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

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Zim Independent

RBZ near fuel deal
Conrad Dube/Godfrey Marawanyika
SOUTH Africa's Rand Merchant Bank (RMB) is demanding that Zimbabwe's export
receipts to that country be tied up as security for a long-term fuel deal
whose negotiations are at an advanced stage, it was established this week.

The RBZ confirmed that "negotiations with South Africa's Rand Merchant Bank
have progressed satisfactorily".

Officials in the fuel industry yesterday revealed that the parties were yet
to agree on two major sticking points relating to security of the loan.

They said RMB has said that the facility must include the settling of
previous debts to South African fuel suppliers. The bank is understood to
have demanded that all exports to South Africa be used to settle the debts
including the loan under negotiation.

The officials said if all these conditions are met, the fuel situation
should improve in 30 days. The central bank, without revealing much, said
talks were in progress.

"The Reserve Bank of Zimbabwe is in the process of negotiating a facility
with Rand Merchant Bank," the central bank said in response to written
questions from the Zimbabwe Independent.

"The facility will be activated as soon as the negotiations have been
concluded. Negotiations so far have progressed satisfactorily," the RBZ
said.

RMB spokesperson Peter Gent also confirmed the negotiations with the RBZ. He
would not divulge details regarding the facility, citing client
confidentiality.

"For reasons of client confidentiality, RMB cannot comment on specific
transactions. Where transactions are of a politically sensitive nature, RMB
will only act as a facilitator on request from our government which deems
such a transaction to be in the national interest," Gent said in his
response to questions.

In pursuit of the facility, RMB officials held talks with RBZ officials in
Harare at the beginning of the month while RBZ governor Gideon Gono and his
delegation went to South Africa for further discussions.

"We confirm that we were approached to look into the possibility of helping
the Reserve Bank of Zimbabwe to finance the importation of fuel for that
country. No further details are available at this stage," Gent said.

"Zimbabwe is a major trading partner of South Africa, and cross-border
financing of this kind takes place on a regular basis in a wide variety of
product areas, from maize to railway equipment," Gent added.

It has since emerged that the facility is not confined to petroleum products
but that the RMB is also acting as a facilitator on behalf of the South
African government on a loan Zimbabwe has requested from South Africa.

The negotiations have been going on for almost a month but the critical
aspects of the facility have not been made public. The value of the facility
has also not been disclosed but it is believed to be worth half-a-billion
United States dollars.

Meanwhile, the fuel crisis reached unprecedented levels as the country
virtually ran dry after foreign currency shortages worsened this week.

Service stations selling fuel in foreign currency were swamped by motorists
who have access to the scarce resource.

At Wedzera Service Station along Samora Machel Avenue, motorists jostled to
get petrol or diesel. A long queue formed towards Enterprise road as
motorists with free funds bought fuel coupons.

Meanwhile, MDC president Morgan Tsvangirai will today walk from his
Strathaven home to the party's headquarters in the city centre after failing
to access fuel.

Tsvangirai said he has tried without success to get fuel from service
stations including those selling in foreign currency.
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Zim Independent

Killer war vets sentenced to 4 years
Loughty Dube
THREE Lupane war veterans accused of kidnapping and assaulting MDC MP, David
Mpala, who later died of injuries sustained during the attack in 2003, were
recently sentenced to four years in jail each.

War veterans Seith Themba Jubane, Nicholas Minenhle Ncube and Patrick Ndlovu
were part of a group of six who kidnapped and assaulted the former Lupane MP
in 2003.

Two other accused, Raymond Gumbo and Boyana Ndlovu, have since died while
Ndaba Mpofu was acquitted of all charges.

Lupane magistrate, Sikhumbuzo Nyathi, sentenced the war veteran trio to two
years each in prison for the assault charges and another two years each on
the kidnapping charges.

The three were however not jailed for the third offence relating to the
theft of $15 000 that was in Mpala's vehicle when he was attacked.

The state prosecutor, Sanders Sibanda, told the court that war veterans were
at a meeting at Lupane business centre when they were alerted that there was
an MDC vehicle around.

The group is alleged to have seized Mpala and dragged him to a bush behind
the business centre where they assaulted him and stabbed him until he lost
consciousness, leaving him for dead.

Mpala was hospitalised and never fully recovered and later died of injuries
that he sustained during the attack.

It is alleged that after the attack the group drove off with Mpala's
vehicle. Police in Tsholotsho discovered Mpala's vehicle in the possession
of the accused the following day.

Recently Zanu PF thugs in Mbare and Umguza attacked MDC MPs Edward Mkhosi
and Gift Chimanikire but the perpetrators have not yet been brought to book.
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Zim Independent

Mugabe's early departure can save Zim

ONLY immediate and drastic political and economic reforms, including
President Robert Mugabe leaving power - now and not after two years - could
pull Zimbabwe from the brink, analysts said on Monday.

Reacting to comments by Mugabe in an interview on Sky News at the weekend
that he would step down "to rest" when his term expires in 2008, the
analysts said an earlier departure by the veteran leader would more than
lift crisis-sapped Zimbabwe's fortunes.

The perception within the international community and among an increasing
number within Mugabe's own ruling Zanu PF party was that he had become a
stumbling block to Zimbabwe's economic and political progress, they said.

But more critical, according to Harare economic consultant John Robertson,
was the fact that Zimbabwe could not wait another two and a half years for
Mugabe to step down when his term ends, before it can embark on extensive
and radical reforms to resuscitate its comatose economy.

Robertson said: "The economy can hardly wait for that long, we need changes
as a matter of urgency. We need to begin to see a respect for market forces
which we no longer have. We must not wait until 2008 (when Mugabe goes)
because the damage will be too great to fix."

Zimbabwe's six-year economic crisis is seen as one of the highest inflation
rates in the world. Annual inflation rose to 265,1 % in August compared to
254,8 % in July, according to official figures released this week. The
country's limping economy has been worsened by foreign currency, fuel and
food shortages. Foreign currency shortages have hamstrung industry, plunging
production levels to below 30%.

Critics blame repression by Mugabe and his controversial economic and land
policies, chiefly his expropriation of white-owned farms to resettle
landless blacks, for exacerbating Zimbabwe's crisis. The veteran leader
denies responsibility for the economic meltdown, instead he says Britain and
its Western allies have ganged up to sabotage Zimbabwe's economy in a bid to
incite an uprising against him in retaliation for the land seizures.

Whatever the reasons behind Zimbabwe's deepening crisis, the analysts said
only the departure of Mugabe, who has ruled the country since Independence
in 1980, could restore much needed confidence in the southern African
country.This, if only because modern politics dictated that leadership
renewal was crucial in a country's development, according to University of
Zimbabwe lecturer and political commentator Heneri Dzinotyiwei.

"It is always better with a new leadership," Dzinotyiwei said. Asked whether
Mugabe's departure will herald a new beginning for the troubled southern
African country, Dzinotyiwei responded: "There is no question about that.
The government is the problem. Out of the government, the cabinet, the
parliament, the only thing that has not changed since Independence in 1980
is Mugabe, so people are beginning to associate the country's (problems)
with Mugabe."

Adored and reviled by multitudes in Africa and banned from most Western
capitals for alleged human rights abuses, Mugabe has in the past insisted
his Zanu PF party will decide when he should leave office. But analysts are
agreed that the culture of fear within Zanu PF precludes anyone within the
party from stepping forward to tell Mugabe to go.And when Mugabe eventually
goes at a time of his choosing, putting the country back on track would take
years as Zimbabwe has lost millions of skilled workers to neighbouring
countries and abroad while there are few resources available for
reconstruction.

More than three million Zimbabweans out of the country's total 12 million
people live in neighbouring countries or further abroad after fleeing home
because of hunger or political persecution.

Dzinotyiwei said: "Zimbabwe is one of the biggest countries in Africa in
terms of resources and it has patriotic citizens but exactly that strength
is what we are losing as more people leave the country in frustration." -
zwnews.
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Zim Independent

Mandaza fires board
Dumisani Muleya
AS the crisis triggered by the mediagate scandal at the Zimbabwe Mirror
Newspapers Group deepens, the publishing concern's CEO and editor-in-chief
Ibbo Mandaza has fired the company's board of directors in a bid to retain
control of the company.

Sources said Mandaza has dismissed nearly all directors, save for three
loyalists, creating an explosive situation at the beleaguered media house.

Mandaza two weeks ago dismissed his deputy, Alexander Kanengoni, after he
failed to appear for a disciplinary hearing.

Kanengoni had been suspended for alleged acts of insubordination and
misconduct. Sources said Mandaza was scrambling to gag this paper on
mediagate by trying to rope in the Media and Information Commission to act
as a "censorship board".

