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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.