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Zimbabwe's dirty tricks brigade

Thursday, 13 September 2007, 07:30 GMT 08:30 UK
Joseph Winter
BBC News

Bishop Pius Ncube (file photo)
Archbishop Ncube - many believe he was a victim of CIO agents
Pius Ncube is widely believed in Zimbabwe to be the latest victim of dirty tricks by the feared Central Intelligence Organisation (CIO).

Bishop Ncube, who has just resigned as the Archbishop of Bulawayo, has been a vocal critic of the government.

In July this year, he called for foreign intervention to remove President Robert Mugabe.

A week later, he called the president a "megalomaniac, a bully and a murderer".

Barely two weeks after that, state media gleefully published photos - allegedly of Bishop Ncube in bed with a married woman.

The bishop denies the allegations but the scandal has led to his resignation, with her husband suing him for damages.

"The CIO manufactured all that," says Tendai Biti, secretary general of one faction of the opposition Movement for Democratic Change (MDC).

"He fought the regime and the regime fought back."

Pius Ncube - adultery
Morgan Tsvangirai - treason plot
MDC - infiltration split
Ndabaningi Sithole - attempted assassination

Bishop Ncube himself talks of the "crude machinations of a wicked regime" but vows: "I will not be silenced".

He has, however, lost his job and it remains to be seen whether his voice will carry the same influence without the backing of such an influential post.

Lovemore Madhuku from the National Constitutional Assembly, which campaigns for political reform in Zimbabwe, says that as soon as you stand up and criticise the government, you are taking a huge risk.

Opposition activists have been beaten up, tortured and even killed but CIO agents also employ subtler methods, such as those many believe were used against Bishop Ncube.

"They visit your husband, or your wife, or your workplace and try to interfere in your day-to-day life," Mr Madhuku told the BBC News website.

MDC opposition member Lovemore Madhuku
Madhuku: the CIO find ways to interfere in your day-to-day life

"They are very clever," he says. "They cannot force you to have an affair but they study you, so they can take advantage of your weaknesses."

He says that other favoured methods are to entrap businesspeople into doing something illegal, like dealing in foreign currency.

They then keep this information and use it against you when they judge the time is right, blackmailing you into giving up politics.

Mr Madhuku says CIO agents have repeatedly gone to the University of Zimbabwe, where he works in the law faculty, to try to get him sacked.

He says they have successfully managed to stop him taking a high-profile role in his church.

Spreading mistrust

The CIO reports directly to the office of the president and agents are selected on the basis of their loyalty to Mr Mugabe and his Zanu-PF party.

It has a massive budget despite Zimbabwe's economic woes, access to the latest technology and a massive network of informers.

"You don't know who you're talking to, who you can trust," Mr Biti says.

MDC leader Morgan Tsvangirai
Mr Tsvangirai was acquitted after a long treason trial in Harare

He says they have infiltrated every structure of every organisation in the country. And opposition parties are first in their firing line.

Two years ago, the MDC, which has presented Mr Mugabe with its strongest challenge since he led Zimbabwe to independence in 1980, split into two factions, making it far less effective.

Many see this as another CIO coup.

Mr Madhuku says their agents infiltrated the highest levels of the party and successfully played on the egos of top MDC officials.

One group, including the party's secretary general and vice-president, accused leader Morgan Tsvangirai of over-ruling a vote taken by a majority of the party`s leadership.

Mr Madhuku says undercover CIO agents would have gone to Mr Tsvangirai and told him: "You're the leader, you must be decisive."

Then other agents would have approached people like Secretary General Welshman Ncube and said: "That Tsvangirai is a dictator. Our party is based on the fight for democracy, so we must all obey the rules."

Going back and forth between the different camps, the agents eventually sowed discord, personality clashes and eventually a split, which greatly weakened the party.

This was not the first time that Mr Tsvangirai had been targeted.

Trumped-up treason

Just weeks before the 2002 presidential election, he was charged with treason, based on the evidence of Ari Ben-Menashe, a Canada-based political consultant.

Zim treason cctv tape
Grainy footage of the CCTV tape of Mr Tsvangirai (R) was sloppy

He testified that in a secretly-filmed meeting in December 2001, Mr Tsvangirai had asked him to arrange the assassination of President Mugabe.

As evidence, he produced a grainy tape-recording.

However, on that occasion, the CIO's standards had slipped and it was obvious that the tape had been heavily edited in an amateurish attempt to put incriminating words into Mr Tsvangirai's mouth.

The clock in the corner of the CCTV footage kept on flicking backwards and forwards.

With its tentacles reaching into every facet of Zimbabwean life, the CIO no doubt tried to ensure that a compliant judge heard the case.

But for whatever reason, on this occasion, their plans failed and Mr Tsvangirai was acquitted.

Nevertheless, the possibility of a death sentence must have been a huge distraction for the opposition leader for more than two years, making him less of a threat to Mr Mugabe.

He was not the first opposition leader to be tried for treason on spurious grounds in Zimbabwe.

Reverend Ndabaningi Sithole, Mr Mugabe's rival for more than 20 years, always claimed that he had been set up when he was charged with trying to assassinate Mr Mugabe in 1997.

On this occasion, he was found guilty and sentenced to two-and-a-half years in prison, although he died, aged 80, before serving any time.

Before the treason charges, another CIO ploy to discourage one of only two opposition MPs at the time, had been to show Rev Sithole a document allegedly showing that his wife was having an affair with a government minister.

Rule by Securicrat
Mr Mugabe owes his position to dirty tricks... and the securicrats who invent them
Tendai Biti

Mr Madhuku says such petty interference, as much as the threat of physical violence, is why many ordinary Zimbabweans decide not to get involved in politics, despite the country's economic collapse.

Mr Biti concurs, and says: "Mr Mugabe owes his position to dirty tricks and the 'securicrats' who invent them. The 'securicrats' are the real brains of this regime."

Mugabe to cut powers


Clemence Manyukwe Staff Reporter
. . . But moves to tighten hold on party
PRESIDENT Robert Mugabe has agreed to shed some of his sweeping powers in
talks between his party and the opposition Movement for Democratic Change
(MDC), but at the same time he has begun consolidating his hold on ZANU PF,
ahead of a special congress where he will seek to crush factions vying to
block his candidacy.