The Zimbabwe Independent has reported that the Mirror titles, the Daily
Mirror and Sunday Mirror, and the Financial Gazette have been taken over by
the Central Intelligence Organisation (CIO) using public funds.

This was part of a covert propaganda blitz by the state security agency
which also runs news websites and is eyeing other publictions as well.

Sources said the CIO also had a presence in other communication agencies,
including newsrooms of the state-controlled media. It has been learnt that a
major production house could be operating under the direction of the CIO.

Sources said Mandaza dismissed most members of the Mirror board led by
Jonathan Kadzura. Among those fired are the directors who represented CIO
interests at the Mirror, Thomas James Meke, Charm Ndaba Mukuwane, John
Marangwanda, and Kanengoni.

Meke is the immediate past CIO administration and finance director and
Mukuwane, now managing director and majority shareholder of Creative
Solutions (Pvt) Ltd, is one of his predecessors.

Marangwanda - affectionately known by his CIO colleagues as "Jofo" - was
head of the economic desk. He was once posted to Botswana as a liaison
officer before he returned home and later retired. Sources said he was key
in brokering the CIO newspaper deal through a shelf company called Unique
Investments (Pvt) Ltd.

Only Mandaza, Ambassador Buzwani Mothobi, now acting chair, Joyce Kazembe
and Amy Tsanga, remain on the Mirror board. Tsanga replaced Tendai Mangezi
who resigned. Musi Khumalo also resigned.

Kadzura declined to comment, saying he would issue a "comprehensive
statement" on the matter.

"I will issue a comprehensive statement on the issue in due course. I will
advise you on when the statement will be issued. I will invite you when I do
that," he said.

Asked for an exclusive interview on the unfolding CIO media ownership saga
at the Mirror group, Kadzura said: "I will talk to you when I issue the
statement."

Sources said the dismissal of the Mirror board would worsen the situation.

The sources said the CIO was giving Mandaza a long rope to hang himself by
allowing him to act against their interests as major shareholders.

It was said Mandaza had mustered enough courage to confront the CIO head-on
after he secured the backing of members of the dominant faction of the
ruling Zanu PF led by retired army commander, Solomon Mujuru.

Sources said Mandaza ensured the Mirror titles backed Vice-President Joice
Mujuru in the run-up to the Zanu PF congress last December in her bid to
secure her current position.

Although the Independent was the first to break the story of the Mujuru
vice-presidency bid last year, the Mirror papers gave extensive coverage to
the story.

Mandaza was said to have approached a local bank looking for money to retain
control of the papers and ensure a massive mediagate cover-up but sources
said this came too late. The CIO was said to be angered by this.

Sources said the CIO was carefully watching the events as they unfold while
it plans how to regain control of the papers. It was said to be tightening
the noose around Mandaza through an audit of the finances of the Mirror.
There were allegations of abuse of funds at the group. The Mirror reportedly
obtained $38 billion from the central bank's productive sector facility
although some of the money came from the CIO who at one time paid 83% of the
papers' operating expenses.

The Mirror papers have a weak economic base, poor advertising and low
circulation. It was said they were surviving through the backing of their
major shareholder "who has deep pockets and staying power".

Sources said a forensic audit report by Ernst & Young was out. It was handed
over to Kadzura, as board chair. It is understood on Wednesday Mandaza
convened what he termed a board meeting although minus the representatives
of the major shareholder.

Sources said only Mothobi, Tsanga and Mandaza himself attended the meeting.
It was said Mandaza tried to have the audit report handed over to Mothobi
but Ernst & Young flatly refused, saying they would only hand it over to the
principal who commissioned the audit.

Sources said the audit has "interesting details" on the Mirror's finances.
The CIO was due to convene a meeting to deal with the crisis. This has set
the stage for an explosive showdown at the Mirror
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Zim Independent

Mugabe's retirement date a 'disaster' - MDC

PRESIDENT Robert Mugabe's announcement that he will only retire in 2008 when
his term of office expires spells disaster for Zimbabwe since the country
needs an able leadership as a matter of urgency, the opposition MDC has
said.

President Mugabe, in power for a quarter of a century, told reporters in
Havana where he was on a state visit that he needed to rest and would cede
power in 2008. But the opposition said 2008 was a long wait.

"The country is bleeding and as long as Mugabe continues in power for a
single day it's a disaster for Zimbabweans," said Paul Themba Nyathi, the
MDC spokesperson. "We have said before that as long as there is a country
left to destroy, Mugabe will not leave power."

Nyathi said Mugabe's policies have brought suffering to Zimbabweans and for
Mugabe to stay in power for even three months was a catastrophe.

"Every single day Mugabe continues in power regresses the country to the
sixteenth century and Zimbabweans should brace themselves for more hardships
as Mugabe has made it known that he is still around for the coming three
years," Nyathi said.

Mugabe has in the past scoffed at suggestions for him to step down, arguing
that he has a mandate from the electorate to lead the country.

Meanwhile the MDC national executive committee will meet today to decide on
whether to participate in the Senate election.

Nyathi confirmed that the meeting was taking place today at the party
headquarters in Harare.

Questioned on MDC leader Morgan Tsvangirai's statements that the MDC would
not participate in the Senate polls, Nyathi said Tsvangirai was contributing
to public discourse on a matter of public concern.

"The MDC leader is a Zimbabwean and he was contributing to debate on the
matter but the issue will be resolved when the national executive makes a
decision today," Nyathi said. - Staff Writer.
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Zim Independent

Transport operators seek to double fares

COMMUTER fares need to be raised immediately if operators are to break even
in the light of critical fuel shortages that have compelled operators to
source petrol and diesel from the black market.

Operators say they need to charge commuters double the current $15 000 for a
25 km trip to Mabvuku high-density suburb to remain viable.

In submissions made to the Local Government ministry, they say they are
foregoing essential repairs and servicing of their vehicles to cut costs but
that this endangers the lives of commuters. Operators are being forced to
use unroadworthy vehicles.

Those operators who run 18-seater omnibuses risk incurring losses of up to
$3,2 million a day if fares remain at current levels when they have to
source fuel from the black market at $80 000 a litre.

It costs $2,7 million per day to run a commuter omnibus at official pump
prices of $20 300 a litre with a calculated loss of $407 000 per day at
government-stipulated fares. The costs soar to $5,6 million with the
operator incurring a $3,2 million daily loss when he buys fuel at black
market prices.

These calculations are based on quotations obtained from insurance
companies, the city council, the Ministry of Transport and vehicle repair
companies.

Other daily costs include oils, car washes, tickets and lunches for the
driver and his assistant.

The costs assume that fuel is readily available. Any continued fuel
shortages would result in huge losses for the operators as some operational
costs such as vehicle insurance and presumptive tax, route permit fees and
vehicle licences remain fixed.

Rising commuter fares have worsened the plight of workers whose salaries
have remained stagnant despite recent fuel price hikes.

Commuter omnibus operators say government must reach a compromise with them
soon to avert a serious transport crisis that has the potential to disrupt
industry and commerce and grind it to a halt as workers fail to go to work.

Fuel shortages have become so acute that Harare town clerk Nomutsa Chideya
on Tuesday admitted his council had been compelled to procure fuel from the
black market to maintain services.

"We have not received diesel for the past four weeks. For the sake of the
health of the residents, we would rather buy the fuel on the parallel
market." Chideya told a parliamentary committee on local government.

Harare City Council used to receive a fuel allocation of 30 000 litres a
month from the National Oil Company of Zimbabwe, but this had been
drastically reduced to about 10 000 litres a month. - Staff Writer.
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Zim Independent

Harare/Byo water woes get worse
Grace Kombora/Susan Mateko
HARARE will continue to experience water problems so long as the Zimbabwe
National Water Authority (Zinwa), which is managing water purification, does
not have the capacity to do so.

Zinwa board chairman Willie Muringani this week told the Zimbabwe
Independent that the parastatal was facing numerous challenges as it does
not have enough resources to improve water purification.

Zinwa four months ago took over bulk water treatment in Harare from the city
council saying the local authority was failing to provide water to
ratepayers. However, the capital has for the past three months faced its
worst ever water supply problems with the city's northern and eastern
suburbs going without water for over two months.

"The takeover has presented numerous challenges to Zinwa such as
infrastructure that has outlived its economic life, inadequate resources to
maintain and repair the existing infrastructure and unavailability of
foreign currency to import the required equipment and chemicals," Muringani
said.

