The ZIMBABWE Situation Our thoughts and prayers are with Zimbabwe
- may peace, truth and justice prevail.

Back to Index

Back to the Top
Back to Index

FinGaz

      Makamba turns to UK

      Felix Njini
      9/15/2005 8:39:47 AM (GMT +2)

      BUSINESSMAN and former ZANU PF central committee member James Makamba,
who skipped the country to escape the long arm of the law and alleged
persecution by his political foes, is reported to be seeking asylum in the
United Kingdom.
      The Financial Gazette has established that the beleaguered Makamba,
who early this month failed to appear for a routine court hearing at the
Harare magistrates courts, was in the UK recently to sort out his asylum
papers.

      Authoritative sources said Makamba consulted Chipatiso and Company
Solicitors, a UK-based law firm run by Zimbabweans, to process his
application for asylum.
      They said South Africa, where Makamba has been spotted recently, is
proving to be a not-so-secure sanctuary for the former ZANU PF legislator,
who fears that the government might strike a deal with Pretoria to have him
extradited.
      The UK, accused by Makamba's party, ZANU PF, of working with the
country's main opposition party to topple President Robert Mugabe's
government has not treated failed Zimbabwean asylum-seekers facing
deportation, with kid gloves.
      Makamba claims senior members of the Central Intelligence Organisation
(CIO) are after his head although he has not disclosed the reasons behind
his alleged persecution. He alleges that the CIO, which has not responded to
the claims, forced him to shut down his $9.5 billion Blue Ridge Sweet Valley
retail supermarket in Mazowe.
      He joins a number of Zimbabwean business executives who have skipped
the country following allegations of corruption.
      A source said Yvonne Mahlunge, a political activist and former
Movement for Democratic Change (MDC) national executive member who now
specialises in immigration law with Chipatiso and Company in London, spoke
to Makamba and is handling the asylum application.
      Mahlunge, however, vehemently denied having spoken to Makamba and
declined to discuss the issue further, citing client confidentiality.
      "Last week Makamba consulted a law firm in the UK seeking immediate
help. The firm is quite uneasy about the whole thing, which it considers too
political and therefore requiring delicate handling," said the source.
      Chipatiso and Company Solicitors specialises in immigration law and
handles most asylum applications by Zimbabweans.
      One of the law firm's partners, Pamela Chipatiso, also refused to
comment and threatened legal action against The Financial Gazette for
defamation should the "false allegations be published".
      "You should refrain from calling this office and any of my staff. Do
not write that story because if you do, we will sue you for defamation. I am
the one who approves which clients to handle and we do not even know this
(James) Makamba, we have never worked with him," Pamela fumed in a telephone
interview Other prominent businessmen who have skipped the country during
the past two years include NMBZ entrepreneurial executives, Julius Makoni,
James Mushore, Otto Chekeche and Francis Zimuto. Intermarket group founder
Nicholas Vingirai, Mthuli Ncube of Barbican Bank, Gilbert Muponda of ENG
Capital, Dipak Pandya, Jayant Josh and his brother Manharlal have also
joined the band of executives who have left the country in inauspicious
circumstances since 2004.
      Makamba is facing a second charge of contravening exchange control
regulations after the Supreme Court rescinded a High Court judgment, which
last August set the Telecel non-executive chairman free.
      In rescinding the High Court judgment issued by Justice Lawrence
Kamocha, Justice Luke Malaba ruled that Makamba had a case to answer and
that the magistrate's court, which initially heard the case, was correct in
holding that there was enough evidence for the businessman's prosecution.
      Makamba, however, maintains "forces of evil" are persecuting him for
no apparent reason.
      "There are people who have committed more serious offences, among them
murder, who ran away from the country, but funny enough the authorities are
not looking for them," he was quoted as saying in a local daily a few weeks
ago.

Back to the Top
Back to Index

FinGaz

      You're sellouts, Tsvangirai tells members eyeing senate seats

      Nelson Banya
      9/15/2005 8:45:59 AM (GMT +2)

      MOVEMENT for Democratic Change (MDC) president Morgan Tsvangirai has
slammed "opportunists and sellouts" within the opposition party's ranks, as
the party faces another daunting poser ahead of planned senate elections.

      Speaking at the MDC's sixth anniversary celebrations at White City
Stadium in Bulawayo over the weekend, Tsvangirai chided party members for
girding their loins to participate in the senate elections, a move he said
would legitimise ZANU PF's piecemeal and partisan approach to constitutional
reform.
      "We must watch out for opportunists who fall for the regime's
patronage and pursue individual agendas to claim personal positions and
fulfil personal interests. Those who argue in favour of the way ZANU PF
approaches the need for a new, homegrown constitution have lost focus.
      "Those who wish to benefit from ZANU PF's cut-and-paste approach to
constitutionalism are working against the wishes of the majority of our
people. They are sellouts!" Tsvangirai said.
      Although the MDC leader has hinted that the party could boycott the
senate elections in protest against the widely condemned 17th amendment to
the constitution - which reintroduces the senate, denies dispossessed
landowners recourse in the courts except for compensation and seeks to
curtail the freedom of movement of "traitors" - the party is yet to take an
official position on the issue.
      MDC spokesperson Paul Themba Nyathi this week said the party was still
consulting on the issue.
      "The MDC is still consulting on the issue because there are some
people in the party who feel that we are legitimising the whole rigging
process by participating in these elections. There are also others who feel
that if we boycott the elections we are surrendering the entire political
space to ZANU PF . . . and that we have to keep fighting," Nyathi said.
      Some within the MDC believe that a boycott would hand ZANU PF
dominance in the proposed 66-member upper House of parliament.
      The opposition party lost ground in the last general election, having
belatedly taken a position on whether to contest or not, and managed only 41
seats from the 57 it won in its infancy in 2000.
      Of the 66 senators, President Robert Mugabe will appoint 16 from
"special interest groups" and traditional leaders - a provision slammed by
critics and opposition groups as a ploy to extend the President's patronange
system.
      President Mugabe also appoints 20 members of the lower House, who have
invariably voted with the ruling party, as have the 10 traditional leaders
nominated by the chiefs' council.
      Tsvangirai told the gathering that the MDC, which has so far
participated in three major national elections, was pressing for
comprehensive constitutional reforms which would facilitate an even playing
field for all political parties.
      "Our desire for comprehensive and holistic constitutional reform
remains one of our most cherished objectives. In 2000, the people rejected
the flawed process of developing a new constitution for Zimbabwe proposed by
the regime.
      "The regime has refused to honour the people's verdict. It continues
to tamper with the British-designed Lancaster House Constitution, brought
about as a transitional arrangement at independence.
      "Twenty-five years after independence, it is a shame on us that we
find ourselves without a homegrown guide to the way we govern ourselves
which will confer democratic legitimacy on our own governments.
      "We reject the latest ploy to avoid the critical national demand for a
new constitution by pushing through piece-meal amendments designed to pursue
partisan interests," Tsvangirai said.

Back to the Top
Back to Index

FinGaz

      Official grilled over grain controversy

      Felix Njini
      9/15/2005 8:40:22 AM (GMT +2)

      THE secretary for agriculture Simon Pazvakavambwa was this week taken
to task by the National Taskforce on Grain for disclosing what it considered
classified information after the senior civil servant lifted the veil of
secrecy on the country's precarious grain situation.

