criminal
Law (Codification and Reform) Act.
In other words, in the official mind, Gukurahundi didn’t really happen or if
it did we mustn’t mention it.
Earlier this year a collection of photographs had to be removed from the
Gallery Delta in similar circumstances.
Then the Herald talks about “negative perceptions” by the West.
What sort of “perceptions” does it think this repressive behaviour invites —
not just abroad but within Zimbabwe itself? Freedom of expression is
enshrined in Zimbabwe’s constitution. But it is not upheld by the country’s
rulers.

The Nathaniel Manheru columnist in the Herald has been on the attack again.
And we are his main target. He had this to say on Saturday: “…The Zimbabwe
Independent takes the colour and worldview of its Rhodesian owners and it is
important that this insidious yet assiduous reissuance of the Rhodesian
ethos be exposed for all to see.”
What needs exposing for all to see is Manheru’s mendacity. Everybody in the
media knows that Trevor Ncube owns this newspaper. But Manheru deliberately
lies about its ownership to express manufactured indignation over our
exposure of the fate of members of the once violent land-reform youth corps
who now wallow in poverty on the farms they helped to seize.
It is of course perfectly legitimate for a newspaper to ask what happened to
those the then ruling party claimed to be liberating nearly a decade ago.
Manheru says he doesn’t object to anyone defending white farmers “but let it
be done cleverly and without taking advantage of unsuspecting poor people”.
And who cleverly used “unsuspecting poor people” to fulfil their partisan
cause 10 years ago?
Can you imagine a senior civil servant dictating to a newspaper how “clever”
it has to be in framing its stories?
Meanwhile Manheru could demonstrate a measure of “cleverness” in limiting
his turgid prose to a readable length on a Saturday so we don’t fall asleep
at the breakfast table!

Thanks to Nelson Chamisa and Pishai Muchauraya for their swift intervention.
They quickly disputed Theresa Makone’s claims telling the Zimbabwe
Independent police were now better behaved.
American music star Akon  witnessed first-hand the rogue behaviour of our
police.
Akon, who performed in front of a 30 000-plus crowd at the National Sports
Stadium on Saturday night reminded the police to respect human rights.
Reports elsewhere suggest the music icon insisted that he did not want them
as part of his security team.
Akon made it clear at the show that he was not happy with the conduct of the
police officers who were beating up people during his live performance.
When he got on stage Akon told the police to stop assaulting his fans.
“Police, stop swinging those batons onto my fans,” Akon repeatedly said.
“I want to meet with my fans so move the barricades forward and let them
come closer.”
He later threw himself into the crowd straight off the stage and also got
into a glass balloon and conducted a crowd scanning exercise, a move which
has made his shows around the world popular.
Thanks Akon for that reminder. Let’s hope Makone, who has been making
misleading public remarks, also heard you.
A Zimbabwean based in the Netherlands, Hatina Chitiyo, fell victim to the
police heavy handedness.
“I screamed for Akon which I suppose is normal for anyone upon seeing a
musician of his calibre,” Chitiyo said. “I was beaten by a police officer
and tried to run away but had to come back to help my sister who was also
being beaten by the policeman.”
Any “negative perceptions” arising from this episode cannot be ascribed to
Tony Blair who the state media appear to be still obsessed with.
What annoys them so much, we suspect, is that he presided over a successful
economy.
And how are they going to report Fidel’s welcome admonishment of Iran’s
presidential bigot, Mahmoud Ahmadinejad?

Finally, Muckraker was intrigued to read a news report  of March 15 2001
headed “Fake bishop accused of arms smuggling”. Police in Ecuador said they
had arrested a man posing
as an Anglican bishop on charges of arms smuggling. All very curious!

 


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Media’s role in transitional justice

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:53

A TRUTH and Reconciliation Commission (TRC) — however imperfect its
structure and process — was a mechanism for peace (in South Africa).

I felt sure that, somehow, the TRC could prevent South Africa from
disintegrating into an endless cycle of revenge and violence.
The media played a central role in helping South Africa make sense of this
complex, confusing journey.