The ruling party's supreme decision-making body - the Politburo - last week
decided to call an extraordinary congress in place of a conference that had
been pencilled for December.
ZANU PF insiders said the congress will give President Mugabe, who had
earlier hinted at retiring at the expiry of his current term only to change
his mind after the race to succeed him split the ruling party right through
the middle, a chance to finally get official endorsement as ZANU PF's
presidential candidate.
But the decision also shows that some opposition to his bid remains, despite
public endorsements he has received from the leaders of the Women's League
and the Youth League plus war veterans, chiefs and ZANU PF mayors.
The extraordinary congress has been called to choose the party's
presidential candidate for elections next year, Vice President Joice Mujuru
was quoted as saying this week.
According to ZANU PF sources, President Mugabe's supporters are now stepping
up a campaign for Mujuru's ouster.
Mujuru and Rural Housing Minister Emmerson Mnangagwa are linked to factions
jockeying to succeed the ageing Zimbabwean leader, in power since the
country's independence from Britain in 1980.
Recent public comments made by senior members of the ZANU PF Women's League,
regarded as critical of Mujuru, are part of a wider strategy to sideline her
ahead of congress, the sources said.
But insiders say although there are dissenting voices in the ruling party,
there is little chance President Mugabe will face an open challenge at
Unlike the conference, which had been planned earlier, congress draws huge
crowds, particularly from the boisterous war veterans and the party's youth
and women's leagues, where President Mugabe enjoys strong support.
"There is resistance, but unless something extraordinary happens, he will be
nominated," a Politburo member said yesterday.
President Mugabe has, since the Goromonzi conference last December, shown
increasing unease with the Mujuru faction, which he backed against Mnangagwa
at the 2004 congress.
In an interview with state television to mark his birthday in February, the
President criticised what he said was "an insidious dimension (in ZANU PF)
where ambitious leaders have been cutting deals with the British and
Americans", and voiced his opposition to involvement by his top lieutenants
in diamonds.
This was widely seen as a dig at retired army general Solomon Mujuru, the
only one of his top officials with known interests in diamonds. The retired
general is Vice-President Mujuru's husband.
And at the weekend, Herald columnist Nathaniel Manheru, who said the
congress would need to "secure its leader", referred to a "British-run
faction, which has been seeking to worm itself to influence. It is a
faction, which is greedy, anti-nation, a bit daft, without structures, but
well heeled and quite white at its core."
President Mugabe's ZANU PF supporters, Manheru suggested, were moving
"relentlessly to pare down the power claims of this faction."
Supporters of President Mugabe have cast him as the remaining authentic
revolutionary in the ruling party. Apart from fighting other factions,
radical ZANU PF supporters have sniped at any hints at the need for reform,
especially after comments in South Africa by Simba Makoni the former finance
minister, who merely acknowledged that there was an economic crisis in the
Over recent months, the women's and youth leagues, chiefs and war veterans
have endorsed the President for the harmonised 2008 elections.
Justice Minister Patrick Chinamasa yesterday tabled the 18th amendment, but
debate on it will only begin on Tuesday.
The Bill will help President Mugabe manage his succession, but it is the
unexpected call for a special congress that reflects the continuing scheming
within ZANU PF over his future.
Jabulani Sibanda, sacked as war veterans leader in a row some linked to the
succession battle, is suddenly back in favour, leading a march in President
Mugabe's support two weeks ago.
Sibanda has been linked to the Mnangagwa camp, although he has denied this
in previous comments to The Financial Gazette.
However, signs that support among war veterans for President Mugabe, though
strong, is not unanimous, came last week when there were clashes in Masvingo
between groups supporting rival factions of the party.
The Politburo meeting also discussed and approved changes to the original
wording of the Constitutional Amendment No.18 Bill, changes that will limit
President Mugabe's powers, especially his influence over Parliament.
The changes were agreed after ZANU PF tabled the Amendment as an agenda item
in the talks, spearheaded by South African President Thabo Mbeki.
A 210-member House of Assembly will be constituted entirely by elected
members, unlike the previous plan where the President could appoint 10
The President would still choose governors, three members from interest
groups, and have influence over the appointment of chiefs to an expanded
93-member Senate. But the lower house would have the power of veto on the
upper chamber, again diluting the influence of his appointees.
The constitutional changes would also see the Delimitation Commission being
abolished, and its work taken over by the Zimbabwe Electoral Commission.
"We will be going back to the 20 percent (constituency population) variance
factor, from the current 25 percent, which created huge urban constituencies
and small rural constituencies," a source said.
This arrangement had the effect of creating more rural constituencies than
urban seats.
Since 2000, the Delimitation Commission has controversially increased seats
in rural areas, a ZANU PF stronghold, while seats in the urban areas, where
the MDC draws most of its support, were gradually reduced.
Sources said the ruling party was also debating excluding Registrar General
(R-G) Tobaiwa Mudede from all involvement in elections. The opposition sees
the R-G as a ZANU PF appointee.

Chaos at border posts as ZIMRA workers strike


Shame Makoshori Staff Reporter

THE country's ports of entry plunged into a crisis yesterday after the
Zimbabwe Revenue Authority (ZIMRA) workers went on strike to press for a 5
700 percent salary increase, The Financial Gazette established.

The work stoppage could have cost ZIMRA at least $1 trillion in revenue
alone on the first day of the strike, besides inconveniencing thousands of
cross-border travellers battling to clear imports into the country.
All non-managerial employees at ZIMRA, estimated at over 2 000, had joined
the work stoppage, which comes at a time when government has imposed a
blanket freeze on salary adjustments to rein in rampant inflation, currently
topping 7 600 percent.
Sources within ZIMRA told The Financial Gazette yesterday that the
negotiations between workers and management had collapsed on Tuesday after
the authority refused to grant the 5 700 percent salary increase, arguing
this was beyond the revenue authority's budget.
The 5 700 percent increment could have lifted the salary of revenue
specialists, the equivalent of bank tellers in a financial institution, to
about $87 million per month, up from $1.5 million per month they are
currently earning.
Workers warned that while government was in des-perate need for revenue,
ZIMRA's refusal to award workers the salary adjustment could be a major blow
to the ailing economy.
"Companies had started remitting Pay as You Earn (PAYE) deductions because
we are approaching the 15th of September. That is about $1 trillion revenue
per day that the government is losing," said a senior ZIMRA employee.
"There are serious problems at the Beitbridge border post because after the
Immigration Department clears passengers, there is no one to do the customs
clearance. All the border posts have been affected except Forbes near Mutare
because of communication problems there," the source said.
ZIMRA management had offered the workers a 400 percent increment to be
implemented this month.
This would have taken the salary of a revenue officer to $10 million at a
time the poverty datum line is estimated at over $15 million.
The workers, who also seemed to ignore a government directive for a price
and salary freeze, spent most of the day holed up in an open office at one
of ZIMRA's buildings in Harare yesterday.
They said the industrial action had started at the Beitbridge border post,
one of Africa's busiest ports, at midnight yesterday, before spreading to
Chirundu, Nyamapanda and other border posts causing serious confusion among
travellers and investors seeking to clear their goods.
The Beitbridge border post clears a number of vehicles daily, some of which
are in transit to Zambia, Tanzania, Malawi and the Democratic Republic of
the Congo.
Sources however, said it was the disruption in Harare that would be a big
blow to revenue collection because at this time of the month, about 85
percent of ZIMRA's revenue collections came from the capital through
corporate tax payments as well as Value Added Tax.
ZIMRA's corporate communications department had not yet responded to written
questions submitted yesterday by the time of going to press.
It is understood that ZIMRA has lost between 10 and 15 key staff members
every month since January due to poor salaries.
This is, however, not the first time ZIMRA has clashed with its workers over
In 2005, the Labour Court ordered the revenue collection authority to award
a 200 percent salary increment but ZIMRA pressed on with its decision to
award a 17 percent increment leading to threats by the workers to down
ZIMRA is under pressure to increase revenue collection to replenish the
state's depleted coffers as escalating costs of goods and services have
taken their toll on the fiscus.

New rules empower govt to take over firms


Rangarirai Mberi News Editor

NEW measures freshly authorised by President Robert Mugabe to bolster the
price war make it easier for government to wrest control of private
companies under the guise of resuscitating them.

Statutory instrument 159A, meant to widen the powers of the National Incomes
and Pricing Commission (NIPC), allows the state to appoint an administrator
to take over management of any company that stops or cuts production due to
the price clampdown.
The instrument, published last week, is made under Presidential Powers
(Temporary Measures) regulations.
The measures appear to vindicate suspicions that the widely condemned price
blitz may be targeted at specific companies, which government might want to
take over in order to influence the pricing of goods and services.
Targeted for takeover, according to sources, could be major producers of
basic commodities such as milk, sugar, bread, mealie-meal and cooking oil.
At the moment, government is claiming links to the indigenisation drive of
the acquisition by the Cotton Company of Zimbabwe of H.J. Heinz's 49 percent
stake in food manufacturer Olivine Industries.
Government is also in the process of enacting a law compelling foreign-owned
companies to give up 51 percent shareholding to locals as part of new
measures to empower previously disadvantaged blacks.
Now, government can issue new shares in a company it takes over, appoint its
own directors, and raise capital without the approval of the owners,
according to the latest regulations.
The instrument says "where the enterprise is a private company, an order
declaring it to be a public company, whereupon such enterprise shall for all
purposes be deemed to be a public company", can be issued by the NIPC.
An administrator will be appointed to take over a company whose owners have
"discontinued" production, the instrument says.
However, it is vague on how it determines the cause behind the stoppage of
production, defining a "discontinuation" as when the owner ceases "to
properly or adequately operate or supervise the enterprise".
The instrument claims to target "essential enterprises", and defines such a
company as one that manufactures "any commodity used by the public
generally, or any significant section of the public."
A broad range of sectors are listed as essential: manufacturing,
distribution, fuel supply, retail, commuter transport, health services,
mining, telecommunications and finance.
However, an essential company, according to the instrument, can also be "any
other enterprise the Minister (of Industry and International Trade) deems to
be an essential service."
Government will compensate for any damage suffered by a company under
However, in calculating any compensation, allowance will be made for "any
dam-age or deterioration, which would probably have occurred had the
enterprise not been subjected to temporary administration, and the value of
any improvements effected during the period of the temporary
The NIPC will determine the length of a period of administration, at the end
of which an order can be issued extending the period for a further three
Should the NIPC choose to return a company to its owner, and the owner does
not "continue it to the satisfaction of the Commission within seven days
after repossession," or discontinues production within three months, the
administration order will be reinstated.
Administrators, who can be drawn from the military or the police under the
rules, will be appointed with the consultation of the Industrial Development
Corporation or the Zimbabwe Development Corporation.
Before an administration order can be issued, an NIPC inspector is sent in
to "ensure the continuation of essential services". The inspector is allowed
to "break open the doors and windows of the premises if he or she has failed
to obtain admission after having audibly demanded admission."
The inspector will take an inventory of all equipment and stock, and demand
all information on the conduct of the business, including the names and
addresses of owners and creditors.
The new rules represent a further escalation by government of its war on
business, which began in June with an order for a 50 percent price cut and
continued last month with a salary freeze.
The price war, which virtually outlaws real profits and has caused massive
shortages, has driven industry to the brink, forcing many to drastically
scale down operations by shutting down plants and idle floor space.
However, industrialists now face the prospect of losing their businesses if
they either stop or reduce production to prevent further losses.
Over 7 000 traders, from the heads of listed corporations to small retail
operators, have been arrested since the crackdown began.