A source at Zinwa said financing of the repair works, which Reserve Bank
governor Gideon Gono promised when Zinwa took over from the Harare city
council, was not forthcoming.

Muringani said they were trying to correct the anomalies inherent in the old
system in order to alleviate water shortages.

"What is actually happening is that we are trying to correct anomalies that
were inherent in the old system where some parts of the city almost always
bore the brunt of water cuts," he said.

He attributed the persistent water cuts to the increase in demand by Harare
residents. "The persistent water cuts are being caused by demand which has
outstripped supply in Harare," Muringani said.

The shortages have forced residents to draw water from unprotected wells and
Mukuvisi River.

Meanwhile Zinwa has intro-duced demand management, which entails the cutting
of water supplies to most residential suburbs for the whole day.

"The water demand management entails cutting of water supplies for 24 hours
to the southern and northern suburbs. However, we are not in a position to
say when the demand management will end," Muringani said.

Under the plan, water pressure to southern suburbs and to Chitungwiza is
reduced at certain periods to allow for greater distribution to other
suburbs.

"Water supply mains to the high-density areas of Highfield, Sunningdale,
Dzivarasekwa, Kuwadzana, Warren Park and Chitungwiza will be throttled to
control flows into those areas," said Muringani.

Zinwa in May this year took over bulk water supply for the Harare
Metropolitan area. This covers the city of Harare, Chitungwiza, Ruwa and
Epworth.

Muringani said the solution to persistent water problems lay in the complete
rehabilitation of waterworks and the construction of Kunzvi dam.

"The long-term solution to Harare's water problems lies in the complete
rehabilitation of the city's major treatment works, Morton Jaffrey and
Prince Edward, which have the capacity to produce a combined estimate of 600
megalitres per day and the construction of Kunzvi dam," he said.

Muringani said Kunzvi Dam was expected to be completed in the next three
years.

The dam, to be built on the confluence of Nyaguwe and Nora rivers in the
Goromonzi district, falls in a different catchment area to Chivero, Manyame,
Seke and Harava dams that get their water from Manyame River.

Muringani said: "Construction of Kunzvi Dam is expected to be complete
within the next three years."

Water Resources minister Munacho Mutezo in April said government would
announce the funding for the construction of the dam "in the next three
weeks". To date no such announcement has been made nor has there been any
tendering process for the project.

Meanwhile our Bulawayo bureau reports that a catastrophe is in the making in
the city unless there are good rains this season.

Bulawayo has been hit by serious water shortages that have seen some suburbs
going for two months without water.

Two dams in the city have completely dried up while the remaining two dams
have no pumping capacity.

The city's director of engineering services Peter Sibanda on Wednesday
revealed that short of good rains, the remaining supply dams, Inyakuni and
Insiza, would dry up.

"The situation is really bad. If there are no rains this season we are set
for a disaster as the current water supply dams are running low and very
soon they will dry up, if there are no huge inflows," Sibanda said.

He said current supplies were only enough to last 12 months and thereafter
there would be shortages if there were no inflows into the city's dams.

"So far the water in the dams is not enough and will only last for about 12
months because of the water rationing measures we have put in place,"
Sibanda said.

Sibanda said council was trying to resuscitate boreholes at the Nyamandlovu
aquifer in Matabeleland North.

He however reiterated that this would not meet demand as it only accounted
for a 10th of the city's daily requirements.

"Council has embarked on a programme to resuscitate boreholes at the
Nyamandlovu aquifer. However this will not meet the demand as it will only
provide a 10th of what is needed," said Sibanda.

The two remaining dams are currently supplying the city with only half of
requirements.

Inyakuni supplies 24 million cubic metres out of a capacity of 80 million
cubic metres while Insiza supplies 83 million cubic metres out of a capacity
of 173 million cubic metres.
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Zim Independent

Air Zim flies three passengers
Roadwin Chirara
PROBLEMS at Air Zimbabwe continue to mount after revelations that the
airline managed to fly only three passengers on its Bangkok-Dubai route on
Friday, September 2.

On the same day the airline cancelled its flights to Bangkok from Beijing
after it had been notified that there were no passengers from the Chinese
capital to Thailand.

The national airline flew the three passengers in Bangkok to Dubai on its
leased 245-seater plane. On arrival in Dubai the airline managed to pick up
80 passengers from the Emirate city for the trip to Harare.

Bangkok was recently added to the airline's Asian destinations after earlier
efforts to launch the route failed due to lack of passengers to the Thai
capital.

The Independent heard that the three passengers on the flight from Bangkok
were over-weight on their luggage allowance and Air Zimbabwe wanted them to
pay extra for the surplus.

"That was not all," said one of the passengers on the flight. "We thought
because there were only three of us on the plane, there would be free
seating in business. But we were told to go to the economy class."

After protesting, the passengers were eventually allowed to take business
class seats.

The airline's problems have been worsened by its leasing of a Boeing 767-200
from PB Air of Thailand at a total cost in excess of US$2 million for the
duration of the three-month deal.

Air Zimbabwe is also said to have committed itself to servicing the Bangkok
route during negotiations for the plane with the Thailand company in return
for the company charging below market rates for the lease of the plane.

Air Zimbabwe spokesperson David Mwenga could not comment on the issue saying
he did not have the figures and information on the flight.

"I am sorry I cannot comment without having the information on the date in
question," Mwenga said.

The airline is currently being charged US$3 200 per flight hour compared to
the Iata rate of US$8 000 for planes in the 245-seater range.

The airline will also be subjected to insurance costs which are pegged in US
dollars over the duration of the lease arrangement.

Currently Air Zimbabwe is charging $25 million for a return ticket to
Beijing, $12 million for a return ticket to Dubai while Bangkok travellers
will be expected to fork out $28,4 million for a return ticket.
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Zim Independent

Industry operating at 25% of capacity
Shakeman Mugari
ZIMBABWEAN industry's capacity utilisation has slumped to an all-time low
with information this week that most companies are operating at a quarter of
their capacity.

The Zimbabwe National Chamber of Commerce (ZNCC) said although it is yet to
conclude a comprehensive study on the state of industry, preliminary
research indicates that most companies are now operating at 25% of capacity.

This is arguably the lowest level since Independence in 1980. Political
uncertainty and lack of investor confidence have been blamed for the parlous
state of Zimbabwe's economy. Foreign currency, fuel, power and water
shortages have precipitated the rapid plunge in industrial capacity
utilisation.

ZNCC president Luxon Zembe confirmed that initial feedback from its 2 500
members showed that industry was operating at about a quarter of capacity.

At its worst in 2003, industry operated at about 35%, but the new levels
show that contrary to government claims that things are getting better, the
economy is getting worse.

"Things are really bad in industry," Zembe said.

"A number of our members have closed down," he said. "Fuel, water and power
are in short supply. But the biggest cause of the problem is the foreign
currency shortage."

Most ZNCC members have not received foreign currency from the Reserve Bank
of Zimbabwe's auction market in the past five months. They have not been
able to buy crucial raw materials to operate.

Zembe warned that things could still get worse.

"The economy is in the intensive care unit and there is need for a major
policy shift if things are to get better," he said. He blasted what he
called "discord, incoherence and distortions" in government policies.

"The economy is bleeding because there is no policy consistency. The
government and monetary authorities are pulling in different directions."

The recent attack on the International Monetary Fund (IMF) by President
Robert Mugabe in Cuba soon after Zimbabwe was reprieved from expulsion shows
policy contradictions.

The chamber is working on a special report which will feed into a
comprehensive document to be submitted to the RBZ for consideration before
the next monetary policy review. At the core of the ZNCC's concerns to be
raised in that submission would be the apparent policy confusion in the
government, lack of political will and misplaced priorities, Zembe said.

He said members of the chamber were also concerned with the government's
extravagance. The members, he said, were worried that the government is
splashing money on galas and air shows at a time the economy is burning.

The Air Force of Zimbabwe last week held air shows which used a lot of fuel
which industry thought should have been put to better use.

Government has also spent millions of dollars on galas - something which
according to Zembe, the country cannot afford in this crisis.

"Our priorities are just skewed. We are so obsessed with petty issues that
do not add value to the economy," Zembe said.
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Zim Independent

Gono's measures short of expectations

THE International Monetary Fund (IMF) executive board says the policy
measures introduced by Reserve Bank of Zimbabwe governor Gideon Gono are not
enough to turn around the economy.

The fund also warned that unless strong macroeconomic policies are
undertaken urgently, the country's social and economic conditions could
deteriorate further.

In a statement released last week after the IMF executive board gave
Zimbabwe a six-month reprieve, the fund said although Zimbabwe had made
positive moves, there was need for comprehensive policies to address the
crisis.