Cartoonist Zapiro summed it up with his usual incisive wit. He depicted
Archbishop Desmond Tutu poised on the edge of a precipice called “Truth”.
Behind Tutu: a motley bunch of journalists, along with a perpetrator and a
victim in a wheelchair.
Across the gaping chasm there was another precipice — this time called
“Reconciliation”. Tutu clutched a useless map, and utters one word: “Oops!”

Anyone who has lived through a period of personal or political transition
knows all about the “oops!” word.
“The past is never dead,” wrote the American novelist, William Faulkener.
“It’s not even past.”

What then is transitional justice? I like the way Judge Richard Goldstone
describes it: “Transitional justice,” he says, “is ultimately about nations
torn apart by gross violations of human rights, learning to live together
within a context of dignity, human rights and social justice.”

Implicit in Goldstone’s definition is healing; a sense of moving forward
into a brighter future, and—above all — the recognition that such a complex
process cannot be fast-forwarded. It takes time.

Transitional justice, therefore, is about the past, the present and the
future. There are no fixed models. There can’t be, because every nation’s
history is unique.

But we can identify five common foundation stones. These are:
Prosecutions: of perpetrators of human rights abuses;
 Truth-telling: uncovering the extent and nature of past abuses through
initiatives such as truth commissions;
Reparations: for victims of human rights violations;
Memorialisation: finding ways to preserve the memory of the past, through
museums or memorials. And finally:
Institutional reform: of sectors that were used as tools of repression,
especially the security sector: the police, the military. Reform of the
judiciary, of the electoral system, of education. and, of course: reform of
the media.

Each of these areas can generate a wealth of stories and— for the media —
many challenges.

Firstly, when we write transitional justice stories, context and follow-up
are all-important. It’s not enough to do one isolated article, or to
ghettoise transitional justice issues.

So, a transitional justice process offers us the chance to reflect, as
media, on our past. Rwanda is a much-quoted example. Especially Radio Milles
Collines, which played a direct and horrifying role in the genocide. “Kill
the cockroaches!” The radio urged its listeners. And neighbour turned
against neighbour. Those chilling words still haunt us: a reminder of the
power of media, and its potential to incite hatred, or to nurture peace.

It’s not always so clear-cut, of course.

Transitional justice reporting also requires in-depth investigation: the
ability and the resources to excavate through layers of complex, contested
versions of the truth.

But transitional justice isn’t only about naming and shaming. It’s also
about healing. About conversations and dialogue, finding common ground, when
society has been fractured. For journalists, this might mean finding ways to
challenge polarisation within the media sector.

How did the South African media cover the TRC process from 1996-98?

As part of the TRC process, there was a three-day Special Hearing on the
role of the media during the apartheid-era. Black journalists spoke angrily
and eloquently about the racism and abuses they experienced — not just in
state-controlled media organisations but, to the shocked surprise of many  —
in the newsrooms of so-called “liberal” papers.

The Special Hearing also highlighted the role of state agents: for instance,
the spies who operated under the guise of journalists; and the propaganda
specialists at the SABC. No surprise there. We knew they existed. What was
horrifying, however, was the extent and sophistication of their
operations—especially in the area of disinformation. Never, never again, we
told ourselves.
The TRC aimed to promote national healing, and nation-building. How far,
therefore, could media report critically on the TRC process without
undermining it? Without playing into the hands of those who wanted the TRC
to fail, in order to protect their own skins?

Journalist Stephen Laufer summed up the dilemma: “Our job is to question, to
reflect the realities of what is going on, to attempt to show that truth is
multi-faceted. Sometimes truth becomes particularly unpleasant when the
victims have also been perpetrators –– or the perpetrators are in some
fashion, victims.”

The journalists who reported on the TRC, day in and day out, paid a heavy
price: emotionally, mentally and physically.
They absorbed the story, and it invaded their dreams and their nightmares.
SABC producer, and veteran journalist Max du Preez, laughed when he was
first offered psychological counselling. “A journalist getting therapy is
like a Springbok rugby prop using moisturiser”, he joked. But four weeks
into the TRC hearings, he noticed that members of his Special Report team
were, as he put it, “cracking up”. It turned out, he wrote later, that “the
rugby prop really did need moisturiser”.