Chinese diplomat reveals why Zim deals are dead in the water


Clemence Manyukwe Staff Reporter

A STRING of commercial agreements signed with China have failed because
Zimbabwe cannot raise both the foreign and the local currency to back the
projects, a senior official at the Chinese mission in Harare has said.

Liu Joe, trade attaché at the Chinese Embassy told The Financial Gazette
last week: "Zimbabwe does not have the foreign currency needed for the
projects. In some cases, they do not have the local currency."
Liu said he did not have actual figures showing how much Zimbabwe needed to
raise for the outstanding investments. He also declined to discuss Chinese
aid to Zimbabwe saying the issue was confidential.
Chinese involvement in Zimbabwe has come under renewed scrutiny in recent
weeks after Mark Malloch-Brown, British foreign secretary, claimed in a
newspaper interview that he had been assured by a senior Chinese government
official that the Asian giant had stopped all non-humanitarian aid to
China has dismissed the claims.
The government adopted a "Look East Policy" in 2002 when the European Union
and some western countries slapped sanctions on President Robert Mugabe's
government and restricted commercial links with Zimbabwe.
Under the "Look East Policy", the government has over the years trumpeted
what it described as big deals with the Chinese.
But tangible Chinese investment has yet to materialise.
One of the biggest deals was announced in November 2005, after Vice
President Joice Mujuru and Water Resources and Infrastructure Development
Minister, Munacho Mutezo, signed an agreement in China with the Jiangxi
Corporation of International Economic and Technical Co-operation.
Officials said at the time that the company would build Kunzvi Dam and
provide irrigation equipment to boost food security, in exchange for mineral
However, Kunzvi Dam remains "in the pipeline", with many urban centres still
going without regular water supplies.
Promised Chinese investment into a methane gas project in Lupane is also yet
to materialise.
The government has also previously announced it was negotiating a US$2
billion loan facility from China for the stabilisation of the economy. But
China - even with its colossal US$1.4 trillion foreign reserve - has not
extended much in loans to Zimbabwe.

Economy won't collapse: Gono


Staff Reporter

RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono has said Zimbabwe will
not collapse due to the economic crisis that has engulfed the country,
arguing the country will finally come out of its present quagmire.

Speaking in a recent wide ranging interview with the London-based New
African magazine on the future prospects of the economy, which has suffered
eight years of a successive recession, Gono, said that "armchair critics"
should instead blame Western sanctions for Zimbabwe's problems.
"Let me just say Zimbabwe will not die," Gono said. "We will have bruises
here and there, but we will not die. And we will not tell the whole world
our strategies for survival because we have been betrayed before," he added.
The central bank chief has spearheaded the country's campaign for an
economic revival since taking over the central bank governorship in late
In 2005, Gono committed the country's meager foreign currency reserves to
clear a US$275 million debt with the International Monetary Fund (IMF), in
the process averting an embarrassing expulsion of Zimbabwe from the IMF's
But the governor expressed his disappointment with the international
financial system, saying it had been politicised and was in urgent need of
"We have been very disappointed with the action of institutions that are
supposed to be apolitical," Gono said.
"I am afraid to say that the multilateral institutions of this world leave a
lot to be desired. I should say we have greater faith in ourselves than
outside ourselves (but) we will welcome support from whatever quarter; that
support should be predicated on actions that we take voluntarily."
"There is need for us to reform these institutions. We continue to remain a
member but working for its (IMF) transformation.
He defended the printing of money by the central bank, arguing those who
blamed him for the actions were "armchair critics."
"Only the bullfighter knows exactly what goes on in the ring. It is easy to
criticise, but what alternatives do you proffer in an environment where we
can't get the traditional BoP (balance of payments) support. If you look at
the impact of sanctions on this economy, you will then see how the drying of
resources has affected us," said Gono.
He argued that the printing of money to sustain lives, to build
infrastructure, a springboard from which to leap forward, "cannot be bad."
"After the Great Depression in the 1930s, the United States had to print
money to finance some of the infrastructure that the current generation are
proud to have. Look at the bridges across many rivers and other
infrastructure that were built with high budget deficits," Gono said.
"When these people in the rural areas say we want a dam, they want to see
water. They do not care where the funds come from".

Forex duty on underwear


Staff Reporter

FOR goods ranging from underwear to fridges, from shoes to carpets,
government now wants duty in foreign currency.

An expanded list of what government defines as "luxury items" is contained
in a statutory instrument, the Customs and Excise (Designation of Luxury)
amendment notice that came into effect last Friday.
It was gazetted a day after Finance Minister Samuel Mumbengegwi announced he
would expand the list of goods for which duty would now be paid in foreign
Earlier this year, government slapped foreign currency duty payment on the
importation of motor vehicles, saying cars were luxury items, and that their
importation was hurting the local motor industry - which, essentially, is
two companies.
Now government has released a new list of hundreds of other products that
will be considered luxury items, and for which duty in
foreign currency will have to be paid.
The list classifies virtually all forms of clothing as luxury items.
This includes footwear, and underwear for both men and women - and the
instrument describes these at length;
the bras, the panties, hosiery,
and even girdles, veils, gloves and ties.
Duty for all types of carpeting, "refrigerators of a household type",
cookers, bed linen, blankets - excluding, surprisingly, electric blankets -
will also be charged in foreign currency.
According to the instrument, duty for most clothing will
be charged at 60 percent of its value, plus at US$10 per kilogramme.
Goods such as bed linen will attract duty of 50 percent, plus the US$10 per
kg. Fridges and cookers will be charged at 60 percent and US$45 per item.

2005 spying case: High Court orders hearing


Clemence Manyukwe Staff Reporter

THE High court has ordered the Attorney General (A-G) and the Master of the
High Court, Charles Nyatanga, to facilitate the hearing of an appeal by
three men convicted in 2005 of spying on ZANU PF, following numerous
postponements as a result of the state's failure to get its case in order.

The three appellants, former ambassador-designate to Mozambique, Godfrey
Dzvairo, former Metropolitan Bank secretary Tendai Matambanadzo, and ZANU-PF's
ex-director for external affairs, Itai Marchi, were jailed in 2005 for
espionage following their arrest the previous year.
Harare Magistrate Peter Kumbawa sentenced Dzvairo to six years in jail, and
the other two accused to five years each, but they are appealing against
both conviction and sentence. The appellants were charged with breaching the
Official Secrets Act.
Court records show that High Court judges Lawrence Kamocha and Ben
Hlatshwayo ruled last month that the A-G must immediately file the state's
heads of arguments in the matter, and that the Master of the High Court
should set down the appeal date in the first week of this month.
Both orders have, however, not been complied with. Neither have further
court papers been filed nor a date set for the hearing.
Documents show that lawyers for the three men have now written to the A-G
and Nyatanga, protesting at their failure to abide by the ruling. Harare
lawyer Selby Hwacha represents the appellants while prosecutor Joseph
Makwakwa represents the state.
Last December, Justice Anne-Marie Gowora postponed the matter indefinitely
after the A-G had failed to file the required court records.
Dzvairo, Matambanadzo and Marchi were convicted of supplying information
about ZANU PF to foreign governments, including South Africa.
During their trial, they claimed they had been tortured in custody.
They pleaded guilty to the charges at their first court appearance on
December 24, 2004, but later sought unsuccessfully to change their pleas on
the grounds that their confession had been extracted under duress.
Businessman Phillip Chiyangwa, then a ZANU PF Member of Parliament, and
Kenny Karidza, a top ZANU-PF security officer, were also arrested in
connection with the sensational case. They were subsequently set free.