"The IMF executive board notes that Zimbabwe has taken positive steps in the
area of the exchange rate and monetary policies since the last review, but
concludes that these fell well short of what is needed to address Zimbabwe's
economic difficulties.

"The executive board warns that there is a significant risk that unless
strong macroeconomic policies are undertaken without delay, economic and
social conditions could deteriorate further," reads the IMF board report
numbered 5/205.

There is speculation that Harare has over the past month been trying to show
that it is addressing the IMF's recommendations to devalue the dollar by
allowing it to slide on the auction market.

Previous IMF missions to Zimbabwe have recommended devaluation to boost
exports to generate more foreign currency.

The dollar this week depreciated to $26 000 against the US dollar, up from
$10 000 in the past two months but fetches nearly double on the black
market.

Finance minister Herbert Murerwa this week however flatly denied allegations
that the exchange rate movement was part of the IMF's conditions.

"That is not true at all, it is not part of the deal," Murerwa said.

The executive board also urged Zimbabwe to implement a comprehensive
adjustment programme as a matter of urgency in the areas of fiscal,
monetary, and exchange rate policies and structural reforms.

Zimbabwe recently made US$131 million loan repayments to the IMF to delay
its expulsion.

* Meanwhile, the IMF has denied reports that Zimbabwe was last week forced
to make a further US$50 million payment to avoid expulsion.

An IMF official told businessdigest on Wednesday that Zimbabwe "had not paid
the US$50 million as previously recorded".

He said their accounts showed that Zimbabwe had paid only US$120 million.
"As far as we know, we only received US$120 million from Zimbabwe and that
is final," the official said.

Zimbabwe has been in continuous arrears to the IMF since 2001.

As of last week, Zimbabwe's arrears to the IMF amounted to SDR119 million
(about US$175 million), or about 34% of its quota in the IMF, down from
US$295 million.

Of the current debt, SDR37 million (about US$54 million) is owed to the
General Resources Account and SDR82 million (about US$121 million) to the
Poverty Reduction Growth Facility Trust.

Compulsory withdrawal is the last step in a series of escalating measures
that the IMF applies to members that fail to meet their obligations under
the Articles of Agreement. - Staff Writer.
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Zim Independent

Liquidation of Hippo FCA will worsen sugar shortage - Gomwe
Eric Chiriga
HIPPO Valley Estates (Hippo), one of the country's two major sugarcane
producers, says the decision by the Reserve Bank of Zimbabwe to liquidate
US$2,68 million from its foreign currency account (FCA) will worsen the
current shortage of sugar.

The RBZ last week directed that US$2,68 million be liquidated from the
company's FCA on grounds that its banker had violated exchange control
regulations with respect to the liquidation of FCA balances within the 30
days stipulated by the Reserve Bank.

"This development will adversely impact on the company's ability to import
critical inputs and thus seriously undermine production," Godfrey Gomwe, the
chairman of Hippo, said.

Hippo has denied violating exchange regulations and has since appealed to
the RBZ to reverse the liquidation. Hippo is arguing that the funds were
approved by the exchange control authorities and were within the stipulated
retention period.

Gomwe said the monitored domestic sugar prices, which are grossly unviable
and uncompetitive when compared to the regional markets, were the major
cause of the current sugar shortage as it created room for speculative
activities.

"The economic improvements recorded during the greater part of 2004 and
early 2005 in response to the RBZ monetary policy interventions have started
to reverse," Gomwe said.

On the problems with their seized land, Gomwe said parts of Hippo Estates
remained listed for compulsory acquisition under Section 5 despite
objections lodged with the relevant authorities.

In his annual report for 2004, Gomwe said the company achieved an overall
cane yield of 86,45 tonnes per hectare - a drop of 18,7% from the prior
year's average yield of 106,28 tonnes.
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Zim Independent

Previous gains under threat - Agribank
Eric Chiriga
THE loss of business confidence will result in reversal of the gains made in
the last financial year, unless controlled, the Agricultural Development
Bank of Zimbabwe (Agribank) has said.

Shepherd Makonyere, the acting chairman of Agribank, said the reporting
period has seen a decline in business confidence which, if not checked, may
reverse gains made in the 2004 financial period.

Both local and foreign investors have lost confidence in Zimbabwe's economy,
saying it is highly unpredictable.

Currently, the country is not getting any significant Foreign Direct
Investment (FDI).

Makonyere said last year business witnessed appreciable moves towards
macroeconomic stability, but things are turning negative again.

"While a steady decline in year-on-year inflation was registered in the
period from 623% in January last year to 124% in March this year, a reversal
of the trend has been recorded since then," Makonyere said.

From April to June, inflation rates of 129%, 144% and 164% were recorded and
the rate recently increased to 254%.

In the belief that inflation was sustainable on a downward trend, the
Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono, reduced overnight
accommodation rates from 189-199% in July 2004 and 110-120% in December 2004
for secured and unsecured borrowing respectively.

These rates were projected to decline steadily to between 70 and 80% by June
this year.

However, due to reversal in the inflation trends, rates were raised from
160-170% in May and subsequently from 190-200% in July.

Makonyere said the principal source of the inflation remains foreign
exchange shortages and its consequent effects on the supply side of the
economy.

He said last year the limited supply of foreign currency led to a
depreciation of the Zimbabwe dollar by 595%.

The dollar depreciated by a further 200% at the beginning of this year as
the central bank endeavoured to maintain export competitiveness.

In a bid to solve the chronic foreign currency shortage, the RBZ introduced
the foreign currency auction which unfortunately can only allot a maximum of
about US$50 million per month.

In their results for the half-year ended June 30, Agribank recorded a
pre-tax profit of $14,9 billion.

However, the bank had bad and doubtful debts of $94,1 billion, which
Makonyere said were due to the incidence of crop failure caused by the
severe drought of 2004/5 cropping season and wilful default in some cases.

Agribank's capital adequacy ratio is 6% which falls short by 4% to the RBZ
minimum prudential ratio of 10%.

"This has arisen as a result of a reclassification of government's loans
amounting to $954 billion whose terms and conditions were not clarified at
the time of disbursement."

The loans had been treated as grants from government.
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Zim Independent

Fires cost Border dearly
Roadwin Chirara
BORDER Timbers has lost a total of 4 000 hectares of timber to arson since
2002, a development that has negatively impacted on the availability of
matured timbers on its plantations.

The situation has resulted in the company resorting to the importation of
matured timber to meet market demand.

In the period under review ending June 30, Border Timbers said it had been
subject to a total of 75 fires of which 93% were arson.

The company said its investment in fire-fighting equipment had significantly
reduced the severity of the fires on its plantations.

Border Timbers had previously made a provision of over $3 billion towards
the acquisition of fire-fighting equipment in the previous financial year.

"The fires are continuing into the new financial year, the acquisition of
state-of-the-art fire trucks, rapid response strike units and specialised
small tools has significantly enhanced fire-fighting capabilities in the
group and has prevented a potential catastrophe in the plantations," the
company said.

It added that it had projected to meet its planting target in the coming
financial year as the dry weather had affected its previously set targets.

"Pruning and thinning to waste operations achieved the targets of the year.
However, the planting programme was not met because of the dry weather
conditions experienced in Chimanimani," said the company.

Border Timbers said continued erratic power suppliers had affected the
production at most of its mills which in turn impacted on market supply.

"All three mills operated under outrageous erratic power supply,
specifically in the latter part of the year. This impact was most pronounced
at Charter and Tilbury sawmills," the company said.

Border Timbers International operations were affected by the pricing
pressure arising from the increased competition from Chinese exports to its
United States market.

"The Chinese have entered the USA market and are putting pressures on
prices. In the last quarter of the financial year, a new product was
successfully marketed in the United Kingdom and orders are set to improve if
deliveries meet the customers' expectations," said the company.

"Prices for this particular market in the UK are generally better than those
achieved in the USA," the company said.
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Zim Independent

Comment

No way out of the woods yet

BEWILDERING signals of Zimbabwe's relations with the International Monetary
Fund (IMF) have again emerged from government with the usual sabre-rattling
from President Mugabe and more mellow comments from the Ministry of Finance
and the central bank.

Mugabe, who recently authorised the payment of US$120 million towards the
IMF's US$295 million debt, saw it fit last weekend to attack the
international banking institution on his arrival in Cuba. While in the warm
embrace of the communist state which has promised Zimbabwe assistance in
health and education, he sang the Fidel Castro refrain that the IMF was not
of any help to poor countries.