There is much more to tell about the role media played in South Africa’s TRC
process. How radio, TV and print helped to give the proceedings a human
face; helped to expose the extent of apartheid-era atrocities — especially
for those who chose not to attend the actual hearings.

A word of advice from Anneliese Burgess: an SABC television journalist who
was part of the TRC Special Report team.
“My first bit of advice to anyone covering a TRC would be to use what was
coming out of the hearing as the backbone of a story,” she says. “The
challenge would be to go further.”

There are some key questions that need to be considered before embarking on
any transitional justice journey. The media can stimulate debate about these
issues, so that people can decide what they want  —  and what they don’t
want — from the process, long before it starts.

Of all the different kinds of media, there is one that is crucial in this
regard. Radio. Why? Because radio can provide space for dialogue. A space
where people can talk and listen to each other. A channel to contest the ten
powerful elites who make decisions in the name of those who are not so
powerful.

But this can’t happen unless the airwaves are free. Unless there is a strong
culture of community radio: radio by the people, for the people, from the
people. Community radio can host talk shows in a mix of languages. It can
create radio dramas, or use traditional story-telling, poetry and music to
open up issues around justice, reconciliation and healing. Radio can allow
people to speak freely, because it preserves their privacy and safety.

Of course, it can be risky to “open up the airwaves”: you need to make sure
that radio stations don’t become tools of particular interest groups; or
vehicles for propaganda. And that requires careful regulation, by
independent bodies that everyone can trust.

In South Africa, at the time of the TRC, there was already a vibrant
community radio sector. With enough support, community radio could have done
so much to develop a stronger sense of ownership in the TRC process —   for
all South Africans.
In the end, though, there can be no cookie-cutter model for transitional
justice. Every country has to find its own way. As they say in West Africa:
“Paths are made by walking”.

Meanwhile — and in closing — a note of sanity from the not-so-distant past.

“South Africa should put the freedom of its press and media at the top of
its priorities as a democracy. None of our irritations with the perceived
inadequacies of the media should ever allow us to suggest even faintly that
the independence of the press could be compromised or coerced. A bad free
press is preferable to a technically good, subservient press,” Nelson
Mandela said at the 10th anniversary of the Institute for the Advancement of
Journalism in Johannesburg in 2002.

Lewin is a veteran South African journalist who served for two years on the
country’s Truth and Reconciliation Commission as a member of the Human
Rights Violations Committee. This article is an edited version of his speech
to senior journalists in Harare on Monday.

By Hugh Lewin


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Eric Bloch: Looming Zim economic tsunami