      Sources said Pazvakava-mbwa's job could be on the line.
      Pazvakavambwa shocked the nation when he told delegates at the
Confederation of Zimbabwe Industries (CZI) congress last week that the
country's grain silos had run dry, in stark contrast to the government's
long-stated public position.
      "We have in our silos, three weeks' supply of food and if for some
reason imports stop, we are doomed, there will not be food for Zimbabweans,"
Pazva-kavambwa said.
      The statements, which confirmed the government's failure to procure
enough food to mitigate against the drought, immediately elicited the fury
of Agriculture Minister Joseph Made and Security Minister Didymus Mutasa,
whose expanded Cabinet role encompasses food distribution, land reform and
resettlement.
      Sources said the National Taskforce on Grain, which is chaired by
Mutasa, grilled the outspoken Pazvakavambwa on Monday "for causing alarm and
despondency."
      Other members of the taskforce include Made, Finance Minister Herbert
Murerwa, Local Government, Public Works and Urban Development Minister
Ignatius Chombo and Social Welfare Minister Nicholas Goche.
      Sources who attended the highly charged meeting said Pazvakavambwa, a
former Agricultural, Technical and Extension Services (Agritex) director,
was asked why he had "divulged classified information," which "involves
national security".
      "If he does not lose his job, then he is very fortunate," said the
source.
      This is not the first time Pazvakavambwa has found himself under fire
from government, mainly due to his central role in the land redistribution
exercise.
      He was briefly arrested last year on allegations of theft of
government farm equipment. He was later exonerated after the state admitted
there was no reasonable suspicion that he committed the offence.
      During the same year, he attracted the wrath of ZANU PF bigwigs who
held more than one farm in violation of government policy, after he issued
withdrawal letters to the culprits.
      "It is still a hot issue but I cannot run the ministry through the
press," said Pazvakavambwa when contacted for comment this week.
      Mutasa yesterday confirmed his taskforce had met Pazva-kavambwa but
refused to disclose details of the meeting. Mutasa said there was "nothing
unusual about the meeting".
      "He was not summoned here, we hold these meetings regularly and today
was not an exception," Mutasa said.
      The government however, lent credence to Pazvakava-mbwa's revelations
when Mutasa inadvertently revealed that the government is importing 15 000
tonnes of staple maize every week.
      This brings to 60 000 tonnes of maize available in the country every
month when the national requirement is more than 150 000 tonnes. Zimbabwe,
now a perennial grain importer, requires more than 1.8 million tonnes to
feed the nation till the next harvest in May 2006.
      If the government is importing 15 000 tonnes every week, this means
that it requires up to 30 months to import the required 1.8 million tonnes
of maize.
      "There was no way Pazvakavambwa would give incorrect figures. He
receives the information from the Grain Marketing Board every Monday," said
Movement for Democratic Change spokesperson on agriculture and former GMB
executive Renson Gasela.
      "Mutasa's figures have revealed the gravity of the situation. He has
himself revealed the dire situation regarding the food situation in
Zimbabwe," Gasela said.
      The government, which initially denied the country faced food
shortages, has dug in its heels and refused to formally appeal for
assistance from the World Food Programme, insisting it has enough stocks to
feed the nation.
      Commercial Farmers Union (CFU) president Douglas Taylor Freeme said
the 15 000 tonnes Mutasa said was being imported weekly was not enough.
      Freeme also warned the nation of another bitter food shortage in the
coming year, saying preparations for the forthcoming farming season were
'disastrous.'
      "The season ahead of us is the most difficult and worst situation in
terms of supply of inputs. The national inputs are in serious short supply,"
Freeme said.

Back to the Top
Back to Index

FinGaz

      Millers fail to buy wheat

      Rangarirai Mberi
      9/15/2005 8:45:06 AM (GMT +2)

      AT least 20 000 metric tonnes of wheat being kept at local silos could
be re-exported elsewhere after major players in the milling industry failed
to raise the foreign currency needed to pay for the consignment.

      The Financial Gazette can reveal that three of the country's largest
millers-Blue Ribbon, National Foods and Victoria Foods-were to receive the
imported wheat, but the companies failed to raise enough foreign currency to
pay the suppliers owing to the biting foreign exchange crunch that has also
seen official fuel supplies drying up.
      Mike Manga, chairman of the Millers Association of Zimbabwe, said the
millers had failed to access foreign currency from the central bank over the
past two months and were now under increasing pressure from the foreign
suppliers.
      This has triggered alarm bells within the industry amid concerns that
the sector may be forced to scale down on production, putting scores of jobs
at risk. It is also feared that the impasse between suppliers and millers
might cause a serious shortage of bread and related products.
      "There haven't been any returns (of the wheat) yet. It is basically an
issue where wheat suppliers are putting pressure on us saying they might
have to re-export the wheat in our silos because of our failure to get
foreign exchange on the auction floor to pay them. They are saying if this
goes on, they might have to sell the wheat to other countries. In the
meantime they need payment plan to assure them of the payment," Manga said.
      The wheat came under a bond arrangement called Collateral Management
(CMA), whereby wheat is delivered to Zimbabwean silos but only released to
local millers once payment is made. The wheat is delivered via a middleman.
      "We source wheat from regional and international suppliers but our bit
of the 20 000 metric tonnes of wheat is from Argentina," said Manga.
      He said the impact of any re-exportation of the wheat consignment on
the industry would depend on whether the Grain Marketing Board (GMB), the
state grain buyer, has enough stocks to cover the shortfall up to the next
harvest at the end of October.
      Although the GMB declined to comment, it is understood that the
parastatal is in fact strictly rationing wheat to millers.
      Experts in the agriculture industry last week painted a bleak picture
of the farming season ahead, predicting yet another poor harvest due to a
critical shortage of inputs such as seed and fertiliser.
      The new threat to Zimbabwe's wheat situation follows a week of
contradictory official statements on the state of maize stocks. Top
government officials this week moved swiftly to deny surprisingly frank
disclosures by Simon Pazvakava-mbwa, Ministry of Agriculture permanent
secretary, that Zimbabwe's maize supply would not last three weeks.
      Zimbabwe needs 350 000 metric tonnes of wheat each year, but output
has slumped because of high production costs and government's chaotic land
reforms.

Back to the Top
Back to Index

FinGaz

      Will trio usher in new era for Africa?

      Mavis Makuni
      9/15/2005 8:46:58 AM (GMT +2)

      What do Nigerian President Olusegun Obasanjo, South African head of
state Thabo Mbeki and his deputy, Phumzile Mlambo-Ngcuka have in common ?