It should be remembered that Cuba withdrew from membership of the fund in
April 1964. The move was the culmination of a period of difficulties in
Cuba's balance of payments starting in 1959. Castro has since then not
missed an opportunity to take potshots at the IMF and to rally other Third
World countries to break ranks with the "ruinous institution".

He has called it the "executioner which pulls the string so that the
guillotine's blade falls on the heads of Third World nations''.

To blend in with his surroundings, Mugabe did not disappoint.

"We have never been friends of the IMF and we shall never be friends of the
IMF," Mugabe warbled on arrival in Cuba on Saturday. "The IMF is never of
real assistance to developing countries. It is wielded by the big powers. It
is the big powers which dictate what it should do."

But his Finance minister Herbert Murerwa and central bank governor Gideon
Gono were meanwhile working feverishly to ensure that Zimbabwe is not
expelled from the fund. Gono justified the payment of US$120 million saying
it
was " important as a matter of national pride, dignity, security and
survival to sacrifice present comforts in fulfilment of wider global
obligations".

Murerwa also expressed optimism after the decision to spare Zimbabwe from
expulsion.

"I am happy Zimbabwe has been given another lifeline," he said. "We will
look at ways in the next few months to cut down on more of our debts and
patch up our relationship with the IMF."

While Mugabe believes that Zimbabwe "shall never be friends" with the IMF,
his Finance minister sees hope in maintaining cordial relations with the
fund. He has also spoken out against price controls which Mugabe is known to
favour.

While Gono pleaded with the IMF not to "take precipitous actions (to expel
Zimbabwe) whose effect is to blunt or negate the turnaround efforts
currently underway ", Mugabe sees the IMF as a hostile construct of the
capitalist order.

Put simply, the IMF is a key facet of Gono's so-called turnaround programme
but features very differently in President Mugabe's Fidelist mindset. He
already has many converts in the higher echelons of the party who subscribe
to his belligerent views on the World Bank and the IMF.

Therein lies the tragedy of Zimbabwe's quest for economic recovery. Policy
contradictions in the handling of the economy within the Zanu PF government
have ensured nothing tangible is achieved. Murerwa and Gono seem condemned
to the same fate as Makoni, Chambati and Chidzero.

Not that much will be achieved anyway by the payment of the US$120 million
to the IMF as Zimbabwe can still not access any balance of payments support
as it is still suspended.

Murerwa and Gono's run-around to normalise relations with the IMF will turn
out to be a waste of time as long as Mugabe continues to second-guess his
ministers and confuse the country on real government policy with regards to
relations with the Bretton Woods twins.

This obscurantist mode that has become so predictable has seen the country
failing to implement its own economic policies, from the Economic Structural
Adjustment Programme (Esap I and II), Zimprest, the Millennium Budget, the
Millennium Economic Recovery Programme, the National Economic Recovery
Programme (Nerp), and the National Economic Revival Programme (Nerp) to the
expansively titled Towards Sustained Economic Growth - Macro-economic
Framework, 2005-6.

There is a long history of half-heartedness by Mugabe's government in
drawing up and executing turnaround programmes. It gets worse when the
presidential coach and horses drives through fragile foundations.

Business leaders at the Confederation of Zimbabwe Industries congress last
week heard of the co-operation and consultation between Business Unit South
Africa and President Thabo Mbeki's government on economic issues. That
remains a pipe-dream here where government thinks co-operation with social
partners and the international community is a global conspiracy to evict the
incumbent.

If President Mugabe is serious about turning this economy around, he must
lead the charge to demonstrate willingness to adopt a cooperative approach
to international financial relations.

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Zim Independent

ZABG a reflection of RBZ's failure
Shakeman Mugari /Conrad Dube

THE Supreme Court ruling last week that the Zimbabwe Allied Banking Group
(ZABG) was using illegally acquired assets from collapsed banks mirrors the
failure of government's economic recovery programme.

The ruling said the sale and transfer of Trust and Royal banks' assets to
the ZABG earlier this year was unlawful "null and void, and of no force or
effect".

In his judgement, Justice Wilson Sandura also said there was disregard of
the law in the manner the Reserve Bank of Zimbabwe (RBZ) approved the
takeover of the assets. He said the central bank had sidestepped the
Troubled Financial Institutions (Resolution) Act, which was rushed through
parliament last year to justify the takeover of the collapsed banks.

The judgement means the ZABG is insolvent in the likely event that the
assets are returned to their legitimate owners, Trust and Royal.

Analysts say the problems at the ZABG are a sign of how Reserve Bank
governor Gideon Gono and his government principals have failed to
resuscitate the economy. The ZABG was the flagship of Gono's economic
turnaround strategy. Its imminent collapse should therefore be viewed in the
broader scope of an economy on the slide, analysts say.

The problems buffeting the bank include rising inflation, which this week
surged by 10,3 percentage points to 265,1% from 254,8% last month. This
trend, analysts say, will continue despite Gono's assurances that inflation
will soon stabilise. They say inflation should gallop to more than 500%
before year-end. The Central Statistical Office (CSO) this week warned that
inflation was likely to rise this month when the recent fuel price increases
are factored in. It said the 265% only reflected price movements up to
mid-August when the figures were collected. "We should note that this
(265,1%) applies to prices up to mid-August when the data was collected,"
the CSO said. "The recent fuel price increase has not been factored into the
inflation rate. Also there are some services and commodities that were
subjected to VAT, like postal services. Obviously that will come into effect
next month."

It warned: "Historically, the tendency has been that business people want to
take advantage of fuel price increases. For instance even though fuel costs
might only constitute 20% of the cost, businesses normally want to effect a
100% increase on their services and products."

Therefore contrary to Gono's predictions that inflation will start
decelerating in September there are strong signs that it should increase
drastically on the back of fuel price hikes and a weakening Zimbabwe dollar.

Perhaps the crux of Zimbabwe's problem is the lack of political will to deal
with the economic crisis decisively. The government's policy confusion and
arbitrary actions are probably the biggest threat to Gono's economic
turnaround. Soon after the International Monetary Fund (IMF) gave Zimbabwe a
six-month reprieve to deal with its problems or risk expulsion, President
Robert Mugabe went on the offensive, attacking the fund in Cuba. "We have
never been friends of the IMF and in the future we will never be friends of
the IMF," Mugabe said. He called the IMF an organisation that is "willed by
the big powers which dictate what it should do."

His attack cast doubt upon Zimbabwe's commitment to implement some of the
key measures that the fund has been proposing for the past five years. The
IMF has on more than five occasions advised Harare to cut its budget
deficit, abolish the dual exchange rate and stop interfering with the
market. The fund has also advised against the dual interest rates, which it
said created distortions in the market. But the government and the Reserve
Bank have maintained a dead man's grip on the market and the exchange rate.
They have continued with price controls and maintained the monopoly in grain
trading through the Grain Marketing Board (GMB), a practice that runs
parallel to the IMF's advice.

Policy and price distortions abound in the Zimbabwean economy. Fuel, for
instance is sold at three different prices. Government ministries and
departments buy at $11 000 a litre for diesel and $13 500 a litre for
petrol. All other fuel stations sell to the public petrol at $22 300 a litre
and diesel at $20 800 a litre. Selected service stations sell the same
amount of petrol and diesel at US$1 a litre.

Farmers have been diverting the fuel onto the black market while some Noczim
officials have faced similar allegations. Analysts say the three tier
pricing system opened loopholes for the black market.

Mugabe's statement, coming 24 hours after the reprieve, shows that Zimbabwe
has no interest in implementing reforms despite Gono's posturing. Analysts
say internally the statement is an indication that government and the
central bank are at odds on what they want to achieve.

"This shows that there is no political will. This economy will never recover
unless we break the political impasse," Zimbabwe Congress of Trade Unions
(ZCTU) economist, Prosper Chitambara, said.

"If we have a political settlement it means that we would significantly
reduce our risk factor which has so far sacred investors from Zimbabwe,"
Chitambara said. Zimbabwe National Chamber of Commerce president Luxon Zembe
said it was critical for Zimbabwe to source balance of payments support to
stabilise the
dollar.

"We need balance of payments support to stabilise our dollar and this is
where the relationship with the Bretton Woods instruments is critical," he
said. "No company can sustain the current costs of doing business in
Zimbabwe. If we do not get balance of payments support to stabilise the
macro-economic fundamentals we are headed for a crash," Zembe said adding:
"We are now in a vicious cycle and it's not looking good."

Zembe lamented the lack of coordination in government policy saying the
passage of the constitutional amendment affects security of investments.
"This can stop foreign direct investment. We need a market-driven economy,
but this is difficult because there is no coordination in government," he
added.