Govt tables land tax for A2 farmers


Clemence Manyukwe/ Shame Makoshori Staff Reporters

THE government has tabled a law in Parliament imposing a new tax on A2
farmers, with those failing to pay risking eviction from properties
allocated to them.

Government has previously insisted that no taxes would be levied on
resettled farmers, but its new proposals show an increasing desperation to
replenish depleted coffers. Apart from the farm tax, which comes into
effective next month, the proposals, contained in the Finance Bill, also
give Finance Minister Samuel Mumbengegwi sweeping powers to introduce
regulations amending or replacing rates of taxes, duties, levies and other
On the whole, the new Bill contains amendments to the Finance Act, Income
Tax Act and Customs and Excise Act. Notably, it covers the controversial
payment of customs duty in foreign exchange.
"This clause will insert a new chapter in the Finance Act, which sets out
the rates of rental to be charged on holders of offer letters in respect of,
or leases of, Model A2 farms allocated to them by the State," reads part of
the proposed law. "The minister responsible for the gazetted land
(Consequential provisions) Act (chapter 20; 28) (No8 of 2006) shall cancel
the offer letter of any holder thereof who fails to pay rentals for three
consecutive quarters," the proposals say.
Presenting his maiden supplementary budget last week, Mumbengegwi said the
tax would be based on land size and
ecological region in which the farm is located. The tax, he said, would be
pegged at levels that do
not threaten the viability of farming. Government had introduced lease
rentals to raise revenue
and enforce maximum utilisation
of productive land, said Mumbengegwi.
"Following the successful completion of the agrarian reform programme, there
now exists a large number of potential taxpayers involved in the farming
business," Mumbengegwi said. "It is therefore, essential that the current
farming taxation regime be reviewed, with the objective of encouraging full
utilisation of the allocated land."
Last year, State Security, Lands and Resettlement Minister Didymus Mutasa,
clashed with retired army chief and now ZANU PF Gutu senator Vitalis
Zvinavashe, during a lands committee hearing over whether a new tax should
be slapped on resettled farmers.
Zvinavashe had proposed that government tax the new farmers to fund
compensation for dispossessed white farmers.
However, Mutasa said the farmers should concentrate on farming only, without
having to carry the extra burden of taxation.
"The politicians are refusing to pay," Mutasa said at the time. "That land
simply taken from us through conquest. It belongs to all of us. The farmers
should concentrate only on farming activities."

Lawyers spotlight wage freeze decree


Njabulo Ncube Political Editor

THE Law Society of Zimbabwe (LSZ) is collating legal opinion from experts on
the decree issued by President Robert Mugabe ordering a six-month salary
freeze, with a view to mounting a legal challenge against the controversial

President Mugabe recently invoked the Presidential Powers (Temporary
Measures) Act, to order that "no employer shall increase the remuneration of
any employee on account of an increase in a consumer index, on account of an
increase in any official or unofficial rate at which the Zimbabwe dollar may
be exchanged for other currency, increase in a consumer price index and an
increase in any official or unofficial rate at which the Zimbabwe dollar
maybe exchanged for any other currency."
The order stipulates that salary or fee increases can only be made in future
with specific approval from the National Incomes and Pricing Commission, a
body that President Mugabe directly controls, and without any link to
galloping inflation, which currently stands at over 7600 percent. The LSZ
deliberated over the statutory instrument at its meeting last Thursday and
resolved to tackle the issue, which has irked labour unions.
Beatrice Mtetwa, president of the LSZ, confirmed an opinion was being sought
over the decree, described last week by the Zimbabwe Congress of Trade
Unions as "satanic". "The council has resolved to get an opinion on the
statutory instrument and depending on that, there might be another
resolution. Council felt that six months is too long a period at a time when
employees are suffering," said Mtetwa.
She said upon receiving expert opinion, the council would make a decision.
Heads of labour unions will eagerly await the outcome of the LSZ
The ZCTU has already threatened industrial action if the statutory
instrument is not removed. The union has said the instrument runs counter to
international labour conventions and is in violation of a fragile protocol
on Incomes and Price Stabilisation signed in June by government, business
and labour.
Disquiet in labour grew last week after statistics supplied by Finance
Minister Samuel Mumbengegwi, in his 2007 supplementary budget statement,
revealed that President Mugabe's annual salary had been raised by $1.4
In the original 2007budget, the President's salary had been put at $62.3
million, but was revised by $1 462 305 000 in the supplementary budget.

Illicit diamonds probe team misses own deadline


Clemence Manyukwe Staff Reporter

THE Kimberly Process (KP), the global dispensation for preventing trade in
conflict diamonds, has missed a self-imposed August deadline to make known
the findings of an investigation conducted in June into allegations of
diamond smuggling in Zimbabwe.

The KP sent a six-member team that met government officials and inspected
the Chiadzwa diamond fields in Marange district, as well as River Ranch
diamond mine in Beitbridge.
The probe followed claims that rough stones from the two areas were being
smuggled out of the country.
A KP spokesman told The Financial Gazette that the report was not yet out,
but gave no reasons for the delay, or when the findings were now expected.
The European Union currently holds the rotating KP chairmanship.
Christiane Hohmann, spokesperson for External Relations and European
Neighbourhood Policy European Commission, said: "Unfortunately, the report
you refer to is not finalised yet. Therefore, it is impossible to provide
you with any detail of the findings of the report or to comment on it."
In an interview on Monday,
a representative of Bubye Minerals, which made allegations of smuggling
against rival investor River Ranch Limited, said a complaint against the
probe team had been lodged after the delegation refused during its visit to
meet Bubye officials to get the company's evidence.
Bubye and River Ranch Limited are involved in an ownership wrangle over
River Ranch Mine. The dispute is before the courts.
"We are not surprised by the team's failure to produce the report, because
it was non-inclusive, and the team was subject to a controlled and
pre-determined itinerary," said Bubye Minerals lawyer Terrence Hussein.
"The team, in fact, informed my client that they were under strict
instruction not to speak to Bubye Minerals Private limited. Bubye has since
launched an official complaint at the manner with which the KPC team
conducted itself in Zimbabwe."
Hussein said Bubye wants to be heard like the other parties that had their
say during the probe.

Chinese fertiliser last hope for new season


Zhean Gwaze Staff Reporter

Zimbabwe's farmer groups hope that a consignment of fertiliser expected from
China will avert what experts say is yet another disastrous start to the
farming season.

Hardest hit by worsening input shortages are tobacco farmers, who had
planted enough seed to cover 95 000 hectares, with the aim of increasing
production in the coming season from this year's 77 million kilogrammes to
120 million kg.
Compound C fertiliser, which tobacco farmers require at the planting stage
is in critically short supply, the Tobacco Industry and Marketing Board
(TIMB) said.
"The situation regarding the fertiliser situation is that there is no
fertiliser on the market. We hope that the consignment coming from China
arrives on time to save the crop. Otherwise only contracted tobacco growers
are accessing imported fertiliser from their sponsors," said the TIMB.
The country has experienced perennial fertiliser crises owing to the
unavailability of foreign currency. But this year, the fertiliser supply
situation has been made particularly dire by the closure of Dorowa Mine,
Iron Duke and Zimphos, key suppliers of raw materials to the
fertiliser-manufacturing sector.
Media reports said recently the three companies had closed due to the
unavailability of various raw materials and power cuts.
Cash-strapped Zimbabwe requires US$45.6 million for the refurbishment of the
plants in the next three years to ensure production levels are maintained at
100 percent or 552 000 tonnes of fertiliser annually, industry players have
The sector also requires US$5.9 million per month to procure raw materials
such as potassium, which is imported from the Middle East, Chile and Europe
and sulphur from South Africa.
Seed maize is also not readily available on the market, threatening the
summer cropping season.
Zimbabwe Farmers Union official Blessing Chifeya said although seed was sold
on a limited scale, farmers also faced challenges in accessing tillage
Another poor farming season would have a devastating effect on Zimbabwe
which hoped for better fortunes this year after seven years of poor
harvests, largely blamed on disruptions to production on farms following the
violent take over of land from white farmers.
Falling food production coupled with an unprecedented economic meltdown has
resulted in most Zimbabweans depending on food handouts from international
relief agencies.