      Apart from breathing the rarified air in the corridors of African
state power, these three leaders have done something in recent months that
is rarely heard of in Africa-they have voluntarily invited and submitted to
public scrutiny following the casting of aspersions of corruption and
impropriety against them.
      By this action, they have broken an unspoken continental taboo that
prevents leaders from admitting having human weaknesses and being fallible,
even if their misdeeds and abuses of power are as high as Mount Everest.
      The press reported about a week ago that Obasanjo had agreed to have
Nigeria's anti-corruption commission investigate allegations of corruption
levelled against him.
      Earlier Mbeki had been similarly obliged to announce that he was
prepared to have the circumstances that led to his decision to eject his
deputy, Jacob Zuma, investigated by an independent commission after charges
that he had ulterior motives for sacking his number two, had reached a
crescendo.
      Mbeki's new deputy, Mlambo-Ngcuka succeeded Zuma in June amid
accusations that she was 'tainted goods' because she had been implicated in
irregularities in her former Minerals and Energy portfolio.
      However, she too, readily agreed to have her role in what is known in
South Africa as the Oilgate scandal in which her brother, Bonga Mlambo, is
alleged to have received kickbacks, scrutinized by an independent body.
      Mlambo-Ngcuka, one of only two women in the South African Development
Community (SADC) to ascend to the powerful position of vice-president, was
accused of having turned a blind eye as the responsible minister , on the
alleged improprieties involving her brother.
      Of the different situations in which the three leaders have found
themselves, Mbeki's is the most ironic in that he has been chastened for
taking a firm and decisive stance against corruption in high
places-something the long-suffering populations of different African
countries have been clamouring for.
      The South African leader has been taken to task for supposedly
dismissing Zuma unjustly for purposes of promoting personal agendas,
including self-preservation.
      Charges were made that Mbeki , who is said to be secretly eyeing a
third presidential term after the expiry of his current one in 2009 , had
sacrificed Zuma in a bid to eliminate his strongest challenger ahead of that
eventuality.
      The fact that Mbeki's decision, which was supposed to demonstrate that
there are no sacred cows who cannot be subjected to the rule of law in
Africa's fight against rampant corruption and graft, has sparked deep
divisions within the ruling ANC, raises the question : what do Africans
really want?
      Do they want to have their cake and eat it by railing against their
leaders' greed and then be blinded by sectional and ethnic considerations
when powerful culprits are brought to book? As the main architect of the New
Economic Partnership for Africa's Develop-ment (NEPAD) which aims to promote
good governance in Africa, Mbeki should have been congratulated rather than
crucified for setting an example for the rest of his peers.
      Over in Nigeria, a member of Obasanjo's own party, Orji Uzor Kalu, who
is a governor, has accused the head of state of accepting bribes.
      He has charged that Obasanjo illegally received commissions for oil
contracts and that he holds foreign bank accounts.
      The Nigerian president, who has been vocal in condemning corruption
and vowing to fight it, has not only denied the allegations but has taken
the unprecedented step in a country considered one of the most corrupt in
the world of saying: "Probe me".
      And of all the allegations levelled against Obasanjo, the one about
holding foreign bank accounts must be a particularly sore point in an oil
rich country from which billions have been siphoned off by corrupt and
greedy dictators.
      The country's officials have waged a determined battle in recent years
to trace and recover billions stashed away in foreign bank accounts by
former strongman, Sani Abacha, before his sudden death in office in 1998.
      And despite the indignant and vehement denials of Africa's incumbent
dictators and their resort to repressive tactics and abuses of power to
crush dissent from their disgruntled and pauperised populations, the Abacha
saga proves that there is usually no smoke without fire. The media reported
at the weekend that Swiss banks have handed over to Nigeria US$290 million
found in accounts linked to the late dictator.
      Nigeria will receive an additional US$170 million from Switzerland
once assets secretly acquired by Abacha with money stolen from the nation
are converted to cash These are considerable financial resources that should
have been used to improve the quality of life of all Nigerians.
      It remains to be seen what impact the successful reclaiming of
national wealth plundered by Abacha and Obasanjo's willingness to
voluntarily submit to public scrutiny will have in a country that has had a
long tradition of sweeping mountains of sins under the carpet in its bloody
45-year post-independence history.
      Since attaining independence from Britain in 1960, Nigeria has
experienced numerous upheavals including military coups and civil wars. More
than one million people perished during the civil war sparked by the
short-lived secession of the Eastern region of Nigeria after proclaiming
itself the Republic of Biafra in the late 1960s.
      Some of the most recent Nigerian horrors that have sparked
international outcries include the execution of Ogoni playwright Ken
Saro-Wiwa in 1995 and the arrest and subsequent death in detention of
Moshood Abiola, the presumed winner of a disputed 1993 presidential
election.
      Anti-corruption rhetoric is currently all the rage in many African
countries, including Zimbabwe. Only last week, President Robert Mugabe swore
in an eight-member anti-corruption commission chaired by Eric Harid.
      It seems fair to conclude that such bodies will continue to be
perceived as smokescreens as long as officials in high places, perceived by
the masses to be the real culprits, are unwilling to submit to scrutiny as
Obasanjo, Mbeki and Mlambo-Ngcuka have done.

Back to the Top
Back to Index

FinGaz

      Contradictions mark Zimbabwe's IMF stance

      Rangarirai Mberi
      9/15/2005 8:49:01 AM (GMT +2)

      CENTRAL Bank governor Gideon Gono says he plans "radical" reforms over
the next six months after a close call at the International Monetary Fund
(IMF) last week, but critics see little to suggest central government is
ready to press ahead with reforms - at least not to the extent demanded by
the IMF.

      Gono said this week Zimbabwe needed to end its history of policy
contradictions to survive the next review, expected in March. But hours
after the IMF executive board had given Zimbabwe yet another chance,
pessimists already had reason to doubt the country's will to reform fully.
      "We have never been friends of the IMF and in the future we will never
be friends of the IMF," President Robert Mugabe said in Cuba on Saturday,
the same day his Finance Minister Herbert Murerwa said Zimbabwe was fully
committed to addressing the IMF's concerns on policy.
      Early this week, Gono said while there had been "joy and relief" after
the IMF verdict, the slim majority vote that saved Zimbabwe pointed to a
tougher battle ahead.
      "It is difficult to express the feeling of joy and relief, but also,
there is a feeling of the weight of the decision, of the responsibility that
lies ahead," Gono said.
      There should be a swift change in policy, he said, adding: "We have to
appreciate that to the extent that there are some policy implementation
shortcomings which are within our capabilities to rectify, we should move
with speed to rectify those."
      Gono was also critical of Zimbabwe's policy reversals, signs of
failure to establish a workable economic blueprint.
      "We need to be consistent in the implementation of policy that we
would have agreed, and not to implement policy one day and reverse it the
next day. That's the inconsistency people are talking about."
      Aware of the IMF's quota-based voting system that gives Zimbabwe's
rich critics more voting rights, Gono met with 10 directors - including Tom
Scholar, who represents Zimbabwe foe Britain's 4.95 percent voting rights.
      "I indicated to them that Zimbabwe's economy is in transition, that
ours is a situation that has been affected by historical factors. I had
issued a statement, prior to the board meeting, to all the members of the
fund, outlining both indigenous and exogenous factors that have militated
against our turnaround. I was basically committing the country to further
policy measures and expressing optimism that if the board were to give
Zimbabwe another chance, we would come out of the woods," said Gono.
      Zimbabwe has touted several recent policy shifts as measures that
would reverse the decline. The country says these have been very hard
decisions, but the IMF calls them mere "initial policy steps". Instead, the
fund demands "a comprehensive and coherent adjustment programme as a matter
of urgency, in the areas of fiscal, monetary and exchange rate policies and
structural reforms."
      A team from the IMF is expected to visit Zimbabwe soon, but analysts
and even government officials doubt the mission will find evidence of
far-reaching economic reforms, at least for now.
      "I can't think of anything more we are expected to do that we haven't
done already," a senior Finance Ministry official admitted this week, asking
not to be named.
      It's not clear what Gono plans as part of his "radical" reforms, but
many speculate an end to remaining subsidies, further devaluation and
steeper interest rate hikes.
      Government is however likely to resist IMF pressure to free the
currency, having already allowed RBZ to devalue the Zimdollar by more than
75 percent over the past quarter.
      Although Murerwa is opposed to price controls, he faces stiff
resistance from his government colleagues if he attempts broad reforms that
include ending all controls.
      Ahead of the IMF decision last week, opposition MDC shadow finance
minister Tapiwa Mashakada said even if Zimbabwe survived, he did not see
government learning any lessons and suddenly embracing blanket change.
      "If Zimbabwe were expelled, then all international credit lines would
be gone. And even if we avoid expulsion, Zimbabwe will stay on its present
course. The government will continue with its record of mismanagement and
default," Mashakada told The Financial Gazette.
      Finding the recovery path will not be easy, with political
temperatures expected to rise ahead of an expensive Senate election while
food imports, sacrificed for the US$120 million IMF pay-down, resume against
a deepening foreign currency crisis.
      Experts told Parliament last week that the coming farming season was
under-funded, pointing to a poor harvest.