Mugabe declared 2005 the year of investment but events on the ground show
otherwise. He has signed the Constitutional Amendment Bill into law,
hammering the final nail in the national the coffin. The new Act
nationalises land, making it impossible for any investors to commit their
funds to agriculture. Remarks by Transport minister Chris Mushowe last week
that white-owned businesses will be targeted next will have compounded
negative perceptions about the country.
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Zim Independent

We've divine right to resist Zanu PF
By Rejoice Ngwenya
MY wife is adamant that true Christians should not entangle themselves in
politics. This damning perspective includes such "earthly things" like
office bearing, attending meetings and inevitably voting.

The catastrophic implication is that she has never, in her life, held
political office, attended a political meeting or voted. In civic education
lingo, such people would be classified a "bad citizens".

Being a true liberal democrat myself, I politely agree to disagree with her
simply because of two reasons.

Firstly, were it not for those brave, selfless men and women who gave up
their comfortable Christian education at mission schools in the 60s and
70s - and my wife was either not born or too young to notice - we black
Zimbabweans would still be washing the white man's bottom for a plate of
sadza.

Ironically, most in her generation are now doing just that in Leytonstone,
London, excommunicated through the unsightly deeds of these previous freedom
fighters-turned-fighters against freedom!

Secondly, many villagers sacrificed their lives for true freedom - and
sacrifice is just what every follower of Christ understands most, because
the man Jesus himself lost an earthly life to prepare us for another kingdom
that is not of this earth.

Perhaps my wife's point is about the nature of Christians who have
contaminated Zimbabwe's decaying political landscape. They attend mass every
Sunday, and spend Monday to Saturday in massive annihilation of our civil
liberties.

Yet if my wife had a close-up view of Christian soldiers in the mould of
Desmond Tutu, Martin Luther King and Pius Ncube, this could at least convert
her to that there is nothing wrong with politics per se but everything wrong
with the architecture and machinations of Zanu PF politics.

But before you strip wires off my doctrine of positive Christian politics
(PCP) that generally exalts freedom of choice and love, you have first to
admit that all beings naturally gravitate towards sinfulness. Everyone at
one time or another, according to the Holy Book, is a sinner - ie, lies,
cheats, steals and commits adultery "for all have sinned and come short of
the glory of God".

In Zimbabwe, ruling party politicians have added a special angle to that
category of "all", because the vindictiveness with which they are oppressing
their own kinsman, their lust for power and total insensitivity to the needs
of citizens surprises even the originator of sin himself, Lucifer the
Serpent.

After cheating their way into office through massive vote rigging last
March, they have proceeded to promulgate repugnant constitutional reforms
that are only meant to fortify their power, silence critics and further
mutilate the residual liberties we were clinging to.

My wife's point is therefore that if I were to expose myself to such a
vicious political environment, my attention would be diverted from issues of
spiritual purity - which is the core business of Christian living.

And yet the Bible tells a different story. If you are in search of intrigue,
romance, adultery, murder, politics, corruption and deceit, why bother
chasing Wilbur Smith, Jackie Collins, Chinua Achebe and Salman Rushdie?

Read the Bible, it's all in there - written so that we might know.

What my wife accuses politicians of has always been part of human nature
since time immemorial - the difference being now there is an added element
of applying high technology to perpetuate partisan propaganda. Even then,
the Holy Book is loaded with examples of heroes who deserve to assume the
mettle of political sainthood.

Zaphenath-Paneah, the 30-year-old Jewish captive known also as Joseph the
son of Jacob, was a politician of high esteem, gifted with knowledge,
humility and love. He was placed in the pagan royal house of Pharaoh by
divine intervention but maintained his faith up to the end, saving two
nations from starvation while in the process boasted a record of having
rebuffed advances of a lustful queen.

Women leaders have also had their fair say in biblical history - the
memorable Abihail's daughter called Esther, who reigned in the royal court
of the obscenely wealthy and powerful King Xerxes and once again saved the
injury-prone Jews from destruction.

And yet my wife's argument is not just about abstinence from politics, but
also my tendencies towards defiance. I believe that if God gave us the right
to choose, no one, Zanu PF included, has a right to take it away.

Sometimes it is important to defy authority. Moses writes in Exodus: "The
midwives, however, feared God and did not do what the King of Egypt had told
them to do; they let the boys live."

In other words, when a powerful autocracy stands between you, your
principles and freedom, you have the right to defy it. The very reason why
we took up arms against the Rhodesian Front was that our fundamental rights
to self-determination had been violated, despite the fact that what Ian
Smith did was, in Patrick Chinamasa speak, "constitutional". We defied the
devil's statutes to restore our dignity as a people and became part of the
world of civilisation that respects international laws and justice.

The same opportunity has presented itself to us, again because now our
leaders - Zanu PF leaders that is - are so intoxicated with power to the
point of being spiteful of the very people they claim to have emancipated.

President Robert Mugabe and his technical team have created a video-wall of
illusions and prisms to deceive the world that it is good to destroy your
own people in order to protect their sovereignty. Substantive, collective,
classical hogwash!

Ironically, we assumed our sovereignty in 1980 and anything else becomes a
cheap excuse to remain in power. We have the right - divine that is - to
resist not by humbly submitting ourselves to such renegade authority, but
effectively participating in resistance politics.

Zanu PF has desecrated our dignity, self-esteem and very being. Shall we
stand and watch these men trample on rights because "we are not of this
world"?

 Rejoice Ngwenya is a Harare-based writer.
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Zim Independent

Editor's Memo

Patriotic press
Vincent Kahiya
WHEN Finance minister Herbert Murerwa told the Confederation of Zimbabwe
Industries (CZI) congress in Nyanga last week that "there is no-one sitting
at his house saying 'zvinhu ngazvishate (things must go wrong)'", I almost
believed him.

The fact that things have really gone bad in the country does not
necessarily mean there are people working feverishly to ensure that the
economy goes down the tubes. It could just be the absence of the right
chemistry in those running the economy or people not doing their jobs
properly.

CZI vice-president Florence Sachikonye revealed in one session she was
chairing that she was one of three passengers who flew on Air Zimbabwe from
Bangkok to Dubai recently. To apply Murerwa's theory to this embarrassing
performance by our debt-ridden airline, no-one at Air Zimbabwe or the parent
Transport and Communications ministry is saying "zvinhu nga-zvishate".

Whatever the airline's motivation, it is not helping this economy move
forward. In fact such poor decision-making must be exposed so it is not
replicated elsewhere, thus becoming a drain on the economy.

When news media take issue with such imprudent business practices, the
motivation is not to destroy the economy but to ensure that those entrusted
with running it and creating wealth remain focused on that goal. It is
called accountability and should not be such a stranger to ministers or
their fawning friends in business!

So I was surprised when a respected businessman stood up at the congress to
pronounce the culpability of this paper and our sister publication the
Standard in the demise of the economy. David Govere seems to believe that we
are saying zvinhu ngazvishate.

"As business people we must sit down with (proprietor) Trevor Ncube and his
papers to tell them what they have done to this economy . . ." said Govere,
blithely ignoring what incompetent ministers have "done".

Then others chipped in with tired mantras about the need for the media to be
patriotic and that we should stick together like Nigerians do when they are
abroad. Perhaps I should ask why Nigerians stick closer to each other when
they are in Europe or the United States than when they are at home! The
media must be patriotic and serve national interests, we are repeatedly
told.

The question is who defines the national interest and patriotism? According
to our rulers, national interest and patriotism involves blind allegiance to
a system which we can all see is failing.

It is flying a 245-seater plane empty in the name of a Look East policy
which only the most gullible swallow. It is building dams and leaving them
to silt instead of using them to support irrigation and boost agricultural
output.

It is evidently unpatriotic to question why government would rather import
maize from South Africa and pay $8-9 million a tonne while it pays local
farmers $2 million a tonne. All these are not creations of the media but
real issues raised at the CZI congress by business leaders and senior
government officials.

Proponents of a patriotic press want the media to look the other way and
tell the world that everything is fine even when we do not have fuel and
food.

Ministers who drove to Troutbeck Inn should have seen the environmental
degradation caused by the wanton burning of flora. Did they see the invaders
at Ariston Holdings' Claremont Estates and the disruption their presence has
caused? If they didn't, it is the role of the media to remind them that
while they preach economic recovery and the need to generate foreign
currency, land invaders are building shacks in the middle of fields where
export crops should be grown.

Should the media pretend to be patriotic when Transport and Energy minister
Chris Mushowe advocates the seizure of white-owned companies in the same
manner as the land reform programme while in the same breath government
claims to be wooing investors?