Bare pantries, hungry kids, no teachers


Zhean Gwaze Staff Reporter
Boarding schools now the ultimate schoolhead's nightmare
THIRTY-FOUR year old Sekai Muchikichi recounts nostalgically the story of
her life as a boarder at a high school in Masvingo, and visualises the daily
menu card that was pregnant with what to a boarder were sumptuous meals.

Breakfast, lunch and dinner were never tedious affairs because the school
authorities tried hard to serve nutritious meals that blunted the gloom of
being away from home.
So good were meal times that, one weekend, after being served mealie rice,
the students were so outraged that they demanded an explanation from the
boarding master for the absence of "proper" rice.
Years later, Muchikichi's accounts of life at boarding school are almost
unbelievable to her daughter, who is in Form One at another boarding school.
Muchikichi holds out a circular sent out by her daughter's school at the
beginning of the third term last week, instructing each student to bring a
packet of rice, sugar, and cooking oil.
Worsening shortages of basic commodities - which followed a prize freeze
that was supposed to ease the plight of consumers, but has only heightened
their misery - have hit boarding schools hard.
"I do not know how many parents could have afforded to send their children
with any of these foodstuffs they list here. The goods were not available in
any supermarket. I believe even for those who managed small quantities, the
food will not last the term," Muchikichi said.
Parents now face a tough decision; either to withdraw their children from
the once-fashionable boarding schools and shell out millions in transport
fares to get their children to day schools, or keep the children in boarding
schools where they face starvation.
Foodstuffs disappeared from shop shelves beginning in June when the
government ordered a blanket freeze on the prices of all commodities.
When schools re-opened for the third term, even school uniforms, shoe polish
and stationery had disappeared.
The Association of Trust Schools (ATS), representing a number of private
boarding schools, said its assessment was that the food situation was dire.
"We cannot find food. The food situation is precarious," said ATS chairman
Jameson Timba.
Many boarding schools have facilities to bake their own bread, but a wheat
shortage means they still cannot feed students. The baking industry has said
the wheat shortage will force it to retrench more than 10 000 workers.
"At my child's school, we were told that there will be no bread this term
and the headmaster even warned us that we should not be shocked when we are
called back to collect our children mid-term," one parent said.
Although Education, Sport and Culture Minister Aeneas Chigwedere said
recently in Parliament that the Grain Marketing Board (GMB) has been
supplying maize meal to boarding schools, his remarks do not tally with
realities on the ground.
Many parts of the country have gone for months without maize-meal, and the
World Food Programme (WFP) says up to four million people could be at risk
of starvation by early next year.
Last month, the WFP appealed for US$118 million to buy food for starving
Zimbabweans over the next eight months.
The food relief agency already had 138 000 tonnes of food but needed another
180 000 tonnes to distribute to about three million Zimbabweans until the
next harvest in April.
Given such a scenario, boarding schools are unlikely to be in front of the
queue for mealie meal.
This means that school heads who opt to provide bread for their pupils will
have to compete with hordes of other buyers desperately looking for flour on
the black market.
Although the official price of flour is $6 million per tonne, it is only
available on the black market at $15 million, which many schools cannot
The headmaster of one Midlands boarding school said this week that since
students returned last Monday for the new term, he had spent most of his
time hunting for goods on the black market.
"I have not held any meetings with staff since we opened. I am short of
everything. I have no teachers, and I have no food," he told The Financial
Gazette by phone.

Byo's critical water shortage to worsen


Charles Rukuni Bureau Chief
City soon to be left with one out of five supply dams
BULAWAYO - The critical shortage of water in Bulawayo is likely to worsen if
there are no rains before the end of October.

The council is now relying on only two of its five dams but will be
decommissioning one of them, Inyankuni, next month leaving it with only one
supply dam, Insiza.
The council has already decommissioned Lower and Upper Ncema as well as
Umzingwane dams.
The city of more than one million people is getting only 69 000 cubic metres
of water a day against an unsuppressed demand of 140 000 to 150 000 cubic
metres a day.
If Inyankuni is
deommissioned, the
city will only have
43 000 cubic metres of water a day, less than a third of its requirements.
The only viable
solution to the city's water problems is the linking of Umzingwane Dam to
Mtshabezi Dam through a pipeline but the Zimbabwe National Water Authority
(ZINWA), which is
supposed to put up the pipe link has been saying it cannot do so unless the
council agrees to a government takeover of the city's water supplies.
The Bulawayo City Council has vowed to resist the takeover because it will
lose 44 percent of its revenue and also because it does not believe ZINWA
has the capacity.
Though ZINWA is using the council's rejection of a takeover as an excuse,
observers believe that the real reason ZINWA cannot install the pipeline is
that it has no money.
The water authority has failed to rehabilitate its boreholes in the
Nyamandlovu area while construction of the Gwayi-Shangani Dam is reported to
have stopped. Only eight of the 77 boreholes in Nyamandlovu are operational
and supply the city with 298 cubic metres of water instead of 16 000 cubic
metres if all boreholes were on line.
Bulawayo has introduced strict water rationing way beyond what the city
fathers have recommended.
According to the latest council minutes residents are supposed to have water
at least four days a week from 1530 to 730 but at times they are going for a
week without water.
Nkulumane, Emganwini, Nketa, Pumula, Sizinda, Tshabalala, Bellevue. Newton
West, Southwold and West Summerton should have water on Tuesday and
Wednesday, and on Friday and Saturday.
Cowdray Park, Luveve, Magwegwe, Njube, Entumbane, Emakhandeni,
Barbourfields, Mzilikazi, Mpopoma, Nguboyenja, Iminyela, Pelandaba and
Matshobane should have water on Wednesday and Thurday, and Saturday and
Sunday while all eastern suburbs should have water on Monday and Tuesday,
Thursday and Friday.
The council has also introduced a ban on the use of hosepipes and will not
only fine anyone found using a hosepipe but will confiscate the hosepipe.

Econet allowed to test mobile payphones


ECONET, Zimbabwe's largest cellular telephone network operator has been
granted permission to deploy its mobile payphones in Bulawayo on a trial

The company said its payphones, which operate under the Yourfone Yellowman
brand, served both as public payphones as well as airtime distribution
The benefits to the public were that people could access the phones and
airtime anywhere where there was Econet's network coverage and this could be
at stadiums, bus terminuses, shopping centres and even at weddings.
It said the product had immense opportunities to create employment through
The Bulawayo City Council said the project should be given a chance since it
had the potential to create jobs. However, it had to be first carried out on
a trial basis to assess whether any nuisance would rise from its operations.
The council also wanted to assess modalities for licensing vendors who would
be deployed at various centres to operate the payphones.

Elections: history set to repeat itself


Personal Glimpses with Mavis Makuni

HISTORY seems set to repeat itself when the harmonised elections are held
next year despite South African President Thabo Mbeki's belief that it will
be possible to stage free and fair polls Mbeki, who is the Southern African
Development Community (SADC's) troubleshooter on Zimbabwe has indicated that
a top priority of his mediation mission is to ensure the combined
parliamentary and presidential elections to be held in March next year will
produce a result that no one will dispute.