Back to the Top
Back to Index

FinGaz

      ZISCO to pay $208 bln to Chinese

      Chris Muronzi
      9/15/2005 8:43:42 AM (GMT +2)

      THE Zimbabwe Iron and Steel Company (ZISCO) will pay US$8 million
(Z$208 billion at the official exchange rate) to Shougang International
Trade and Engineering Corporation of China, tasked to help turn around the
giant steelworks and hopefully revive the two firms' collapsed marriage.

      ZISCO managing director Gabriel Masanga said the Redcliff-based
steelworks had moved to stem losses and enhance operational efficiencies
following the signing of an agreement of technical cooperation with
Shougang - a few months after the same company had apparently pulled out of
a deal that would have seen the injection of US$200 million into ZISCO.
      Masanga also hinted that the Chinese firm could be earmarked for
equity participation in ZISCO.
      "We are going to be working with Shougang International Trade and
Engineering Corporation of China in our turnaround programme and the
realignment of blast furnace Number Three after we signed an agreement of
technical cooperation recently. We are going to be making a payment of
US$1.6 million in the first phase of the programme.
      "The first phase will take over 12 months and another 12 months for
the turnaround initiatives with a view of servicing the plant, redesigning
the plant and improving our product range. Equity participation will be
considered at a later stage but we are not ruling it out entirely," said
Masanga.
      ZISCO, whose output has tumbled over the years due to lack of
investment and mismanagement, hopes a new investor could improve its
business.
      The steel giant has capacity to produce one million tonnes of steel
annually but has lost some of its markets in East Africa and Europe because
of the sagging output. Reforms at the company have in the past failed to
take place due to political interference.

Back to the Top
Back to Index

FinGaz

      Yet another great grain lie

      Nelson Banya
      9/15/2005 8:47:50 AM (GMT +2)

      ONCE again, Zimbabweans - who face another summer of discontent and
worsening shortages of basic commodities - have been subjected to official
contempt with regards to the all-too-important subject of food security by a
government whose denial of the perilous situation borders on the criminal.

      Last week's storm, touched off by a Freudian slip of startlingly
revealing proportions by the most senior civil servant in the agriculture
ministry, permanent secretary Simon Pazvakavam-bwa,-who told a meeting of
business leaders that the country had only three weeks' supply of the staple
maize in stock, has elicited predictable and shrill denials from government
ministers and earned him a reprimand.
      Zimbabwe's grain stocks have increasingly become the subject of
conjecture, with the state-run Grain Marketing Board maintaining an opaque
screen over its holdings. This has left the nation at the mercy of official
pronouncements which, since the onset of the land redistribution exercise,
have been dangerously misleading.
      Although government appears to have yielded to the dictates of the
market and relaxed regulations around grain purchase and movement, which had
been in force since 2001, the ceding of the government's grain importation
and distribution programme to the state security ministry confirms a
predilection to maintain a tight grip on key data surrounding the staple
commodity.
      The appointment of a five-member ministerial taskforce on grain, led
by state security minister Didymus Mutasa and which also includes
Agriculture Minister Joseph Made, Finance Minister Herbert Murerwa, Local
Government Minister Ignatius Chombo and Social Welfare Minister Nicholas
Goche, has further clouded the food security picture, and done little to
assuage apprehensive Zimbabweans' fears of a never-ending food crisis.
      This week, in denying Pazvakavambwa's disclosure on the country's
severely attenuated grain stocks, Mutasa announced that Zimbabwe has been
importing an average of 15 000 tonnes of grain from South Africa per week.
Apart from the fact that at that rate, total imports would amount to 60 000
per month against the country's monthly requirements of about 150 000 tonnes
grain imports have been declining in recent weeks. The country requires 1.8
million tones in grain imports until the next harvest season around April
2006 but has imported a total of 333 935 tonnes of maize from South Africa
between April 30 and September 9 2005, just about two months' supply.
      An acute shortage of foreign currency in the face of other urgent,
competing imports such as fuel and medical drugs has made it an uphill task
to import adequate grain.
      South Africa is Zimbabwe's major source of grain. Zambia, from which
Zimbabwe - the former regional bread basket - had also targeted as a
supplier of grain, banned grain exports in order to augment domestic stocks
in the face of an impending regional deficit in March.
      Statistics provided by South Africa's Grain Information Service
(SAGIS) reveals that while Zimbabwe stepped up grain imports from that
country between April and August, the volumes have been progressively
declining in recent weeks.
      SAGIS recorded no exports to Zimbabwe over the past two weeks. The
last recorded exports amounted to 10 062 tonnes, itself a decline from the
previous week's 12 774 tonnes during the week-ending August 19.
      In contrast with its southern neighbour South Africa where grain
statistics are accessible to the public, Zimbabwean government officials
frequently refuse to release statistics, saying the information is
"classified" since maize and wheat have been designated "strategic grains".
      Having shifted from the widely discredited figure of 2.4 million
tonnes of maize from the 2004/2005 season, government has now moved the
smokescreen to grain imports, with officials thumping their noses at aid
agencies.
      Although over 2.5 million of its citizens face shortages of the staple
maize grain, Zimbabwe has refused to put out an appeal for food aid, even
after the disruptive Operation Murambatsvina/Restore Order - described by
the UN as a disastrous venture - which directly affected 700 000 people who
were left homeless and with no source of income at the height of last
winter.
      Government has, however, grudgingly invited "any donor organisations
that are willing to assist to come in with their assistance through the
normal channels."
      In recent weeks, major relief agencies have embarked on major
recruitment exercises in a bid to help avert what is clearly a man-made
disaster.

Back to the Top
Back to Index

FinGaz

      Shares pick up momentum

      Rangarirai Mberi
      9/15/2005 8:44:31 AM (GMT +2)

      SHARES rose this week after a slower-than-expected rise in August
inflation eased worries about an immediate rate hike.

      The market appeared to draw momentum from pent-up demand built up over
a three week-trade hiatus.
      Official data released on Monday showed annual inflation up 10.3
percentage points to 265.1 percent year-on-year from 254.8 percent in July.
      The rise in August was much smaller than the 90 percentage point rise
in July, but economists and officials from the Central Statistical Office
agree that September numbers will come in much higher because of
devaluation, higher fuel costs and a sharp rise in the prices of a range of
consumer goods.
      The size of the August rise has convinced market players that the
Reserve Bank of Zimbabwe (RBZ) is unlikely to immediately rush in with a new
rate hike, as it did last month after the release of July inflation numbers.
Then, the RBZ effected two rate hikes within hours, a sign it had been
unprepared for the size of the rise.
      But the RBZ's response to inflation was instant on the foreign
currency market this week, where it allowed the Zimbabwe dollar to slide six
percent down to $26 000 against the key United States dollar from $24 500.
Demand rose to US$221 million from US$172 million at the previous auction.

Back to the Top
Back to Index

FinGaz

Comment

      Playing Russian roulette with the people's lives

      9/15/2005 8:28:37 AM (GMT +2)

      THE truth is indeed bizarre to the ears of Zimbabwean politicians.
They get bent out of shape over unpalatable truths as can be exemplified by
the chairman of the National Taskforce on Grain, Didymus Mutasa, who last
week got his knickers in a twist after the Secretary for Agriculture, Simon
Pazvakavambwa, categorically stated that the country faced the grim spectre
of hunger.