What foreign investor would want to put his money in such a risky
environment where crude populism is rampant?

Those wanting to sit down and have tea with us (as RBZ governor Gideon Gono
would put it) should be pleased to know that we are very keen to see this
economy turning the corner. They should also be pleased to know that someone
does not become unpatriotic simply because they refuse to repeat the party
slogans with the same gusto as other political beings.

Equally so, patriotism is not parroting failed policies or celebrating
success when there is none. Those who read newspapers are cleverer than
that.

It is sad when the media in many developing countries are so worried about
being perceived as unpatriotic that they shudder at the thought of reporting
anything critical about the incumbent and the ruling order.

In any event, when did it become the job of the news media to be called
patriotic? When news becomes "patriotic", it ceases to be news and becomes
propaganda. News media become co-collaborators in deluding the public,
pretending the country is undergoing a turnaround when it manifestly isn't.
They are drooling cheerleaders for dimwits driving a bus straight off a
cliff.

To my brother David Govere, we are prepared to sit down and talk to anyone
because we want all those bright ideas which came out of the congress to
work, kuti zvinake.
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Zim Independent

Eric Bloch Column

Myopia triggers economic disaster

THERE are numerous causes for the distressed state of the Zimbabwean
economy, but undoubtedly one of the principal triggers of the endlessly
continuing deterioration of the economy is that government is totally unable
to accept any reality that is unpalatable to it.

If there is any factor which will impact negatively upon the economy,
government has so great a short-sightedness that it cannot recognise it or,
on the rare occasion that it does, it cannot conceive that it would be a
result of its own action or inaction.

If there is any occurrence which is at variance with government's
ideologies, its policies, or its self-interest, it fails to take note of it,
let alone address it, or it attributes blame to others for having brought it
about.

And if there is any need for governmental action of a nature which would
evidence that need was as a result of that which government has or has not
done, then total myopia sets in. It cannot see that need must be fulfilled.

The examples are manifold. One of the foremost is demonstrated by the
ridiculous projections which emanate annually from government as to
anticipated levels of agricultural production.

Prior to the commencement of each agricultural season, forecasts of output
are proudly released. Each such forecast is markedly higher than the actual
production in the preceding season, but government always has some
justification for the anticipated increases, while it disregards any
circumstances which negate that justification.

Agriculture has always been the foundation of the Zimbabwean economy. At its
height, tobacco produced 237 million kilogrammes, most of which was of
exceptionally high quality. At that time, Zimbabwe not only produced the 1,8
million tonnes of maize required to feed the populace, but it also produced
a surplus for export to neighbouring territories.

Zimbabwe was, to all intents and purposes, the region's granary. It produced
large volumes of sugar, considerably in excess of the national consumption
need, and yielding much valuable export-generated exchange. It had a
national herd which was three times the size that it is today, constituting
world-class beef for home consumption and for export.

The cotton crop was acknowledged to be the finest cotton in the world, and
was produced in great volumes. Now the quality has deteriorated markedly,
and it is of substantially less value than before. Similar circumstances
apply to almost all other Zimbabwean agricultural produce.

However, none of this deters government from annually projecting remarkably
greater production, instead of recognising the real causes of the
near-demise of the agricultural sector. And, even if that is disastrous for
the country and its people, government can readily afford to give such
projections, deluding itself and some of the gullible population. It is
already apparent that 2005/2006 will be no exception to this devastating
trend of short-sightedness, and of an inability to see realities, or of an
unwillingness to do so.

The realities behind the accelerating demise of agriculture, unseen by a
government which has grossly impaired vision, is that it cavalierly ejected
from the lands the thousands of farmers who had long proven their very great
skills and productivity, doing so in total and contemptuous disregard for
justice and equity, international law and human rights.

Moreover, it replaced those who had fed the nation, who had provided
employment for over 300 000 farm workers, who had steadily reinvested the
profits of their efforts into further development, and who had fuelled
economic growth and well-being with, in very many instances, those
diametrically opposite to those attributes.

Of course, some of the new farmers are very able, capable and motivated. But
many were only interested in vandalising the farm improvements in order to
dispose of them for gain more easily achieved than from working the lands.
Selling the asbestos sheeting, doors and doorframes from farm buildings,
pumps, motors, irrigation equipment, fencing, stocks of chemicals,
fertilisers and insecticides yielded quick returns at considerably lesser
effort than farming.

And for those desirous of working the lands, most had little or no
resources, or access to them, precluding them from doing so. Compounding the
catastrophic regression of agriculture, year after year government has
promised timeous availability of operational inputs, but year after year
they have failed to materialise.

In the last few weeks government has once again shown its pronounced
blindness to realities, with inevitably appalling consequences looming
ahead. Because of its almost total inability to contain its expenditures,
government is ravenous for borrowings to supplement its revenues.

It has so destroyed its international creditworthiness that it cannot access
foreign lines of credit - save, very possibly, for a loan from South Africa,
which despite pronounced protestations to the contrary will undoubtedly be
linked to an array of conditions focused upon transforming the Zimbabwean
political and economic environments to one of stability and international
acceptability. So, instead, it has to seek the loan funding from within the
domestic market.

Aware that attracting the large loan inflows necessary would be extremely
difficult, and very costly within the prevailing interest rate regime,
government had a brainstorm. It was very conscious that the greatest
financial resources lie in the hands of the insurance companies and pension
funds, so government saw a golden opportunity to raise the monies needed.

Those companies have always been required, in law, to invest a proportion of
their funds in prescribed assets which, essentially, comprise governmental
loan instruments. However, to achieve the amount of funds required, the
specified percentage to be so invested would have to be raised to untenable
levels, so some other methodology would have to be resorted to.

And that is where the "brain-storm" came in. With a bureaucratic stroke of
genius, government announced in the mid-term fiscal review that hereinafter
the specified percentage of funds to be invested in prescribed assets must
be computed upon the market value of the institutional assets.

This is not only foolishness in the extreme, but also the final nail in the
economy's coffin. If all the assets of the insurance companies and pension
funds must be valued at market value, the amounts required for investment in
prescribed assets will be gargantuan. In order to have such massive amounts
of funds available, the institutions will have no alternative but to
withdraw very considerable money market investments from the banks and
building societies.

So great will be those withdrawals that Zimbabwe could well be confronted
with a banking sector crisis of equal or greater magnitude to that which
prevailed in early 2004, with a concomitant loss of confidence in that
sector on the part of economic players. The radical extent of such
unavoidable withdrawals could well collapse several banks and building
societies, and others dependent upon the financial bodies.

Of similar, or even greater catastrophic consequences, is the possible total
failure of the Zimbabwe Stock Exchange (ZSE). In determining the market
value of their assets, the insurance companies and pension funds will
necessarily have to value the quoted securities held by them by reference to
the last sales on the exchange of such securities.

But, upon the institutions offloading vast quantities of equities into the
market, the values must inevitably fall very significantly, and especially
so as normally the institutions are the principal buyers of quoted
securities, and yet now they will be the sellers. There will be very few
buyers, and that will depress the sale prices very considerably.

Over and above the plethora of other calamitous repercussions of a collapse
of the ZSE, the ability of the private sector to source investment capital
by reverting to listings on the bourse, and to rights issues, will cease,
resulting in yet another major hindrance to the much needed economic
development.

The old adage, "look before you leap", applies, but government's myopia is
so great that it regularly leaps into the chasms of economic disaster,
worsening the lot of all Zimbabweans.
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Zim Independent

Muckraker

Mugabe's false bravado laid bare

PRESIDENT Mugabe and Prince Charles appear to have divergent interpretations
of what happened when they met at the Pope's funeral in Rome. Mugabe has
praised the Prince of Wales as a "real gentleman" for controversially
shaking hands with him at the funeral but has dismissed Tony Blair, who
snubbed him, as a "tyrant".

Reports say Vatican officials triggered a diplomatic incident when they gave
Mugabe, Charles and Blair seats close to each other at Pope John Paul's
funeral in April. Blair switched seats but the prince took the president's
outstretched hand. Charles's spokesman claimed at the time that he had been
"ambushed" and that he found the Zimbabwean regime "abhorrent".

But in a recent interview with Daphne Barak, an Israeli television reporter,
Mugabe claimed the two reminisced on the past. Herbert Murerwa says he
introduced Mugabe to the prince and they chatted throughout the
one-and-a-half-hour ceremony.

This followed Tony Blair's hasty departure from his seat when he realised he
would be sitting next to Mugabe.

"We'd never met," Mugabe claimed, "but he deserted his seat because he
realised that our own seats were next to their own. But Prince Charles
remained in place. He's a real gentleman."