It is difficult to see what Mbeki bases his optimism on given that the
perennial complaints of opposition groups about an uneven electoral playing
field have not been addressed.
I have a problem with Mbeki's ambivalence. He does not seem to be sure
whether he has a role to play in resolving the Zimbabwean crisis or whether
the matter should be left entirely to Zimbabweans themselves. However, one
assumes that by accepting appointment by SADC leaders in Dar es Salaam six
months ago as their pointman, the South African leader believed he and the
regional bloc had something to offer. But as was the case about five years
ago when his first stint as mediator was shrouded in secrecy, Mbeki has
never spelt out his vision and expectations for the current initiative. He
continues to send out conflicting signals in the same manner he did when he
operated under the discredited cover of "quiet diplomacy".
At the SADC summit held in Lusaka in mid-August Mbeki reported progress
being made in dialogue between ZANU PF and opposition groups, but did not
expound on the nature of the progress. A short while later he was quoted as
insisting that it was up to Zimbabweans to solve their own problems and that
SADC did not wish to take away their right to self-determination. But the
only way the generality of Zimbabweans can reclaim and exercise their right
to self-determination would be through elections in which they can vote for
candidates of their choice without being intimidated or coerced. The
candidates must in turn have equal access to the media and must be able to
campaign freely.
But barely six months before the landmark polls, even these minimum
conditions do not exist. The state media are as partisan as ever and
opposition politicians are only featured in newspaper reports and news
broadcasts when they are being attacked, mocked or generally cast in bad
light. Opposition parties must get police clearance to hold rallies. It has
already been announced that as they did in past elections, war veterans will
once again campaign for President Mugabe and the ruling party. The
involvement of the former freedom fighters in election campaigning has
sparked controversy in the past because of accusations of violence and
intimidation levelled against them. They have been accused of barring
opposition politicians from campaigning or holding rallies in the rural
areas by declaring the countryside a no-go zone.
It will be a mammoth task for Mbeki to get genuine assurances that
irregularities such as the abduction of opposition polling agents and the
intimidation of voters right up to polling day will not be repeated next
year. Allegations that the ruling ZANU PF uses food to buy votes persist.
These concerns will be heightened this time around because of the severe
shortages of basic commodities sparked by the government's price war and the
announcement that the state is to introduce Soviet-style "people's shops".
According to the Deputy Minister of Small and Medium Enterprises, Kenneth
Mutiwekuziwa, the establishment of the shops is designed to ease demand and
enable rural dwellers to have easy access to basic commodities. The
conditions under which the people will be able to buy from these shops are
yet to be announced. However there is no doubt that the people will now be
totally dependent on the state for almost everything.
Another aspect of the electoral process that has been mired in controversy
in the past is voter registration. The voters' roll has been described in
the past as being in a shambles with allegations of thousands of "ghost"
voters being included while the names of thousands suspected to be
opposition supporters have been reported missing from the list. Ordinary
Zimbabweans will not have found any comfort in the recent admission by
Registrar-General, Tobaiwa Mudede that he has been subjected to political
pressure on issues pertaining to the voting rights of certain categories of
In The Financial Gazette issue of September 6-12, Mudede was quoted as
telling the Parliamentary Portfolio Committee on Defence and Home Affairs
that politicians campaigning to increase their support bases ahead of next
year's elections wanted him to revise his interpretation of citizenship
laws. In the past, hundreds of thousands of Zimbabweans of foreign descent
were deprived of the right to vote when they were declared to be aliens.
This was apparently done because it was feared that these people, most of
whom were farm labourers supported the opposition. This time around however
some ruling party politicians believe they cannot make it without support
from this voting bloc.
While Mudede's attempts to strip people of mixed parentage of their
Zimbabwean citizenship was ruled unconstitutional by the High Court, what is
of concern is that such personalised interpretations and applications of the
law are allowed to take place at all. In the circumstances, it is difficult
to know what other aspects can be manipulated behind the scenes to influence
the eventual outcome of an election. Mbeki's focus on the outcome of next
year's elections is meaningless unless he interests himself in some of these

Fringe political parties emerge as polls draw closer


Njabulo Ncube Political Editor

NOW you see them, now you don't. When newspapers or newsrooms are inundated
with calls from nondescript fellows, brandishing usually badly written press
statements, you do not have to be a soothsayer to know an election is

It is four months before voting begins, and the country's fringe political
parties are once again emerging from hibernation that began after the last
elections in 2005.
Once again, editors and journalists must live with the constant harangues of
small-time political players, each desperate to have stories published on
their activities - especially on the front page.
There are different varieties of parties; some come out in the open as
elections approach, while others are born just before ballots are cast.
A new party, the Zimbabwe People's Party (ZPP), has joined a long
list of the country's fringe political parties, announcing its arrival in a
series of press advertisements.
"Fight Poverty, join
the Zimbabwe People's Party (ZPP) For Genuine Democracy," reads one of its
recent advertisement.
Log on to its website, and an impressive logo pops up, accompanied by a
thumbs up sign, encircled with more slogans, suspiciously Macheso-like:
"Zvakanaka Zvakadaro, Kuhle Kunjalo, It's good like that."
The site offers nothing more.
But ZPP's splashing of expensive advertisements has already sent tongues
wagging, with the usual suspicion that the party could be a ploy by the
Central Intelligence Organisation (CIO) to further split the opposition
Another new party to emerge recently is the Patriotic Union of Matabeleland
(PUMA), launched in Bulawayo under the theme "Nothing for Us, Without Us".
ZPP and PUMA join a club of other smaller parties, led by veteran fringe man
Paul Siwela, who leads the ZAPU Federal Party, and Wurayayi Zembe of the
Democratic Party.
Others in this class are the United People's Party (UPP), launched in June
this year by Daniel Shumba, the businessman and former ZANU PF chairman for
Masvingo province.
Shumba launched his project after becoming disenchanted with ZANU PF.
He was one of six provincial chairmen suspended by the ruling party over the
infamous Tsholotsho Indaba.
He later resigned.
"The UPP together with all Zimbabweans will restore the vibrant and
diversified economy in a democratic, law-abiding Zimbabwe. Unite with us,
and together we will unite our nation," the party said in a half page colour
advert on the day of its launch.
The UPP symbol shows two hands, joined together, promising to lead the
country "from hopelessness to hope, from poverty to prosperity, from terror
to well-being, from dictatorship to democracy."
Siwela, whose party has participated in parliamentary and presidential
elections since 2000, blames the low profile of his party and other small
opposition parties on both the public and private media.
"We refuse to be called a fringe political party or a fly-by-night party.
This is nonsensical and a myth created by the media," Siwela told The
Financial Gazette last week.
He said his ZAPU FP - which campaigns for federalism - was in talks with
other "like-minded" groups to forge a united front for 2008, so as to avoid
the "Kenyan Syndrome" - giving the ruling party victory by splitting the
opposition vote.
"We are pushing for a broad alliance with other opposition political
players, but at the moment I am not in a position to disclose their
identities," he said.
There are more parties. Little known Zimbabwe Youth in Alliance (ZIYA) has
dismally lost all elections since its formation on September 15, 2003.
It has courted controversy with disclosures that its youthful leader
Chawaona Kanoti, a University of Zimbabwe law graduate, once worked in
President Robert Mugabe's Office as an intelligence operative.
In 2005, ZIYA candidates unsuccessfully contested in Chirumhanzu, Harare and
Buhera, while its leader Kanoti was trounced in the Mabvuku-Tafara senate
elections in November 2005.
Then enter the United People's Movement. It has been linked to Tsholotsho
independent Member of Parliament and former government spin-doctor Jonathan
Moyo (MP) and former Zvishavane MP Pearson Mbalekwa.
Late last year,
it threatened to change the landscape of opposition politics in Zimbabwe,
proclaiming it would "rock the nation".
"Victory is certain", its advertisements proclaimed.
Its symbol was a rugged piece of rock, representing, it explained, the "rock
solid foundations" of the Great Zimbabwe Monuments, the pillars of Zimbabwe's
spiritual home at Njelele in Matopos, the party said.
But this flamboyant marketing has not won the parties much respect.
"It is good to have different voices, but these should be from genuine
origins," said Takura Zhangazha, a political commentator.
"Small political parties should be allowed to
exist but we are in a political environment that requires them now to take a
back seat and join forces with a progressive opposition party with a
realistic chance of delivering change," said Zhangazha.
Analysts said the political landscape in Zimbabwe makes it difficult for
political parties to grow and eventually dislodge ZANU PF, a revolutionary
party that has ruled the country since independence from Britain in 1980.
They said the ruling party, whose stiffest challenge came from the Movement
for Democratic Change, which is now in disarray following its split in 2005,
uses state organs such as the police, the CIO and army to fortify its hold
on power.
ZANU PF has also made it difficult for smaller
parties to access external funding except for the meager resources provided
under the Political Parties (Finance) Act and has shut out the opposition
from the public media.
And because most of the opposition parties remain in the periphery, ZANU PF
has always enjoyed the lion's share of the budget.
"The promulgation of laws such as the Public Order and Security Act, the
Access to Information and Protection of Privacy Act, the Interception of
Communications Act, etc, combine to make it
impossible for smaller
parties to thrive," said one analyst.
"Some of the faces behind the smaller parties are also not convincing, which
explains why people are not interested in them. It also appears that some of
them are just out to get donor funding, which is later converted for use by
individuals," added the analyst.

Scandal in the budget


Dumisani Ndlela Business Editor

It was not a mid-term fiscal policy statement or supplementary budget meant
to inspire the market, and take the economy out of its current quagmire.