      Pazvakavambwa, who we expect to know better, said the food security
situation of the regional breadbasket-turned-basket case is as precarious as
it has ever been. It is now left with three weeks' supply of the staple
maize. Put simply, Pazvakavambwa was warning the nation that the crisis is
far more ominous than we are made to believe because the country is sailing
close to the wind.
      Enter Mutasa, who is also the Minister of National Security, Lands,
Land Reform and Resettlement. The minister sang from a different hymn sheet.
His instinct was to simply dismiss Pazvakavambwa's warning offhand. Mutasa,
who just came short of describing the permanent secretary in the kind of
language ZANU PF normally reserves for largely imaginary saboteurs bent on
"causing alarm and despondency" by exaggerating crises, said Pazvakavambwa
was misleading the nation - implying Zimbabwe has adequate maize stocks.
      But doesn't this have a familiar ring? And if reason consists of
seeing things the way they really are, why then do we have these striking
discrepancies between what Mutasa, who doesn't have an inkling what it means
to endure long-winding queues for days to no end in search of scarce
commodities, and Pazvakavambwa are saying? And who of the two are
disillusioned Zimbabweans most likely to believe? Of course there are no
prizes for guessing that one.
      We ask these questions because the statistical haze that has muddied
the waters and ignited such a furore over the country's supposed adequate
staple maize supplies is eerily reminiscent of that unforgettable year when
Joseph Made gave us one for the books, claiming that his bird's eye view
assessment of the country's crop situation showed that Zimbabwe would have a
bumper harvest. Suffice to say that this the minister did at immeasurable
cost to Zimbabwe. The country was lulled into a false sense of security and
once again found itself stuck in awkward scrapes because the figures Made
presented as fact were way off the mark.
      This is why, much as we would like to give him the benefit of the
doubt, it is difficult not to suspect that just like Made before him, Mutasa
is leading Zimbabwe up the garden path about the country's food security
situation. Zimbabweans are indeed justifiably suspicious and concerned about
the accuracy of Mutasa's assurances given the credibility gap in the last
food debacle.
      It boils down to the question of credibility, especially where
government ministers, desperate to give the impression that the land reform
programme has been a resounding success, paint a rosier-than-real picture of
the country's food supply situation. This has happened time without number
and the country has had to fight a rearguard action to stave off food
shortages. In some instances the compassionate and helpful donor community,
which has played an inestimable role in averting human crises of
catastrophic proportions, has found it extremely difficult to mount swift
responses to provide the country with food aid because government keeps on
giving conflicting signals over the country's food security situation.
      To get a semblance of a clearer picture as regards the food security
situation, even Zimbabweans have had to rely on reading between the lines.
Yet government, which has hardly acted as if it does not have anything to
hide, is supposed to release the data.
      Which is why it is almost impossible to assuage the general perception
that Mutasa is being economic with the truth and why we are hard-pressed to
believe the minister and his colleagues in government. They have continued
to play a very dangerous game where they just pluck crop figures from the
air which is what we have in the past called playing Russian roulette with
the people's lives.
      It is imperative that government ministers desist from inflating
figures regarding the food situation. To avoid such confusion as the current
one, information on the food situation should therefore be made public on a
monthly or quarterly basis, for the sake of all stakeholders to ensure the
inviolable priority of food self-sufficiency.
      While we are aware of the need to withhold information in areas of
national security and law enforcement, we believe that the release of
statistics on food would not pose any prejudice to national interest. Indeed
this remains very much subject to public interest test. If there could be
any "harm" posed to state interest that "harm" would certainly not outweigh
the public interest that could be served through the release of such
information.

Back to the Top
Back to Index

FinGaz

                  AND NOW TO THE NOTEBOOK...

                  9/15/2005 8:31:11 AM (GMT +2)

                  Cde Senior

                  ONCE upon a time in a far-away country, there was a
national madness programme politely called agrarian reform. It was a
free-for-all affair. Everyone grabbing whatever slice of land they could.
                  Because there was a lot of noise between some senior
members of "the party" and little nobodies over some prime pieces of land,
the party decided in its accustomed wisdom that there should be a semblance
of order in the exercise.
                  So they asked Cde Senior Party Official to be in charge of
the important process of parcelling out land to the people. So naturally,
Cde Senior started off by blessing himself with a huge farm
                  After looking at his neighbour, a certain chef who was
doing well at the farm he himself had given him, Cde Senior was green with
envy. What especially put his nose out of joint was the lucrative safari
lodge that was in the neighbour's farm. So he decided to use his powers to
tinker with the boundaries and seize part of that adjacent farm and make it
part of his non-productive farm.
                  The neighbour resisted. He resisted all the moves from Cde
Senior and all his goons until Cde Senior decided to take the issue to the
courts.
                  In his founding affidavit, he wrote something to this
effect: "My name is Comrade Senior Party Official. I am a very senior party
chef. Sometime in 2003, in my capacity as the party chef responsible for
dishing out land to the landless majority, I took this opportunity to favour
myself with this piece of land on this farm out there.
                  "But because I was not able to properly utilise the piece
of land due to ever-pressing party commitments, the next time I visited my
farm, I realised that my neighbour, whom I had given what I thought was a
not-so-good piece of land abutting mine, was doing too well for my comfort.
                  "I also realised that there is a safari lodge, which is a
real money spinner. So I thought in the interest of the collective dignity
of the party, I should seize part of that farm and make it my own.
                  "This would give the positive impression that all senior
party officials were doing what they were preaching
                  . . . you see? Visitors to my farm would see something
happening.
                  "But this stubborn fellow decided to defy me, and in the
same process defy the party and the government. I am so aggrieved because
there is no way a nobody can do better than me and go ahead to defy my
orders. Although he is a black man like me, I have decided that he should be
treated in the same way the party has treated former white commercial
farmers.
                  "On the basis of the above, I have decided to sue him for
a princely sum of $5 billion. This figure takes into consideration the fact
that I am also being sued by some former senior party official for
defamation, so in the event that I lose this lawsuit, as a very very senior
party official, I would not have to pay the defamation damages from my own
pocket. Lawsuits would have to settle themselves. You see? So I pray for an
order in terms of the . . . "

                  Remembered

                  WHILE Zimbabweans will tomorrow be commemorating the
second anniversary of the passing on of Vice President Simon Muzenda, one
Zimbo asked CZ to please ask on his behalf from those who might know what
happened to the old man's rich collection of jerseys.
                  Overworked
                  FOR a long time I've been blaming it on lack of sleep and
too much pressure from my job, but now I have found out the real reason. I'm
tired because I'm overworked.
                  The population of this country is rumoured to be around 12
million. One million are retired. That leaves 11 million to do the work.
There are 3.8 million in school, which leaves 7.2 million to do the work.
                  Of these people there are three million employed in
central government (you know civil servants, don't you?). That leaves 4.2
million to do the work.
                  Two million are in self-imposed exile, which leaves 2.2
million to do the work.
                  Another million are lazy municipal workers across the
country, and that leaves 1.4 million to do the work. At any given time there
are 500 000 people in hospitals, leaving 700 000 to do the work. Of these,
50 000 are in jail for various crimes.
                  There are 649 998 people with mental problems. Mad people,
to use a crude term. That leaves just two people to do the work - you and
me. And you're sitting reading CZ's jokes while I am working alone!