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:52

LAST week a spokesman of the South African government, Themba Maseko,
advised that their cabinet had decided that the special dispensation
accorded Zimbabweans, enabling residence and employment in South Africa
without compliance to normal immigration processes would cease with effect
from the end of December 2010.  He said that any Zimbabwean without a valid
temporary or permanent residence permit or work permit will be deported back
to Zimbabwe.
The International Organisation of Migration estimates that there could be as
many as 3,5 million Zimbabweans in South Africa.  If this estimate is
substantially correct, it is probable that from year-end between 1,5 and two
million Zimbabweans are likely to be deported back to Zimbabwe.  The
consequences upon an already  strained economy will be immense and
extremely negative.
Some of those who return to Zimbabwe will be highly skilled and greatly
needed. This will be good for the economy.  However, the number of skilled
people who will be deported from South Africa will undoubtedly be relatively
few, for most skilled Zimbabweans  are presently  in formal employment in
South Africa. South African employers will have demanded sight of requisite
South African residence permits before granting that employment.  Therefore,
the boost to the Zimbabwean skills' resource will be limited.
In  contrast tothat one  advantage,the prejudices to the economy will be
extremely great.  An overwhelming majority of the Zimbabweans who fled to
South Africa did so to earn incomes to support their impoverished families.
That support was partially by remittance of funds, and partially by
provision of essential commodities.
If, on average, each gave only US$50 per-month of support, in cash or in
kind, then the two million likely to be returned to Zimbabwe will have
represented  US$100 million of inflows of cash and goods each month, albeit
much of that will have been received via informal channels.  As a result, a
very great number of the intensely impoverished in Zimbabwe, estimated to
exceed eight million, will be  destitute, struggling to survive at levels
far below the poverty datum line and confronted with intensified hardships.
Moreover, whilst a significant portion of the cash inflows from abroad have
been expended across the border, thereby being re-externalised from
Zimbabwe, substantial amounts were utilised within the country, and as the
monetary inflows diminish, there will be pronounced negative repercussions
upon both formal and informal sector trade volumes, with knock-on diminution
of demand upon the outputs of the manufacturing sector.
Not only will that further impair the viability of many Zimbabwean
enterprises, but it may also become a stimulus for further unemployment in
Zimbabwe.  Concurrently, the decrease in trade will have adverse
repercussion upon revenue inflows to the fiscus.
The negative impact upon the fiscus will also be intensified by a loss of
customs duties and other import imposts on the goods sent by those abroad to
their families at home.  Whilst it must be assumed that considerable volumes
of such goods enter Zimbabwe unlawfully, without being subjected to those
imposts, and some of them benefit from duty free allowances, others have
attracted the diverse importation charges, and hence a sharp diminution in
inflows of goods from Zimbabwe abroad will result in a fall in fiscal
revenues.
Yet another negative consequence of the forthcoming South African
deportations must be a surge in the already relatively high rate of crime in
Zimbabwe.  Most Zimbabweans are inherently honest, but when children are
crying from hunger, even the most honest turn in desperation to crime.  To a
very great extent, those forced to return from South Africa will be unable
to obtain employment.
Whilst there has been economic upturn in the Zimbabwean economy since the
horrendous days of 2008, nevertheless the economy remains a very weakened
one, and especially so when government foolhardily undermines the
slowly-progressing economic recovery with catastrophically abysmal policies
in 2010.
These included the disastrously destructive and counterproductive
Indigenisation and Economic Empowerment Regulations, and the ill-considered
new legislation governing the mining sector.
These policies, concurrently with failure to implement fully the global
political agreement, and recurrent inflammatory statements of hatred for
Western countries have disastrously alienated potential investors, decimated
business confidence, and precluded access to international lines of credit
and to developmental aid.
The ever-deteriorating service delivery of parastatals has further precluded
continuance of economic recovery, and has triggered the reversal of the 2009
economic gains.As a result, the returning Zimbabweans from South Africa,
together with those who are having to return from the United Kingdom will
find life difficult in Zimbabwe.
As they then become increasingly poverty-stricken, and their needs and those
of their dependants intensify, many will either seek to return to South
Africa or the United Kingdom, or to enter other countries, notwithstanding
that they will have to do so unlawfully.
But very great numbers will not be able to do so, and therefore will, in
desperation, turn to crime.  In so doing, it must be presumed that many will
seek to emulate the crime methodologies and tactics which have become very
pronounced in South Africa, inclusive of armed robberies, car hijackings,
and the like.
The consequences   of such crimes  will be  adverse.  They will include
decline in tourist arrivals, decline on the part of potential investors  in
Zimbabwe, losses for those business enterprises falling prey to the
criminals, and yet further emigration of the skilled  people that Zimbabwe
desperately needs.
One cannot blame South Africa for its intended actions against the
Zimbabweans, for it must first and foremost protect its nationals, its
economy, and the wellbeing of all South Africa's interests.
However, the adverse economic repercussions on Zimbabwe will be of such
magnitude that the only possible perception of last week's announcement by
the South African government is that Zimbabwe is facing a looming economic
tsunami.


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Zanu PF a party functioning on a wing and prayer

http://www.theindependent.co.zw/

Thursday, 09 September 2010 17:50

ZANU PF is a party that is seeking to reinvent itself. Witness the copious
notes they are producing by way of analysis and revisionist history of both
the liberation struggle and post-Independence politics in the
state-controlled media.