Rather, even for those inside government corridors, it was a hopeless
knee-jerk affair meant to inform the market that government was still
functioning, and that there still was that modicum of courtesy to present
budget estimates before the August house, for approval as required by law,
but nevertheless mislead or conceal details that might create "shock and
And certainly, as remarks from the market indicated last week, there was a
scandal in the budget.
Finance Minister, Samuel Mumbengegwi, indicated that the 2007 budget, which
The Financial Gazette has previously reported as having been spent in March,
had suffered greatly from both economic and fiscal developments that took
place during the year.
On the economic front, inflation raced to over 7 600 percent year-on-year in
July, obviously affecting government expenditure which had been planned
based on inflation projections of between 350 and 400 percent by year-end.
On the fiscal front, there was a yawning budget deficit, and this had been
largely financed by increased borrowings from the domestic market,
Mumbengegwi said.
Total domestic borrowings to June 2007 amounted to $1.96 trillion, raising
the domestic debt stock to $8.1 trillion, of which $6.1 trillion was related
to interest.
That was only as far as he could inform the market, and mention of the
government forcing the printing press to run to finance profligate
government arms was strategically avoided.
The Financial Gazette reported in July that government expenditure had
ballooned to well over $30 trillion in the first six months of the year,
well ahead of a $6.5 trillion envelope issued by former Finance Minister
Herbert Murerwa to finance government expenditure in 2007.
Increased inflationary pressure had put the national budget off the rails.
The $6.2 trillion had included provisions for over-spending government
Indeed bids from government ministries and departments had amounted to $24
trillion for the year.
This represented a 5 313 percent growth over the anticipated expenditure
outturn for the revised budget for 2006.
But over $25 trillion could therefore have been spent during the three
months to June 2007 alone.
While fresh salary and wage hikes bloated expenditure for the year, these
were by no means the only factors pushing costs for the cash-strapped
Expenditure for the year suffered from escalating costs of goods and
services, which rose beyond projected levels.
In his budget statement for the year, Murerwa had indicated that the budget
framework was based on an inflation target of 350 percent - 400 percent by
December 2007.
The salary bill has moved significantly since the start of the year, way
above projected forecasts.
The government increased the civil servants' salaries by about 400 percent
in January, against a budgeted salary increase of 300 percent for the entire
This was besides increases in allowances for transport and housing, which
went up by 145 percent and 100 percent respectively.
The January salary increments meant that the government was already way out
of its budget framework days into the budget.
Civil servants' salaries were again adjusted upwards in May by 639 percent.
Transport and housing allowances went up by 524 percent and 110 percent
Already, civil servants have started demanding salary reviews of 400 percent
before year-end.
In his script last week, Mumbengegwi said line ministries, departments and
grant-aided institutions had continued to submit additional financial
expenditure requests in order to meet their operational expenses, cost of
on-going projects to end of 2007, as well as support for agricultural
Additional expenditure submissions stood at over $255 trillion, Mumbengegwi
said, indicating that these bids were far beyond the country's domestic
financing capacity.
Consequently, he had unveiled a supplementary budget amounting to $37.1
trillion, out of additional revenue projected to hit $26.4 trillion.
This, Mumbengegwi said, was "to maintain government operations and service
delivery for the remaining four months of the year, and allow for
continuation of development projects, where progress has reached critical
In other words, the supplementary budget was for four months to December 31,
2007; how the government had survived with a $6.2 trillion budget between
January and August is not explained.
But, certainly, a lot of money had been spent during the eight months to
August, and Mumbengegwi has not indicated the source of that money during
the period.
Last year, the International Monetary Fund (IMF) stunned the market after
disclosures that the budget deficit for 2005 had run into a massive $62
trillion, or 60 percent of gross domestic product (GDP), contrary Murerwa's
declaration that the deficit amounted to $3 trillion, or 2.9 percent of GDP.
Much of the deficit had been concealed through government's recourse to the
central bank's quasi-fiscal activities, which later led to a public row
between Reserve Bank governor Gideon Gono and Murerwa over the inflationary
effects of the activities.
Gono charged that the central bank had supported government projects after
concerted pleas from Murerwa.
Now, apparently, given the chasm between budgetary bids and what Mumbengegwi
offered - $255 trillion against $37.1 trillion - the question is how will a
profligate government not known for miracles last with just that little?

Another lost opportunity



YET another golden opportunity has gone begging. A lot was expected of
Finance Minister Samuel Mumbengegwi's mid-term fiscal policy review on
Thursday, what with a seemingly untenable economic Tsunami reverberating
across all sectors of the economy.

Mumbengegwi was circumspect, unveiling a maiden policy that was largely thin
on detail and lacking the imagination needed to heal the economy.
All there was were all-too-familiar relief measures such as the relaxation
of tax-free thresholds and the widening of tax bands to cheer up restless
workers who will be going through a thorny six months after the government
slammed the brakes on all salary and wage increases to tame inflation. But
even with a bit more cash to spend, workers will still find themselves stuck
with worthless dollars after the blitz on prices left businesses unable to
In order to stimulate exports, the troubled local unit was devalued from
$250 to $30 000 against the greenback, sadly by that time the parallel rate
had raced beyond $270 000.
Other notable highlights in the mid-term fiscal policy review statement
included the expansion of the list of goods attracting duty in foreign
currency, the injection of additional funds into infrastructural development
and the usual rambling about giving a leg up to the crumbling real sector,
particularly agriculture.
Admittedly Mumbengegwi, just like his predecessors Herbert Murerwa and Simba
Makoni, had little room to manoeuvre. In as much as he might have wanted to
cut down on recurrent expenditure, which gobbled up the lion's share of the
supplementary budget, Mumbengegwi was cautious not to stir up discontent
ahead of a crucial election in which his party, ZANU PF, is seeking to
extend its stay in power. Mumbengegwi was also under pressure to make
serious provisions for food imports in the wake of exogenous factors such as
the drought, while at the same time pumping additional resources into
capital projects.
Revenue has shrunk in line with the contraction in the economy, a trend
which is likely to worsen. And this is against the backdrop of an inexorable
rise in government's insatiable appetite to spend what it does not have as
inflation maintained its upward trajectory. This has been the trend since
the withdrawal of balance of payments support (BoP) in the late 1990s.
That ministries had submitted votes in excess of $255 trillion but were only
able to secure $37.1 trillion means that they have to forego a lot of
important things, further compromising service delivery, which many thought
had hit its lowest ebb. With so many service providers queuing for
outstanding payments, the bulk of the $37.1 trillion is likely to go towards
expunging debts. Capital expenditure might have to be deferred to cover
yawning gaps in recurrent expenditure.
That aside, the supplementary budget, 700 percent bigger than what Murerwa
had allocated for the full year, is in itself very inflationary.
Interestingly, Murerwa had budgeted $4.3 trillion, and by June government
had collected $3.4 trillion. Taking into account the knock on effects of the
price blitz on the fiscus, revenue for the remaining months will still
remain constrained, barring any unforeseen circumstances.
To keep going in the absence of BoP support, government would have to borrow
more from the domestic market. Inadvertently, the budget deficit will widen,
crowding out private investment in the process and worsening inflation in
the outlook period. This might explain why the Finance Minister ducked
making forecasts on revenue and inflation, which made the government look
stupid in the past after its predictions went way off the mark.
With the central bank expected to calibrate its delayed mid-term monetary
policy review statement along the lines of the Finance Ministry's mid-term
fiscal policy and supplementary budget, Reserve Bank governor Gideon Gono
has his task cut out for him. Gono has to ensure that domestic debt, whose
financing is at the core of the country's four-digit inflation, does not
overshoot the runway, mop up excess liquidity, which would be worsened by
Treasury Bill maturities and the injection of the $37.1 trillion into the
market. All eyes will also be on Gono to see whether he can re-adjust the
exchange rate, which, despite last week's massive devaluation, remains
We could not agree more with Mumbengegwi when he said, "the success of the
measures and supplementary budget I have outlined above will depend on all
social partners subscribing to a common and shared vision, underpinned by
the Zimbabwe First Philosophy espoused under the social contract."
We wished however, he had been more specific and truthful to his colleagues
in Cabinet that they are the biggest culprits. If the powers-that-be think
that the use of the stick on capital and labour would result in those
controlling these factors of production coming to the negotiating table with
their tails between their legs, then they must be dreaming.
The heavy-handed treatment business and labour has been subjected to is
turning entrepreneurs and workers into reluctant criminals. Unless the
powers-that-be bite the bullet and admit they have failed, they might as
well forget about securing the buy-in from business and labour, which is
critical for the success of the social contract. Otherwise resolving the
Zimbabwean crisis would be like trying to solve a crossword puzzle with only
half the clues.