                  Parting shot

                  A MAN is taking a walk in the park in Broadhurst,
Gaborone.
                  Suddenly he sees a little girl being attacked by a pit
bull dog. He runs over and starts fighting with the dog. He succeeds in
killing the dog and saving the girl's life.
                  A policeman who was watching the scene walks over and
says: "You are a hero, tomorrow you can read it in all the newspapers: Brave
Broadhurst resident saves the life of little girl.
                  The man says: "But I am not a resident of Broadhurst!"
                  "Oh, then it will say in newspapers in the morning: Brave
Motswana saves life of little girl," the policeman answers.
                  "But I'm not a Motswana?" says the man.
                  "Oh, what are you then?"
                  The man says: "I am a Zimbabwean!"
                  The next day newspaper headlines screamed: Illegal
Zimbabwean immigrant kills innocent Botswana dog.

                  This is CZ. Take extreme care. Travel documents are at
stake, remember?
                  cznotebook@yahoo.co.uk

Back to the Top
Back to Index

FinGaz

Personal Glimpses

      Give me the old timers anytime

      Mavis Makuni
      9/15/2005 8:29:54 AM (GMT +2)

      GIVE me Musi Khumalo, Colin Harvey or Joseph Madhimba anytime. I often
swear angrily under my breath while trying to make sense of the "news" as
reported and presented by the crop of youthful and inexperienced reporters
and anchors holding the nation to ransom on Zimbabwe Broadcasting Holdings
(ZBH) television.

      I experience pangs of nostalgia for the good old days when listening
to the main evening news read in firm, clear and authoritative voices was a
dignified and worthwhile experience and not the annoying chore it can be
today. You not only have to strain to hear what the dreamy-eyed anchor
person is saying in her barely audible monotone, but you must also
constantly try to guess the real meaning of the mixed-up bits mouthed by the
reporters in jarring tones that constantly assault your senses. To make
matters worse, these reports are liberally punctuated by dreadful
grammatical errors and atrocious pronunciation.
      I know I am opening myself to accusations of having a colonial
mentality by suggesting that Her Majesty's English should be spoken and
pronounced as correctly as possible even by people who speak it as a second
language and frankly, I can live with that. What I cannot stand is having to
cringe each time a reporter says coundry, (for country) strateg (strategy),
technolog (technology), and sikisiti (sixty).
      Are these youngsters given any in-house training and guidance in
pronunciation, diction and inflection? The purpose of using English as
opposed to our own local languages should be to communicate effectively with
a wider audience united by a common understanding of the Queen's language.
      A cardinal premise in mass communication is that reporters cannot tell
audiences something they cannot understand themselves. They first have to
understand the issues and subjects they report on themselves and then make
them understandable to viewers and listeners. On numerous occasions I have
been left asking, "what was that all about?" after listening to reports even
by the most senior reporters.
      The tragedy is that audiences are being subjected to this unbearable
tedium and mediocrity when the skills of experienced broadcasters nurtured
since independence are going to waste. These are tried and tested
professionals who could turn things around instantly. Personally, I throw my
lot in with those who argue for the reinstatement of these seasoned
practitioners who were ejected during former spin-doctor, Jonathan Moyo's
"restructuring exercises". As everyone now knows, Moyo used these endless
upheavals as an underhand way to weed out all those who opposed his madcap
management style and Stalinist-Marxist ideas through which he demanded total
loyalty.
      Against this background it is difficult to fathom why, as reported in
last week's issue of The Financial Gazette, anyone would be opposed to the
reinstatement of seasoned broadcasters to end the embarrassing amateurism
and shallowness that audiences are being subjected to.
      The Permanent Secretary in the Ministry of Information and Publicity,
George Charamba, recently vowed to tackle the problem after blasting ZBH
staffers for dereliction of duty and inefficiency. But, according to a
report published in this paper last week, Charamba is reported to favour
"reorganisation" of these greenhorns as opposed to bringing back those who
have proven track records.
      The permanent secretary is being unrealistic in this regard.
Broadcasting is not a profession in which experience can be "fast-tracked"
or feigned as the unending and embarrassing gaffes on radio and television
have shown. New equipment will not change anything as long as audiences
continue to be subjected to wooden on-screen performances by clueless
newsreaders and reporters.
      To be fair, there are some among the current crop who have shown
promise and deserve to be nurtured and encouraged. But there are others who
will simply never make the grade. There is no reason why audiences should be
required to endure their monumental shortcomings simply because Charamba has
a soft spot for them. After, all ZBH is sustained by public funds and
listeners and viewers pay for licences!
      Moreover, the overhaul to be undertaken at ZBH should not only be in
terms of staffing but should also focus on re-orientation and a return to
professional ethics. Anyone who watched the programme, Face the Nation, last
Friday will agree with me. The programme, hosted by veteran broadcaster
Masimba Musarira, featured Foreign Minister Simbarashe Mumbengegwi.
      In the introduction, the presenter informed viewers that the guest had
been invited to discuss Zimbabwe's foreign policy and related issues. But
while it is to be expected that appearances by government officials on such
programmes invariably descend into self-congratulation sprees because of the
interviewer's failure to ask relevant and probing questions, this episode
really took the cake.
      Musarira all but abandoned any pretence of being a journalist
representing the viewing public and conducted a chummy chat in which he
constantly patted the minister on the back and gave Mumbengegwi free rein to
sing his own and the government's praises. In asking "questions" the
presenter even resorted to the cosy and inclusive "we" as in: "What is our
position on . . . ?
      Watching the spectacle, it was obvious that calling the programme Face
the Nation is a misnomer. It will take more than cosmetic changes to put
things in order at the public broadcaster.

Back to the Top
Back to Index

FinGaz

      Old Mutual ready to get rid of Zimpapers stake

      Rangarirai Mberi
      9/15/2005 8:00:33 AM (GMT +2)

      OLD Mutual says it is prepared to sell its stake in Zimbabwe
Newspapers (Zimpapers), after its 19 percent shareholding in the
state-controlled media group nearly derailed a R37 billion bid for Swedish
savings group Skandia last week.

      Skandia board members opposed to the Old Mutual takeover have kicked
up dust over Old Mutual's shareholding in Zimpapers, saying its investment
in the Zimbabwe government's propaganda machine made the insurer and
financial services group an unsuitable partner.
      Old Mutual would be prepared to sell its Zimpapers stake, but it was
unlikely buyers would easily be found to take up the equity, which Old
Mutual has valued at US$1million. The company's business practices remained
above board, Old Mutual chief executive officer Jim Sutcliffe said.
      Zimbabwe's business and political environment was complicated,
Sutcliffe was quoted as saying, but Old Mutual was prepared to sell its
stake in the newspaper group if the opportunity arose.
      "It could be sold, sure, who do you think would buy it?" said
Sutcliffe.
      The government is the largest shareholder in Zimbabwe Newspapers,
holding 51 percent of the group via the Mass Media Trust.
      Despite the protests from Skandia board members and shareholders, Old
Mutual has played down the significance of that hostility. According to
Sutcliffe, Old Mutual is capable of meeting all the requirements of the
Skandia board.
      "The issue of our stake in Zimbabwe Newspapers has never been raised
with me by the company, but I am quite comfortable that our business
practices would stand up to a test and follow the standards that the Swedes
want," Sutcliffe said.

Back to the Top
Back to Index

FinGaz

       A row where no one emerged the winner

      Rangarirai Mberi
      9/15/2005 8:01:49 AM (GMT +2)

      AFTER three whole weeks of heavy financial losses on all sides, there
were no winners last week at the end of the stock exchange row.