They spoke about Charles' forthcoming marriage, Murerwa said.

However, Mugabe's and Murerwa's recollection of events has once again been
challenged by Clarence House. A spokesman for the prince said: "The prince
was caught unawares during the peace-be-with-you part of the funeral, the
traditional handshake part. Partly he was unaware and partly it would have
been very disrespectful to the church at the time for the prince not to
shake Mugabe's hand."

He added: "The prince was very much there as an official representative at
the Pope's funeral and certainly didn't view the hour-and-a-half as a time
to start having conversations with people. To claim he had conversations
with either Herbert Murerwa or President Mugabe is not true."

In his interview Mugabe denied being a tyrant and accused Blair of being
arrogant.

"If there was judgement by some supreme power of the three of us - Bush,
Blair and Robert Mugabe - I'd be the first to receive greater justice from
the Almighty," he said. "I've killed no one, like they are doing (in Iraq)."

Mugabe's selective recall of events is sometimes breathtaking. Has he
forgotten the 20 000 who perished during Gukurahundi? Is he washing his
hands of responsibility for that episode?

As for his assertion that he has never met Blair, he needs reminding of the
hour they spent together at Gleneagles in Scotland during the 1997
Commonwealth summit. Blair certainly hasn't forgotten the long rambling
account Mugabe gave of the land issue with its usual distortions and
contrived claims.

"I never want to see that man again," he was reported to have said after the
ordeal. His resolve was confirmed by Mugabe's undiplomatic behaviour at the
Durban Chogm in 1999 when he made all sorts of personal attacks on the
British leader in interviews with British tabloids. Now he expects to
negotiate his way out of the predicament he has created for himself.

Last week Muckraker remarked that President Mugabe was a hypocrite, putting
on a brave face to mask his actual fear of Zimbabwe's expulsion from the
IMF. The fear was evident in Zimbabwe's hasty payment of US$120 million
(it's now risen to US$131 million) to reduce its debt to the IMF.

Our sentiments, and Zimbabweans' mounting frustration with Mugabe's
posturing, found full expression in the Tuesday Herald's reaction to the
president's attack on the IMF. Following the reprieve, Mugabe rushed to Cuba
where he told his fellow outcast Fidel Castro that Zimbabwe was not a friend
of the IMF and was "unlikely to be its friend in future".

Commenting on Mugabe's two-faced behaviour, Herald political and features
editor, Caesar Zvayi, said: "This statement left some people puzzled,
especially in light of the sacrifice Zimbabwe made by using the scarce
foreign currency reserves to pay part of the debt to the IMF. Some people
felt that President Mugabe's statement was an expression of false bravado
and contradicted . . . Gideon Gono who campaigned vigorously for Zimbabwe's
continued membership of the IMF."

The message should be clear enough. We are here dealing with a charlatan who
is impervious to reason and is only too glad to bite the hand that feeds
him. Zvayi's analysis shows the man has been consistently hypocritical since
Independence in 1980.

As for Gono, he has been repeatedly warned that so long as the politics is
wrongly pitched, he is fighting a lost battle. It doesn't matter what
home-grown economic concoction he might dream up, Mugabe has become the
albatross around this nation's neck.

Gono has to face up to that reality. Nobody takes seriously the drivel about
Zimbabwe being under Western sanctions, whether legal or otherwise.

And let's hope Morgan Tsvangirai learns a thing or two from this episode. He
urged the IMF not to expel Zimbabwe because that would compound people's
suffering. Instead of being hailed for his patriotic stance, he was
subjected to a nasty bit of character assassination by a suborned journalist
in the Herald .

Meanwhile, who will take Mugabe seriously when he talks about Zimbabweans
enjoying improved living standards "as we work to fulfil the expectations of
the millennium declaration"?

He welcomed the support of "our development partners" in achieving the
Millennium Development Goals. These are presumably the same development
partners who are having difficulty getting aid to the victims of
Murambatsvina?

As for improved living standards, we need to remind ourselves that this is
the same leader whose policies have seen the economy shrink by a third in
recent years, unemployment climb to 75%, and poverty escalate. And then he
stands on a public platform and says poverty eradication is a priority!

We can understand why George Charamba should complain, as he did on
Saturday, when the Zimbabwe Independent exposes this hypocrisy. It is all
rather inconvenient.

But when the Herald is inviting its readers to swallow every claim Mugabe
makes, somebody has to point out that the man is seriously delusional.
Poverty is on the rise. More people are poorer and unemployed today than
they were last year. Murambatsvina has added to their miseries.

Mugabe is not only head of state and of government, he is at the centre of
policy-making and his word is law. There is no "butt outside the president",
as Charamba would have it. He is accountable for the mess we find ourselves
in whether his dissembling spokesmen like it or not.

Meanwhile, Charamba's defence of Nolbert Kunonga is understandable. The man
is an apologist of the regime that now sustains him. But it is too late to
rescue him.

Anglicans everywhere are aware of the damage done by this fawning prelate.
Forget the smoke-and-mirrors stuff over ties to empire and just ask the
ordinary Zimbabwean church member what he thinks of the bishop. There's your
verdict.

Muckraker was intrigued by a website providing details of the Silver Jubilee
and reflecting the Zanu PF regime's claims to be conducting a turnaround
programme.

A quick inspection found it was the product of a company called IC
Publications which publishes Baffour Ankomah's New African , a magazine that
has proved sympathetic to Mugabe's policies.

The company's publications, including New African , have " a reputation for
editorial excellence, cutting edge reporting and integrity and are known for
their independent, objective and balanced reporting", we are told.

If that is so, we're sure New African's old-school editor will have no
difficulty in telling us who paid for his trips to Zimbabwe which resulted
in glowing accounts of President Mugabe's land reforms?

Another apologist, Viola Plummer of the December 12 Movement, appeared on
the History Channel's biography of Mugabe last Friday evening. Thankfully,
her na´ve attempts at solidarity were eclipsed by more authentic voices,
most notably former Daily News editor Geoff Nyarota and US activist Salih
Booker.

But the producers should be told to run their material past one or two of
the people they interviewed before screening to avoid embarrassment. Ian
Smith was not "colonial governor" and Sir Robin Renwick was not "former
ambassador to Rhodesia". He was ambassador to Pretoria.

But we liked Chester Crocker's comments on Mugabe's state visit to
Washington shortly after Ronald Reagan became president. "Mugabe had the
habit of sticking his finger in your eye," Crocker noted. Apparently he
lectured Reagan on his Central American policy in much the same way he later
lectured Blair on land. Crocker was told not to invite him back!

Joshua Nkomo was shown arriving in the UK after having been hounded out of
Zimbabwe in 1982. "In my 35 years of struggle against white supremacy," he
said, "I have never suffered as I have in the two years of Mugabe's rule."
Let's remember that on Unity Day this year.

We enjoyed Newsnet chief correspondent Reuben Barwe's snap survey on what
people feel about life in Zimbabwe. The question said it all.

It went like: "Would you say if you have survived in Zimbabwe you can
survive anywhere else in the world?"

Most respondents agreed although nobody openly said they wished they were
somewhere else. The gist of the matter being: there is no worse place to
live in than Zimbabwe, a dubious distinction indeed for any country.

When Mugabe told his war cabinet that what the country needed were " amadoda
sibili " the message wasn't really clear. But everybody now knows the full
meaning of that statement. The only question is: is there an end to this
suffering?

Lands minister Didymus Mutasa has threatened imprisonment for multiple-farm
owners. He told provincial land committees in Masvingo that owning more than
one farm amounts to "corruption" and that his ministry would take
appropriate action.

"How can a single person own more than one farm?" Mutasa wondered aloud.
"These are chefs with many farms and we want to end that corruption so that
everyone gets land," he said.

We want to see who will be made an example of in this long-drawn-out fiasco.

President Mugabe made equally stern threats in 2003 but those who stole more
than one farm appear to have called his bluff. Then there were all those
audits that amounted to nothing.

The miscreants are still holding on to their ill-gotten gains and walking
about freely in defiance. Even John Nkomo tried it when he was Lands
minister. Why should there be any action now?

Speaking at the same meeting, Minister of State responsible for Land and
Resettlement Flora Buka talked of more land audits in the pipeline. What
else does she do for a living, we wonder?

But she had good reasons for keeping herself busy with more land audits. "We
want to avoid a situation whereby we go down in history as people who took
land then failed to use it," she said.

Unfortunately, Madam, that fate is unavoidable anymore. There is all the
evidence of calamity everywhere one looks, a disaster worse than
government's obsession with the conveniently distracting Hurricane Katrina.
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