FinGaz Letters

Pius Ncube's resignation a most sensible move

EDITOR - The resignation of Archbishop Pius Ncube was the most sensible
thing to do. Only he knows what happened, and it is a matter between himself
and God as to whether he is telling the truth or not.
However, the man is entitled to enjoy himself and even if his church
disapproved of the allleged sex escapades, he could still defend himself as
an individual who is entitled to sexual gratification because it is an
essential need. But he has to follow the rules and be an example to the
public both as an archbishop and as a politician.
It is just totally unacceptable that he can continue to rant about "regimes"
instead of using his office to influence change which, unfortunately, he has
dismally failed to do.
It is inconceivable that he can do so in any other office. The constant
claim that he has championed the cause of the poor is open to debate. The
lavish garment that he wears would be adequate material for a couple of
dresses for needy young girls or shirts for boys, would it not?
Showing up the state as the exclusive and only mean institution is
completely misleading. Please, Archbishop, no hatred towards you at all but
start a new life with a good woman (who does not want the same?) and let the
matter rest.

Mordecai Mutiswa Betera
United Kingdom
 All the people want is water in the taps

EDITOR - I have seen Water Resources Minister Munacho Mutezo on a number of
occasions defending the handing over of water treatment and distribution to
the Zimbabwe National Water Authority (ZINWA).
Mutezo has gone further to accuse people of politicising this decision and
at some point purported that some individuals might have sabotaged ZINWA and
his ministry when a number of suburbs went without water for three or four
Tell you what Minister, nobody cares who is in charge of water. All the
people want is water flowing from their taps, period. Deliver water to the
people and see who will ask which board is in charge of water. The only
reason why the issue raises so much noise is because people are not getting
the service.
Put the Ministry of Labour, the Reserve Bank of Zimbabwe, ZESA Holdings or
even the Ministry of Finance in charge of water and see who among the
residents mind for as long as the service is delivered.
Before ZINWA was put in charge, we used to have water continuously. Rarely
would we go without water and whenever that happened, it never used to be
for the whole day.
Come on ZINWA, the norm, specifically in my area of residence (Hatfield) was
water today and no water tomorrow and it continued like that for some time.
We adjusted and lived with that and accepted that level of incompetence.
As if that was not enough, things deteriorated even further in the past
couple of weeks. These days, we are going without water virtually seven days
of the week with water coming for an hour or two on one single day of the
week. Such has become the norm.
How are people expected to live under such conditions? There are people who
have to wash napkins on a daily basis and I want to know from the Minister
how he expects such people to cope.
I know the Minister has always wanted to make the point that the equipment
is old. True, the equipment is old. I do agree with him on that. He will,
however, have to be very scientific to convince me that just as ZINWA took
over, the equipment's capacity deteriorated from being able to provide water
for the whole week to providing water for just two hours a week. What I
actually believe is that ZINWA is causing all these burst pipes that we see
every day. Imagine sewage not being taken down the sewage lines, all piling
at some point in the line. Tell me what happens that single day when water
is available? Obviously the lines are blocked and they burst.
Surprisingly, the Minister is still holding firm and abiding by his decision
that water and sewer should be in the hands of ZINWA. He must tell me the
people are wrong when they make noise about this issue.
What surprises me even more is the fact that even the majority in Parliament
are against the idea of handing over water treatment and distribution to
ZINWA. The portfolio committee in charge of that concluded that the decision
to hand over this crucial service to ZINWA was not in the best interest of
the residents and the committee got the support of the House. By whose
authority then is Minister Mutezo and ZINWA sticking to this decision at the
expense of the residents?

 It's up to us as Zimbabweans

EDITOR - I always read Bornwell Chakaodza's column in The Financial Gazette
and would like to comment on his article of August 30 2007 titled "Time to
hold Zimbabweans to account".
First, it was a well written article which, unlike many other articles out
there, does not merely castigate all and sundry but merely states facts.
President Thabo Mbeki and many others in his cabinet have many times said
that Zimbabwe's problems have to be solved by Zimbabweans.
The west may say what they like about the current leadership but it has
little or no effect at all. Short of economic sanctions or military
intervention, there is nothing else they or anyone else could do. We all
agree that this is not the course we would like to take as it will be the
ordinary Zimbabwean on the street that would suffer the worst.
Therefore it is up to us as citizens of Zimbabwe to effect change. This does
not necessarily mean a change of the ruling party. How this will happen I do
not know but it is the only way. Although it would be a bitter pill to
swallow, the solution may lie in an agreement ensuring the saftey of our
President on his departure from office for the betterment of the Zimbabwean
people as a whole.

Trevor Herbert
 We do not need a Mbeki

EDITOR - If one were to come up with an operational definition of a
dictatorship there is bound to be a clause in it making any governing body
that does not recognise the Universal Declaration of Human Rights a
dictatorship. In passing its laws since 2001 our government has made it its
business to be always in contravention of these and this is a cause for
The cornerstone of these writs is found in the first three clauses viz:
lWhereas recognition of the inherent dignity and of the equal and
inalienable rights of all members of the human family is the foundation of
freedom, justice and peace in the world;
lWhereas disregard and contempt for human rights have resulted in barbarous
acts, which have outraged the conscience of mankind, and the advent of a
world in which human beings shall enjoy freedom of speech and belief and
freedom from fear and want has been proclaimed as the highest aspiration of
the common people;
lWhereas it is essential, if man is not to be compelled to have recourse, as
a last resort, to rebel.
I must emphasise that "no one shall be subjected to arbitrary interference
with his privacy, family, home or correspondence, nor to attacks upon his
honour and reputation. Everyone has the right to the protection of the law
against such interference or attacks."
We do not need a Thabo Mbeki to solve our problems. After all, during the
apartheid era in South Africa, the efforts of all the other nations to
abitrate amounted to nothing. It was only after the indigenous people stood
up for their rights that they gained independence.
Likewise we should do something to show our disapproval with our lot.

Garikai Dzoma
 Free, fair polls a pipe dream

EDITOR - It is less than a year to go before the crucial Presidential
elections yet there is a real risk that the elections will be no more than
The playing field is not level and is heavily tilted in favour of ZANU PF.
Unjust laws such as the Public Order and Security Act still exist in our
statute books and remain to be abused by the police in banning rallies by
the Movement for Democratic Change.
There is an urgent need to repeal such laws as well as to depoliticise the
police who now appear to be an extention of ZANU PF. Above all there must be
a new constitution that clips the Executive's powers, which allow it to
override and dominate other arms of government, particularly the judiciary.
Zimbabwe has one of the most biased judiciaries whose support for the ruling
party is undeniable. This makes free and fair elections a pipe dream to be
pursued but never attained.

 Bad boy image doing us no good

EDITOR - Thank you for a frank paper that lays bare all the evil amidst us.
I just wish you could publish a daily paper.
It is a sad reality that the 2010 World Cup will be taking place in our
backyard yet our chances of benefiting are remote because of the bad boy
image of our government.
Instead of trying to mend international relations we are busy aligning
ourselves with rogue regimes like Cuba, Iran and Venezuela. North Korea has
seen the light and is about to reap the benefits of good international
Cdes, it is a phyrric victory we have scored against the west because we are
hurting our own citizens. Those white commercial farmers are not British but
are as Zimbabwean as the people of Malawian and Zambian origin who are
settled here.
Racism has no place in the new world no matter what happened in the past. It
is being imprisoned by the past that will impede our development. I am black
and my father fought against the settler regime. We cannot develop by
turning half of our population into farmers. If you look at developed
countries, just about 10 percent of their population are farmers.
ZANU PF has destroyed our economy. They forget that empowerment can also be
achieved by giving people shares in parastatals and industrialising the
country and then affording our citizens the chance to create jobs or getting
high paying jobs whose earnings are the same as from farming.
Surely how can you mechanise small pieces of land unless you import ox-drawn
ploughs and hoes? Ever heard of economies of scale?
Please let us rely on people with expertise to run things and help pull
Zimbabwe out the morass.