      Following 17 straight days of no trade on the Zimbabwe Stock Exchange
(ZSE), the government reviewed its 10 percent withholding tax on gross share
sales and changed an order compelling major market players - pension funds -
to have 35 percent of the value of their investments in government paper.
      The government's climbdown contrasted with cocky official pledges that
there would be no turning back on the new measures. The new regime was
irreversible and it had become law once Parliament had passed the
supplementary budget, one senior government official said in one of many
meetings held to end the impasse.
      But as the dust settled after the row, nobody had achieved anything.
According to ZSE boss Emmanuel Munyukwi, the exchange was losing an average
of $12 billion every day. Brokers had been pushed into financial distress,
with several standalone brokerages facing a real threat of collapse.
      Pensioners' funds had seen a rapid erosion of value. The government -
which admits to being bankrupt - was losing $500 million per day in stamp
duty by its own actions.
      Perhaps it was that realisation alone that finally convinced the
government to agree to renegotiate its way out of its entrenched position,
finally ending the three-week madness.
      "This was a regrettable problem. There was poor consultation from the
beginning," Finance Minister Herbert Murerwa admitted. A team would now be
sent to South Africa to look at the tax systems there, he said.
      For Murerwa at least, it would seem that lessons have been learnt. But
market players who now have burnt holes in their books say the whole affair
could have been avoided had the government made the consultations before
announcing the new measures, and not after setting off a crisis in which
billions of dollars were lost by all sides involved.
      "We've seen it before, and we are likely to see it happen again, that
government only backtracks on issues after the damage is already done," the
head of a leading brokerage told The Financial Gazette this week. "Everyone
has come out the loser here."
      Brokers had already been suffering from shrinking margins, and the
standoff had only made "an already bad situation worse", he said.
      Independent brokers have taken much of the damage because they had
nobody to cling to once business dried out.
      The government conceded its original demands would have caused
administrative problems for brokers.
      "To allow the ease of administration, the capital gains withholding
tax on marketable securities is now collected on a gross basis and at five
percent that does not compromise the revenue collection targets," an
official statement said.
      Insurance companies and pension funds will apply 40 percent of their
net monthly cash flows to purchase prescribed assets, a separate statement
said.
      Tendai Kakora, the director-general of the Zimbabwe Association of
Pension Funds, described the earlier proposals as "fundamental changes that
required careful consideration".
      The proposed withholding tax would have meant that the government
scooped up the thicker cream off each share sale, resulting in the odd
arrangement where it made more money off a transaction than those actually
involved in the business.
      Under the original proposals, pension funds would have had to sell
trillions of dollars worth of stock to meet the new requirements.
Ironically, nobody, apart from the pension funds themselves, would have been
able to spend that much on stock.
      After the August 16 announcement, the ZSE drifted along for three
weeks with sellers finding virtually no buyers. And last Tuesday, for the
first time since the crisis began, a few worn-out sellers withdrew. This
meant there was no way of telling the value of some shares on the market, or
of calculating the industrial index itself.

Back to the Top
Back to Index

FinGaz

      Company-owned estates' fate sealed

      Chris Muronzi
      9/15/2005 7:59:57 AM (GMT +2)

      CONTROVERSIAL constitutional amendments signed into law by President
Robert Mugabe recently despite protestations from opposition and rights
groups, have effectively sealed the fate of previously company-owned
estates.

      In line with the much-maligned Constitution of Zimbabwe Amendment Bill
No. 17, government will expropriate agricultural land without having to face
court challenges, dealing a body blow to firms which were contesting the
designation of their land.
      Zimbabwe Stock Exchange-listed firms, Hippo Valley Estates, Interfresh
Limited, Border Timbers and Ariston Holdings, all have land listed for
acquisition since 2000 and could well learn to adjust to life without their
prime agricultural land in the wake of the constitutional amendments.
      Hippo, a subsidiary of Anglo American Corporation, virtually
capitulated and issued a statement last week to that effect.
      "Hippo Valley remains listed for compulsory acquisition under a
section 5 order despite objections having been lodged with the relevant
authorities. Mkwasine Estate has since been listed under schedule 7 of the
Constitution of Zimbabwe Amendment Bill No. 17, which seeks to vest land in
the state without compensation other than for the improvements. Compulsory
acquisition would thus not be subject to legal contest.
      "The Bill now awaits presidential assent for it to become law. This
latest development has serious consequences on the company's operations as
Mkwasine Estate accounts for 13 percent of the company's cane requirements.
Following the interpleader proceedings instituted by Hippo Valley Estates
with respect to disputed ownership of cane delivered in 2003, the High Court
has recently ruled that payment be made to the party which delivered that
cane," Hippo said in a statement last week.
      Effectively Hippo, a leading plantation and sugar producer, has no
right under the recent amendments to lodge an appeal.
      Meanwhile, Border Timbers announced that more of its land has been
listed for acquisition recently.
      The company said it was worried about the continued presence of
settlers on its property, who are responsible for an outbreak of bushfires
on the plantations.
      Borders' plantations have been plagued by an outbreak of fires since
war veterans and other groups resettled themselves on the company's
properties.
      Repeated calls from agro-based companies to the government to rid
their properties of settlers and appeals against listings have fallen on
deaf ears.

Back to the Top
Back to Index

FinGaz

      Clean-up operation hits Tedco sales

      Ruramai Mutizwa
      9/15/2005 8:06:12 AM (GMT +2)

      TEDCO Limited says sales at its retail division have been badly hit by
Operation Murambatsvina and hinted that it might need yet another rights
issue to raise more capital.

      Tedco becomes the second Zimbabwe Stock Exchange (ZSE)-listed company
after technology company Celsys to admit to suffering losses as a direct
result of the clean-up exercise.
      Tedco, which owns clothing store House of Kumali and furniture shop
Radio Limited, said it had recorded good business up to April due to a large
wage adjustment for civil servants, traditionally the main customers at
Tedco's Nyore Nyore stores.
      "In May, however, the clean-up exercise by the government dampened
consumer enthusiasm. This impacted on our sales, particularly in the
furniture division.
      "The cash chains in particular felt the loss of the cash customer who
generally was a market trader," Tedco chairman Simba Mangwende said.
      The clean-up exercise, in which government closed down informal
markets and destroyed illegal houses, has been strongly condemned by the
United Nations (UN) and human rights groups.
      The UN has said up to 700 000 people were left homeless by the
clean-up exercise.
      Tedco said the clean-up, together with rising inflation, had seen a
reduction in bedding and furniture sales in May and June.
      This also impacted on credit sales, which resulted in a paltry 70
percent increase in the debtor's book.
      Supply of raw materials is proving to be a major challenge for the
company due to the devaluation of the Zimbabwe dollar.
      However, the company is optimistic about the second half of the year,
which is usually a strong period for retailers.
      "The second half is traditionally stronger than the first so we expect
the group to continue to show gains in the top line due to improved stock
holdings despite a relatively soft trading environment."
      The group has admitted that in spite of the improvements in their
balance sheet; they are still undercapitalised. The proceeds of last year's
rights issue, at $11.7 billion, are much lower than the company's interest
bill of $21 billion.
      "We believe the business is now properly structured, as demonstrated
by the improved performance, but needs additional capital, which will go
towards strengthening the balance sheet and growing the business in this
difficult period," Mangwende said.
      Tedco last year suffered from high interest rates and low stock
levels. The company last year unsuccessfully attempted to regain lost market
share by expanding into a new fashion line through CW Fashions, and also
trying to remodel the Radio Limited furniture store into exclusively an
electronic goods retailer.
      Tedco made profit after tax of $13.5 billion in the first half of this
year, compared to a loss of $15 billion in 2004.