What is of particular importance is that since they suffered a heavy
political defeat by way of the March 2008 harmonised election, they are
beginning to believe their own lie that they are once again in political
ascendancy.  The truth of the matter is that they are a rather unpopular
party that relied primarily on the unprecedented use of partisan state
security agents to retain a semblance of power.  That they are not nearly as
legitimate as a democratically elected party should be therefore beyond
doubt. What they have been attempting to bank on is an assumed monopoly of
being the only revolutionary party in our country's history, a claim which
is contemptuous of the struggle for liberation.
In their attempts at reinvention, they are faced with a myriad of problems
which include the issue of succession within their party, international
pariah status and a still unpredictable Sadc mediator in the processes that
concern the inclusive government.
Zanu PF seems to have developed a five-pronged strategy in its attempt at
political survival.  The first is to literally attempt to hold out as far as
is possible in the inclusive government in order to prevent any national
election being held before they can measure their popularity. Of course they
claim that they are not afraid of elections as any political party would,
but that is not necessarily a demonstration of honesty on their part. They
remain in a politically precarious position to the extent that they know it
is well nigh impossible for them to win any national electoral contest
outright.  Their patent fear is that they will never be able to muster a
complete majority in any election in the short-term to avoid having to
contend with another Global Political Agreement.
The second strategy that they have is to test the holding capacity of the
two MDCs in the inclusive government.  This strategy is aimed at using the
state media and state security agents to accentuate any potential divisions
in the two MDCs, ostensibly to weaken them internally and in the eyes of the
electorate.  This would explain why Zanu PF's narrative is almost of
unbridled joy when they hear of an incident at Harvest House or in MDC-M.
This also includes their goading of the newly launched Zapu not necessarily
to outmanoeuvre it, but to keep it in the political domain in order to
divide the Matebeleland vote for the MDCs. It will also milk any mistakes by
the MDCs either in the inclusive government or in the eyes of their
political constituencies for what they are worth in order to position itself
as an experienced party.
The third strategy aimed at retaining political survival by Zanu PF is the
reforming and expansion of its patronage networks.  Access to the state and
to state resources will be key in this process.  This includes the
indigenisation processes which remain controversial in their implementation.
It also includes continually ratcheting up the land question and attempting
local government reform with traditional chiefs being given greater access
and control over either agricultural inputs or the land itself.  They have
also been recruiting employment-starved young Zimbabweans into either the
Zimbabwe Republic Police or other such state security agencies.
The fourth strategy they are employing is that of attempting to cast the
MDCs as puppets of the West.  Indeed this strategy has been consistently
utilised in the vain belief that at some point it will gain popularity and
diminish the support base of the MDC. They have taken this campaign to Sadc
and the AU in a manner that is as dishonest as it is opportunistic. In the
process they have tended to conveniently ignore the fact they in the past
years that they were in complete power they were literally functioning in
compliance with the dictates of  Western powers.  This is true of their
adoption of economic structural adjustment programmes, their willing buyer
willing seller land policy until desperate times in 2000 and also their
continued membership of the Commonwealth which they left in a haste and not
necessarily because they had no intention of not staying.
The fifth and final strategy is to continue with the narrative of
threatening political violence on those that voluntarily voted for the MDC
in 2008.  This has been done through a divided Zimbabwe National Liberation
War Veterans Association as well as through the discredited Constitutional
Parliamentary Committee outreach programme. Rumours abound as to the role of
the military and intelligence arms of state security in attempting to
measure the effectiveness of their political campaign.
It is in these five strategies that Zanu PF is functioning on a wing and a
prayer. Whether their political opponents in the MDCs realise this may be a
matter for debate elsewhere.  Suffice it to say, that for all their
posturing, Zanu PF and its leaders are not, and at this rate, may never be
in a comfortable position after March 2008. And not even with Sadc.

Zhangazha can be contacted on kuurayiwa@gmail.com

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