Back to the Top
Back to Index

FinGaz

      ZUPCO boss develops cold feet in lawsuit against bus supplier

      Chris Muronzi
      9/15/2005 8:03:50 AM (GMT +2)

      ZIMBABWE United Passenger Company (ZUPCO) chairman Charles Nherera has
backed off from threats to sue businessman and transport supplier Jayesh
Shah for defamation damages.

      The lawsuit threats had arisen from allegations that Nherera solicited
for US$355 000 ($8 billion) to facilitate the purchase of Shah's buses by
the public transporter.
      Sources close to the developments told The Financial Gazette this week
that Nherera's lawyers, Muzangaza, Mandaza and Tomana, had not issued
summons despite earlier threats to sue Shah should he fail to pay $100
million in defamation damages.
      The sources added that Nherera had developed cold feet after Shah
vowed to meet the ZUPCO chairman in court and refused to pay the purported
damages.
      It is believed that some board members of the parastatal have been
questioned after the accusations filtered into the public domain amid
reports that the President's Office is closely monitoring developments at
the public transport operator.
      In a letter dated August 4, Nherera's lawyers wrote: "We address you
(Shah) at the instance of our above-named (Nherera) client who instructs us
to demand, as we hereby do, payment to him of the sum of $100 million in
damages for defamation arising out of your calculated malicious and false
allegation against him that he demanded from you a bribe in the sum of US$5
000 per bus in order to facilitate a sale of your 69 buses to ZUPCO."
      Nherera's lawyers alleged that Shah defamed Nherera to members of the
secret service, the police, some ZUPCO board members and Local Government
Minister Ignatius Chombo.
      "We understand that in making the defamatory allegation your intention
was to cause your audience to believe that our client was so corrupt that he
did not deserve to be the chairman of the ZUPCO board. We accordingly give
you up to the end of business on the 11th of August 2005 to pay up failing
which summons will be issued out of the High Court for the same relief."
      When reached for comment, Shah said his lawyers, Atherstone and Cook,
were yet to receive summons from Nherera's lawyers despite earlier threats.
      Nherera could not be drawn into commenting on the issue saying his
statements could have legal implications.

Back to the Top
Back to Index

FinGaz

      Industry fires broadside salvo at govt

      Felix Njini
      9/15/2005 8:07:38 AM (GMT +2)

      Zimbabwe's business sector, battling to arrest accelerating economic
decline, has blasted the government for its disruptive economic and
political policies, which have created a hostile environment for business.

      Business leaders who met at last week's Confederation of Zimba-bwe
Industries (CZI) congress in Nyanga took turns to chide the government,
which they accused of "stifling industrial capacity".
      Industry said it was doing business in a disruptive environment
re-sulting in capacity utilisation falling to levels around 20 percent.
      Among some of the problems besetting industry are crippling fuel
shortages, which business leaders say are affecting product delivery,
infrastructural collapse, rising inflation, unpredictable policies, low
capacity utilisation and lack of capitalisation.
      Industry also expres-sed concern at bureaucratic tendencies by the
Reserve Bank of Zimba-bwe (RBZ) and Zimba-bwe Revenue Authority (ZIMRA)
officials who were accused of causing unnecessary delays in business
transactions.
      Industry also called for the central bank to scrap the foreign
currency retention scheme.
      The RBZ retains 50 percent of foreign currency proceeds from
exporters. But companies argue they are unable to access the money when they
require it to procure inputs.
      There are mounting fears that heavily geared companies might not
survive the economic storm as interest rates charge towards the 300 percent
mark.
      Inflation, which had come down to as low as 124 percent accelerated to
265.1 percent in August.
      Analysts predict inflation will shoot up to more than 300 percent in
the coming months due to a hike in prices of basic commodities, a 120
percent fuel price hike and shortages of essential goods.
      PG Industries chief executive Nyasha Zhou said underutilisation of
capacity was a major contributor to inflation, said.
      "The policy frameworks are fine in principle but we have an economy
which is in a crisis. Let us see reality and walk the talk. Government
should respect industry for creating value," Zhou said.
      Zhou accused RBZ officers of a "lack of industrial experience", adding
that their conduct was "like giving a pain-killer to every patient who walks
into a hospital".
      "The youngsters we have in the central bank are very bright and
educated in conventional economics but they need industrial experience,"
admitted Finance Mini-ster Herbert Mure-rwa.
      Ariston Holdings chief executive Kumbirai Ka-tsande said some
government policies were taking the country a decade back.
      He accused government of lacking a "collective memory" to realise that
some of the policies being "recycled" failed the country a long time ago.
      Zimboard chief executive Kurai Matsheza slammed the bureaucracy at the
RBZ and ZIMRA, saying their officers were delaying deliveries to the export
markets.
      "The bureaucracy that we go through to get our money to export more is
uncalled for. Why should we have a retention period for our money? They must
do away with the retention period. Gono (RBZ governor) must allow me to use
the 50 percent he retains as and when I want to use it," Matsheza said.
      "Government and the RBZ do not create foreign currency, it is us who
make the money so they must make it easy for us to generate more. The
problem in this country is we are being judged and led by people who have
not gone to school," Matsheza charged.
      Zimbabwe is in a six-year economic recession characterised by biting
foreign currency, food and fuel shortages.
      The country's relations with most international financiers have soured
and these, in turn, have cut off aid.
      Zimbabwe last week survived expulsion from the International Mone-tary
Fund, a development that would have spelled doom for the battered economy.
      The intransigent and increasingly paranoid government has however dug
in its heels, refusing to mend relations with the Bretton Woods
institutions.

Back to the Top
Back to Index

FinGaz

      Building materials shoot up 200%

      Audrey Chitsika
      9/15/2005 8:22:44 AM (GMT +2)

      BUILDING material suppliers have hiked prices by 200 percent since the
beginning of the year, presenting further problems for an industry that
already has several projects in limbo.

      A survey by The Property Gazette revealed that, only last month, the
prices for building materials increased by 30 percent in response to a
sudden surge in demand for new housing, coupled with shortages and the
recently adjusted Value Added Tax.
      Realtor Elias Mabikacheche, a former chairman of the Estate Agents
Council, said he foresees a boom in property prices over the coming months.
      "The increase in the building material prices will lead to an increase
in the property prices. It is difficult for the government to control the
prices. More foreign currency is needed to import raw materials, which is
what the country does not have at present," Mabikacheche said.
      The price of common bricks has gone up to $4 million per
      1 000 units from last month's price of $3 million.
      The common type of cement, PC15, was priced at $54 000 in December
2004, before rising to $176 000 in August. Suppliers say stocks have now run
out.
      River sand is being sold at $1.144 million per cubic metre, up from
last month's price of $820 000.
      A property analyst said: "The increase in Value Added Tax to 17.5
percent left suppliers with no option but to increase the prices since they
have to catch up with transportation costs and also aim to make profit."
      Analysts urged players in the industry to focus on taking over
existing buildings that have refurbishment potential, which can be bought at
a discount, as opposed to funding expensive new construction projects.
      Construction Industry Federation of Zimbabwe chief executive officer
Martin Chingaira said the continued shortage of essential building materials
had delayed completion of several projects.
      "No building process can take place without cement. The increase in
operational costs might force some contractors to hike charges or to abandon
building projects before completion," he said.
      Suppliers contacted by The Property Gazette said they had no cement in
stock and, when it does become available, they expect prices to have
increased by 28 percent.

Back to the Top
Back to Index